With the Tumas uranium project set to start production in 2026, one question is whether John Borshoff can repeat the same feat he did with Langer Heinrich.
Deep Yellow expects to announce the Tumas Project’s final investment decision during the latter part of the third calendar quarter of 2024.
If the company’s plans unravel as expected production at Tumas will commence during the second half of 2026.
The Tumas Project will be Deep Yellow’s first mining operation and flagship development.
The project, which comprises Tumas 1, 2, 3, Tumas Central, and Tumas 1 East, received a 20-year mining license 237 in December 2023.
Deep Yellow has been exploring the Tumas since 2016, when the resources, especially at Tumas 1 and 3, increased more than fourfold at a low discovery cost.
Borshoff joined Deep Yellow 10 years after the Tumas deposit had been discovered. The work at Tumas was refocused to define probable reserves of 67.3 Mlb of U3O8.
Tumas has a resource of 121 Mlb (260 ppm U308), a reserve of 67 Mlb (345 ppm U308), and inferred resources of 16.5 Mlb available to expand the ore reserve base. These resources can add 10+ years to the mine’s current 22.25-year life.
Deep Yellow released an initial scoping study on Tumas that delivered positive results in January 2020, followed by a pre-feasibility study completed in February 2021.
In February 2023, Deep Yellow completed the Tumas definitive feasibility study and received environmental approvals for the Tumas project, water pipeline, and powerline in early October 2023.
The power line was approved on September 29, 2023, and the ECC was issued on October 6, 2023.
The company also conducted a re-costing study, and the uranium market re-assessment resulted in a material increase in the base case (US$75/lb U3O8) NPV8 and IRR to US$570 million (A$838.2 million) and 27%, respectively.
Deep Yellow has maintained the 3Q 2024 timeline for the final investment decision.
The Langer Heinrich feat
Borshoff founded Paladin Energy in 1993 and acquired the Langer Heinrich mine in August 2002 from Aztec Resources.
It took Borshoff four years—2002–2006—to bring the Langer Heinrich deposit to production.
Borshoff did the same with Paladin’s Malawian asset, the Kayelekera Mine, between 2009 and 2013.
Borshoff founded Paladin after the company Uranerz, for which he worked, left Australia.
Between 2002 and 2015, Borshoff changed Paladin Energy from a junior explorer into a multi-mine uranium producer with a global asset base and a peak valuation of more than US$5 billion.
Borshoff’s team completed the drill out, feasibility studies, financing, construction, commissioning, and safe operation of the first two conventional uranium mines built worldwide for 20 years.
He also oversaw numerous successful, large public market transactions, including acquisitions and significant capital raisings, before leaving Paladin in 2015.
When he left, Paladin Energy had become the 7th largest uranium producer globally.
Borshoff decided to leave due to the falling uranium prices around 2014.
To keep operations going, Paladin sold a 25% stake to China National Nuclear Corp. for US$190 million in January 2014.
Paladin Energy had to place Kayelekera under care and maintenance but kept Langer Heinrich running.
However, the company suspended work on stage 4, which could have increased production output at Langer Heinrich to 8,5 million pounds from 5,2 million.
A year after Borshoff left Paladin Energy, he was appointed the Deep Yellow managing director in October 2016.
Now Borshoff has to perform another miracle with the Tumas, which is about 30 kilometres from the Langer Heinrich uranium mine.
Will Borshoff work a miracle?
It took Borshoff four years—2002–2006—to bring the Langer Heinrich deposit to production.
Borshoff did the same with Paladin’s Malawian asset, the Kayelekera Mine, between 2009 and 2013.
He could, mainly because he has some of the team from Paladin Energy. There is the geologist Dr Alexx Otto, Dr Jean Corbin, environmental scientist Cathy Paxton, investment banker Timothy Lindley, business development executive Andrew Mirco, economic geologist Eduard Becker, and project manager Darryl Butcher.
Zacks Investment Research suggests that Borshoff can perform another miracle with Tumas.
In a 17-page study dated May 31, 2024, Zacks Investment Research says
Deep Yellow Ltd. is unique among junior mining companies and is positioned to provide a leveraged opportunity to participate in all phases of the expected upswing in uranium prices.
The study adds that Deep Yellow management is focused on becoming a low-cost, tier 1 uranium producer, a multi-project producer capable of delivering 5–10 million lbs. of uranium annually.
In addition, Zacks says Borshoff, and his team previously achieved the same accomplishment with Paladin Energy Ltd by acquiring, developing and advancing the Langer Heinrich deposit into production within four years and the Kayelekera Mine in Malawi during the last uranium upcycle.
According to Zacks, the geology and type of deposit mineralisation at Langer Heinrich and Tumas are pretty similar, and the mining jurisdiction is the same.
“The company is well funded, with a cash balance of A$155.6 million as of March 31, 2024.
“Roughly A$100 million was added to the company’s coffers from the oversubscribed Share Purchase Plan in April and from the second tranche of the private placement in May,” Zacks says.
Zacks further says Deep Yellow grossed A$250 million in private placement to continue advancing the Tumas Project toward production and to allow for further development activities at the Mulga Rock Project.
“This initial significant equity financing provides the necessary capital to move forward to the final investment decision for the Tumas Project,” Zacks says.
In 2024, Zacks says, several entities were required to file that their ownership of Deep Yellow exceeded 5% of the company’s outstanding shares, primarily because of participation in the private placement.
“Furthermore, through discussions with financiers, the company is progressing toward securing debt financing that will help fund construction costs of the Tumas uranium mine once the financial investment decision is made to proceed, which is expected to be announced near the end of the third calendar quarter of 2024,” Zacks notes.
John Borshoff
Borshoff is an experienced mining executive and geologist with over 40 years of uranium industry experience.
At the start of his career, he spent 17 years as a senior geologist and manager of the Australian activities of German uranium miner Uranerz.
In 1993, following Uranerz’s withdrawal from Australia, Borshoff founded Paladin Energy Ltd. He built the company from a junior explorer into a multi-mine uranium producer with a global asset base and a peak valuation of more than US$5 billion.
At Paladin, Borshoff led the team that completed the drill out, feasibility studies, financing, construction, commissioning and safe operation of the first two conventional uranium mines built worldwide for 20 years.
He also oversaw numerous successful, large public market transactions, including acquisitions and significant capital raisings, before leaving Paladin in 2015.
Borshoff is recognised as a global uranium industry expert and has a vast international network in the uranium, nuclear, and mining investment markets.
He has a Bachelor of Science (Geology) from the University of Western Australia.
He is a Fellow of the Australian Institute of Company Directors and the Australasian Institute of Mining and Metallurgy.
He is a member of the Uranium Forum within the Minerals Council of Australia (of which he is a former Board member) and sits on the Council of the Namibian Chamber of Mines.