Uranium miner, Deep Yellow has set the third quarter of this year as the time that it will make its final investment decision on its Flagship Tumas project in Namibia.
Namibia’s Ministry of Mines and Energy (MME) issued Reptile Uranium Namibia (Pty) Ltd (RUN), a 100% subsidiary of Deep Yellow, with its 20-year mining licence, (expiring 21 September 2043) for the Tumas Project (Tumas or Project) last month.
The environmental approvals for the Project, water pipeline and powerline were granted in late September/early October 2023, with the Environmental Clearance Certificates (ECC) for Tumas and the water pipeline received on 28 September 2023. The approval of the power line was received on 29 September 2023 and the ECC was issued 6 October 2023.
The grant of ML 237 was subject to the provision of all relevant ECCs for the Project and associated infrastructure. The issue of ML 237, valid for 20 years, is a key step towards Deep Yellow commencing production at Tumas. Importantly, upon execution of the current timeline, Deep Yellow will establish Tumas as the 4th uranium mine in Namibia.
“Following completion of the Re-Costing Study, Deep Yellow has engaged with selected engineering service providers that are suitably experienced to bid for the detailed engineering and EPCM phases of the Project. As anticipated, the Company expects to call for tenders for detailed engineering and project execution from the selected third-party engineering services providers in January 2024,” John Borshoff, Managing Director/CEO of Deep Yellow Limited said last week.
He went on to say that during the Re-Costing Study, several opportunities for improvement were identified.
“These further potential improvements remain available for complete assessment during the detailed engineering phase. Key areas for reassessment include vendor packaged equipment requirements and financing and direct owner purchases of structural steel, platework, pipes, and pumping equipment.
“The Company also proposes to develop a detailed transport and logistics plan and continue to evaluate local procurement options,” he said.
Ongoing metallurgical testwork is also indicating that a reduction of up to 2MW may be realised in the installed capacity of the beneficiation circuit.
“This will result in reduced operating and capital cost estimates. In addition, indicated improved performance from the membrane circuit (PLS concentration) suggests that the refining section may become physically smaller, and that CCD capacity may be reduced by one unit, importantly still using the same design criteria controls, which is also expected to provide further improvement to the project economics.
“With the Tumas Re-Costing Study completed, defining the Project more accurately, the Company has now intensified its activity to progress debt financing, building on the considerable groundwork already undertaken. This will be progressed in parallel with the Project detailed engineering with the aim of achieving FID by late Q3/2024,” explained Borshoff.
DFS Re-Costing Study
The January 2023 DFS, announced on 2 February 2023, was presented with the full impact of the inflationary and supply chain pressures prevailing at that time. In July 2023 it was decided, with Ausenco Services Pty Ltd (Ausenco) (DFS Engineers), to review the results and obtain an updated costing profile as an addendum to the January DFS.
The Re-Costing Study was undertaken as a collaborative effort by Deep Yellow and Ausenco (who undertook the original DFS) and was completed in accordance with Ausenco’s costing standards for a DFS-level study. Ausenco consented to lead this program and be associated with the Addendum Report and its conclusion. Critical to the methodology used for the Re-Costing Study was that this work be sufficiently documented and supported, such that it is considered suitable for project funding due diligence.
“Deep Yellow and Ausenco performed a comprehensive market re-evaluation of the CAPEX and OPEX, one year after the initial DFS pricing study. This reassessment included revising procurement strategies, reorganising construction packages and negotiating shortlisted vendor agreements, especially in critical areas like bulk earthworks and Structural, Mechanical, Piping, and Platework (SMPP) packages,” Borshoff said.
Resource Expansion
Following the second phase of the drill program involving 8 holes for 1,558m completed in September 2023, Deep Yellow announced an updated MRE for the Tumas 3 Deposit, located within EPL3496 and EPL34974.
The program successfully increased the Tumas 3 MRE by delivering an 11% uplift in Indicated Mineral Resources to 60.6Mlb at 325ppm eU3O8, using a 100ppm cut-off grade. The drill program also identified a further 1.2Mlb of Inferred Mineral Resources in the same area.
Overall, at a 100ppm eU3O8 cut-off grade, the Tumas 3 MRE stands at an Indicated Mineral Resource of 60.6Mlb grading 325ppm and an Inferred Mineral Resource of 6.2Mlb at 170ppm eU3O8, totalling 66.8Mlb at 300ppm eU3O8. The primary objective of the drill program was to identify additional resources to the immediate west of Tumas 3 to eventually extend the overall Tumas Project to a +30-year LOM from its current 22.5 years.
Tumas 3 is the largest known deposit occurring along the Tumas palaeodrainage. Together with Tumas 1, 1 East, Tumas 2 and Tubas deposits, the palaeodrainage contains approximately 108.5Mlb U3O8 of Indicated Resources, of which 67.3Mlb U3O8 are contained in a Probable Ore Reserve category, with 31.2Mlb U3O8 remaining as Inferred resources.
Uranium mineralisation at Tumas occurs in association with calcium carbonate precipitations (calcrete) in sediment-filled palaeovalleys. Prior to commencing the drill program at Tumas 3, the total Indicated Resources were 54.9Mlb and the remaining Inferred Resources were 5.9Mlb.
Following the latest drill program, at a 100ppm cut off, the updated MRE has an Indicated Mineral Resource totalling 60.6Mlb at 325ppm eU3O8. The infill drilling has locally improved the grade of the deposit by limiting the influence of peripheral, low-grade mineralisation. The 100ppm eU3O8 cut-off was selected for reporting based on previous mining studies and represents the most continuous mineralisation within the deposit.
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