The Reptile Project (Reptile or the Project) contains uranium resources from both target types – palaeochannel/calcrete and basement/alaskite.
The principal exploration and development target at the Reptile Project is the palaeochannel/calcrete style of mineralisation, as exemplified by the Langer Heinrich deposit. Uranium mineralisation in this style of deposit occurs as uranium vanadate carnotite, hosted by Tertiary and Quaternary fluvial sediments occupying narrow and steep-sided palaeochannels. Host-rocks vary from hard, carbonate-cemented sandstones and conglomerates (calcrete), to poorly consolidated and friable sands.
The Reptile Project contains a Mineral Resource in the Tumas and Tubas palaeochannel/calcrete-type deposits of 122.6Mlb U3O8 at 232ppm.
In 2016, the current executive and management team (majority ex-Paladin Energy) joined Deep Yellow. Exploration during this period has been extremely successful, highlighted by management increasing the Project’s palaeochannel/calcrete Resource more than threefold (mainly at the Tumas 3 and Tumas East discoveries), at an extremely low and impressive discovery cost of 11.5c/lb.
Management also successfully identified 125km of highly prospective palaeochannels during this period. Importantly, only 50% of the total mineral resource base and 50% of the 125km Tumas palaeochannel system has been tested, providing the Company with significant exploration upside.
Ongoing exploration within this region is targeting an additional 30-60Mlb U3O8 in the grade range of 300-500ppm eU3O8 and, if successful, will assist the Company in increasing the total palaeochannel resource base to 125-150Mlb in that grade range.
The Deep Yellow team (majority ex Paladin Energy) has experienced significant exploration success in such palaeochannel deposits. Fertile paleochannels of this region can contain between 2Mlb to 12Mlb U3O8/km, and it is reasonable to assume that an additional 2 to 3 mineralised zones will be discovered.
The Deep Yellow team has experienced significant exploration success in such palaeochannel deposits. Fertile paleochannels of this region can contain between 2Mlb to 12Mlb U3O8/km and it is reasonable to assume that an additional 2 to 3 mineralised zones will be discovered.
The Company’s rapid success in advancing the palaeochannel-related uranium resource bases has resulted in advancing the Project to economic consideration.
|Deep Yellow Limited Uranium Resources – February 2021|
|Calcrete + Basement Deposits|
A positive Scoping Study (SS) was completed at the end of 2019 on the Tumas deposits, with results providing the Board with confidence to proceed immediately to a formal Pre-Feasibility Study (PFS).
The PFS was completed in early 2020.
The PFS delivered robust results in line with and in some cases better than assumptions from the SS, highlighting a strong economic case for Tumas and justifying immediate commencement of a Definitive Feasibility Study (DFS), for the future development of Tumas.
Key PFS outputs are outlined below:
|Project Physicals and Financials (Ungeared): Real Unless Stated Otherwise||Unit||LOM||Per Operating Year|
|Operating Life (Total)||Years||11.5|
|U3O8 Recovered and Sold||Mlb||29.1||2.53|
|Operating Margin (EBITDA) (U3O8 @ US$65/lb & V2O5 @ US$7/lb)||US$M||1,034||90|
|Total Initial, Pre-Production, Sustaining & Closure Capital||US$M||-357.4||-31.1|
|Undiscounted Cashflow After Tax||US$M||447.4||38.9|
|C1 Cost (U3O8 basis with V2O5 by-product)||US$/lb||27.28|
|AISC (U3O8 basis with V2O5 by-product)||US$/lb||30.69|
|Project NPV8.6 Nominal (Post Tax) – ungeared||US$M||207|
|Project IRR (Post Tax) – ungeared||%||21.1|
|Project Payback Period from Production Start||Years||3.8|
For a detailed review of the PFS, refer to the ASX release dated 10 February 2021 Deep Yellow Proceeding with Tumas DFS Following Positive PFS.
The DFS will pursue an expanded Project target, by incorporating the remaining 50% of the Total Mineral Resources into the Ore Reserve model, to achieve the stated goal of a minimum 20-year Life of Mine operation.
Many unoptimised areas remain, representing significant potential for economic improvement. These include:
- Mine scheduling
- Increase in Ore Reserves
- Treatment process and balance
- Ore treatment rate
- Additional Mineral Resource identification
Tumas is being advanced in alignment with forecasts of an increasing uranium price, in reaction to the looming uranium shortage expected post 2023.
Deep Yellow requires a minimum uranium price of $65/lb U3O8 to bring Tumas online.
The second type of mineralisation at Reptile is basement/alaskite.
Deep Yellow’s basement exploration is mainly focused on the 30km x 10km Alaskite Alley, which contains the bulk of the known basement resources in the region and cuts through the western part of EPL3496.
The Company has identified the Ongolo, MS7 and Inca deposits within EPL3496, which have a combined total Resource of 45.1Mlb U3O8 at 420ppm.
The prospective portion of Alaskite Alley within EPL3496, has been underexplored and represents a substantial opportunity to discover additional uranium resources of basement style.