Deep Yellow defers Tumas decision pending price improvement

Wednesday, 9 April 2025

In January, the Australian company had said it expected to be ready to make a final investment decision - or FID - on Tumas this March, but cautioned that an improved uranium price would be a primary pre-condition. Now, it says it is adopting a staged approach to development. Engineering and early works infrastructure development will continue, but full-scale process plant construction will be approved only when there is "sufficient uranium price incentive for greenfield project development". The processing plant accounts for the majority of the project's estimated capital expenditure.

Deep Yellow Managing Director John Borshoff said that Tumas is economic at current long-term uranium prices, but these prices "do not reflect or support" the amount of production that will be needed to meet expected demand.

"The Tumas Project is ready to take the next step but, as we have consistently stated, a healthy prevailing uranium market is a key prerequisite," he said. "The final project approval will therefore be delayed until uranium prices fully reflect a sustainable incentivisation environment essential to encourage development of new projects for much needed additional production."

Borshoff said the demand outlook, driven by decarbonisation efforts, forecasts of continued growth in energy demand, prevailing structural supply shortages and newly emerging requirements from the data centre developers, is "undeniable", and that the company is "comfortable" with its decision to continue with its staged development work while not committing the capital to construct the process plant.

“The reality is there are limited greenfield uranium deposits available for start-up globally over the next 10 years to satisfy projected demand, and new uranium supply will be virtually impossible to achieve in the current price environment," he said.

“Nuclear utilities cannot ignore the fact that unless uranium prices increase to appropriate levels and large amounts of capital become available to the supply sector, those greenfields projects will remain undeveloped."

The company has issued an updated Ore Reserve Estimate for the project, including 79.3 million pounds U3O8 of proved and probable reserves at 298 parts per million and a uranium price of USD100 per pound (reserves are the part of a mineral resource that are judged to be technically and economically feasible to extract). This would support a 30-year life-of-mine at a production rate of 3.6 million pounds U3O8 per year, according to an update of Deep Yellow's definitive feasibility study completed in March.