Deep Yellow (ASX: DYL) is hitting pause on full-scale construction of its flagship Tumas Project in Namibia, deferring a final investment decision (FID) until uranium prices show more robust, long-term support. But don’t mistake that for inaction — the company is pressing ahead with early infrastructure and detailed engineering to ensure it’s ready to move fast when the market turns.
The call comes despite recent optimisation work that reaffirmed Tumas as a Tier-1, long-life project, with a post-tax NPV of US$577 million and IRR of 19% at a uranium price of US$82.50/lb. The key issue? That price point still doesn’t offer enough incentive for greenfield project development — not in Deep Yellow’s eyes.
Managing Director John Borshoff was characteristically blunt: “The long-term uranium market is essentially broken. Utilities haven’t yet committed to contracting at levels that justify new greenfield production. But we’ve built a project that’s ready to go — and we’ll push the button when prices reflect what’s needed.”
A phased approach, not a full stop
Instead of launching into construction, Deep Yellow is opting for a three-phase strategy:
- Keep engineering ticking to finalise schedules and costs — ensuring the project is shovel-ready;
- Invest in early works like water and power infrastructure to maintain momentum; and
- Defer the big capex spend on the processing plant until uranium prices improve.
The strategy is all about flexibility — and patience. The company believes a uranium supply crunch is brewing, thanks to a decade of underinvestment, rising energy demand, and now the power needs of AI-driven data centres.
Strong footing, bigger picture
Deep Yellow is in no rush. It’s sitting on a tidy cash balance of A$227 million as of 31 March 2025 and expects to hold A$170–180 million by year’s end, even after continued spending on early works.
Backing up the pause is a newly upgraded Ore Reserve of 79.3 Mlb U₃O₈, supporting a 30-year mine life. The groundwork is solid — it’s just a matter of timing.
This move also underlines the company’s broader positioning. With two greenfield projects — Tumas and Mulga Rock — in Tier-1 jurisdictions, Deep Yellow is one of the few ASX players with real development optionality. And it’s determined to extract maximum value when the market’s ready.
