Deep Yellow (ASX: DYL) has pressed pause on the final investment decision (FID) for its flagship Tumas uranium project in Namibia, choosing instead a staged development approach as it waits for a more supportive uranium price environment.
The company will continue with early works and detailed engineering to keep the project “shovel ready”, but full construction of the processing plant — the most capital-intensive part — has been deferred until uranium prices better reflect the long-term supply gap and provide a stronger development incentive.
Project economics remain solid
Recent optimisation work reaffirms Tumas as a top-tier, long-life uranium project. Using a base uranium price of US$82.50/lb U₃O₈, the updated numbers are impressive:
- Post-tax NPV: US$577 million (A$912 million)
- IRR: 19%
- Initial capex: US$474 million (A$750 million)
- C1 operating cost (first 20 years): US$35.02/lb U₃O₈
This robust outlook is underpinned by a newly updated ore reserve of 79.3 million pounds U₃O₈, with enough inventory to support a 30-year mine life.
A wait worth the reward?
According to Managing Director John Borshoff, the uranium market remains structurally broken after years of underinvestment. While current long-term prices technically support Tumas, Deep Yellow sees far greater upside in waiting for the market to correct — which they believe is inevitable.
“We’re at an extraordinary stage in the uranium supply sector,” Borshoff said. “Yes, Tumas is economic today, but the real value will come when uranium prices reflect the genuine supply shortfall that’s building rapidly — especially as demand grows from new sectors like data centres.”
Preserving value while keeping momentum
Instead of charging ahead, Deep Yellow will focus on advancing water and power infrastructure and refining the execution plan. Importantly, it still plans to move forward with project financing, keeping Tumas positioned to launch quickly when market conditions improve.
The company is in a strong financial position, holding A$227 million in cash as of March 2025, with an expected balance of A$170–180 million at year-end, even after planned infrastructure spend.
Why it matters
With very few greenfield uranium projects ready to go — and demand set to outstrip supply — Deep Yellow is playing the long game. By keeping capital powder dry and waiting for better pricing, it’s aiming to maximise long-term returns rather than rush to market prematurely.
