DEEP YELLOW LIMITED - QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDING 30 JUNE 2021, REPTILE PROJECT, NAMIBIA.
Tumas Definitive Feasibility Study The Definitive Feasibility Study (DFS) is progressing well, further evaluating the economic feasibility of mining the calcrete-associated uranium deposits located within the Tumas palaeochannel in the Deep Yellow Limited (ASX: DYL) (Deep Yellow or the Company) 100% owned Reptile Project, located in Namibia.
The DFS is targeting a +20-year Life Of Mine (LOM) and a 2.5 to 3Mlb annual production rate. To achieve this target, the Company commenced a resource upgrade drilling program to convert the remaining Inferred Mineral Resources at Tumas 3 and Tumas 1 East into the Indicated Resource category (JORC, 2012).
The Company expects that the DFS will define a project of similar CAPEX and OPEX to the PFS, but with at least 20-years operating life.
Also, potential is seen to further expand the operating life of the Project outside the current scope of the DFS once those prospective areas that remain untested along the Tumas palaeochannel system have been explored.
The Company is also in the final stages of completion of all the necessary documentation for the anticipated lodgement of a Mining Licence Application (MLA) for Tumas. The successful and positive Tumas PFS is being used as the key foundation document for the MLA, outlining the technical and commercial viability of the Project within the development paradigm assumed by the Company.
The lodgement of the MLA for Tumas will mark an important milestone in the Company's plans to establish its maiden uranium production platform at the Project.
The Company expanded the technical team through the addition of two new and experienced process engineers, including Mr Simon Donegan, a recognised expert in uranium hydrometallurgy. Mr Donegan was previously a senior member of the Paladin Energy Technical and Project Development team and played a lead role in developing, commissioning and operating the nanofiltration process at Langer Heinrich. This process was very successful in improving process plant operability at Langer Heinrich and reduced process operating costs considerably.
The DFS work program to date and for the rest of 2021 is focussed on completion of the optimisation and trade-off studies recommended in the PFS, additional metallurgical testwork and any further work required as part of the MLA or Environmental Impact Assessment (EIA) programs. The DFS remains on track for completion in the December quarter 2022. The Company is focused on progressing Tumas towards a development decision, in preparation for the anticipated uranium price increase expected around this time.
EIA Progress
The Company continues to work with its expert advisers and sub-consultants on the tasks required to complete the EIA process for the Tumas Project. Baseline studies have either been completed or are well advanced in all required disciplines. Despite the restrictions caused by COVID-19, the initial and final consultations with Interested and Affected Parties (IAPs), as required by the Namibian EIA regulations, have been completed successfully and the draft EIA Scoping Report was released for review by the IAPs. The EIA
Scoping Report was subsequently finalised and submitted post quarter on 15 July to the required Namibian Government agencies. The process design for the Tumas Project has been specifically focussed at reducing the short and long-term environmental impacts of the Project.
To this end, the process incorporates a high degree of not only water recycling, but also reagent recycling (benefiting both long-term environmental rehabilitation of the site and reducing process operating costs). Additionally, final tailings will be washed with water containing very low levels of process reagents or contaminants and all tailings will be permanently stored by back-filling completed mine open-pits. A specialist tailings storage consultant has been engaged by the Company to assist with the detailed design of this tailings storage facility concept.
Tumas 3 Resource Upgrade Drilling
The Tumas 3 RC infill resource upgrade drilling program, located on EPL3496, has been completed (ASX announcements 13 July and 8 June). The infill drilling has been moved to drill-out the Tumas 1 East deposit. In the June quarter, 755 RC holes were drilled for 14,955m to complete the Tumas 3 infill drilling program in total involving 911 RC holes for 17,697m.
The infill drilling on the Tumas 1 East deposit, is anticipated to be completed by late July. The objectives of the drill program are to convert most of the existing Inferred Resources to an Indicated Resource (JORC 2012) category at Tumas 3 (includes Tumas 3 East, Tumas 3 Central and Tumas 3 West) and Tumas 1 East to produce an expanded Ore Reserve having the objective of providing at least a 20-year LOM for evaluation in the DFS. Drilling completed to date has confirmed previous results and expectations, with some additional positive results generated along the edges of the previously identified mineralisation.
This drilling has resulted in 46% of the 755 holes drilled in the June quarter returning uranium mineralisation greater than 100ppm eU3O8 over 1m.
Barking Gecko
The Nova JV partners agreed a 12-month program with a budget of $1.1M, to be applied as two 6-month modules. Except for Sixzone, which has a carried interest, the other three parties to the JV (Deep Yellow, JOGMEC and Toro) are contributing to the funding on a pro rata basis. Phase 1 involves a 14 hole, 3,500m RC drilling program for $580,000. The program will follow up encouraging results at Barking Gecko reported 20 April 2021. The follow-up program is focussing on gaining a better understanding of the 3-dimensional setting of this 'blind' discovery and testing its possible easterly extension.
New Chairman Appointed
On 12 May, Deep Yellow appointed highly experienced executive Mr Chris Salisbury to the Board as a non-executive Chairman, replacing Mr Rudolf Brunovs. Mr Brunovs remains on the Board as a Non-Executive Director and will retain Chair of the Audit Committee. Mr Salisbury is a metallurgical engineer who brings more than 30 years of mining, strategy and operational experience across a diverse range of commodities and has extensive uranium experience having worked in the industry in both Australia and Namibia, through senior roles for the Rio Tinto Group.
The appointment of Mr Salisbury strengthens and diversifies the capabilities of the Board importantly, at a critical time for Deep Yellow, as the Company embarks on the next phase of its dual-pillar growth strategy to establish a multi-platform, 5-10Mlb per annum, low-cost, tier-one uranium producer
The Board has agreed, that under the stewardship of Mr Salisbury, the Board composition will be reviewed to ensure it remains aligned to the emerging needs of the Company and further changes are anticipated in the second half of 2021.
Executive Team Strengthened
Head of M&A: Deep Yellow appointed Mr Andrew Mirco as the Company's Head of Business Development. Mr Mirco is an experienced corporate finance and business development executive, with a successful and proven background in financing, M&A, and risk management.
Through his time at Paladin Energy Limited, he worked closely with the current Deep Yellow management and technical team. Mr Mirco will be responsible for advancing the Company's inorganic pillar of its growth strategy, working in close association with Managing Director and CEO John Borshoff. At the appropriate time, he will also be responsible for leading and progressing project debt funding as the Company advances the Tumas Project towards production.
Tumas DFS Peer Review Chair: To further strengthen its Owner's Team, Deep Yellow hired Mr Ben Zikmundovsky to assist with the development of the DFS together with the Study Manager. Mr Zikmundovsky is a mechanical engineer, who brings 40 years' experience in managing development of projects in mining, mineral processing, construction and equipment industries. Mr Zikmundovsky has a successful track record of operating in Africa.
For eight years he held the role of Senior Projects Manager with Minproc Engineers, was Managing Director - Africa with GRD Minproc for eight years, Executive Vice President Goldfields for four years and Managing Director of KPS Power Africa for five years. Mr Zikmundovsky brings strong credentials and African mining knowledge to effectively contribute to the development of the Tumas Project. Mr Zikmundovsky will also assume the role of Chairman of the Peer Review Committee.
Contact:
John Borshoff
Tel: +61 8 9286 6999
Email: john.borshoff@deepyellow.com.au
About Deep Yellow Limited
Deep Yellow Limited is a differentiated, advanced uranium exploration company, in predevelopment phase, implementing a contrarian strategy to grow shareholder wealth. This strategy is founded upon growing the existing uranium resources across the Company's uranium projects in Namibia and the pursuit of accretive, counter-cyclical acquisitions to build a global, geographically diverse asset portfolio. A PFS was completed in early 2021 on its Tumas Project in Namibia and a DFS commenced February 2021. The Company's cornerstone suite of projects in Namibia is situated within a top-ranked African mining destination in a jurisdiction that has a long, well-regarded history of safely and effectively developing and regulating its considerable uranium mining industry
DEEP YELLOW LIMITED 
