Tumas Project Shows US$577M NPV but FID Deferred Pending Uranium Price Recovery
Deep Yellow Limited has deferred the Final Investment Decision for its flagship Tumas uranium project due to current uranium prices, while continuing detailed engineering and early works. The company remains confident in the project's robust economics and is progressing financing and development at its Mulga Rock project.
- Tumas Project FID deferred due to insufficient uranium price incentives
- Staged development approach adopted with ongoing detailed engineering and early works
- 2025 DFS confirms robust project economics: post-tax NPV US$577M, IRR 19% at US$82.50/lb U3O8
- Mulga Rock Project advances mini-pilot metallurgical testing and hydrogeological evaluations
- Strong corporate cash position of A$227 million and active project financing with Nedbank
Tumas Project Defers Final Investment Decision Amid Market Uncertainty
Deep Yellow Limited has announced the deferral of the Final Investment Decision (FID) for its flagship Tumas uranium project in Namibia, citing insufficient uranium price incentives to justify full-scale greenfield development at this time. Despite the delay, the company has adopted a staged development approach, continuing with detailed engineering and early infrastructure works to maintain project momentum and readiness.
The updated 2025 Detailed Feasibility Study (DFS) underscores the project's strength, delivering a post-tax net present value (NPV) of US$577 million and an internal rate of return (IRR) of 19% at a uranium price of US$82.50 per pound of U3O8. Initial capital expenditure is estimated at US$474 million, with operating costs competitive at US$35.02 per pound of uranium produced over the first 20 years.
Market Dynamics and Strategic Patience
Deep Yellow's Managing Director and CEO, John Borshoff, highlighted the challenging uranium market environment, describing it as "essentially broken" due to prolonged sector inactivity and pricing that fails to incentivize new greenfield projects. The company’s decision to delay FID reflects a strategic choice to protect shareholder value and capitalize on anticipated improvements in uranium pricing driven by growing global demand and supply constraints.
While the project is economically viable at current prices, the board believes that a healthier uranium market is essential before committing to full-scale construction. Early works such as powerlines, water pipelines, and road infrastructure continue, ensuring the project remains shovel-ready when market conditions improve.
Advances at Mulga Rock and Corporate Strength
Meanwhile, Deep Yellow’s Mulga Rock project in Western Australia is progressing well, with mini-pilot plant testing for uranium and critical minerals extraction substantially completed. Hydrogeological studies and mining evaluations are underway to support a revised DFS scheduled for the second half of 2025. These activities aim to refine process design criteria and cost estimates, positioning Mulga Rock for future development.
On the corporate front, Deep Yellow maintains a robust financial position with a group cash balance of A$227 million at quarter-end. The company is actively advancing project financing discussions with Nedbank as the mandated lead arranger, working towards securing funding packages to support future development phases.
Outlook and Industry Context
Deep Yellow’s portfolio, spanning Namibia and Australia, positions it as a prospective Tier-1 uranium producer with geographic and development diversity. The company emphasizes the long-term demand growth for uranium, driven by global decarbonization efforts, expanding energy needs, and emerging sectors such as data centers requiring reliable baseload power.
With limited greenfield uranium deposits available globally and a supply outlook marked by delays and underperformance, Deep Yellow’s cautious yet proactive approach aims to balance risk with readiness. The staged development strategy allows the company to retain technical expertise and de-risk the project while awaiting a more supportive market environment.
Bottom Line?
Deep Yellow’s patient, staged approach keeps Tumas poised for development when uranium prices finally incentivize new supply.
Questions in the middle?
- When might uranium prices reach levels sufficient to trigger Deep Yellow’s Final Investment Decision?
- How will the extended construction and ramp-up schedules impact the Tumas Project’s overall economics?
- What insights will the upcoming Mulga Rock DFS update provide on capital and operating costs?