Deep Yellow, an Australian uranium exploration company, remains optimistic about the long-term prospects for the uranium market. However, the development of its flagship Tumas project in Namibia is contingent upon improved uranium pricing. The company has delayed a final investment decision for Tumas to March 2025 due to market conditions. Deep Yellow maintains that the uranium market is undersupplied and believes prices will need to rise significantly for greenfield projects like Tumas to become economically viable.
John Borshoff's Deep Yellow remains optimistic about the long-term prospects for the uranium market, but the development of its flagship Tumas project in Namibia is contingent upon improved pricing, the company announced on Tuesday. Deep Yellow had postponed the final investment decision for Tumas to March 2025 in December due to delays in securing crucial cost estimates and the subdued lithium price environment.
However, the company anticipates that this delay will have minimal impact on the project's overall development timeline, which remains fluid. \'Deep Yellow will only proceed with the execution phase of Tumas when it believes the uranium price, encompassing both term and spot contracts, reaches levels that will yield the best return for shareholders in both the near and long term,' the company reiterated in its December quarterly report. Deep Yellow's financial position allows for a wait-and-see approach, with A$238.4 million in the bank at the start of the new year, a slight decrease from the $247 million held at the end of September. \Deep Yellow asserts that its board 'firmly believes' that forecasts for uranium supply growth by some analysts are 'materially overstated in the short, medium, and long term.' The company expresses significant doubt regarding the pace of available greenfield uranium developments over the next decade. It argues that with the demand for nuclear power on the rise due to global decarbonization efforts, existing uranium mines, even those that have been closed and could be reactivated, are insufficient to meet global requirements. At COP29 last November, 31 countries pledged to triple their nuclear output by 2050, a commitment that will necessitate a substantial increase in uranium supply. 'This growth will be virtually impossible to achieve in the current uranium price environment,' Deep Yellow contends. 'In this environment of emerging supply shortage, uranium companies will need to adopt very disciplined approaches in determining the optimal time to commence development of the limited greenfield projects available for consideration.' Deep Yellow emphasizes that greenfield projects like Tumas will remain stalled until uranium prices rise, a situation that nuclear utilities cannot afford to overlook
Deep Yellow Uranium Tumas Project Namibia Uranium Prices Supply And Demand Nuclear Power COP29
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