Energy: Deep Yellow is back on the hunt at its Reptile project in Namibia

Uranium company Deep Yellow (ASX:DYL) has hit the go button on a pre-feasibility study (PFS) for the Tumas deposits at its Reptile project in Namibia after getting a good result from the scoping study.

The PFS is part of the company’s goal to prove up a broader uranium resource for the Tumas paleochannel system, of which only around half has been “properly tested” to-date, Deep Yellow said.

The scoping study was undertaken to determine the “potential viability of mining and processing the Tumas deposits” that sit within a 30km radius of a proposed processing facility (yet to be built).

While it’s still relative early days in the project, managing director John Borshoff said the results from the study represented an “important milestone” for the company.

The results “clearly demonstrate advancing this project to the pre-feasibility study stage is justified, appreciating that uranium prices are expected to improve strongly over the next two to three years”, Borshoff said.

Deep Yellow said it was confident that a PFS would allow it to convert the current inferred resource at Tumas into a sufficiently large indicated resource, which would form the basis of an ore reserve estimate.

ALSO READ: Energy: Deep Yellow shines with uranium resource upgrade

Mineral resources are categorised in order of increasing geological confidence as inferred, indicated or measured. By moving resources into the indicated category, it means a company has sufficient information on geology and grade continuity to support mine planning.

Looking ahead, the company advised that investors should consider a multi-year timeline for potential development at the site.

Should all studies prove positive, Deep Yellow said they would form the basis of a possible development decision which was “at least two or three years away, and based on the uranium price reaching $US60/lb to $US70/lb” ($87/lb to $102/lb). Uranium currently trades at around $US25/lb.

Shares in Deep Yellow ticked higher in morning trade, but the stock is still down around 50 per cent from its February 2019 highs.

In other ASX energy news today:

Boss Resources (ASX: BOE) is further down the track at its Honeymoon project in South Australia, announcing the results of a feasibility study (FS) to restart operations at the site this morning.

Labelling the results “outstanding”, Boss said that even with a conservative uranium price, the FS positions Honeymoon as “one of the world’s most advanced uranium development projects, that can be fast-tracked to re-start production in 12 months with low capital intensity”. Shares were up 4.35 per cent to 4.8c in morning trade.

The company also has a new chairman having helped the transition, with Peter O’Connor set to join the board from a funds management background. He will replace Mark Hohnen, who will step down now that Boss is in the position to be a “viable restart operation and Australia’s next uranium producer”.