PERTH (miningweekly.com) – Uranium hopeful Deep Yellow has flagged a cost blowout at its Tumas project, in Namibia, where a definitive feasibility study (DFS) is currently under internal review.

The company told shareholders on Friday that the DFS, which had been completed, had indicated that the project remained "commercially attractive" despite capital and cost inflation, which the company said was consistent with the global mining environment.

Examination of the draft financial model has indicated there were areas which could be further optimised to deliver increased value, before the DFS is finalised, Deep Yellow said. This optimisation work will focus on the preproduction mining plan and schedule.

The DFS results are expected by February next year.

The 2021 prefeasibility study on the Tumas project estimated a capital cost of $295.1-million to develop the project, which could produce 2.5-million pounds a year of uranium oxide over an 11.5-year mine life. C1 costs were estimated at $27.3/lb after by-product vanadium credit.

Meanwhile, at its Mulga Rock project, in Australia, Deep Yellow said that it was reconsidering its approach to the uranium project, with an eye to including all minerals which could have economic potential.

Prior to its merger with Deep Yellow, Mulga Rock owner Vimy Resources had considered only the uranium resources at the project area, but it had planned to include some base metals in an updated bankable feasibility study around the end of 2023.

Deep Yellow told shareholders on Friday that assessment work carried out by the company had focussed on incorporating all the base metals and rare earth elements within the expanded uranium resource concentrating on the Mulga Rock East deposits. The work indicates potential for significant increase in project value and the strong likelihood that the project life beyond 20 years can be achieved from these deposits alone.

In addition, the re-evaluation work completed to date also identified the potential to increase the overall uranium resource within these deposits owing to the inclusion of peripheral lower grade uranium associated with base metals dominated zones.

This work has demonstrated the need to reconsider the project approach and consider all minerals that could have economic potential in the revised DFS now being undertaken, Deep Yellow said.

The DFS work, along with a 600-hole air core drilling programme to better define the resource, is scheduled for completion by mid-2024.