Deep Yellow (ASX: DYL) has posted a 32% increase to uranium resources at its Tumas 3 deposit, part of its Reptile project in Namibia, after a four-month drilling campaign at the project wound up last month.
The updated resource at Tumas 3 now contains 31.2 million pounds grading 377 parts per million uranium (200ppm cut-off), which is a 32% increase on the maiden resource estimate of 23.5Mlb at 382ppm uranium reported in September 2017.
Tumas 3 has added to Reptile’s global resource which now sits at 81.3Mlb of contained uranium with a grade of 237ppm. However, 6.1Mlb of that resource from the Tubas calcrete deposit has not been updated from JORC 2004 to JORC 2012 status.
Resource extensional drilling at Tumas 3 boosted known mineralisation by 6km from the previously defined 4.4km, with 274 reverse circulation holes carried out for 6,781m.
Mineralisation remains open to the west of Tumas 3m, with Deep Yellow planning to drill this region along with another 85km of uranium fertile paleochannels that remain relatively untested.
Deep Yellow has calculated an exploration target up to 150Mlb at 500ppm across its Namibian projects, which includes the Nova Joint venture.
The next drilling program is anticipated to begin later this month.
Uranium prices have been wallowing at all time lows around US$20/lb uranium for the last 18-months, despite many operators curbing production to reduce oversupply in the market.
This compares to US$39.50/lb, which the commodity was fetching in November 2014 and US$136/lb, which it is was commanding in June 2007, before the GFC wiped out global markets.
However, Deep Yellow points out uranium shortages will begin from 2022 onwards, which will propel the price higher again.
Deep Yellow claims its strategy is to take advantages of the shortages when they occur.
Despite the lagging uranium market, investors reacted positively to Deep Yellow’s news this morning which pushed its share price up more than 7% to reach A$0.365 in early afternoon trade.