In November 2019, Deep Yellow Limited (ASX: DYL) (Deep Yellow) announced an updated Mineral Resource Estimate (MRE) for the Tumas 1 East deposit (Tumas 1 East), located within the Reptile Project.
Successful resource extension drilling resulted in a 34% increase in resource growth at Tumas 1 East, with Inferred Mineral Resources now 24.8Mlb at 319ppm eU3O8 (at a 200ppm eU3O8 cut-off).
Total combined measured, indicated and inferred calcrete resources in the Tumas palaeochannel (Tumas 1 East, 1, 2, 3 and Tubas Red Sand/calcrete deposits) now stand at 92.5Mlb at 303ppm eU3O8.
The uranium mineralisation defined to date in the Tumas palaeochannel system occurs as three distinct mineralised bodies: the Tumas 1 and 2 deposits, now including the Tumas 1 East tributary extensions, the Tumas 3 deposit and the Tubas Red Sand/Calcrete deposits. These deposits occur on EPLs 3496 and 3497, held by Deep Yellow's wholly owned subsidiary, Reptile Uranium Namibia (Pty) Ltd.
With the combined overall Tumas palaeochannel resource totalling 92.5Mlb eU3O8 at 303ppm over EPLs 3496/97, the overall total surficial calcrete-related Mineral Resources across the Company's Namibian projects, including the Aussinanis Deposit on EPL3498, have more than doubled since 2017 to 110.5Mlb U308.
Resource extension RC drilling programs succeeded in closing off the Tributary 5 deposit in the Tumas 1 East area, with Deep Yellow also completing some limited infill drilling within the Tributary 4 channel. A total of 591 RC holes were drilled for 6,281m during the Tumas 1 East drilling campaigns, with 291 holes returning positive results, a pleasing overall success rate of 50%.
Tumas 1 East Mineral Resource Estimate Summary
Exploration and infill resource drilling, carried out in conjunction with geological studies in 2017 and 2018, has substantially improved the Company's understanding of the palaeochannelassociated calcrete-type targets and its uranium mineralisation. The upgraded MRE over the Tumas 1 East deposit, incorporating newly discovered tributaries, was the result of successful 2018 and 2019 drilling programs.
The MRE was estimated by Ordinary Kriging. Cut-off grades used for the expanded MRE included 100, 150, 200, and 250ppm eU3O8 and the Measured, Indicated and Inferred Mineral Resource Estimates derived from these cut-off grades indicate the mineralisation remains robust and consistent.
Exploration Drilling
In December 2019, Deep Yellow announced the completion of the exploration drilling program west of the Tumas Central area on EPL3498. The program was successful in outlining additional calcrete-type uranium mineralisation below the surficial Red Sand deposit. Importantly, exploration drill testing of the Tubas Red Sand and Calcrete areas succeeded in extending the previous depth limits of the known mineralisation of the palaeochannel in this area. Drilling also identified the potential to further extend the mineralisation in this channel to the west and along other parts of the palaeochannel system including tributary channels. Significantly this work delineated new zones for future resource in-fill drilling within this part of the main Tumas channel.
In October, Deep Yellow completed the 2019 drilling program at Tumas 3 West and Central. Mineralisation was identified at depths between 1m to 40m below surface. In the exploration drilling area, uranium mineralisation >100ppm/m eU3O8 was identified in 75 (51%) of the 147 holes drilled in this zone. At >200ppm/m cut-off, the average grade returned is 335ppm eU3O8. Each of these areas are will be subject to follow-up work.
Only 56% of the 125km of the targeted channels has been sufficiently explored over the past three years and, to date, the Inferred uranium resource base in the Tumas channel system has been increased by 280% from 32.2Mlb U3O8 at 252ppm to 92.5Mlb U3O8 at 303ppm. Approximately 55km of this palaeochannel system, which deepens to the west, remains to be tested.
Deep Yellow has resumed its planned drilling programs for the first half of 2020. Initially, the program will focus on resource infill drilling to upgrade areas of Tumas 3 to the Indicated Mineral Resource JORC reporting category. This will be followed by resource drilling at Tumas Central and Tubas Red Sand areas to enable an updated Mineral Resource Estimate to be completed for these areas of the paleochannel.
Tumas 3 Diamond Core Drilling
The triple tube diamond core drilling program at Tumas 3 is focused on obtaining 1,000kg of mineralised material suitable for metallurgical test work. By the end of December, 21 holes for 416m had been completed in 2019. A further 200m are planned to be drilled in January to February 2020 to complete this program. A total of 590kg of mineralised core material has been collected and sent to Australia.
The drill core obtained from this work will be used to refine the geological model and obtain approximately 500 density determinations to be used in future resource estimations to upgrade to Indicated and Measured JORC reporting status.
Uranium Resources
The Study was based on a high proportion of Inferred Resources.
The overall Inferred, Indicated and Measured Resources in Tumas 3, Tumas 1 & 2 and Tumas 1 East is 73.7Mlb eU3O8 grading 345ppm of which 13.1Mlb eU3O8 grading 362ppm eU3O8 are Measured and Indicated Resources.
The base case model in the Scoping Study utilises the Tumas 3 deposit containing 33.1Mlb eU308 grading 378ppm lying adjacent to the proposed plant site, with significant potential for upside growth when considering the other nearby deposits.
The Company is confident in converting a sufficient amount of the Inferred Resource to Indicated to establish an Ore Reserve Statement for the Pre-Feasibility Study for the following reasons: the depth of geological knowledge the Company holds regarding these palaeochannelrelated uranium deposits is very high and the management team's working familiarity with the resource base of the adjacent Langer Heinrich uranium mine deposits (the Company believes that the Tumas Project Resources are an extension of the palaeochannel system and resources located at the Langer Heinrich Mine).
The Inferred Resource mineralisation established at Tumas is delineated in four discrete deposits occurring over a 40km long zone within the prospective palaeochannel system. 83% of the Tumas 1 & 2 deposits (occurring east-adjacent to the Tumas 3 deposit) is in an Indicated and Measured Resource status. This type of mineralisation is remarkably consistent over an extensive length. The Company is confident that the Inferred Resources at Tumas 3 will convert to a sufficiently large Indicated Resource for the purposes of Ore Reserve estimation during the Pre-Feasibility Study.
Development Timing
The timing of both the Study and the Pre-Feasibility Study, as advised previously, has been developed for a possible development decision (should all subsequent studies prove positive) which is at least two to three years away and based on the uranium price reaching US$60/lb to US$70/lb on a predicted supply/demand dynamic, where shortages are anticipated at that time in the global uranium market. These studies are structured to provide Deep Yellow with sufficient time to align with a potential development in the period 2023-24.
The Deep Yellow Growth Strategy
The Deep Yellow strategic growth plan is focused on establishing the Company as a low-cost, tier-one global uranium platform. The dual-pillar strategy has been developed to deliver organic and inorganic growth through advancing the development of its Namibian projects and secondly, via sector consolidation, to acquire additional projects through merger and acquisition. This utilises the strong uranium project development, operational and corporate capabilities and proven track record of the Deep Yellow management team. The Company remains well-funded to continue the execution of this strategy over the next 12 months.
Scoping Study Outcomes
The analysis undertaken for the Study relies on many assumptions to be assessed in followon studies based on emerging project data as well as the relevant experience of the Deep Yellow management team. This evaluation indicates the Tumas Project meets the Company's investment criteria having the potential to achieve the stated corporate benchmarks required by the Deep Yellow growth strategy.
Approval to Proceed to Pre-Feasibility
The Pre-Feasibility Study, which is expected to be completed in the December 2020 quarter, will represent a further significant milestone in the Company fulfilling its stated ambition of becoming a multi-platform, low-cost, global uranium company.
Nova Joint Venture
On 10 January 2020, Deep Yellow announced that in December 2019 the exploration drilling program on its Nova Joint Venture project (Nova JV) on EPL3670 was completed. JOGMEC is earning a 39.5% interest on expenditure of A$4.5M within 4 years, which commenced in November 2016. The overall drilling campaign was designed to test four previously unexplored palaeochannels in addition to one extensive basement target defined by the 2018 airborne spectrometric and magnetic survey.
Results of palaeochannel drilling at Day Gecko, Bibron and STD 24 and Komodo 2 basement target zones, with the exception of one hole, recorded below cut-off uranium mineralisation. A moderate intersection of 130ppm eU3O8 over 1m from 5m depth was encountered at the southern end of the drill line. The intersection lines up with uranium mineralisation encountered at Skink prospect, 1.5km to the north-west and as such some follow-up work may be required.
Basement target drilling focussed on the Komodo 2 target approximately 9km by 3km beneath Tertiary and Quaternary cover sediments. 96 shallow RC exploration holes for 1,980m were drilled, returning only minor anomalism and all below 100ppm eU3O8 over 1m.
On EPL3669, Namaqua remains open to the north-east and is earmarked for follow-up drill testing as previously reported. In addition, prospective leucogranite at Barking Gecko will require follow-up work.
Contact:
John Borshoff
Tel: +61 8 9286 6999
Email: john.borshoff@deepyellow.com.au
ABOUT DEEP YELLOW LIMITED
Deep Yellow Limited is a specialist differentiated uranium company implementing a new contrarian strategy to grow shareholder wealth. This strategy is founded upon growing the existing uranium resources across the Company's uranium projects in Namibia and the pursuit of accretive, countercyclical acquisitions to build a global, geographically diverse asset portfolio. The Company's cornerstone suite of projects in Namibia is situated within a top-ranked African mining destination in a jurisdiction that has a long, well regarded history of safely and effectively developing and regulating its considerable uranium mining industry.
Forward Looking Statement
Any statements, estimates, forecasts or projections with respect to the future performance of Deep Yellow and/or its subsidiaries contained in this presentation are based on subjective assumptions made by Deep Yellow's management and about circumstances and events that have not yet taken place. Such statements, estimates, forecasts and projections involve significant elements of subjective judgement and analysis which, whilst reasonably formulated, cannot be guaranteed to occur. Accordingly, no representations are made by Deep Yellow or its affiliates, subsidiaries, directors, officers, agents, advisers or employees as to the accuracy of such information; such statements, estimates, forecasts and projections should not be relied upon as indicative of future value or as a guaranteed of value or future results and there can be no assurance that the projected results will be achieved.
DEEP YELLOW LIMITED 
