- Deep Yellow (ASX:DYL) will kick off drilling in late February to boost the JORC around its Namibian assets
- Shares sunk four per cent in the second hour of trade
- DYL has been criticised in the recent past for appearing nonplussed by a uranium rally
- In the meantime, at least one uranium hopeful is seeking to list on the ASX as the commodity price rises
- Shares last at $1.61
Deep Yellow (ASX:DYL), a bona fide uranium stalwart and longtime materials constituent, announced this morning it’ll expand drilling activities at its play in Namibia, Africa.
However, the company is angling for geodata to substantiate an ore reserve drilling program, as opposed to boosting exploration on the back of higher uranium prices.
The price of the nuclear reactor feedstock jumped to more than US$106.xx/lb last week in what is a record recovery for the controversial commodity.
(Worth noting: TradingEconomics data shows futures prices receded US$6.00/lb to US$100/lb flat over the weekend, but let’s assume that’s a data anomaly until other providers say the same thing. Still, one to watch.)
Market not loving it
At any rate, DYL isn’t immediately planning to boost production, either, based on its communications released today.
Perhaps because of this, the stock was down four per cent in the second hour of trades to $1.61, though, this needs to be contextualised against a red Monday for the bourse with some profit-taking likely happening following the ASX200’s new all time high reached last Friday.
The US markets also had a strong finish to the week, further implying psychology driving today’s moves is more inward-focused.
Anyway – back to Deep Yellow.
What exactly is the plan?
Drilling will kick off in late February at Tumas 3, part of its Namibian asset portfolio.
No less than 13,000 metres of RC drilling will substantiate the ore drilling program with diamond drills to also be brought in – albeit, for a paltry 350 metres of core.
“The program will comprise RC and diamond core drilling and has been developed with the primary objective of increasing drill spacing across targeted areas of Tumas 3,” DYL wrote.
“[This will] enable the company to convert some of the 67.3Mlb of probable reserves to a proven status under the JORC mineral resource code.”
The company also mentioned that this strategy would “also support the debt financing effort”.
Between the lines: the bigger your JORC, the better your bankability.
While DYL has been the beneficiary of a sector-wide commodity-price-driven lifting of all boats, the uranium stalwart has attracted criticism in the recent past for what is perceived by some as an unwillingness to seize the day, so to speak.
While at least one uranium hopeful is gearing up to list on the ASX, it’s not controversial to suggest DYL has so far been fairly non-responsive to the late 2023 uranium price rally.
Shares last traded at $1.61.