…an unusual combination of complex geochemistry and development of a massive oxidation zone where supergene enrichment created a paradise for collectors and mineralogists. –Phil Persson
“Phil’s Top Ten Mineral Localities of the World,” The Collector’s Edge, 2017
Persson was referring specifically to the prolific Cu-Pb-Zn-Ag-Ge-Cd mine of the same name in the Oshikoto Region of Namibia, a region that will become of greater interest to Fahy Capital Management if a handful of stars align over the next few days.
The question that has been on every earth scientist’s lips is: could there be another Tsumeb deposit lurking undiscovered in the Otavi Mountainland? –Clive King
“An Introduction to the Geology of the Tsumeb Mine, Namibia,” Tsumeb.com
Underground mine Geologist, Clive King, for one, believes the Northern Carbonate Platform still has secrets to reveal.
Deep Yellow is eager to take advantage of the uranium downturn to buy lbs. cheap. Management has hinted that an acquisition would transform the company into a ‘globally diversified uranium platform,’ which suggests management may be in talks with advanced explorers and early developers outside of Namibia.* Wording in recent press releases may also be construed to indicate that a strategic acquisition is imminent.
*Strategy for Growth
Establish through selective sector consolidation a multi-project, global uranium platform with a project pipeline eventually supporting 5-10Mlb annual low cost production with multi-mine capability.
The Namibian Government has lifted a ten year moratorium on new uranium exploration and production licenses and has rescinded its long-standing Namibian ownership and management clause.
One recent beneficiary of deregulation is Australian explorer, Marenica Energy*, which has acquired exploration licenses for five tenements covering 180km of prospective territory.
With its uranium mining sector currently ranked fifth globally, it is the Namibian Government’s belief that aggressive deregulation will incentivize strategic investments that will transform the nation into the world’s 4th largest producer.
*Marenica Energy is the developer and patent-holder of the U-pgrade beneficiation process for surficial uranium projects. U-pgrade technology has been licensed for use at Deep Yellow’s Tumas Uranium Project, where it has been theorized that the process will dramatically transform the economics of the deposit, lowering capital and operating costs by as much as 50%, compared to conventional processing, as > 95% of mass of the ore is rejected prior to leaching. Incorporation of the technology into development of Tumas significantly lowers the price hurdle of the Project.
Japan Oil, Gas and Metals National Corporation (Jomec) has approved a U.S. $70 M (N$1 Billion) ’20 exploration budget on its Nova JV with Deep Yellow.
The Nova JV, in which Jogmec holds a 39.5% interest, is exploring for alaskite and palaeochannel/calcrete-type uranium deposits. Two prominent zones of uranium mineralization were confirmed in ’17 and are currently being further delineated with IP, radiometric, gravity, ground magnetic, and EM ground surveys. Previously uncharted palaeochannel systems have been identified, as well.
On 31 May, Deep Yellow was placed in a trading halt, pending the release of an announcement (capital raise). The halt will remain in effect until Tuesday, 4 June.
The Chinese are paying an initial U.S. $6.5 M for Rio’s 69% stake (36,222,566 lbs. U308) and up to an additional U.S. $100 M, contingent upon the mine’s net income over the next 7 years. The estimated total cost of the sale is roughly U.S. $2.94/lb. U308.
This last figure is an important one, as it establishes a benchmark sale price for Namibian lbs. at current spot prices: ~$2.94/lb.
One can begin to get an idea of the types of offers with which nearby Namibian developers may be approached. Forsys Metals, for instance, could expect an offer at going spot prices of approximately U.S. $338.1 M or U.S. $2.08/sh. And Deep Yellow could expect an offer of up to U.S. $306.3 M or U.S. $1.52/sh.
One thing is for certain, Namibian lbs. are being acquired at fire sale prices. It will be interesting to see if CNUC continues its regional uranium rollup strategy.