Deep Yellow Ltd (ASX:DYL) has executed a technology licence agreement for the application of Marenica Energy Ltd’s (ASX:MEY) U-pgrade process on the company’s Tumas Project in Namibia.
The commercialisation agreement follows the recent conclusion of a successful metallurgical testwork program and aims to share the economic benefit of the resource/technology combination.
The testwork program demonstrated that processing Tumas ore through the U-pgrade process has the potential to reject up to 98% of the mass whilst recovering over 82% of the uranium.
This could potentially reduce both capital and operating costs and enable the Tumas Project to be developed at a lower uranium incentive price.
The fees to Marenica will include a series of lump sum payments and an ongoing fees once the U-pgrade plant has met specific performance indicators.
The ongoing fee varies with the sales price and is nominal if uranium is sold at a price below US$50 per pound and is capped at US$4.80 per pound if the uranium price received exceeds US$80 per pound.
The Tumas deposit has a current 2004 JORC resource of 14.8 million tonnes at 366 ppm triuranium octoxide (U3O8) containing 11.9 million pounds U3O8.
However, the palaeochannels have extensive upside potential as demonstrated by Deep Yellow’s recent exploration success.
The companies are already in an advanced stage of planning a fast track feasibility study which would include metallurgical variability testwork and a resource expansion drilling program.
Deep Yellow had a cash and liquid asset balance of $1.6 million at the end of the June 2016 quarter.
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