Deep Yellow (ASX:DYL) is well funded to continue its uranium exploration activities in Namibia after successfully closing a $15.1 million entitlement issue.
Shares worth circa $4.9 million was subscribed for by shareholders with the remaining shares placed with the support of co-lead managers to the offer, Sprott Private Wealth LP and CPS Capital Group.
Deep Yellow holds 65% interest and is the manager of the Nova joint venture in Namibia along with Toro Energy (25%) and Sixzone Investments (10%).
Nova is considered prospective for both alaskite-associated uranium targets and palaeochannel-related calcrete uranium targets and has only been subject to minimal testing.
The companies are planning to drill test both the alaskite and the palaeochannel targets in late 2017.
In late March, the Nova joint venture signed a landmark strategic earn-in with Japan Oil, Gas and Metal National Corporation (JOGMEG).
JOGMEC can earn a 39.5% interest in the joint venture by spending $4.5 million over four years, with Deep Yellow continuing as manager of the joint venture and diluting its interest to 39.5%.
Moreover, Deep Yellow holds a 100% interest in the ‘Reptile’ exploration licenses covering 1131 square kilometres targeting palaeochannel uranium deposits in Namibia.
The data from 750,000 metres drilled over 10 years at Reptile has helped Deep Yellow define an exploration target of circa 120-150 million tonnes containing 80-100 million pounds of uranium.
Deep Yellow has commenced the first stage of a 10,000-metre drill program at Reptile in March, with 60 of the first 72 drill holes intersecting significant zones of uranium mineralisation.
Further new targets have been identified and will be tested during the remainder of 2017.
The long-term market demand for uranium is expected to be strong as many new uranium powered nuclear reactors are planned to be commissioned post-2020.