Pure-play uranium company Deep Yellow aims to produce ten-million pounds a year within the next decade, driven by strong demand and a market deficit, says head of business development Andrew Mirco.

Speaking at the Diggers and Dealers conference in Kalgoorlie, he outlined the company’s plans, highlighting the construction of the Tumas project, in Namibia, and Mulga Rock mine, in Australia, as key developments. Tumas was set to be operational by 2026 and Mulga Rock would come on line by 2028.

These two long-life assets would be producing well into the 2050s and 2060s in a market with limited greenfield production, he said.

Following a successful capital raise in March, Deep Yellow is in a strong position, boasting A$257-million in cash, no debt, and a market cap of A$1.2-billion. This stability places the company in a strong position to advance its projects and pursue growth organically through exploration, and inorganically via mergers and acquisitions. The company recently merged with Vimy Resources.

Mirco emphasised Deep Yellow's experienced team, led by MD John Borshoff, who had nearly 50 years in the uranium industry and a track record of building world-class uranium mines. The team also included seasoned professionals such as chairperson Chris Salisbury, Darryl Butcher, and Dustin Garrow, all bringing extensive expertise in uranium mining, marketing and finance.

Reflecting on the uranium market, Mirco noted the shift in global inventories and demand since the post-Fukushima era. He pointed out that the inventory overhang had largely disappeared and that secondary material supply coming into the market had reduced. At the same time, there had been a global pivot towards nuclear power for energy security and clean baseload power.

On the supply front, the market is in a race to restart production, with limited greenfield projects expected before 2030, resulting in a price rally. Uranium recently traded at 17-year highs.

Mirco expressed confidence that uranium prices would remain high for an extended period. “It took ten-plus years of underinvestment to create this structural deficit; it will take ten-plus years and a lot of investment to fix it,” he said at the conference.

The price rally was also unlikely to unleash a plethora of new deposits being discovered and a wave of new supply. He pointed out that most of the uranium deposits globally today were those discovered in the 1970s and early 1980s post the oil shock, at a time when corporates and governments were spending billions scouring the earth looking for new deposits. Despite the billions being spent over the last couple of decades, the only two material uranium deposits that have been discovered are those of NexGen and Fission Uranium, in North America. “I don't believe there will be a flood of new deposits being discovered,” said Mirco.

He also noted that developing new uranium mines today is more challenging than a decade ago due to stricter regulatory regimes, funding difficulties, and a reduced pool of experienced personnel.

Concluding his speech, Mirco highlighted the unique nature of uranium compared to other commodities. Uranium makes up only 5% to 7% of the cost to produce electricity from a nuclear power plant, compared to much higher percentages for coal and gas. This means that even significant increases in uranium prices would have a minimal impact on electricity costs, ensuring sustained demand.