Motley Fool Australia

What’s with the Deep Yellow (ASX:DYL) share price today?

energy asx share price flat represented by worker in hi vis gear shrugging
Image source: Getty Images

The Deep Yellow Limited (ASX: DYL) share price is back where it started today after the company’s latest presentation to investors.

At the time of writing, shares in the uranium miner are trading at 68 cents each, the same price at yesterday’s close of trade. By comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) is 0.93% higher.

Let’s take a closer look.

‘Well-positioned for growth’

In today’s presentation to investors, Deep Yellow outlined some of the reasons why it believes it is on a strong path to growth. They include:

  • A dual-pillar growth strategy consisting of organic and inorganic growth;
  • A “standout” uranium team, and;
  • Key achievements over the last 12 months.

Organic and inorganic growth

To put us all on the same page, a company achieves organic growth by increasing sales and operations. Inorganic growth comes through strategic mergers and acquisitions.

On the organic growth front, Deep Yellow is forecasting a squeeze in the supply of uranium in 2023/24. A decrease in supply will increase the price of its product, as per the laws of supply and demand

Regarding inorganic growth, the uranium explorer has identified “2 or 3” projects it wishes to acquire. It believes doing so will lead to tangible benefits from 2024 and beyond.

Team spirit

Deep Yellow also believes it has the management and technical teams to identify better opportunities for purchase than its competitors.

The company says its team is better than others because it has “experience across all disciplines”, a “proven track record”, vision and leadership, growth strategy, and funding support.

Key projects

Deep Yellow currently has two major projects, the Premier Uranium Mining site and Tumas Mining site in Namibia. The Premier site contains at least 1.5 billion pounds of uranium with the potential for another 350,000 pounds. Deep Yellow says 6% of all the world’s uranium comes from this one site.

The company acquired the latter site in 2017. It believes Tumas is “highly prospective” and is similar to the Heinrich mine located at the Premier Uranium site. Only 50% of the 125km area has been tested so far. Deep Yellow also says it can extract uranium at a cost of only 11.5 cents per pound.

Uranium commodity price

The price of uranium has been on an upswing since August last year when Joe Biden announced a plan for green infrastructure if he were to become the US president.

At the time of writing, uranium is trading for US$31.05 per pound. It’s up 12.1% over the last month and 1.14% in the year-to-date. Yet, the element’s price has fallen since hitting a 5-year high of around US$34 a pound in May last year, due to oversupply and underwhelming demand.

Deep Yellow share price snapshot

The Deep Yellow share price has increased 159.62% over the last 12 months. However, since hitting a 5-year record in February this year, shares in the miner have fallen 23.73%.

Deep Yellow has a market capitalisation of $217.9 million.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

Related Articles…

Marc Sidarous