Shares in uranium exploring company Deep Yellow Limited (ASX: DYL) are soaring this afternoon to now trade 11% higher at $1.07 apiece.
Deep Yellow shares have been on the move following a company announcement regarding the mineral resource estimate (MRE) for its Omahola project.
Here are the details.
Why is the Deep Yellow share price charging higher?
Deep Yellow advised of an MRE upgrade at its second focus project – the Omahola Project, located in Namibia.
The site includes the Ongolo, MS7 and Inca uranium deposits, and it is owned by Deep Yellow through its 100% owned subsidiary Uranium Namibia Ltd.
Previously, the mineral resource measured between 2009–2013 at Omahola was 45 million pounds (Mlb) uranium at 420 parts per million (ppm), conforming to the JORC (2004) Code.
Today's release notes that Deep Yellow now reports its MRE to the JORC (2012) Code at a 100ppm uranium cut-off.
It now defines a measured, indicated and inferred mineral resource base of 125.3Mlb at 190ppm uranium at the site.
Omahola now provides the company with "another significant exploration target, which the company has now started to progress".
Deep Yellow confirmed in the release today that more exploration has commenced across the site to unlock further value at Omahola.
For instance, it has started follow-up drilling "through a shallow 7,100m 200-hole [Reverse Circulation] drilling program".
The announcement also follows up on two previous updates out of Deep Yellow's corner in the past month, where it confirmed the completion of drilling programs at its Nova venture and Tumas project respectively.
There, it upgraded the MRE at its Tumas site as well, now defining a probable ore reserve of 31Mlb of uranium at 344ppm. Deep Yellow estimates that the Tumas mine's life has a tenure of around 11-12 years.
The news comes as uranium prices whipsaw in the spot markets, with contracts trading in a range of US$38/lb to US$51 per pound in the last 2 months – a 34% spread in pricing.
At the time of writing, the alternative energy source is commanding $42.70/lb, down 13% in a single week.
A bit more on the Deep Yellow share price
It's been a year of joy for Deep Yellow and its share price, with shareholders enjoying a 127% since January 1.
Longer-term buyers have seen their positions climb over 230% in the green, meaning Deep Yellow shares have substantially outpaced the benchmark S&P/ASX 200 index (ASX: XJO)'s return of 22% in that time.
