Deep Yellow Ltd (ASX: DYL) shares are on course to end the week on a positive note.
In morning trade, the ASX All Ords mining stock is up over 3% to $1.67.
This appears to have been driven by a broker note out of Macquarie Group Ltd (ASX: MQG), which speaks positively about the uranium producer.
What is Macquarie saying about this ASX All Ords mining stock?
Macquarie is feeling even more positive on this ASX uranium share following the release of an update on a pilot at the Mulga Rock project in Western Australia. It said:
DYL has completed a three-month mini-pilot, which has gone well and will inform the revised DFS study expected mid-2026. It has already increased uranium resources from 56.7Mlb (Vimy) to 71.2Mlb (DYL) U3O8 in Mulga Rock East and now highlights upside to this from a longer life 3.5Mlb p.a. operation (given 85% overall recoveries and critical mineral credits).
Mass recovery to beneficiation concentrate was 36%, with uranium recovery >92% (average grade was 662ppm U3O8, beneficiation upgraded this to 1,698ppm in concentrate). The mini-pilot proved (i) the ability to separate uranium and critical minerals as marketable streams an (ii) the ability to utilise saline site water in the selected resin-in-pulp processes (no need to develop freshwater borefield 30km away). As well, critical mineral by-product revenue is anticipated to be "material" in the revised DFS (Q3-2026).
Big returns
In light of this and in response to improved market conditions, the broker has boosted its valuation for this ASX All Ords mining stock materially.
According to the note, Macquarie has reaffirmed its outperform rating on its this ASX uranium share with an improved price target of $2.05. Based on its current share price, this implies potential upside of 23% for investors over the next 12 months.
Commenting on the mining stock, the broker said:
Our TP is +21% to A$2.05 (1.0x NAV) on lower equity dilution (assumed raise now at a higher equity price level, reflecting improved market conditions) and increased inclusion for Mulga Rock (now 50% vs 35% previously).
Outperform. Tumas is shovel-ready in Namibia, pending an improvement in term prices (we expect to occur in the coming months). Mulga Rock is key to DYL achieving its 7+Mlb/yr scale ambition, and the value enhancement from a lower cost operation (eg, critical mineral credits) could be material.
