Talk about key person risk – shares in Deep Yellow Ltd (ASX: DYL) have copped an absolute shellacking after the company announced that long-time managing director and uranium industry leader John Borshoff is leaving the company.
Mr Borshoff has led the company since late 2016, when the company's shares were changing hands for just a few cents each.
The company was worth more than $2 billion at the close of trade on Friday; however, that value dropped precipitously on Monday morning, with the shares trading down 13.9% to $1.99 in early trade.
Industry stalwart
Mr Borshoff is among the most-experienced uranium executives in the Australian mining industry, having founded fellow uranium miner Paladin Energy Ltd (ASX: PDN), which, as the Deep Yellow annual report says, he built "from a junior explorer into a multi-mine uranium producer with a global asset base and valuation of more than $5 billion at its peak''.
Mr Borshoff left Paladin in 2015, joining Deep Yellow in October of 2016.
The annual report shows the depth of Mr Borshoff's experience, with the outgoing managing director sitting on a number of working groups of the World Nuclear Association as well as sitting on the council of the Namibian Chamber of Mines. He is also a fellow of the Australasian Institute of Mining and Metallurgy.
Transition Phase
Deep Yellow is currently poised to transform from a uranium prospector to a miner; however, it has yet to make a final investment decision on its long-life Tumas project in Namibia.
The company last week announced there was the potential to extend the life of the project beyond its current 30-year mine plan, following positive drilling results at the S-Bend prospect at the project.
Deep Yellow has delayed making a final decision to go ahead with the project while it waits for the uranium market to recover.
Mr Borshoff has previously described the uranium market as "essentially broken", with pricing not reflecting "the enormous amount of production that needs to be brought online to meet expected demand".
Deep Yellow's annual report shows Mr Borshoff was among the top 20 shareholders in the company, owning 18.8 million shares, worth $37.4 million at the current share price.
The company said in its statement to the ASX on Monday that Mr Borshoff "leaves an incredible legacy at Deep Yellow having built one of the most experienced uranium mining leadership teams in the industry''.
A global search for a replacement managing director and chief executive officer for Deep Yellow is at an advanced stage and a further announcement will be made when this process has concluded.
The company's Chief Financial Officer, Craig Barnes, will be acting chief executive in the interim.
The board of Deep Yellow remain confident and excited about the future of Deep Yellow as the company works towards the strategic vision of transitioning to a global, multi-project uranium producer through the near-term final investment decision of the flagship Tumas Project, progressing the definitive feasibility study process for the Mulga Rock Project, and further exploration progress and development at the Alligator River Project.
