Mulga Rock Project - Termination of Royalty Deed
Perth, Dec 20, 2022 AEST (ABN Newswire) - Deep Yellow Limited (
ASX:DYL) (JMI:FRA) (DYLLF:OTCMKTS) is pleased to announce that it has, together with its wholly-owned subsidiary Narnoo Mining Pty Ltd (Narnoo), entered into a binding agreement with Resource Capital Fund VI L.P. (RCF) to terminate the Minerals Royalty Deed (Royalty Deed), which was entered into by RCF with Narnoo in 2015 (Termination Deed). Under the Royalty Deed, RCF was entitled to receive a 1.15% royalty on all ore, concentrates and other products extracted from the Mulga Rock Project in Western Australia (Royalty).
Under the Termination Deed, RCF (or its nominee) will receive $14 million worth of ordinary shares in Deep Yellow (Consideration Shares) as consideration to terminate the Royalty, with the Consideration Shares to be issued at the 5-day volume weighted average price (VWAP) of Deep Yellow shares on the ASX immediately prior to the completion date (expected to be on 22 December 2022). Based on the current 5-day VWAP of $0.72, RCF (or its nominee) would receive approximately 19.4 million Consideration Shares.
The Consideration Shares will be issued under the Company's existing capacity under Listing Rule 7.1 and will not require shareholder approval.
Following completion of the merger with Vimy in August 2022, Deep Yellow initiated an evaluation program aimed at significantly increasing the value of the Mulga Rock Project through the identification and recovery of critical minerals associated within the Mulga Rock deposits. The reappraisal included the assessment of minerals such as copper, nickel, cobalt, zinc, and rare earths (see ASX announcement on 25 November 2022). All of these minerals would have attracted the Royalty. Deep Yellow Managing Director/CEO John Borshoff commented:
"Given the potential significant increase in value within the revised Mulga Rock Project that has been identified through our evaluation program, the termination of this Royalty adds further considerable value and ensures future additional value-enhancing initiatives fully benefit Deep Yellow shareholders."
About Deep Yellow Limited
Deep Yellow Limited (ASX:DYL) (OTCMKTS:DYLLF) is successfully progressing a dual-pillar growth strategy to establish a globally diversified, Tier-1 uranium company to produce 10+Mlb p.a.
The Company's portfolio contains the largest uranium resource base of any ASX-listed company and its projects provide geographic and development diversity. Deep Yellow is the only ASX company with two advanced projects - flagship Tumas, Namibia (Final Investment Decision expected in 1H/CY24) and MRP, Western Australia (advancing through revised DFS), both located in Tier-1 uranium jurisdictions.
Deep Yellow is well-positioned for further growth through development of its highly prospective exploration portfolio - ARP, Northern Territory and Omahola, Namibia with ongoing M&A focused on high-quality assets should opportunities arise that best fit the Company's strategy.
Led by a best-in-class team, who are proven uranium mine builders and operators, the Company is advancing its growth strategy at a time when the need for nuclear energy is becoming the only viable option in the mid-to-long term to provide baseload power supply and achieve zero emission targets.
Importantly, Deep Yellow is on track to becoming a reliable and long-term uranium producer, able to provide production optionality, security of supply and geographic diversity.
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