Deep Yellow divesting Shiyela
Deep Yellow Limited recently reported that it had entered into negotiations regarding its Shiyela iron project. Deep Yellow reported that negotiations have been delayed by the preferred bidder with the likelihood that Deep Yellow will not be able to conclude the transaction in the anticipated and preferred time frame.
Shiyela is a magnetite rich resource discovered in 2008 by Deep Yellow subsidiary Reptile Uranium Namibia. Extensive drilling conducted on site indicated Shiyela would be able to sustain a large open-pit mining operation.
A scoping study conducted in 2012 on behalf of Deep Yellow suggested economically encouraging results Deep Yellow said. The capital cost estimate for a mine producing 2 metric tonnes per annum of concentrate was US$367 million while operating costs were estimated at US$63.20 per tonne of concentrate free on board.
Plant capital cost was estimated at US$207 million with the remainder made up of mining-related capital expenditure and infrastructure. Based on projections done at the time, during construction of the mining project, it would have the potential to create between 500 and 1000 jobs dependent on the level of activity regarding the construction and 150 employment opportunities during its actual operational phase with the potential to exceed 300 employment opportunities as reported by South African based firm, Soft Chem who conducted an environmental impact assessment on the project. Construction of the plant was projected to last approximately 12 months. Work done showed that the project had the potential to be a major money spinner for government with tax revenue projected to be upwards of N$350 million per annum. For the quarter ended, Deep Yellow reported that it had concluded an in-house preliminary economic analysis of its flagship Omahola project. Deep Yellow will initiate test work program which will determine the processing technique while deeper drilling will be conducted at its MS7 deposit. The Ministry of Mines and Energy granted Deep Yellow a mining license covering an area of approximating 54 square kilometres. The site lies 45 kilometres east from the Port of Walvis Bay situated in the Namib-Nauklaft Park.