Active Member Straws
#Business Model/Strategy
Last edited 7 months ago

Deep Yellow is an interesting company.  You can view their latest company presentation here and their website can be accessed here.

John Borshoff, Managing Director / CEO of Deep Yellow is an experienced mining executive and geologist with more than 30 years of uranium industry experience. He spent more than a decade at the start of his career as a senior geologist and manager of the Australian activities of German uranium miner Uranerz. In 1993, following the withdrawal of Uranerz from Australia, Mr Borshoff founded Paladin Energy Ltd (Paladin). He built the company from a junior explorer into a multi-mine uranium producer with a global asset base and valuation of more than US$5 billion at its peak.

At Paladin, Mr Borshoff led the team that completed the drill out, feasibility studies, financing, construction, commissioning and safe operation of the first two conventional uranium mines built in the world for 20 years. He also oversaw numerous successful, large public market transactions including acquisitions and major capital raisings before leaving Paladin in 2015.

Mr Borshoff is recognised as a global uranium industry expert and has a vast international network across the uranium and nuclear industries, as well as the mining investment market. He has a Bachelor of Science (Geology) from the University of Western Australia and is a Fellow of both the Australian Institute of Company Directors and the Australasian Institute of Mining and Metallurgy.

His team at Deep Yellow are almost all ex-Paladin:

 

  • Perth:
    • John Borshoff * - Managing Director/CEO
    • Gillian Swaby * - Corporate/Finance
    • Ed Becker * - Head of Exploration
    • Dr Andy Wilde * - Chief Geologist
    • Ursula Pretorius - Financial Controller
  • Namibia:
    • Martin Hirsch - Exploration Manager
    • Dr J C Corbin * - Senior Geologist-Specialist

* = Ex-Paladin Executive/Technical team.

All but 2 are ex-Paladin.

Skin in the game:

  • John Borshoff owns 4.3% of the company - 8,378,021 shares
  • Mr Rudolf Brunovs, DYL Chairman & Non-Executive Director, owns 11,488,107 DYL shares (5.9% of DYL)
  • Ms Gillian Swaby, an Executive Director, owns 4,829,006 DYL shares (2.5%)
  • Mr Christophe Urtel, DYL Non-Executive Director and current Group Head of Corporate Development for Anglo American, owns 16,856,647 DYL shares (8.6%)
  • Mr Mervyn Greene, DYL Non-Executive Director, owns at least 29,546,667 DYL shares (15%) and - if Commsec is correct - as much as 55,483,833 shares (28.5% of VMY) - although I suspect they have counted some of his indirect holdings again in his direct holdings (or vice versa).  Either way, Merv owns at least 15% of VMY.

Mervyn Greene is an experienced investment banker and entrepreneur who has been working in investment markets in Africa, Europe and the United States for more than 30 years. His most recent experience has focussed on private equity investment in a range of sectors, including property and he currently serves as Managing and Museum Director of EPIC - The Irish Emigration Museum - and is co-founder and Chairman of Dogpatch Labs, Ireland’s leading tech start-up hub. Both businesses are located in Dublin, Ireland.

From 1997 – 2005 Mr Greene was the London-based partner of Irwin Jacobs Greene, one of Namibia’s premier stockbroking, private equity and corporate finance advisory firms. Prior to this Mr Greene worked for investment bank Morgan Stanley in New York and London.

Mr Greene has a Masters in Mathematics and Bachelor in Engineering from Trinity College in Dublin. Mr Greene also has a Masters of Business Administration from London Business School.

Mr Greene was appointed to the Deep Yellow Board in November 2006 and was Chairman from August 2007 to August 2013.

For details about their other board members, click on their names (or faces) from this webpage.

For details of the suite of uranium assets they have assembled, check out the presso or their website (links at the top of this straw).

 

Disclosure:  I hold DYL shares.

 

Warning:  Very Speculative.  You would want to be positive on the uranium price outlook to be investing in a company like this, and they are explorers and developers, not producers, so while they will most certainly benefit from a higher uranium price, they may not benefit as much as others who have infrastructure already in place and who are better positioned to start producing sooner.

 

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#Capital Raising
Last edited 6 months ago
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#Company Reports
Last edited 4 months ago

24 July 2019:  Deep Yellow (DYL) June 2019 Quarterly Activities Report

This is a play on a recovery in the price of Uranium.  DYL was founded by and is run by John Borshoff (their MD & CEO).  

Mr Borshoff is an experienced mining executive and geologist with more than 30 years of uranium industry experience. He spent more than a decade at the start of his career as a senior geologist and manager of the Australian activities of German uranium miner Uranerz.

In 1993, following the withdrawal of Uranerz from Australia, Mr Borshoff founded Paladin Energy Ltd.  He built the company from a junior explorer into a multi-mine uranium producer with a global asset base and valuation of more than US$5 billion at its peak.

At Paladin, Mr Borshoff led the team that completed the drill out, feasibility studies, financing, construction, commissioning and safe operation of the first two conventional uranium mines built in the world for 20 years. He also oversaw numerous successful, large public market transactions including acquisitions and major capital raisings before leaving Paladin in 2015.

Mr Borshoff is recognised as a global uranium industry expert and has a vast international network across the uranium and nuclear industries, as well as the mining investment market.

Deep Yellow has accumulated a number of uranium assets and is in a really good position to make some big money when the price rises and sentiment turns more positive.

As always with single commodity exposure companies, you need to have formed a view as to the likely future direction of the price of the commodity - uranium in this case, so this is one for people who are bullish on uranium over the next year or three, and I'm one of those people, so I do own some DYL.  

However, it's not a large position, because you have to view such companies as speculative.  They don't have any operating mines, due to the low price of uranium over the past few years predominantly, and they are obviously loss-making at this point (having no sales or other reliable income), so by going long DYL you are betting that the environment they operate in will improve and they will be viewed as being worth more by the market in the future than they are today (and will be priced accordingly).

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#Broker/Analyst Views
Added 7 months ago

30 Oct 2019:  Hartleys:  DEEP YELLOW LIMITED (DYL):  Have Your Cake and Eat It Too

Deep Yellow Limited (DYL) is a uranium exploration company with a dual pronged strategy to build ‘a multi-project global uranium development platform’. The two-pronged strategy is primarily focused on growing the existing uranium resource base in Namibia. Secondly, in conjunction with this, DYL is looking to make counter cyclical acquisitions. They are led by Paladin Energy (‘PDN’) founder John Borshoff along with many of that PDN team, providing them with the skills and experience of an independent team that has actually developed a world scale uranium mine. The cornerstone asset is a large acreage position in Namibia, a proven uranium mining and export jurisdiction. DYL holds four key contiguous Exclusive Prospecting Licences (‘EPLs’) covering 1,590km2, that are located in close proximity to the established Rössing, Husab (20km to the north) and the Langer Heinrich (40km to the northeast) mines. 

Resource base continues to grow strongly.

The Tumas palaeochannel (similar to Langer Heinrich) has been the primary exploration target. Exploration undertaken by the new management team (appointed October 2016) has resulted in a three-fold increase in the resource base of the Tumas palaeochannel to 86Mlb grading 310ppm U3O8. This brings the total Mineral Resource Estimate of the calcrete mineralisation to 104Mlb. The Company is now targeting 125Mlb to 150Mlb U3O8 in palaeochannels in the grade range 300-500ppm eU3O8. This is on top of the 45.1Mlb U3O8 at 420ppm in the Rössing/Husab style basement/alaskite targets. DYL’s overall resource stands at 149.3Mlb U3O8 grading 323ppm.

Our 12-month forward valuation is A$0.40 per share.

DYL has a focused strategy and has already discovered a globally relevant resource in Namibia. There is also significant further exploration potential within DYL’s existing tenements. This resource is located close to both existing processing and export capacity. Namibia has a long history of supporting the Uranium sector and is viewed by Uranium purchasers as a reliable source of supply. The regulatory, environmental and fiscal environment within Namibia is also relatively supportive for Uranium mining. DYL’s management team are also one of the most experienced in the industry and have already successfully developed a Uranium mine in Namibia. The second prong of their strategy is to use the current depressed Uranium market to acquire/secure additional assets. The ultimate goal is to secure a suite of development assets that can supply between 5-10Mlb/a. 

The company continues to have a very active drilling program in Namibia and we expect further positive results and potential resource upgrades over the next 12 months. The company also has an active new ventures program, which provides the potential to add further assets to its existing Namibian portfolio. As its resource base continues to grow it is also likely that DYL attracts attention from larger producers (and customers). We derive a 12month forward valuation and target price of $0.40 per share. Given this combination of upside to our target price and active 12 months of news flow we initiate coverage of DYL with a Speculative Buy rating. 

[click on link above for more]

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#ASX Announcements
Added 7 months ago

18-Nov-2019:  Strong Growth Continues at Reptile

30-Oct-2019:  September Quarterly Activities Report

Disclosure:  I have a small holding in DYL as part of my uranium recovery exposure.  Slightly larger holding in VMY.  Both are highly speculative with no revenue or profits.  However, suitable for a punt (for those with a high risk tolerance) with money you can afford to lose, if you think uranium is going to go back above the cost of production, which it has to.  However, timing is everything...

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#Company Reports
Added 4 weeks ago

08-May-2020:  Corporate Update Presentation

Also, recently (last month):  14-Apr-2020:  March Quarterly Activities Report

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