We are initiating coverage on Deep Yellow (DYL AU) with a HOLD rating and set a price target of A$1.50. DYL is progressing a dual-pillar strategy to establish itself as a multi-asset and multi-jurisdictional producer, with current development ready assets providing a pathway to uranium production of ~7.0mlb pa. FID on Tumas, in addition to updates on the funding solution, in 4QCY24 are key near-term catalysts. DYL has a seasoned management team who has experience in developing uranium mines in Namibia. We believe the timing of Tumas development and ramp-up coincides with tightness in the uranium market, driving economic upside from our near-term bullish price outlook. Mulga Rock is also well positioned for a turnaround in WA uranium policy, albeit this remains a key risk, and DYL has an attractive exploration portfolio.
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