Deep Yellow, Vimy merger a lock

A scheme of arrangement between Vimy Resources and Deep Yellow was officially implemented on Thursday, tying up an all-scrip merger valued at about $658 million.

The announcement comes around eight months after Vimy put Mulga Rock-the only uranium project in WA with ministerial approval-on the market, and marks the only uranium-centered deal to speak of in the state for around a decade.

Speaking to Business News, Deep Yellow chief executive John Borshoff said the company would not be holding back in terms of expenditure to get projects off the ground.

Deep Yellow had around $88 million in the bank as of June.

In terms of workflow, Mr Borshoff said the company’s first focus would be on the Tumas project in Namibia, followed by Mulga Rock.

“We are not holding back expenditures on any of our projects,” Mr Borshoff said.

“We think there's enough energy in the nuclear resurgence, particularly in the redefining of the exploration of the uranium supply sector … to getting these projects shovel ready.”

He said the merger had a "profound" impact on the industry, particularly following Russia’s invasion of Ukraine and its effect on global energy supply, which had sparked new calls to consider nuclear power.

“The Russian [invasion] has caused people concern,” Mr Borshoff said.

“There has to be a lot more dependence on uranium coming out of … the Western world.”

Speaking with regards to the Mulga Rock asset, Mr Borshoff said the company would look to further approvals once a development schedule had been put in place.

Establishing an industry in Western Australia will require a significant step-change to the state government’s no-uranium mining policy on future mining leases, which was implemented by the McGowan government in 2017.

The Deep Yellow board is chaired by Rio Tinto’s former iron ore chief executive Chris Salisbury, and includes ex-Vimy Chief executive Steven Michael and former Paladin Energy director Gillian Swaby.

Recently appointed Westgold Resources boss Wayne Bramwell has also stepped across from his role with Vimy and will be non-executive director to Deep Yellow.

Deep Yellow shares closed up 0.65 per cent to trade at 78 cents.