Wounded uranium junior Deep Yellow told a lively annual general meeting in West Perth today that a trading suspension on the company's shares was unlikely to be lifted for at least two months.
The board of wounded uranium junior Deep Yellow Ltd told confused shareholders at a lively annual general meeting in West Perth today that a trading suspension was unlikely to be lifted for at least two months because drilling results remain in doubt.
An array of central Australian mining identities were on hand at the Celtic Club to offer their opinion, reflecting the fact that the crisis over Deep Yellow's drilling results has drawn in others - such as alliance partner Tanami Gold NL and tenement vendor Paladin Resources Ltd.
It was clear from the meeting that there was a significant level of uncertainty among those at the meeting, with some expressing their disappointment at "debacle" as one shareholder put it for the events which have also caused the companies share purchase plan to be put on hold.
At the meeting, there was also confusion as to why Deep Yellow's shares remained suspended when there was nothing new to tell the market for such a long time.
Deep Yellow executive chairman Leon Pretorius agreed to events surrounding Deep Yellow's suspension were a "saga".
Mr Pretorius said the Australian Stock Exchange would not lift its suspension on the shares until the company could determine the correct drilling results from two markedly different data sets from its Napperby deposit currently in its possession.
He said he was scheduled to meet representatives of the exchange straight after the AGM.
The company has been trying to match an assay sample from its Northern Territory Napperby uranium deposit drilled earlier this year against data supplied by previous owner Paladin Resources and certified by the Australian Nuclear Science and Technology Organisation, which Paladin used to estimate a low grade resource of 6,000 tonnes.
Samples of the grade collected by Deep Yellow are orders of magnitude less than those both in the data supplied by Paladin and drill samples kept by ANSTO.
Its shares have been suspended at 11.5 cents since November 15 after losing 11.5 per cent in value the previous day.
Mr Pretorius said that the whole assay process would have to be audited to determine the correct drill results.
"The company has been informed by its resource consultants, Hellman & Schofield, that they have been unable to produce a resource estimate able to be reported in accordance with the JORC(2004) guidelines for the Napperby uranium project, based on the drilling and assay data provided by DYL from the August 2005 field programme," Mr Pretorius told the ASX today.
Taking questions from confused shareholders, Deep Yellow non-executive director and Paladin company secretary Gillian Swaby said the ASX had taken the view that the company's shares should remain suspended until it could verify the quality of the resource, which is expected to require further drilling.
"Realistically, it won't be less than two months," she said.
The wet season in the Northern Territory and a shortage of available drilling equipment is expected to hamper further drilling efforts at the site.
Dennis Waddell, chairman of Tanami Gold, which has an exploration alliance with Deep Yellow, said he found it "staggering" the exchange would leave the share trading halt in place.
Mr Waddell said that explorers like his were "drilling every day with assay issues".
Also addressing the AGM, Paladin managing director John Borshoff said his company had "offered [Deep Yellow] something that had a resource based on three drilling campaigns".
But it was "something that becomes viable at $US50 a pound".
"It's not that you have a Yeelerie here," Mr Borshoff said.
Although Mr Borshoff said he "seriously believed Deep Yellow is the best prepared uranium junior in Australia", and the "sooner it was released from trading suspension the better off it would be".
Deep Yellow is one of about 10 uranium juniors to have surged this year with the higher price of the metal, which is now eyeing $US35 a pound.
With so much investment in uranium juniors this year, some observers are saying the fallout arising from Napperby could range from a loss of investor confidence in older data to a withdrawal of support for more marginal uranium projects.
Yesterday, Hartleys resources analyst Andrew Rowell said the problem with some older drill results was that occasionally they did not stack up favourably with today's stringent JORC standards.
"Older data is usually treated with a possible error of about 10 per cent," he said.
"But Deep Yellow's assay samples were orders of magnitude out."
With its history in Julia Corp and Julia Mines (established in 1985), the name Deep Yellow emerged as it acquired the Mikado gold project near Laverton in April 2003.
By March 2004, Deep Yellow had started mining operations and had ramped up to full production by April; however a similar problem plagued the company as ore recovered from the Mikado pit was about 18 per cent below that indicated by the reserve model.
