Deep Yellow Adds Exploration Value
Deep Yellow (DYL:AU) exploration results (ASX 16 July 2015) are pointing to a more extensive Namibian uranium resource position than had previously been disclosed. The PortfolioDirect rating for the company had already characterised it as having a prospect quality toward the upper end of the range of possible outcomes with a relatively low risk profile. Investment returns remain overwhelmingly driven by influences outside the control of the company with potential buyers of uranium ironically reluctant to underwrite mine developments despite forecasts of potential shortages. The market value of Deep Yellow has declined 38% since the beginning of June as sector sentiment has deteriorated further. The chart shows how Deep Yellow (green line) has tracked against the Global X uranium ETF (white line) since the start of 2014. Deep Yellow is a possible portfolio holding for an investor wishing to gain exposure to an eventual sector recovery with the possibility of an additional value contribution from an extension of its resource base.
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
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