DEEP YELLOW LIMITED - Capital/Financing Update 2012

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ASX Announcement

ASX: DYL

01 May 2012

MS7 DRILLING INTERSECTS 120 METRES OF HIGH GRADE URANIUM MINERALISATION

KEY POINTS

An outstanding 120 metre intersection of high grade uranium mineralisation has been made in hole ALAR1222 during the ongoing RC drilling campaign at MS7.
The intercept of 120 metres at 443 ppm eU3O8 (equivalent uranium) from a depth of 110 metres was measured by calibrated downhole gamma logging.
The intercept is one of several such recent intersections associated with an outlier of marble/skarn offset from the footwall marble unit.
Samples from the drill hole were prioritised and have been dispatched to Scientific Services in South Africa for confirmatory Fusion-XRF analysis.
Infill resource drilling continues in the alaskite region at MS7 and Ongolo as is reconnaissance drilling in the area.

Advanced stage uranium e xplorer Deep Yellow Limited ( DYL ) is pleased to announce an outstanding RC drill intercept from resource drilling conducted by its wholly owned subsidiary Reptile Uranium Namibia (Pty) Ltd (RUN) from the MS7 deposit area (Figure 1). The results are reported as equivalent uranium values (eU3O8) returned from routine downhole logging (Table 1).

“This is an outstanding result, one of the best from our exploration programme in Namibia” said Deep Yellow Managing Director Greg Cochran. “The numerous wide high grade intercepts we have had at MS7 continue to reinforce our optimism about the deposit’s potential.”

The MS7 drill programme is designed to increase the size and confidence of the existing JORC Mineral Resource and test for lateral and depth extensions to previously identified high grade zones. Other selected results from this area include:

ALAD781 47 metres at 418 ppm U3O8 from 49 metres
ALAR966 58 metres at 535 ppm U3O8 from 117 metres  ALAR775 21 metres at 411ppm U3O8 from 35 metres and 28 metres at 537ppm U3O8 from 209 metres.

Level 1, 329 Hay Street, Subiaco, WA 6008 / PO Box 1770, Subiaco, WA 6904 Tel : 61 8 9286 6999 / Fax : 61 8 9286 6969 / ABN 97 006 391 948 Email: [email protected] / Website: www.deepyellow.com.au

120 Metre Intercept at MS7

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Figure 1: 2012 Drill Programme – Ongolo-MS7 region also showing new discovery area

Table 1: Equivalent Uranium Results

Hole	mE	mN	Azi	TD	Dip	Depth (m)	Depth (m)	Interval	eU3O8 (ppm)	GTM
						From	To	(m)
ALAR1222	4950580	7481361	180	387	-60	69	72	3	435	1,305
and						110	230	120	443	53,160
incl						110	131	21	703	14,763
incl						171	211	40	537	21,480
and						308	310	2	799	1,598

Notes: TD is total depth of hole. eU3O8 is an equivalent uranium value derived from downhole gamma logging. GTM is grade thickness metre and is calculated by multiplying the interval (m) x eU3O8 (ppm)

Values of approximately 400 ppm U3O8 are deemed to be significant by DYL in this environment and therefore lower average values are not reported .

Where eU3O8 is reported it relates to values attained from radiometrically logging boreholes with Auslog equipment using an A675 – slimline gamma ray tool. The probe has been calibrated at the Pelindaba Calibration facility in South Africa with calibration certification provided by Geotron Systems (Pty) Ltd a geophysical consultancy based in South Africa. All eU3O8 results reported are affected by issues pertaining to possible disequilibrium and uranium mobility which should be taken into account when interpreting those pending confirmatory chemical analyses.

Ends

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120 Metre Intercept at MS7

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Background

Results received during the 2012 ‘infill’ drill programme in the central and north-east of the MS7 deposit (Figure 2) have provided continuity between the ‘resource blocks’ that were outlined by last year’s drill programme and should serve to improve the JORC classification.

During drilling operations, downhole logging is routinely used to provide calibrated gamma results (i.e. equivalent uranium values) to enable the selection of mineralised intervals for chemical assay. These samples are prepared in RUN’s laboratory and are dispatched to Scientific Services in South Africa for confirmatory Fusion-XRF analysis. However both Fusion-XRF and factored radiometric results are used in the JORC Mineral Resource estimate.

In the MS7 JORC Mineral Resource estimate completed by Coffey Mining Pty Ltd (Coffey) approximately 30% of the composites used in the estimate were sourced from Fusion-XRF chemical assays and 70% from factored radiometric data. To allow the use of the radiometric data, RUN’s calibrated downhole logging systems were reviewed by Coffey and found to be of the highest quality. Generally, DYL has waited for Fusion-XRF chemical assay results from its alaskite drill programmes before release however in this instance, it was decided that such an outstanding radiometric result warranted reporting.

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Figure 2: MS7 2011 JORC Resource Outline and Significant 2012 Infill Drill Results

The wide intercept in ALAR1222 of 120 metres at 443 ppm eU3O8 is one of several such intersections associated with an outlier of marble ‘rafted off’ the footwall marble by the intrusion of the Alaskite bodies as seen in the aeromagnetic data (Figure 3).

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120 Metre Intercept at MS7

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Figure 3: MS7 Aeromagnetic Image showing location of ALAR1222 and the Marble Outlier associated with a zone of wide intersections