DEEP YELLOW LIMITED — Capital/Financing Update 2019

Apr 25, 2019

ASX & NSX: DYL / OTCQX: DYLLF

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ASX Announcement

26 April 2019

NOVA JV ANNUAL BUDGET APPROVED AND FOLLOW-UP DRILLING COMPLETED

Key Points

• JOGMEC approves annual Joint Venture budget of A$1.05M for year end March 2020

• 18 hole, 1,404m follow-up drilling program completed on EPL 3669

Budget Approval

Deep Yellow Limited is pleased to advise that Japan Oil, Gas and Metals National Corporation ( JOGMEC ), who are sole funding the Nova Joint Venture ( Nova JV ) in Namibia, have approved a program and budget of $1.05M over the next 12 months for the period ending 31 March 2020.

The Nova JV, covering EPLs 3669 and 3667, is held in the corporate entity Nova Energy (Namibia) Pty Ltd in which Reptile Mineral Resources and Exploration (Pty) Ltd (RMR - wholly owned subsidiary of Deep Yellow) holds 65% (Manager), Nova Energy Africa Pty Ltd (wholly owned subsidiary of Toro Energy Limited, ASX listed) 25% and Sixzone Investments (Pty) Ltd 10%.

JOGMEC is currently earning a 39.5% equity interest in the Nova JV to be achieved after $4.5m has been spent by them over a four-year period.

Work on the Nova JV is focussing on target definition and drilling to test for both basement related uranium targets (Rössing/Husab style deposits) and palaeochannel/calcrete associated uranium targets (Langer Heinrich style deposits).

Follow-up Drilling

A short drilling program was completed during the March quarter following up a number of results from the 2018 drilling on EPL 3669. A total of 18 RC holes for 1,404m was drilled. This comprised two holes for 176m drilled at Goanna, four holes for 202m at Barking Gecko, six holes for 582m between Iguana and Festive prospects, four holes for 274m at Iguana and two holes for 170m at Berger's. Figure 1 shows tenement locations and Figure 2: Overview map of follow-up drilling on EPL3669, shown over a SPOT6 satellite image. Appendix 1 lists all drill hole details including intersections greater than 100ppm eU3O8 over 1m

Drilling at Iguana aimed at better defining the mineralisation encountered during 2018. This follow-up work confirmed the narrow, low grade nature of the vein system carrying the uranium mineralisation.

Unit 17, 100-104 Railway Road 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: info@deepyellow.com.au / Website: www.deepyellow.com.au

Of the six angled holes drilled to test possible extensions of Iguana under cover to the northwest towards the Festive Prospect, TN145RC intersected 3m @ 135ppm eU3O8 (7-10m depth) in carbonate-rich gravel at the contact to granitic basement, and 3m @ 175ppm eU3O8 (79-82m depth) in granite. Both intersections are sub-economic and no other mineralisation was encountered.

Four angled RC drill holes for a total of 202m were drilled at Barking Gecko. No uranium mineralisation was intersected.

Two holes were drilled without success at each of Goanna and Berger’s to test the edges of previously identified palaeochannels.

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See figure 2 for
drilling locations
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Figure 1: Tenement and Prospect location maps.

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Figure 2: Overview map of follow-up drilling on EPL3669, shown over a SPOT6 satellite image.

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Conclusions

Although exploration drilling did not encounter economic uranium mineralisation in palaeochannels, the identification of calcrete-associated mineralisation within the palaeochannels in the Nova JV area is considered significant as this has confirmed the prospectivity of the system of palaeochannels that has been identified. Further drilling is planned in 2019 to explore previously untested palaeochannels.

To date, basement drilling has not encountered economically significant uranium mineralisation. The next stage of basement exploration in 2019 will start testing blind targets beneath sand cover as defined by both ground and airborne geophysical methods.

Yours faithfully

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JOHN BORSHOFF Managing Director/CEO Deep Yellow Limited

Exploration Competent Person’s Statement

The information in this announcement as it relates to exploration results was compiled by Mr Martin Hirsch, a Competent Person who is a Member of the Institute of Materials, Mining and Metallurgy (IMMM) in the UK. Mr Hirsch, who is currently the Exploration Manager for Reptile Mineral Resources and Exploration (Pty) Ltd ( RMR ), has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Hirsch consents to the inclusion in this announcement of the matters based on the information in the form and context in which it appears. Mr Hirsch holds shares in the Company.

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APPENDIX 1: Drill Hole Details and Uranium intersections

Table 1: Nova JV, Drill Hole Details - January 2019

HOLE ID	Type	Prospect	X	Y	E.O.H.	Dip	Azi Grid	Date completed
TN138	RC	Goanna	480407	7475350	79	-70	180	01/16/2019
TN139	RC	Goanna	480408	7476148	97	-70	0	01/17/2019
TN140	RC	Barking Gecko	478263	7477047	55	-60	221	01/17/2019
TN141	RC	Barking Gecko	478231	7477010	49	-60	221	01/18/2019
TN142	RC	Barking Gecko	478197.9	7476972	49	-60	221	01/18/2019
TN143	RC	Barking Gecko	478164.8	7476935	49	-60	221	01/18/2019
TN144	RC	Iguana	479416	7478631	97	-60	224	01/21/2019
TN145	RC	Iguana	479386	7478589	97	-60	224	01/21/2019
TN146	RC	Iguana	479350	7478549	97	-60	224	01/22/2019
TN147	RC	Iguana	479234	7478360	97	-60	224	01/23/2019
TN148	RC	Iguana	479199	7478328	97	-60	224	01/23/2019
TN149	RC	Iguana	479168	7478292	97	-60	224	01/24/2019
TN150	RC	Iguana	479733	7477747	79	-60	45	01/25/2019
TN151	RC	Iguana	479892	7478127	79	-60	250	01/28/2019
TN152	RC	Iguana	480097	7477820	55	-60	270	01/28/2019
TN153	RC	Iguana	480082	7477880	61	-60	290	01/29/2019
TN154	RC	Berger’s	479420	7475121	85	-90	0	01/30/2019
TN155	RC	Berger’s	479365	7475202	85	-90	0	01/31/2019

Table 2 : Drill Hole Intersections greater than 100ppm eU3O8 over 1m

Hole ID	From [m]	Thickness [m]	eU3O8 [ppm]	From [m]	eU3O8 max	Easting	Northing	RL	TD (m)
TN145RC	7	3	135	8	198	479386	7478589	219	97
	79	3	175	80	291
TN152RC	6	17	122	9	200	480097	7477820	242	55
	34	1	111	34	111
	41	1	218	41	218
TN153RC	50	1	105	50	105	480082	7477880	245	61

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Appendix 2: Table 1 Report (JORC Code 2012 addition)

JORC Code, 2012 Edition – Table 1 report template

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria	JORC Code explanation	•	Commentary
Sampling	• Nature and quality of sampling (e.g. cut channels, random	•	The current drilling relies only on U3O8values derived from down-hole total
techniques	chips, or specific specialised industry standard measurement		gamma counting (eU3O8). First check geochemical assay data are expected
	tools appropriate to the minerals under investigation, such as		late March Quarter to Mid-June Quarter. Previous drill data used in this report
	down hole gamma sondes, or handheld XRF instruments, etc.).		includes both geochemical assay data (U3O8) and down hole gamma equivalent
	These examples should not be taken as limiting the broad		uranium derived values (eU3O8).
	meaning of sampling.	•	Appropriate factors were applied to all downhole gamma counting results to
	• Include reference to measures taken to ensure sample		make allowance for drill rod thickness, gamma probe dead times and
	representivity and the appropriate calibration of any		incorporating all other applicable calibration factors.
	measurement tools or systems used.	•	Selected Uranium intersection greater than 100ppm eU3O8 over 1m will be
	• Aspects of the determination of mineralisation that are Material		assayed by ICP MS or XRF for U3O8 and selected trace elements.
	to the Public Report.	Total gamma eU3O8
	• In cases where ‘industry standard’ work has been done this	•	33 mm Auslog total gamma probes were used and operated by Company
	would be relatively simple (e.g. ‘reverse circulation drilling was		personnel.
	used to obtain 1 m samples from which 3 kg was pulverised to produce a 30g charge for fire assay’). In other cases, more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.	• • •	Gamma probes were calibrated by a qualified technician at Langer Heinrich Mine in May 2017, August 2017 and again in July 2018. During the drilling, probes are checked daily by sensitivity checks against a standard source. Gamma measurements were taken at 5cm intervals at a logging speed of approximately 2m per minute.
		•	Probing was done immediately after drilling mainly through the drill rods and in
			some cases in the open holes. Rod factors were established to compensate for
			the reduced gamma counts when logging was done through the rods.
		•	Some holes encountered water.
		•	The gamma measurements were recorded in counts per second (c/s) and were
			converted to equivalent eU3O8values over 1m intervals using the probe-specific
			K-factor.

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Appendix 2: Table 1 Report (JORC Code 2012 addition) (continued)

Criteria	JORC Code explanation	•	Commentary
		Chemical sampling
		•	Geochemical samples were derived from reverse circulation (RC) drilling at
			intervals of 1 m. Samples were spilt at the drill site using either a riffle or cone
			splitter to obtain a 1 kg sample for in house portable XRF analyses.
Drilling techniques	• Drill type (e.g. core, reverse circulation, open-hole hammer,	•	RC drilling is being used for the Nova JV drilling program.
	rotary air blast, auger, Bangka, sonic, etc.) and details (core	•	All holes targeting palaeochannel mineralisation are being drilled vertically and
	diameter, triple or standard tube, depth of diamond tails, face-		intersections measured present true thicknesses.
	sampling bit or other type, whether core is oriented and if so,	•	All holes targeting basement are being drilled inclined at an angle of -60 or -70
	by what method, etc.).		degrees at azimuths optimized to geology.
Drill sample	• Method of recording and assessing core and chip sample	•	RC drill chip recoveries are good at around 90%.
recovery	recoveries and results assessed.	•	Drill chip recoveries were assessed by weighing 1m drill chip samples at the
	• Measures taken to maximise sample recovery and ensure		drill site. Weights were recorded in sample tag books.
	representative nature of the samples.	•	Sample loss was minimised by placing the sample bags directly underneath
	• Whether a relationship exists between sample recovery and		cyclone/splitter.
	grade and whether sample bias may have occurred due to
	preferential loss/gainof fine/coarse material.
Logging	• Whether core and chip samples have been geologically and	•	All drill holes are being geologically logged.
	geotechnically logged to a level of detail to support appropriate	•	The logging is qualitative in nature. The lithology type is being determined for
	Mineral Resource estimation, mining studies and metallurgical		all samples.
	studies.	•	Other parameters routinely logged include colour, colour intensity, weathering,
	• Whether logging is qualitative or quantitative in nature. Core		oxidation, grain size, carbonate (CaCO3) content, sample condition (wet, dry)
	(or costean, channel, etc.) photography.		and total gamma count (measured by a Rad-eye scintillometer).
	• The total length and percentage of the relevant intersections	•	Lithology codes were used to record the geology.
	logged.
Sub-sampling	• If core, whether cut or sawn and whether quarter, half or all	•	A portable 2-tier (75%/25%) splitter was used to treat a full 1m sample from the
techniques and	core taken.		cyclone into an appropriate size assay sample. All sampling was dry.
sample preparation	• If non-core, whether riffled, tube sampled, rotary split, etc.	•	The above sub-sampling techniques are common industry practice and
	and whether sampled wet or dry.		appropriate.
	• For all sample types, the nature, quality and appropriateness	•	Sample sizes are considered appropriate to the grain size of the material being
	of the sample preparation technique.		sampled.
	• Quality control procedures adopted for all sub-sampling stages
	_to maximise representivity of samples. _

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Appendix 2: Table 1 Report (JORC Code 2012 addition) (continued)

	JORC Code explanation	•	Commentary
•	Measures taken to ensure that the
	sampling is representative of the in-situ
	material collected, including for instance
	results for field duplicate/second-half
	sampling.
•	Whether sample sizes are appropriate to
	the grain size of the material being
	_sampled. _
Quality of assay data and	• The nature, quality and appropriateness of the	•	The analytical methods employed will be XRF (portable in
laboratory tests	assaying and laboratory procedures used and whether		house) NITON XL3t 500 and ICP-MS (ALS Perth: 4 acid
	the technique is considered partial or total.		digest /ME-ICP61).
	• For geophysical tools, spectrometers, handheld XRF	•	Downhole gamma tools were used as explained under
	instruments, etc., the parameters used in determining		‘Sampling techniques.
	the analysis including instrument make and model,
	reading times, calibrations factors applied and their
	derivation, etc.
	• Nature of quality control procedures adopted (e.g.
	standards, blanks, duplicates, external laboratory
	checks) and whether
	acceptable levels of accuracy (i.e. lack of bias) and
	_precision have been established. _
Verification of	• The verification of significant intersections by	•	Geology was directly recorded into a tablet in the field and
sampling and	either independent or alternative company personnel.		sample tag books filed in at the drill site.
assaying	• The use of twinned holes.	•	The drill data of those logs and tag books (lithology,
	• Documentation of primary data, data entry		sample specifications etc.) were transferred by designated
	procedures, data verification, data storage (physical		personnel into a geological database.
	and electronic) protocols.	•	Twinning was not considered due to the high variability in
	• Discuss any adjustment to assay data.		grade distribution.
		•	Equivalent eU3O8values have been calculated from raw
			gamma files by applying calibration factors and casing
			factors where applicable.
		•	The ratio of eU3O8vs assayed U3O8for matching
			composites will be used to quantify the statistical error.

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Appendix 2: Table 1 Report (JORC Code 2012 addition) (continued)

Location of data	• Accuracy and quality of surveys used to locate drill	•	The collars are being surveyed by in-house operators using
points	holes (collar and down-hole surveys), trenches, mine		a differential GPS.
	workings and other locations used in Mineral Resource	•	All drill holes are of exploratory nature and for this no
	estimation.		down-hole surveying was required.
	• Specification of the grid system used.	•	The grid system is World Geodetic System (WGS) 1984,
	• Quality and adequacy of topographic control.		Zone 33 South.
Data spacing and	• Data spacing for reporting of Exploration Results.	•	The data spacing and distribution is optimised to test the
distribution	• Whether the data spacing and distribution is sufficient		selected exploration targets.
	to establish the degree of geological and grade	•	The down hole gamma tool records at 5cm intervals.
	continuity		These were converted to eU3O8values as outlined in the
	appropriate for the Mineral Resource and Ore Reserve		sampling techniques sections. The result was composited
			to1m intervals.
Criteria	JORC Code explanation	•	Commentary
	estimation procedure(s) and classifications applied.
	• _Whether sample compositing has been applied. _
Orientation of data in	• Whether the orientation of sampling achieves	•	In the palaeochannels uranium mineralisation is strata
relation to geological	unbiased sampling of possible structures and the		bound and distributed in continuous horizontal layers.
structure	extent to which this is known, considering the deposit		Holes are being drilled vertically and mineralised intercepts
	type.		represent the true width.
	• If the relationship between the drilling orientation and	•	The basement target mineralisation is vertical to steeply
	the orientation of key mineralised structures is		dipping and the drill holes are aimed at appropriate angels
	considered to have introduced a sampling bias, this		into the target zones. The intersections will not represent
	should be assessed and reported if material.		the true width and has to be evaluated for each hole
			depending on the structural setting
		•	All holes were sampled down-hole from surface.
			Geochemical samples are being collected at 1m intervals.
			Total-gamma count data is being collected at
			5cm intervals.

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Appendix 2: Table 1 Report (JORC Code 2012 addition) (continued)

Sample security	• The measures taken to ensure sample security.	•	1m RC drill chip samples were prepared at the drill site. The
			samples were stored in plastic bags. Sample tags were
			placed inside the bags. The samples are placed into plastic
			crates and transported from the drill site to RMR’s site
			premises in Swakopmund by Company personnel, prior to
			analyses.
		•	Upon completion of the portable XRF assay work the
			remainder of the drill chip sample bags for each hole was
			packed back into crates and then stored in designated
			containers in chronological order, locked up and kept safe at
			RMR’s dedicated sample storage yard at Rocky Point
			located outside Swakopmund. Core trays are stored in
			racks or are stacked at Rocky point as well.
Audits or reviews	• The results of any audits or reviews of sampling	•	D. M. Barrett (PhD MAIG) conducted an audit of gross
	techniques and data.		count gamma logging procedures and log reduction
			methods used by Deep Yellow Limited.
		•	He concludes his audit commenting: “In summary, it is my
			belief that the equivalent uranium grades reported by
			Reptile from their gamma logging programs are reliable
			and areprobablywithin a fewpercent to the truegrade”.

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