DEEP YELLOW LIMITED — Interim / Quarterly Report 2011

Mar 10, 2011

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(ACN 006 391 948)

HALF YEAR REPORT

31 DECEMBER 2010

Directors’ Report	1
Auditor’s Independence Declaration	5
Consolidated Statement of Comprehensive Income	6
Consolidated Balance Sheet	7
Consolidated Statement of Changes in Equity	8
Consolidated Cash Flow Statement	9
Notes to the Financial Statements	10
Directors’ Declaration	17
Independent Review Report	18

DIRECTORS’ REPORT

The Directors of Deep Yellow Limited submit their report for the half year ended 31 December 2010.

Directors

The names of Directors who held office during or since the end of the half year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.

Mervyn Greene Chairman (Non-Executive) Greg Cochran Managing Director (appointed 24 January 2011) Patrick Mutz Managing Director (resigned 12 January 2011) Martin Kavanagh Executive Director Gillian Swaby Non-Executive Director Tony McDonald Non-Executive Director (resigned 31 December 2010) Rudolf Brunovs Non-Executive Director

Review of Operations

During the reporting period activity in Namibia was focussed mainly on: progressing the Omahola Project Pre-Feasibility Study (PFS); JORC Code mineral resource estimates for two uranium projects and grid drilling and a Scoping Study for the Shiyela Iron project.

In Australia exploration in the Mount Isa District focussed on the drill out to depth of known JORC Code resource mineralisation as well as new target generation and initial evaluation of same.

Exploration – NAMIBIA

Engineering Consultants SNC-Lavalin (SNCL) progressed the Omahola Project PFS, providing the Company with a first draft in late November. Updated JORC Code mineral resources were received for the INCA deposit and for the Tumas palaeochannel deposit. In addition reverse cycle (RC) and diamond drilling targeting a JORC Code mineral resource commenced on the recently discovered Ongolo Alaskite Project.

RC and diamond drilling and metallurgical testwork were also carried out at the Shiyela Iron Project with a view to completing a Scoping Study and providing a JORC Code mineral resource for two magnetite deposits.

Exploration – AUSTRALIA

Deep diamond drilling successfully intersected uranium mineralisation at approximately 400 metres vertical depth beneath the Bambino and Thanksgiving Prospects at the Isa West Project showing potential to increase JORC Code resources below the current resource base (~ 200 metres vertical depth). Deep intersections at the Queens Gift and Slance Prospects in the Isa North Project also highlighted potential to increase the existing JORC Code resources with additional drilling.

A number of new prospects identified from a low-level heliborne radiometric and magnetic survey were also scout drilled with varying success.

Deep Yellow Limited

Half Year Report 2010

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DIRECTORS’ REPORT

JORC RESOURCES

A schedule of DYL’s JORC Resources, as previously released to ASX, is given below:

JORC MINERAL RESOURCE ESTIMATES SUMMARY – DECEMBER 2010

Deposit	Category	Cut-off **(ppm U3O8) **	Tonnes (M)	U3O8 (ppm)	U3O8 (t)	U3O8 (Mlb)
REPTILE URANIUM NAMIBIA (NAMIBIA)
Omahola Project
INCA	Inferred	250	5.5	445	2,449	5.4
INCA	Indicated	250	9.4	385	3,628	8.0
Tubas Red Sand	Inferred	100	10.7	158	1,685	3.7
Tubas Red Sand	Measured/Indicated	100	3.2	168	532	1.2
Omahola Project Total			28.8	288	8,294	18.3
Tubas-Tumas Palaeochannel Project
Tumas	Inferred	200	0.4	360	144	0.3
Tumas	Indicated	200	14.4	366	5,270	11.6
Tubas	Inferred	100	77.3	228	17,620	38.9
Tubas-Tumas Project Total			92.1	250	23,034	50.8
Aussinanis Project
Aussinanis	Inferred	150	29.0	240	6,960	15.3
Aussinanis	Indicated	150	5.6	222	1,243	2.7
Aussinanis Project Total			34.6	237	8,203	18.0
RUN TOTAL			155.5	254	39,531	87.2
NAPPERBY PROJECT (NT, AUSTRALIA)
Napperby	Inferred	200	9.3	359	3,351	7.4
NAPPERBY TOTAL			9.3	359	3,351	7.4
MOUNT ISA PROJECT (QLD, AUSTRALIA)
Mount Isa	Inferred	300	2.0	440	890	2.0
Mount Isa	Indicated	300	1.6	400	650	1.4
MOUNT ISA TOTAL			3.6	428	1,540	3.4
TOTAL INFERRED RESOURCES			134.2	247	33,099	73.0
TOTAL INDICATED RESOURCES			34.2	331	11,323	25.0
TOTAL RESOURCES			168.4	264	44,422	98.0

Notes: Figures have been rounded and totals may reflect small rounding errors.

 eU3O8 - equivalent uranium grade as determined by downhole gamma logging.

Deep Yellow Limited

Half Year Report 2010

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DIRECTORS’ REPORT

COMPLIANCE STATEMENTS

The information in this report that relates to the Mineral Resource estimation for Tumas and Aussinanis is based on work completed by Mr Jonathon Abbott who is a full-time employee of Hellman and Schofield Pty Ltd and a member of the Australasian Institute of Mining and Metallurgy. Mr Abbott 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 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ and as a Qualified Person as defined in the AIM Rules. Mr Abbott consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to the Mineral Resource estimation for the INCA deposit is based on work completed by Mr Neil Inwood who is a full-time employee of Coffey Mining and a Member of the Australasian Institute of Mining and Metallurgy. Mr Inwood 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 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Inwood consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to the Mineral Resource estimation for the INCA deposit is based on information compiled by Mr Steve Le Brun, who is a fulltime employee of Coffey Mining and a Member of The Australasian Institute of Mining and Metallurgy. Mr Le Brun 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 2004 Edition of the ‘Australasian Code for Reporting of Mineral Resources and Reserves’. Mr Le Brun consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to the Mineral Resource for the Tubas Red Sand deposits is based on information compiled by Mr Mike Hall, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Hall is Consulting Geologist Resources with The MSA Group and 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 2004 Edition of the ‘Australasian Code for Reporting of Mineral Resources and Reserves’. Mr Hall consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. Information in this report has also been verified by Mr Mike Venter, who is a member of the South African Council for Natural and Scientific Professions (SACNASP), a “Recognised Overseas Professional Organization” (‘ROPO’). Mr Venter is Regional Consulting Geologist, with The MSA Group and 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 2004 Edition of the ‘Australasian Code for Reporting of Mineral Resources and Reserves’. Mr Venter has visited the project sites to review drilling, sampling and other aspects of the work relevant to this report and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to the Mineral Resource estimation for the Tubas deposit is based on work completed by Mr Willem H. Kotzé Pr. Sci. Nat MSAIMM. Mr Kotzé who is a full-time employee of Hellman and Schofield Pty Ltd and a Member of the Australasian Institute of Mining and Metallurgy. Mr Kotzé 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 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ and as a Qualified Person as defined in the AIM Rules. Mr Kotzé consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Exploration Results and to Mineral Resources or Ore Reserves for the Tubas, Tumas, Aussinanis, Tubas Red Sand and INCA deposits is based on information compiled by Dr Leon Pretorius a Fellow of The Australasian Institute of Mining and Metallurgy. Dr Pretorius is a full-time employee of Deep Yellow Limited and 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 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Pretorius consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to the Mineral Resource estimation for the Mount Isa Projects is based on work compiled by Mr Neil Inwood, a Member of the Australasian Institute of Mining and Metallurgy. Mr Inwood is employed by Coffey Mining Pty Ltd and 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 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Inwood consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves for the Mount Isa Projects is based on information compiled by Mr Martin Kavanagh a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Kavanagh is a full-time employee of Deep Yellow Limited and 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 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Kavanagh consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to the Mineral Resource estimation for the Napperby Project is based on information compiled by Mr Daniel Guibal who is a Fellow (CP) of the Australasian Institute of Mining and Metallurgy. Mr Guibal is a full-time employee of SRK Consulting and 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 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Guibal consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Exploration Results for the Napperby Project is based on information compiled by Dr David Rawlings who is a Member of The Australasian Institute of Mining and Metallurgy. Dr Rawlings is a full-time employee of Toro Energy Limited and 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 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Rawlings consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Where eU3O8 is reported it relates to values attained from radiometrically logging boreholes with Auslog equipment using an A675 slimline gamma ray tool. All probes are calibrated either at the Pelindaba Calibration facility in South Africa or at the Adelaide Calibration facility in South Australia.

Deep Yellow Limited

Half Year Report 2010

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DIRECTORS’ REPORT

Financial

Exploration expenditure for the half year was $7,189,313 (December 2009: $8,831,325).

Net loss for the half year was $716,963 (December 2009: $2,213,715). Included in the total expenses of $2,143,060 (December 2009: $3,733,119) for the period is exploration costs written off to the amount of $559,071 (December 2009: $658,731).

Issued share capital has increased by $349,134 during the period. The increase is due to the issue of ordinary fully paid shares on the exercise of options.

Outlook

The end of December 2010 sees the Group in a strong position with $20,349,933 in cash and liquid assets to fund ongoing exploration programmes, advance the Omahola Project Pre-Feasibility Study and Shiyela Iron Project Scoping Study as well as increase its JORC Code Compliant mineral resource base.

Auditor’s Declaration

Section 307C of the Corporations Act 2001 requires our auditors, Ernst & Young, to provide the Directors of the Group with an Independence Declaration in relation to the review of the half-year financial report. This Independence Declaration is set out on page 5 and forms part of this Directors’ Report for the half-year ended 31 December 2010.

This report is signed in accordance with a resolution of the Board of Directors.

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Greg Cochran Managing Director Dated this day 11 March 2011

Deep Yellow Limited

Half Year Report 2010

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Auditor's Independence Declaration to the Directors of Deep Yellow Limited

In relation to our review of the financial report of Deep Yellow Limited for the half-year ended 31 December 2010, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

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Ernst & Young
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Ernst & Young R A Kirkby Partner 11 March 2011

Liability limited by a scheme approved under Professional Standards Legislation

RK:MJ:DYL:044

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STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2010

Notes Continuing operations Interest revenue Other income 2 Revenue and other income Depreciation and amortisation expenses 2 Marketing expenses Occupancy expenses Administrative expenses Employee expenses 2 Exploration costs written off 8 Net fair value gain/(loss) on held for trading financial assets 2 Loss from continuing operations before income tax Income tax benefit 2 Loss from continuing operations after income tax Other comprehensive income Foreign currency translation Net fair value gains/(losses) on available-for-sale financial assets Total other comprehensive loss for the period Total comprehensive loss for the period Loss per share attributable to the ordinary equity holders of the company: Basic loss per share Diluted loss per share	Consolidated 31 December 2010 $ 31 December 2009 $ 738,723 924,976 227,577 99,310
	966,300 1,024,286 (260,013) (279,865) (155,785) (54,551) (119,737) (108,423) (778,163) (556,497) (540,291) (2,035,252) (559,071) (658,731) 270,000 (39,800)
	(1,176,760) (2,708,833)
	459,797 495,118
	(716,963) (2,213,715)
	(928,524) (1,046,738) 362,133 (141,318)
	(566,391) (1,188,056)
	(1,283,354) (3,401,771)
	Cents Cents (0.06) (0.20)
	(0.06) (0.20)

The accompanying notes form part of these financial statements

Deep Yellow Limited

Half Year Report 2010

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BALANCE SHEET AS AT 31 DECEMBER 2010

Notes Assets Current Assets Cash and cash equivalents 9 Other short term bank deposits Trade and other receivables Held for trading financial assets 5 Other financial assets Non-current Assets Held for Sale 6 Total Current Assets Non-Current Assets Available for sale financial assets 7 Property, plant and equipment Deferred exploration expenditure 8 Total Non-Current Assets Total Assets Liabilities Current Liabilities Trade and other payables Total Current Liabilities Non-Current Liabilities Deferred tax liabilities Total Non-Current Liabilities Total Liabilities Net Assets Equity Contributed equity 3 Accumulated losses Equity compensation reserve Asset fair value adjustment reserve Foreign currency translation reserve Total Equity	Consolidated 31 December 2010 $ 30 June 2010 $ 16,849,933 27,575,628 3,500,000 2,000,000 2,519,345 2,414,899 298,000 28,000 497,326 438,765
	23,664,604 32,457,292 2,421,720 -
	26,086,324 32,457,292
	594,666 330,533 2,215,691 2,427,747 117,499,198 113,290,676
	120,309,555 116,048,956
	146,395,879 148,506,248
	933,371 1,488,529
	933,371 1,488,529
	623,237 854,092
	623,237 854,092
	1,556,608 2,342,621
	144,839,271 146,163,627
	195,150,204 194,801,070 (59,612,029) (58,895,066) 9,564,489 9,954,625 362,133 - (625,526) 302,998
	144,839,271 146,163,627

The accompanying notes form part of these financial statements

Deep Yellow Limited

Half Year Report 2010

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2010

At 1 July 2010 Loss for the period Other comprehensive income/(loss) Total comprehensive (loss)/income for the period Transactions with owners in their capacity as owners: Exercise of options Share based payments/(forfeitures) At 31 December 2010 At 1 July 2009 Loss for the period Other comprehensive loss Total comprehensive loss for the period Transactions with owners in their capacity as owners: Exercise of options Share based payments At 31 December 2009	At 1 July 2010 Loss for the period Other comprehensive income/(loss) Total comprehensive (loss)/income for the period Transactions with owners in their capacity as owners: Exercise of options Share based payments/(forfeitures) At 31 December 2010 At 1 July 2009 Loss for the period Other comprehensive loss Total comprehensive loss for the period Transactions with owners in their capacity as owners: Exercise of options Share based payments At 31 December 2009	Contributed Equity Accumulated losses Equity compensation reserve Asset fair value adjustment reserve Foreign currency translation reserve Total Equity $ $ $ $ $ $ 194,801,070(58,895,066) 9,954,625 - 302,998 146,163,627
		- (716,963) - - - (716,963) - - - 362,133 (928,524) (566,391)
		- (716,963) - 362,133 (928,524) (1,283,354) 349,134 - (151,134) - - 198,000 - - (239,002) - - (239,002)
		195,150,204(59,612,029) 9,564,489 362,133 (625,526) 144,839,271
		Contributed Equity Accumulated losses Equity compensation reserve Asset fair value adjustment reserve Foreign currency translation reserve Total Equity $ $ $ $ $ $ 193,696,974(54,386,644) 8,349,235 320,384 523,878 148,503,827
		- (2,213,715) - - - (2,213,715) - - - (141,318) (1,046,738) (1,188,056)
		- (2,213,715) - (141,318) (1,046,738) (3,401,771) 1,069,730 - (433,793) - - 635,937 - - 1,595,970 - - 1,595,970
		194,766,704(56,600,359) 9,511,412 179,066 (522,860) 147,333,963

The accompanying notes form part of these financial statements

Deep Yellow Limited

Half Year Report 2010

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CASH FLOW STATEMENT FOR THE HALF YEAR ENDED 31 DECEMBER 2010

Cash flows from operating activities Payments to suppliers and employees Interest received Tax refund Other receipts Net cash used in operating activities Cash flows from investing activities Payments for property, plant and equipment Payments for exploration Proceeds from sale of investment Proceeds on disposal of security deposits Payments of security deposits Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Net cash provided by financing activities Net decrease in cash held Effect of foreign exchange on cash flows Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period 9	Consolidated 31 December 2010 $ 31 December 2009 $ (2,036,492) (1,729,674) 1,141,536 735,769 228,942 - 5,725 38,333
	(660,289) (955,572)
	(96,474) (105,815) (8,902,611) (10,577,006) 322,500 99,420 - 9,000 (7,250) (7,500)
	(8,683,835) (10,581,901)
	198,000 635,938
	198,000 635,938
	(9,146,124) (10,901,535) (79,571) (189,662) 29,575,628 47,415,814
	20,349,933 36,324,617

The accompanying notes form part of these financial statements

Deep Yellow Limited

Half Year Report 2010

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2010

Note 1 Summary of significant accounting policies

Basis of preparation

This general purpose condensed financial report for the half-year ended 31 December 2010 has been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001.

The half-year financial report includes Deep Yellow Limited and its subsidiaries (the Group). The half-year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

It is recommended that the half-year financial report be read in conjunction with the annual report for the year ended 30 June 2010 and considered together with any public announcements made by Deep Yellow Limited during the halfyear ended 31 December 2010 in accordance with the continuous disclosure obligations of the ASX listing rules.

Apart from the changes in accounting policy noted below, the accounting policies and methods of computation are the same as those adopted in the most recent annual financial report.

Changes in accounting policy

The following standards and interpretations and all consequential amendments, which became applicable on 1 July 2010, have been adopted by the Group, but had no impact on the financial position or performance of the Group, or on presentation or disclosure in its financial statements.

AASB 2009-5	Further Amendments to Australian Accounting Standards arising from the Annual Improvements
	Project
AASB 2009-8	Amendments to Australian Accounting Standards – Group Cash-settled Share-based Payment
	Transactions [AASB 2]
AASB 2009-10	Amendments to Australian Accounting Standards – Classification of Rights Issues [AASB 132]
AASB 2010-3	Amendments to Australian Accounting Standards arising from the Annual Improvements Project
	[AASB 3, AASB 7, AASB 121, AASB 128, AASB 131, AASB 132 & AASB 139]
Interpretation 19	Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments

Non-current assets and disposal groups held for sale – refer note 6

Non-current assets and disposal groups are classified as held for sale and measured at the lower of their carrying amount and fair value less costs to sell if their carrying amount will be recovered principally through a sale transaction instead of use. They are not depreciated or amortised. For an asset or disposal group to be classified as held for sale it must be available for immediate sale in its present condition and its sale must be highly probable.

An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of derecognition.

Deep Yellow Limited

Half Year Report 2010

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2010

Note 2 Income and expenses

Loss from continuing operations after income taxincludes: Other income Gain on sale of available for sale investment Distribution under Deed of Company Arrangement Depreciation expense Office equipment Motor vehicles Site equipment Buildings Employee expenses Wages, salaries and fees Superannuation Share based payments/(forfeitures) Fair value movements Fair value (gain)/loss in held for trading financial assets (note 5) Tax benefit Numerical reconciliation between aggregate tax expense recognised in the statement of comprehensive income and tax expense calculated per the statutory income tax rate Loss from continuing operations before income tax Prima facie tax on result at 30% (2009: 30%) Share based payment expense/(forfeiture) Impairment loss not recognised Reversal of impairment loss not previously recognised Gain on sale of available for sale asset not taxable Under/(Over) provision in prior year Other Tax benefit for the reporting period	Consolidated 31 December 2010 $ 31 December 2009 $ 221,852 60,977 5,725 38,333
	227,577 99,310
	36,252 49,933 93,852 101,442 100,965 99,601 28,944 28,889
	260,013 279,865
	733,603 430,222 41,258 14,783 (234,570) 1,590,247
	540,291 2,035,252
	(270,000) 39,800
	(270,000) 39,800
	(1,176,761) (2,708,833) (353,028) (812,650) (1,365) 477,074 - 11,940 (81,000) - (51,600) - (4,003) (160,740) 31,199 (10,742)
	(459,797) (495,118)

Deep Yellow Limited

Half Year Report 2010

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2010

Note 3 Contributed equity

(a) Ordinary shares Issued and fully paid (b) Movements in ordinary shares on issue At 1 July 2010 Options exercised At 31 December 2010 (c) Options - Movement during the period On issue at 1 July 2010 Options exercised Expired during period Forfeited during the period On issue at 31 December 2010	Consolidated 31 December 2010 $ 30 June 2010 $ 195,150,204 194,801,070
	$ No. 194,801,070 1,125,814,458 349,134 720,000
	195,150,204 1,126,534,458
	No. 41,835,000 (720,000) (15,725,000) (1,260,000) 24,130,000

Deep Yellow Limited

Half Year Report 2010

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2010

Note 4 Segment reporting

Operating segments are identified on the basis of internal reports that are used by the executive management team in assessing performance and in determining the allocation of resources. The operating segments are based on country of operation. The Group conducts uranium exploration in Australia and Namibia.

The following items and associated assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment:

• Interest income

• Foreign currency gains and losses

• Fair value gains/losses on available for sale assets

• Fair value gains/losses on held for trading assets

• Liabilities are not allocated to the segments as they are not monitored on a segment basis

Year Ended 31 December 2010 Revenue and other income Other income Unallocated Interest income Total revenue and other income Results Pre-tax segment profit and loss Unallocated Interest income Fair value gain on held for trading assets Total loss before income tax Year Ended 31 December 2010 Segment Assets Segment operating assets Unallocated assets Cash Receivables Held for trading financial assets Available for sale financial assets Total assets	Australia $ Namibia $	Total $
	227,577 -	227,577 738,723
	(2,097,972) (87,511)
		966,300
		(2,185,483) 738,723 270,000
	43,867,453 78,766,482
		(1,176,760)
		122,633,935 20,349,933 2,519,345 298,000 594,666
		146,395,879

Deep Yellow Limited

Half Year Report 2010

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2010

Year Ended 31 December 2009 Revenue and other income Other income Unallocated Interest income Total revenue and other income Results Pre-tax segment result Unallocated Interest income Fair value loss on held for trading assets Total loss before income tax Year Ended 30 June 2010 Segment Assets Segment operating assets Unallocated assets Cash Receivables Held for trading financial assets Available for sale financial assets Total assets	Australia $ Namibia $	Total $
	99,310 -	99,310 924,976
	(2,418,715) (1,175,294)
		1,024,286
		(3,594,009) 924,976 (39,800)
	42,195,751 73,961,437
		(2,708,833)
		116,157,188 29,575,628 2,414,899 28,000 330,533
		148,506,248

Note 5 Held for trading financial assets

A reconciliation of movements in held for trading financial assets is as follows:

Rum Jungle Uranium Limited Options Value of investment at the start of the reporting period Unrealised fair value gain/(loss) recognised during the reporting period Value of investment at the end of the reporting period	Consolidated 31 December 2010 $ 30 June 2010 $ 31 December 2009 $ 28,000 78,000 117,800 270,000 (50,000) (39,800)
	298,000 28,000 78,000

Deep Yellow Limited

Half Year Report 2010

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2010

Note 6 Non-current assets held for sale

During the reporting period, the board of directors decided on the divestment of the Napperby Project in the Northern Territory to reduce expenditure and to enable the Company to focus on its projects in Namibia and prospects in Queensland. The Napperby Project forms part of the Australian reportable segment.

Exploration and evaluation asset Balance at the beginning of the financial year Transfer from deferred exploration expenditure (Note 8) Total Non-current assets held for sale	Consolidated 31 December 2010 $ 30 June 2010 $ - - 2,421,720 -
	2,421,720 -

Note 7 Available for sale financial assets

Available for sale investments consist of investments in ordinary shares quoted on the ASX and the fair value has been determined by reference to published price quotations.

Note 8 Deferred exploration expenditure

Cost brought forward at the start of the reporting period Exploration expenditure incurred during the period at cost Transfer to non-current assets held for sale Exploration expenditure written off Cost carried forward at the end of the reporting period	Consolidated 31 December 2010 $ 30 June 2010 $ 31 December 2009 $ 113,290,676 106,369,345 98,196,751 7,189,313 7,297,821 8,831,325 (2,421,720) - - (559,071) (376,490) (658,731)
	117,499,198 113,290,676 106,369,345

Exploration expenditure written off was as a result of tenements which expired, were surrendered, where access was refused or agreements were terminated during the period. The amount written off represents the total accumulated costs to date of expiry, surrender, refusal or termination.

Deep Yellow Limited

Half Year Report 2010

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2010

Note 9 Current assets – cash and cash equivalents

Cash at bank and in hand Deposits	Consolidated 31 December 2010 $ 30 June 2010 $ 31 December 2009 $ 4,849,933 6,075,628 4,324,617 12,000,000 21,500,000 28,000,000
	16,849,933 27,575,628 32,324,617

(i) Reconciliation to Cash Flow Statement

For the purposes of the Cash Flow Statement, cash and cash equivalents comprise the following:

Cash and cash equivalents as above Other short term bank deposits Cash carried forward at the end of the reporting period	Consolidated 31 December 2010 $ 30 June 2010 $ 31 December 2009 $ 16,849,933 27,575,628 32,324,617 3,500,000 2,000,000 4,000,000
	20,349,933 29,575,628 36,324,617

Note 10 Contingent liabilities and contingent assets

(i) Contingent liabilities

There were no material contingent liabilities as at 31 December 2010 other than:

Australian native title and aboriginal heritage

Australian native title claims have been made with respect to areas which include tenements in which the Group has an interest. The Group is unable to determine the prospects for success or otherwise of the claims and, in any event, whether or not and to what extent the claims may significantly affect the Group or its projects. Agreement is being or has been reached with various native title claimants in relation to Aboriginal Heritage issues regarding certain areas in which the Group has an interest.

(ii) Contingent assets

There were no material contingent assets as at 31 December 2010.

Note 11 Events after balance sheet date

No event or circumstance has arisen since 31 December 2010 that would require disclosure in the financial report.

Deep Yellow Limited

Half Year Report 2010

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DIRECTORS’ DECLARATION

In the opinion of the directors:

1. The financial statements and notes, as set out on pages 6 to 16:

2. a. give a true and fair view of the consolidated entity’s financial position as at 31 December 2010 and of its performance for the half-year then ended; and

3. b. comply with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001; and

4. There are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.

This declaration is signed in accordance with a resolution of the Board of Directors.

On behalf of the Board of Directors.

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Greg Cochran Managing Director Dated this day 11 March 2011

Deep Yellow Limited

Half Year Report 2010

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To the members of Deep Yellow Limited

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Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Deep Yellow Limited (“the company”), which comprises the consolidated statement of financial position as at 31 December 2010, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies, other explanatory information, and the directors’ declaration of the consolidated entity. The consolidated entity comprises the company and the entities it controlled at the half-year end or from time to time during the half-year.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 . The directors are also responsible for such internal controls that the directors determine are necessary to enable the preparation of the halfyear financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of Interim and other Financial Reports Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2010 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Deep Yellow Limited and the entities it controlled during the half-year, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the Directors’ Report.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Deep Yellow Limited is not in accordance with the Corporations Act 2001 , including:

• i giving a true and fair view of the consolidated entity’s financial position as at 31 December 2010 and of its performance for the half-year ended on that date; and

ii complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

Ernst & Young

R A Kirkby Partner Perth 11 March 2011

Liability limited by a scheme approved under Professional Standards Legislation

RK:MJ:DYL:043

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