DEEP YELLOW LIMITED — Interim / Quarterly Report 2016

Apr 28, 2016

ASX Announcement

ASX: DYL

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29 April 2016

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDING 31 MARCH 2016

HIGHLIGHTS

Corporate and Market Comments:

• DYL is pleased to report a cash and liquid assets balance of $2.3 million at the end of the quarter.

• Overheads continue to be kept to a minimum to enable greater project expenditures.

• Uranium industry leader Cameco announced significant production curtailments at three operations resulting in an expected 7 Mlb reduction in its 2016 uranium output.

• Future nuclear demand growth was provided with further impetus when the European Commission recently called on its member states to make major investments of between €450 and €500 billion in nuclear energy through to 2050.

• The European Commission approved the proposed deal between France’s EDF and China General Nuclear (CGN) concerning the proposed $25.5 billion Hinkley Point C nuclear project in England.

• China's operating nuclear generating capacity is set to double over the next five years under the country's latest Five-Year Plan.

Namibian Exclusive Prospecting Licences Renewed (post the reporting period)

• Renewal confirmation for DYL’s Namibian Exclusive Prospecting Licences (‘EPLs’) 3496 and 3497 was received from the Namibian Ministry of Mines and Energy.

• This means that DYL has met the Namibian Ministry of Mines and Energy’s new licence conditions in regard to empowerment and corporate social responsibility.

• This is the fourth renewal for these two EPLs which will allow DYL to continue to progress its current promising work programs.

• At the time of submission of the renewal applications the Company voluntarily relinquished EPL3499, known as Ripnes.

Tumas Project

• The metallurgical testwork program being supervised by Marenica Energy Ltd (“MEY”) at the Nagrom Laboratory in Perth on a bulk sample from the Company’s Namibian Tumas Deposit remained on schedule and budget.

• Interim results received to date focused on the first steps in the process have been in line with and in some cases even exceeded expectations.

• The testwork program, scheduled to be completed around mid-year, is the first phase of a program designed to assess the amenability of MEY’s U- pgrade[TM] flowsheet to Tumas’s calcrete ore.

• A more detailed release on interim results of the testwork program will be made shortly.

• Reinterpretation of the existing Tumas JORC resource has identified an area of drilling of over 2 kilometres along strike to the east that was not included in the model, opening up the possibility of a significant resource increase.

Level 4, 502 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: info@deepyellow.com.au / Website: www.deepyellow.com.au

Quarterly Report - 31 March 2016

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BUSINESS REVIEW

RUN EPLS RENEWED

After the period under review DYL’s Namibian operating subsidiary Reptile Uranium Namibia (Pty) Ltd (RUN) received renewal confirmation from Namibia’s Ministry of Mines and Energy for its Exclusive Prospecting Licences (EPLs) 3496 and 3497 (see Figure 1). This is the fourth renewal for these two EPLs and will allow the Company to continue to progress its current work program on the Tumas/Tubas Palaeochannel Calcrete Project as well as on the Omahola Project. EPL3499, known as Ripnes and located to the south of EPL3497, was voluntarily relinquished at the time that the renewal applications were submitted.

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Figure 1: Location map of RUN’s wholly owned and joint venture EPLs.

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Quarterly Report - 31 March 2016

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TUMAS PROJECT

Marenica Energy Ltd U-pgrade[TM] Testwork Program

The bench scale metallurgical testwork program being conducted under the supervision of Marenica Energy Ltd (“MEY”) at Nagrom Laboratories in Perth is continuing on schedule and within budget. The testwork is being conducted on a bulk sample that was removed from the Tumas calcrete deposit late in 2015 and early 2016. The program, designed to assess the amenability of MEY’s U-pgrade[TM] flowsheet to Tumas’s calcrete ore, is achieving results entirely within and in some cases even exceeding expectations. So far the scrubbing through to desliming steps have been largely completed and preparation is underway to commence the carbonate removal step.

If the testwork is successful the Company’s ultimate objective is to commercialise the process in an operation developed to cost effectively produce a high grade intermediate product for toll treatment or satellite supply to any one of the three existing Namibian uranium mines. If the metallurgical testwork results are similar to what has been achieved by MEY on its own low grade Namibian deposit the resulting high grade product should be economical to transport and attractive to the existing Namibian uranium producers. However, under the right market conditions a standalone operation producing a final yellowcake product could also be developed.

Tumas Deposit Channel Sampling and Resource Work

A detailed channel sampling exercise was completed within the trench excavated to provide the bulk sample for the metallurgical testwork program. The detailed assay results have not yet been received however indicative grades, generated from the infill drilling program completed in the area last year, are shown in Figure 2 below. (The results of that program were reported in an ASX Release dated 16 July 2015, entitled “Palaeochannel Exploration: Enhanced Prospectivity Potential Confirmed”.) Of interest is the higher grades contained in the higher sulphate containing gypcrete layer compared to the calcrete. In addition to the assays detailed particle size distribution tests are also being conducted which will inform the metallurgical testwork program.

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Figure 2: Image of the Tumas Trench showing indicative channel sampling results.

A new resource model over Tumas Zones 1 and 2 is being constructed to enable a resource update to be completed (see Figure 3). An area along strike and to the east of Zone 1 (to be called Zone 0 in future), which contains holes previously drilled but not included in the current JORC resource, is

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Quarterly Report - 31 March 2016

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also being modelled. The area is some three kilometres in extent and grades seem comparable to those in the existing Tumas Zones (approximately 350ppm U3O8) which may enable a significant resource increase.

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Figure 3: Map showing location Tumas “Zone 0” to the east the current Tumas JORC Resource.

Based on additional recent research on the historical exploration work conducted in the 1970’s and 1980’s and limited field work on the area further east along strike beyond Tumas “Zone 0” it is believed that the area may be prospective for further resource extension. More field work is required before a decision can be made on what, if any, additional drilling is required to prove up this potential.

MARKET COMMENT

The uranium spot price continued to languish well below US$30/lb despite solid medium term demand/supply fundamentals. It is anticipated that the situation is likely to change gradually later in the year as contracting activity is expected to increase significantly. The low price may have been a major factor in industry leader Cameco’s recent decision to curtail its 2016 production by some 7 Mlbs U3O8 with Rabbit Lake being placed on care and maintenance and a reduction in output at McArthur River and its US in situ recovery operations.

Europe recently added positive sentiment to the nuclear demand growth story over and above that of the well-understood new-build programs of China, Russia, India and South Korea. Post the COP21 meetings in Paris the European Parliament adopted a non-legislative Resolution urging the provision of secure, sustainable and affordable energy to its citizens. To achieve this it recognised the significant role that nuclear energy plays in reducing CO2 emissions and securing energy supply.

In the Resolution it noted that "nuclear power provided 27% of the EU's electricity mix and over half of the EU’s low-carbon power in 2014". Nuclear power is a vital element of Europe's energy mix contributing to the three main objectives of EU's energy and climate strategy: security of supply,

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Quarterly Report - 31 March 2016

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climate change mitigation and competitiveness. It advised that nuclear capacity in the EU should therefore be at least maintained up to 2050 and beyond in order to reach these objectives.

The European Commission went even further by calling on Europe’s power utilities to make major investments in nuclear power of between €450 billion and €500 billion by 2050 to secure energy supply across the 28-nation bloc. It was estimated that around 90% of that investment would be in new build and the remainder on maintaining existing power stations.

CORPORATE

DYL is pleased to report a balance of $2.3 million of cash and liquid assets as at 31 March 2016. Overheads continue to be kept to a minimum which is enabling DYL to commit greater expenditure levels to ongoing project work.

For further information regarding this announcement, contact:

Greg Cochran Managing Director

Phone: +61 8 9286 6999 Email: info@deepyellow.com.au

For further information on the Company and its projects - visit the website at www.deepyellow.com.au

About Deep Yellow Limited

Deep Yellow Limited is an ASX-listed, Namibian-focussed advanced stage uranium exploration company. It also has a listing on the Namibian Stock Exchange. Deep Yellow’s operations in Namibia are conducted by its 100% owned subsidiary Reptile Uranium Namibia (Pty) Ltd.

The Company is currently conducting metallurgical testwork and evaluating fast track development options for its Tumas/Tubas surficial calcrete deposits which are amenable to various physical beneficiation upgrading techniques that have been successfully tested over the last four years.

Deep Yellow also holds the Omahola Open Pit Heap Leach Project on which value engineering studies are being conducted to supplement the recently completed preliminary economic analysis.

Competent Person’s Statement

In this report, where the Company refers to the release made to the ASX on 16 July 2015 entitled “Palaeochannel Exploration: Enhanced Prospectivity Potential Confirmed”, DYL confirms that it is not aware of any new information or data that materially affects the information disclosed in that release and the form and context of the announcement has not materially changed.

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Annexure 1

Schedule of Mineral Tenure – March 2016

NAMIBIA

Number Name	Interest	Expiry Date	JV Parties	Approx. Area **(km2) **
EPL 3496 Tubas	100%	05.06.2015#1	-	709
EPL 3497 Tumas	100%	05.06.2015#1	-	637
EPL 3498 Aussinanis	85%	07.05.2016	5% Epangelo#3	253
			10% Oponona#4
EPL 3668 Gawib West EPL 3669 Tumas North EPL 3670 Chungochoab	65% 65% 65%	20.11.2015#1 20.11.2015#1 20.11.2015#1	25% Nova (Africa)#5 10% Sixzone#6	185 163 640
ML 173#2 Tubas Sand	95%	Application		-
ML 174#2 Inca	95%	Application	5% Oponona#4	-
ML 176#2 Shiyela	95%	05.12.2027		-
#1Renewal documentation has been submitted and the Company		awaits the administrative process to be finalised
#2Located entirely within EPL3496
#3Epangelo Mining (Pty) Ltd
#4Oponona Investments (Pty) Ltd
#5Nova (Africa) (Pty) Ltd
#6Sixzone Investments (Pty) Ltd
		Sub-Total		2,587

EPL 3499 Ripnes (application made for relinquishment during the quarter)

NORTHERN TERRITORY

Number.	Name	Interest	Expiry Date	JV Parties	Approx. Area **(km2) **
EL 24246	Napperby	100%	10.10.16	-	234
			Sub-Total		234

QUEENSLAND

Number	Name	Interest	Expiry Date	JV Parties	Approx. Area **(km2) **
EPM 14916	Ewen	100%	14.05.16	-	58
			Sub-Total		58
			DYL Total		3,401

AGREEMENTS

	Approx. Area
	**(km2) **
ABM Resources NL - Northern Territory (100% uranium rights stay with DYL)	14,142
Sub-Total	14,142
Total Area	17,543

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.

Name of entity

Name of entity	Name of entity
DEEP YELLOW LIMITED
ABN			Quarter ended (“current quarter”)
97 006	391 948		31		MAR 2016
Consolidated statement of cash flows
					Current quarter	Year to date
Cash	flows related to operating activities					(6	months)
					$A’000		$A’000
1.1	Receipts from product sales and related debtors				-		-
1.2	Payments for (a) exploration & evaluation				(242)		(831)
	(b) development				-		-
	(c) production				-		-
	(d) administration				(208)		(825)
1.3	Dividends received				-		-
1.4	Interest and other items of a similar nature				9		58
	received
1.5	Interest and other costs of finance paid				-		-
1.6	Tax refund *				-		50
1.7	Other				1		3
	Net Operating Cash Flows				(440)		(1,545)
	Cash flows related to investing activities
1.8	Payment for purchases of:
	(a) prospects				-		-
	(b) equity investments				-		-
	(c) other fixed assets				-		(10)
	(d) environmental and other bonds				-		-
1.9	Proceeds from sale of:
	(a) prospects				-		-
	(b) equity investments				-		-
	(c) other fixed assets				-		-
	(d) environmental and other bonds				-		3
1.10	Loans to other entities				-		-
1.11	Loans repaid by other entities				-		-
1.12	Other (provide details if material)				-		-
	Net investing cash flows				-		(7)
1.13	Total operating and investing cash flows (carried
	forward)				(440)		(1,552)

• Research and Development grant received

• See chapter 19 for defined terms.

30/9/2001

Appendix 5B Page 1

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward) (440) (1,552) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. - - 1.15 Proceeds from sale of forfeited shares - - 1.16 Proceeds from borrowings - - 1.17 Repayment of borrowings - - 1.18 Dividends paid - - 1.19 Other (Capital Raising Costs) - - Net financing cash flows - - Net increase (decrease) in cash held (440) (1,552) 1.20 Cash at beginning of quarter/year to date 2,771 3,927 1.21 Exchange rate adjustments to item 1.20 (25) (69) 1.22 Cash at end ofquarter 2,306 2,306 Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities Current quarter $A'000 1.23 Aggregate amount of payments to the parties included in item 1.2 102 1.24 Aggregate amount of loans to the parties included in item 1.10 - 1.25 Explanation necessaryfor an understandingof the transactions Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows NIL 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest NIL Financing facilities available Add notes as necessary for an understanding of the position. Amount available $A’000 Amount used $A’000 3.1 Loan facilities - - 3.2 Credit standby arrangements - -	1.13 Total operating and investing cash flows (brought forward)	1.13 Total operating and investing cash flows (brought forward)	1.13 Total operating and investing cash flows (brought forward)	(440)	(440)	(440)	(1,552)
	Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (Capital Raising Costs) Net financing cash flows			- - - - - -			- - - - - -
				-			-
	Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter			(440) 2,771 (25)			(1,552) 3,927 (69)
				2,306			2,306
	1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10					Current quarter $A'000
							102
							-
		Explanation necessaryfor an understandingof the transactions
		NIL
		Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest
		NIL
	3.1 Loan facilities 3.2 Credit standby arrangements		Amount available $A’000		Amount used $A’000
			-		-
			-		-

• See chapter 19 for defined terms.

Appendix 5B Page 2

30/9/2001

Appendix 5B Mining exploration entity quarterly report

Estimated cash outflows for next quarter

stimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	350
	-
	-
	210
Total	560

Reconciliation of cash

econciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	1,806	2,271
	500	500
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	2,306	2,771

Changes in interests in mining tenements – Refer to Annexure 1 of the Quarterly Activity Report for a list of all mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6 .2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
	EPM15070 EPL 3499	Relinquished Application made for relinquishment	24 blocks 85%	0 blocks 0%
	-	-	-	-

• See chapter 19 for defined terms.

30/9/2001

Appendix 5B Page 3

Appendix 5B Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference+securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs,redemptions	-	-	-	-
	-	-	-	-
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	1,931,335,128	1,931,335,128	-	-
	-	-	-	-
7.5 +Convertible debt securities(description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	-	-	-	-
	-	-	-	-
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter 7.11 Cancelled during quarter	Unlisted options -	-	Exercise Price -	Expiry Date -
	-	-	-	-
	-	-	-	-
	- - - -	- - - -	- - - -	- - - -
	-	-	-	-

• See chapter 19 for defined terms.

Appendix 5B Page 4

30/9/2001

Appendix 5B Mining exploration entity quarterly report

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.12 Performance Rights 7.13 Granted during quarter 7.14 Vested during quarter 7.15 Lapsed during quarter 7.16 Cancelled during quarter	Unlisted rights 12,761,000 3,000,000 24,475,000 21,985,000	- - - -	- - - -	Vesting dates 01/07/2016 01/12/2016 01/07/2017 01/07/2018
				Vesting dates
				Share issue date
				Date lapsed
				Date cancelled
7.17 Debentures (totals only)	-	-
7.18 Unsecured notes (totals only)	-	-

• See chapter 19 for defined terms.

30/9/2001

Appendix 5B Page 5

Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

• 2 This statement does ~~/does no~~ t* (delete one) give a true and fair view of the matters disclosed.

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Sign here: ............................................................ Date: 29 April 2016 ~~(Director/~~ Company secretary)

Print name:

Mark Pitts

Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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• See chapter 19 for defined terms.

Appendix 5B Page 6

30/9/2001