DEEP YELLOW LIMITED — Share Issue/Capital Change 2007

Dec 20, 2007

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DEEP YELLOW LIMITED

ABN 97 006 391 948

Level 1 329 Hay Street Subiaco WA 6008 PO Box 1770 Subiaco WA 6904 Tel : 61 8 9286 6999 Fax : 61 8 9286 6969 Email: admin@deepyellow.com.au Website: www.deepyellow.com.au

21 December 2007

OPTION ISSUE TO DIRECTORS

Following shareholder approval received at the Company’s Annual General Meeting held on 28 November 2007, the Company has issued 12,500,000 unlisted options to Directors of the Company as follows:

• Dr Leon Pretorius, Managing Director – 7,500,000 unlisted options; and

• Mr Martin Kavanagh, Executive Director – 5,000,000 unlisted options.

Details of the option terms are set out below:

• The options are exercisable on or before 30 November 2010 and at an exercise price of 59.5 cents; and

• 50% of options issued to each director will be issued with a vesting period of twelve months from date of issue; and

• 50% of options issued to each director will be issued with a vesting period of twenty-four months from date of issue.

The Company reserves the right to cancel the options in the event that a Director resigns from their employment or ceases their engagement with the Company prior to satisfaction of the relevant vesting period.

Employee Option Lapse

2,350,000 Employee Options previously offered to employees have lapsed pursuant to the conditions of the Deep Yellow Employee Option Plan. The revised balance of unlisted options on issue is set out in the attached Appendix 3B.

Yours faithfully

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MARK PITTS

Company Secretary

Page No. 1

07-85

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003.

Name of entity

DEEP YELLOW LIMITED

ABN

97 006 391 948

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

• 1 +Class of +securities issued or to be Unlisted options issued

• 2 Number of[+] securities issued or to 12,500,000 be issued (if known) or maximum number which may be issued

• 3 Principal terms of the[+] securities Exercisable at 59.5 cents each on or before 30 (eg, if options, exercise price and November 2010. expiry date; if partly paid +securities, the amount outstanding 50% of the unlisted options subject to a 12 month and due dates for payment; if vesting period from the date of issue, the remaining +convertible securities, the 50% subject to a 24 month vesting period from the conversion price and dates for date of issue. conversion)

• See chapter 19 for defined terms.

Appendix 3B Page 1

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Appendix 3B New issue announcement

4 Do the+securities rank equally in all respects from the date of allotment with an existing+class of quoted +securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 7 Dates of entering+securities into uncertificated holdings or despatch of certificates 8 Number and+class of all +securities quoted on ASX (_including_the securities in clause 2 if applicable)	Upon issue will rank equally with those already on issue.	Upon issue will rank equally with those already on issue.
	Nil
	Options issued as an incentive to Directors, and approved at the Company’s Annual General Meeting.
	21 December 2007
	Number	+Class
	1,108,726,958	ORD

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

9 Number and[+] class of all +securities not quoted on ASX ( including the securities in clause 2 if applicable)

Number	~~+~~Class
12,500,000 31/7/08 at 8.1c 3,000,000 31/12/08 at 21.1c 2,000,000 31/12/08 at 31.1c 16,000,000 30/11/09 at 55.1 2,987,500 31/12/09 at 44.6c 2,987,500 31/12/10 at 59.6c 837,500 30/6/10 at 64.6c 837,500 30/6/11 at 74.6c 12,500,000 30/11/10 at 59.5c	Unlisted options “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “

• 10 Dividend policy (in the case of a trust, distribution policy) on the N/A increased capital (interests)

Part 2 - Bonus issue or pro rata issue

• 11 Is security holder approval required?

• 12 Is the issue renounceable or nonrenounceable?

• 13 Ratio in which the[+] securities will be offered

• 14 +Class of +securities to which the offer relates

• 15 +Record date to determine entitlements

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

16	Will holdings on different registers
	(or subregisters) be aggregated for
	calculating entitlements?
17	Policy for deciding entitlements in
	relation to fractions
18	Names of countries in which the
	entity has+security holders who
	will not be sent new issue
	documents
	Note: Security holders must be told how their
	entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing date for receipt of
	acceptances or renunciations
20	Names of any underwriters
21	Amount of any underwriting fee or
	commission
22	Names of any brokers to the issue
23	Fee or commission payable to the
	broker to the issue
24	Amount of any handling fee
	payable to brokers who lodge
	acceptances or renunciations on
	behalf of+security holders
25	If the issue is contingent on
	+security holders’ approval, the
	date of the meeting
26	Date entitlement and acceptance
	form and prospectus or Product
	Disclosure Statement will be sent to
	persons entitled
27	If the entity has issued options, and
	the terms entitle option holders to
	participate on exercise, the date on
	which notices will be sent to option
	holders
28	Date rights trading will begin (if
	applicable)

• See chapter 19 for defined terms.

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29 Date rights trading will end (if applicable) 30 How do[+] security holders sell their entitlements in full through a broker?

• 31 How do[+] security holders sell part of their entitlements through a broker and accept for the balance?

• 32 How do[+] security holders dispose of their entitlements (except by sale through a broker)?

• 33 +Despatch date

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of securities ( tick one ) (a)[Securities described in Part 1 ] (b)[All other securities ] Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35[If the ][+][securities are ][+][equity securities, the names of the 20 largest holders of the ] additional[+] securities, and the number and percentage of additional[+] securities held by those holders 36[If the ] +securities setting out the number of holders in the categories[+][securities are ][+][equity securities, a distribution schedule of the additional ] 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

37[A copy of any trust deed for the additional ][+][securities ]

Entities that have ticked box 34(b)

38 Number of securities for which +quotation is sought 39 Class of[+] securities for which quotation is sought 40 Do the[+] securities rank equally in all respects from the date of allotment with an existing[+] class of quoted +securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security) Number +Class 42 Number and[+] class of all[+] securities quoted on ASX ( including the securities in clause 38)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Quotation agreement

1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• We warrant that if confirmation is required under section 1017F of the Corporations Act in relation to the[+] securities to be quoted, it has been provided at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before[+] quotation of the[+] securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

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21 December 2007

Sign here: ............................................................ Date: ......................... (Director/Company secretary) Mark Pitts Print name: .........................................................

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• See chapter 19 for defined terms.

Appendix 3B Page 7

1/1/2003