DEEP YELLOW LIMITED — Share Issue/Capital Change 2008

Aug 25, 2008

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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

26 August 2008

– DEEP YELLOW LIMITED OPTION ISSUE

Deep Yellow Limited is pleased to inform the market that the Board has approved a proposed issue of 6,100,000 unlisted options to acquire ordinary shares in Deep Yellow Limited to the Company’s Executive Directors Dr Leon Pretorius and Mr Martin Kavanagh and 5,050,000 unlisted options to acquire ordinary shares in Deep Yellow Limited to Employees and contractors.

Director Options

The Board, through its remuneration committee and as part of its annual remuneration review has reached agreement with the Executive Directors for their services for the 2009 financial year. It has sought independent advice from external remuneration consultants in order to provide a reasonable incentive to the Executive Directors in the current market context and which provides a fair and appropriate level of incentive to retain the executives given the important stage of the Company’s development.

It is proposed to issue a total of 6,100,000 unlisted options to be split among the Company’s Executive Directors, subject to shareholder approval.

The Terms for options will be as follows:

• subject to shareholder approval at the next general meeting of shareholders;

• to take up shares in the capital of the Company on the following terms:

• (i) at an exercise price of 27.5 cents;

• (ii) option expiry date being 1 July 2011;

• (iii) 50% of the number to be issued (subject to shareholder approval) will vest immediately; and

• (iv) the balance of options to be issued will vest on the 1st day of July 2010 subject to the recipient remaining in the employ or contracted to the Company.

The options have been valued independently for the purposes of the annual review based upon the volume weighted average price of 23.4c per share for the 5 trading days immediately after the release of the June quarterly report, the exercise price being at a premium of 17% to the 5 day volume weighted average price.

Page No. 1

08-53

Option Issue

Employee Options

The Directors have resolved to issue 5,050,000 unlisted options to acquire ordinary shares in Deep Yellow Limited to employees, and contractors. The issue has been made in two tranches and is pursuant to the terms of the Deep Yellow Limited - Employees and Other Permitted Persons Option Plan which was approved at the Company’s Annual General Meeting held on 30 November 2006.

The Directors continue to use the policy of issuing options as a reasonable basis for rewarding employees and contractors and providing an incentive to join / remain with Deep Yellow.

Directors have issued 1,375,000 Options to employees with an exercise price of 27.5 cents and which expire on 30 June 2011, the options vest on 1 December 2008.

Directors have issued 3,675,000 Options to employees with an exercise price of 27.5 cents and which expire on 30 June 2011, the options vest on 1 June 2009.

The Directors reserve the right to cancel the options in the event that an employee or contractor resigns from their employment or ceases their engagement with the Company.

No Director or Director related entity will participate in this issue. The attached Appendix 3B provides details of the options.

Options lapse

250,000 employee options have recently lapsed in accordance with the terms of the Deep Yellow Limited Directors, Employees and Other Permitted Persons Option Plan.

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Mark Pitts Company Secretary

Page No. 2

08-53

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 issued Employee Options 2 Number of[+] securities issued or to be issued 5,050,000 (if known) or maximum number which may be issued

• 3 Principal terms of the[+] securities (eg, if 1,375,000 exercisable by payment of 27.5 options, exercise price and expiry date; if cents on or before 30 June 2011, vesting on 1 partly paid[+] securities, the amount December 2008 outstanding and due dates for payment; if +convertible securities, the conversion price 3,675,000 exercisable by payment of 27.5 and dates for conversion) cents on or before 30 June 2011, vesting on 1 June 2009

• 4 Do the[+] securities rank equally in all respects from the date of allotment with an existing +class of quoted +securities?

The shares to be issued on exercise of options will rank equally with those already on issue.

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

• See chapter 19 for defined terms.

1/1/2003

Appendix 3B Page 1

Appendix 3B New issue announcement

• 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)

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

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

NIL

Employee options provided as incentive and part of remuneration package.

27 August 2008

Number	~~+~~Class
1,121,226,958	ORD
Number	~~+~~Class
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 2,912,500 31/12/09 at 44.6c 2,812,500 31/12/10 at 59.6c 787,500 30/6/10 at 64.6c 787,500 30/6/11 at 74.6c 12,500,000 30/11/10 at 59.5c 5,005,000 30/6/11 at 27.5c 5,005,000 30/6/11 at 40c 3,820,000 30/6//11 at 45c 3,820,000 30/6/11 at 60c 5,050,000 30/6/11at27.5c	Unlisted options “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “ “
N/A

• See chapter 19 for defined terms.

1/1/2003

Appendix 3B Page 2

Appendix 3B New issue announcement

Part 2 - Bonus issue or pro rata issue

11	Is security holder approval required?
12	Is the issue renounceable or non-
	renounceable?
13	Ratio in which the+securities will be offered
14	+Class of+securities to which the offer
	relates
15	+Record date to determine entitlements
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

• See chapter 19 for defined terms.

1/1/2003

Appendix 3B Page 3

Appendix 3B New issue announcement

• 28 Date rights trading will begin (if applicable)

• 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, and the number and percentage of additional[+][securities are ][+][equity securities, the names of the 20 largest holders of the additional ] +securities held by those holders

• 36[If the ][+][securities are ][+][equity securities, a distribution schedule of the additional ][+][securities ] setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

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

• See chapter 19 for defined terms.

1/1/2003

Appendix 3B Page 4

Appendix 3B New issue announcement

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.

1/1/2003

Appendix 3B Page 5

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 noone 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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26 August 2008 Sign here: ............................................................ Date: ......................... (Director/Company secretary) Mark Pitts

Print name: .........................................................

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• See chapter 19 for defined terms.

1/1/2003

Appendix 3B Page 6