WELCOME TO DEEP YELLOW LIMITED

ABN: 97 006 391 948

PROJECTS

NORTHERN TERRITORY (September 2008)

Figure 1: Northern Territory Tenements. Click to enlarge

• Operational base in Alice Springs

• Defined projects cover 14,850 km²

• DYL has 100% rights to uranium within Tanami Gold's tenements covering an additional 21,220 km²

• Napperby Farm-Out/Sale to Toro Energy Ltd

• Ongoing CLC and Landowner negotiations for access to prospective areas

DYL's exposure to the highly prospective Tanami - Arunta uranium province totals approximately 36,070 km2 comprising:

• 26 granted exploration licences covering 9,254 km² held 100%.

• 10 exploration licence applications covering 5,596 km² held 100%.

• 100% of the uranium rights to a further 21,220 km² of granted exploration licences and applications held by Tanami Gold NL (TGNL).

The target within the majority of the tenement areas is calcrete-hosted uranium mineralisation similar to DYL's Napperby deposit. The potential for this style of mineralisation occurring in buried (palaeo) channels can be rapidly assessed by airborne electromagnetic surveys and 1 to 2 km spaced shallow drill traverses. Other targets include roll-front uranium mineralisation at Nonouba 60 km to the west of the Angela - Pamela uranium deposits.

DYL has been constantly assessing and prioritizing target areas under granted tenure or applications within the Territory. Since early 2005 DYL has fully evaluated and 'relinquished' over 20,000 km² of unprospective ground (subject to the agreement with TGNL) and made application for 5,596 km² of new ground.

Napperby

The Napperby Project is an historic mineralised zone discovered and explored by CRA Exploration and Uranerz in the late 70's early 80's. The project comprises an extensive, consistent mineralised zone within 3 to 7 m depth from surface in semi-consolidated and unconsolidated sediments. The project is close to infrastructure, being 150 km NW of Alice Springs along the sealed section of the Tanami Highway, within 20 km the Alice Springs to Darwin gas pipeline and with access to the main N-S railway through Alice Springs.

Toro Energy has an Option Agreement with Deep Yellow Ltd over the Napperby Project which allows 100% purchase of the project at a capped price per resource pound (lb) basis at any stage over a 3 year period.

As follow-up to DYL's 2006 drill programme which defined a JORC code compliant Inferred Mineral Resource of 1.9 million tonnes at 0.036% (360 ppm) U₃O₈ for 670 tonne or 1.5 million pounds of U₃O₈, Toro completed an initial 2007 drilling program on the Napperby project and have announced an increased Inferred Mineral Resource* compliant with the JORC code of 4.6 million tonnes @ 305 ppm (0.031%) U₃O₈ for 1,420 tonnes (3.13 million pounds) of contained uranium oxide (using a 200 ppm U₃O₈ cut-off, see ASX Release 25 July 2008).

* This new resource total includes the previous JORC code resource delineated by DYL.

Figure 2: Completed 2008 drilling grade x thickness (GT) grid using corrected eU3O8 equivalent grades

 

Notes on the analysis in Figure 2:

1) Grade x thickness (GT) - the product of grade (U₃O₈ppm) and ore thickness (metres) is used as an indicator of potential mineability.

2) eU₃O₈ grades shown here are for indicative mineralisation purposes only, and samples from the sonic drilling have been gathered under QAQC procedures and dispatched for assay. Initial results are pending. Gamma eU₃O₈ grades are currently not used by Toro for resource calculation purposes, but this will depend if ongoing disequilibrium work provides the basis for increased confidence in grade estimation from gamma data.

3) Data were generated by applying a cutoff of 140 ppm eU₃O₈ to the gamma derived grades. GTs were then calculated and a grid applied. The lowermost GT increment in this figure for example, 100 ppm.m, translates to a grade of 140 ppm with a thickness of 0.7m.

A more extensive resource drilling program was initiated in May 2008 with 7,500 m of drilling completed so far. (See Figure 3).

Figure 3: Plan of 2008 drilling to date compared to current resource area

 

Air core drilling with calibrated gamma logging is guiding the sonic core rig, with sonic holes assayed and gamma logged. Corrections of gamma data are made for casing type, probe crystal K factor and ground water level. This produces equivalent grades ('eU₃O₈').

The 2008 gamma equivalent (eU₃O₈) grades are indicating good continuity in the mineralised zone to the SW of the previous resource (Figure 3). Assay results from this drilling will be incorporated into a further resource update planned for the fourth quarter 2008. The deposit is still exhibiting a dominance of carnotite mineralisation within samples.

Although significant resource definition work is still required, the Boards and Management of both DYL and Toro are excited at the prospect of the Napperby project being advanced toward a potentially viable economic mine, particularly given current long term uranium prices and future industry demand projections.

Reynolds Range Project

The Reynolds Range Project comprises DYL's ELs 23923, 23924 and 23991 and the uranium rights in TGNL's EL 23888 and EL 23655. These granted tenements are subject to two Native Title agreements specifically for gold exploration.

An Exploration Agreement for uranium was signed in late 2007 and the Traditional Owners have cleared proposed drill areas ahead of a September start-up of aircore drilling. An airborne electromagnetic survey (AEM) has been completed over the project area. Results are pending.

Figure 4: Planned AEM and drilling programs, Alice Springs district

 

Mt Liebig Project

The Mt Liebig Project located 250 km WNW of Alice Springs comprises two exploration licences contiguous to the SW of the Napperby tenements. The target is shallow calcrete hosted uranium mineralisation as per Napperby and/or Tertiary sandstone hosted roll front uranium mineralisation at depth. The tenements now 100% DYL were previously held by Tanami Gold.

A meeting with Traditional Aboriginal Owners to negotiate access for uranium exploration took place on the 21st November, 2007. The Company has recently been informed that its proposal to explore for uranium and possible future mining has been accepted by the Traditional Aboriginal Owners. A draft agreement will be forwarded to DYL shortly. Permission has been received to fly an AEM survey over the tenements in August 2008 and DYL field crew has completed a reconnaissance visit to check access for the proposed drill programme.

Mt Doreen Project

The Mt Doreen Project tenements cover 150 km east-west to 20-25 km north-south tract of land located approximately 340 km northwest of Alice Springs. The tenements cover north flowing drainages and target palaeochannels off both the 'hot' Southwalk Granite in the east and from the Bigrlyi uranium deposit in the central tenement area.

Selected areas within the tenements will be covered by an AEM survey. Fieldcrews have established access for an aircore drill programme schedule to commence in late September.

Nonouba

The Nonouba tenement EL 24547 covering 605 km² is located 70 km SW of Alice Springs was granted on 17 August 2007. The tenement lies 60 km west along strike from the Angela - Pamela uranium prospect.

The Nonouba ground was previously explored for uranium by Uranerz from 1972-1983. Uranerz identified two prospects, "Daria" and "Nonouba", and returned assays up to 1900 ppm U₃O₈ over 0.5 m, hosted by carbonaceous - pyritic Undandita Sandstone. The target is roll front uranium mineralisation as delineated at Angela-Pamela.

DYL hopes to commence RC percussion drilling in October 2008 following site clearance by the Aboriginal Areas Protection Authority.