Deep Yellow : December Quarterly Activities Report

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NEWS RELEASE

21 January 2022

QUARTERLY ACTIVITIES REPORT

FOR THE PERIOD ENDING 31 DECEMBER 2021

HIGHLIGHTS

• Tumas Definitive Feasibility Study continued to be advanced and remains on schedule for completion in the 2022 December quarter
  Delivery of major ore reserve upgrade resulted in an increase of 121% to 68.4Mlb at 345ppm on 150ppm cut-off. (Refer ASX announcement 5 October 2021)
  o Impressive Ore Reserve upgrade represented a critical milestone to achieve a 20+ year LOM operation
• Thorough review of the Omahola Basement Project resources completed, resulting in the upgrade of resources to JORC (2012). (Refer ASX announcement 4 November 2021)
  o Upgraded MRE includes a Measured, Indicated and Inferred Resource base of 125.3Mlb at 190ppm U3O8 using 100ppm cut-off
  o Using a 150ppm cut-off, MRE stands at 83Mlb grading 269ppm U3O8
• Omahola basement exploration outlined three highly prospective targets for follow-up. (Refer ASX announcement 22 December 2021)
  o First pass shallow drilling tested 10km of a 35km semi-regional prospective zone
  o 200-hole, 7,259m shallow drilling program returned 34 holes greater than 100pm U3O8
• 10 holes for 2,549m completed at Barking Gecko, successfully completing the Phase 1 drill program of 14 holes for 3,561m. (Refer ASX announcement 19 October 2021)
  o 9 of 10 holes returned significant mineralisation, with best hole TN258RC extended to a depth of 271m containing 70m at 503ppm U3O8 across four intersections within an 83m zone
• Strong cash balance of $72M, additional $22.2M raised with exercise of options

POST QUARTER

• Phase 2 drilling commenced at Barking Gecko. Diamond drill hole TN270DDT completed and returned a cumulative intersection of 118m at 352ppm eU3O8 from 8 intersections between 75m and 265m. (Refer ASX announcement 18 January 2022)

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INTRODUCTION

December quarter activities were extensive, with a primary focus on progressing the Tumas Project Definitive Feasibility Study (DFS), delivering a new ore reserve and mining study to achieve a 20+ year Life Of Mine (LOM) and drilling of 14 triple-tube diamond holes for geotechnical purposes together with three water bores.

Exploration activities focused on the Omahola and Barking Gecko basement targets, where ~15,000m of shallow and deep RC drilling was completed, with both programs returning highly positive results (see Figure 1).

Figure 1: Namibian location map showing position of the Tumas Project.

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TUMAS PROJECT NAMIBIA

Ore Reserve Upgrade

The DFS is targeting a minimum 20-year LOM at an annual production rate of 3Mlb pa.

Following the successful completion of the resource upgrade drilling program undertaken in 2021, which resulted in an increase to the overall Indicated and Measured Mineral Resource base at a 100ppm eU3O8 cut-off from 52.6Mlb to a total of 98.7Mlb eU3O8 a (see Appendix 1), a new Ore Reserve Estimate was undertaken in conjunction with a Mining Study as announced to ASX on 5 October 2021.

The Mining Study used economic parameters determined in the Tumas Pre-Feasibility Study (PFS) and the successful completion of this key piece of work delivered an impressive 121% increase to the previous Ore Reserve Estimate (ORE) as shown on Table 1. The upgraded ORE is a significant milestone and is now sufficient for a LOM greater than 20 years to be considered in the DFS, involving the Tumas 1 East, Tumas 1, Tumas 2 and Tumas 3 orebodies as depicted in Figures 1 and 2.

Table 1: Tumas Project Expanded Ore Reserves

	Classification				U3O8 Cut-off				Tonnes				U3O8				U3O8 Metal
					ppm				Mt				ppm				Mlb
	Probable		150			89.8			345			68.4
	Total		150			89.8			345			68.4

Figure 2: Tumas Project showing Mining Lease Application and relationship to conceptual central processing plant.

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DFS Progress

The DFS work program to date has focused on completion of the optimisation and trade-off studies recommended in the PFS, additional metallurgical test work and any further work required as part of the MLA or Environmental Impact Assessment (EIA) programs.

In support of the DFS, various work programs including geotechnical drilling on the plant site totaling four holes and density determinations on drill core of Tumas 3 were carried out. Water boring targeted to construct six test production bores started in November with three holes now completed. More than one tonne of RC samples for metallurgical testing were sent to Perth and numerous drill core samples for geotechnical studies were included in the consignment.

The DFS remains on track for completion in the December quarter 2022. Deep Yellow is focused on progressing Tumas towards a development decision, the timing of which is in line with the anticipated uranium price increase expected late 2022/mid-2023.

EIA Progress

The Company continues to work with its expert advisers and sub-consultants on the tasks required to complete the EIA. Details of the Project were refined by the Project team and additional information was provided for the EIA and for development of management and mitigation measures.

All baseline studies have been completed and the impact assessments and management plans for all required disciplines are well underway. The draft impact assessment reports for flora, fauna, noise, air quality, radiation, archaeology and socio- economic were received during the reporting period. In support of the EIA, seven shallow and two deeper additional water monitoring bores were drilled to investigate possible shallow ground water levels.

Omahola Basement Project

The Omahola Project (Omahola) occurs within the highly prospective "Alaskite Alley" corridor within which major uranium deposits including Rössing, Husab, Etango and Valencia deposits are located in the basement rocks. These deposits contain in excess of 800Mlb U3O8, with the Rössing mine alone having produced more than 200Mlb U3O8.

The overall target associated with Omahola occupies a 35km x 14km northwest-southeast trending zone within the Alaskite Alley corridor.

On 7 October 2021 Deep Yellow announced the initiation of exploration on these basement targets with a shallow RC drilling program to start at Omahola, targeting extensions of the known deposits in the NW portion of EPL3496.

Omahola Resource Upgrade

On 4 November 2021 Deep Yellow announced an upgrade of the Mineral Resource Estimate (MRE) from JORC (2004) to JORC (2012) for Omahola, which includes the Ongolo, MS7 and Inca deposits (see Figure 3).

The updated MRE now reports to the JORC (2012) Code and at a 100ppm U3O8 cut-off, with a Measured, Indicated and Inferred Mineral Resource base of 125.3Mlb at 190ppm U3O8. Using a 150ppm U3O8 cut-off, the deposits contain a combined 82.9Mlb U3O8 at 269ppm. See Table 2 below and Appendix 1.

Considering the results of more recent feasibility studies by other companies of similar, near- adjacent deposits in the 'Alaskite Alley', along with internal metallurgical and mining studies conducted by Deep Yellow, it was determined that reporting the MRE at a 100ppm U3O8 cut-off is more appropriate than the 250ppm U3O8 cut-off used historically. This has resulted in a substantial increase in contained metal accompanied by a reciprocating grade reduction. Table 2 lists the detailed MRE at a 100ppm U3O8 cut-off associated with the three deposits within Omahola.

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Table 2: Updated MREs reported to JORC (2012) Code

	Deposit			Category		Cut-off		Tonnes		Grade			Metal t		Metal
						ppm U3O8		Mt		U3O8						Mlb
										ppm
						100ppm Cut-offs
	Inca			Indicated		100		21.4		260			5,600		12.3
			Inferred		100		15.2		290			4,400		9.7
	Ongolo			Measured		100		47.7		187			8,900		19.7
			Indicated		100		85.4		168			14,300		31.7
				Inferred		100		94		175			16,400		36.3
	MS7			Measured		100		18.63		220			4,100		9.05
			Indicated		100		7.15		184			1,300		2.9
				Inferred		100		8.71		190			1,600		3.65
	Total							298.2		190						125.3
						150ppm Cut-offs
	Inca			Indicated		150		14.7		320		4,800			10.5
			Inferred		150		10.8		360		3,900			8.5
	Ongolo			Measured		150		23.1		257		5,900			13.1
			Indicated		150		34.5		239		8,200			18.1
				Inferred		150		39.2		251		9,800			21.7
	MS7			Measured		150		10.55		296		3,100			6.87
			Indicated		150		3.02		271		800			1.8
				Inferred		150		3.86		277		1,000			2.36
	Total							139.7		269					82.9

Omahola Exploration - Shallow Drilling Program

A comprehensive review and re-interpretation of existing data at Omahola has shown a major prospective zone of 50km of folded strike length, of which only 15km have been adequately tested leaving significant scope for both expansion of existing deposits and discovery of new deposits.

A study of the historical drill results to identify the minimum drilling depth required to isolate the footprint of the existing deposits (Ongolo, MS7, Inca), showed that presence of deposits could be recognised using first pass drilling to a depth of 25m. Based on this, a shallow 220 hole, 7,426m program commenced which involved hole spacings at a 400m x 50m and grid drilling to a 25m depth (Figure 3). This program was completed on 14 December 2021 and covered the structural target zone occurring between the known deposits of Omahola extending over a 10km strike length toward the SSE.

Figure 3 shows current and historic drill hole locations, outlining key 50ppm and 100ppm eU3O8 results over 1m contours from the shallow exploration drilling. These results clearly show the extensive high priority zones identified for follow-up work, with 15% of the shallow drilling program intersecting uranium mineralisation greater than 100ppm eU3O8 over 1m and indicating the highly uraniferous nature of the targeted prospective zone.

The anomalous holes occur in three distinct clusters, each representing a priority target for follow- up drilling in 2022.

Results from this drilling program were announced 22 December 2021 and importantly, indicated that strong potential exists for the possibility to discover new deposits within the Omahola Project area. Follow-up drilling planned in early 2022 will target these priority zones, following review of geophysical and geological data to help define optimal drilling locations.

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