Deep Yellow Limited (DYLLF)

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http://www.deepyellow.com.au/news/asx/070830_rumjungle.pdf
30 August 2007
Deep Yellow Ltd and Rum Jungle Uranium Ltd
Establish a Joint Venture on
Six Uranium Properties in the Northern Territory
The Boards of Deep Yellow Ltd. (ASX code “DYL”) and Rum Jungle Uranium Limited “Rum Jungle” are
pleased to announce they have reached agreement on commercial terms for the acquisition by Rum Jungle
of a majority interest in six DYL uranium properties located in the Alice Springs area, Northern Territory.
Essentially, the proposal provides Rum Jungle with the opportunity to acquire up to 70% of each of the
wholly owned DYL properties (as listed below).
Tenement Holder
EL 10360 100% DYL
EL 10401 100% DYL
EL 10404 100% DYL
EL 22918 100% DYL
EL 22923 100% DYL
EL 25101 100% DYL
Furthermore Rum Jungle will have the opportunity to maximise its ownership of the properties in the future
by paying for the proven in-ground resource on terms referred to below.
Finalisation of the transaction is subject to the proposed admission of Rum Jungle to the official list of the
ASX no later than 30 October 2007.
DYL will continue to have exposure to the opportunities provided by the tenements through the shareholding
in Rum Jungle. Other than through its share holding and the Joint Venture equity interest, DYL will have no
promotion or role in Rum Jungle. Rum Jungle will benefit from the acquisition and the subsequent focused
and energetic development of a portfolio of potential uranium exploration opportunities.
The principal commercial terms are as follows:
A. CONDITION PRECEDENT
In addition to normal commercial terms for this type of agreement, completion is conditional on Rum
Jungle obtaining approval for admission to the official list of the ASX.
B. CONSIDERATION
Ordinary shares as follows:
The issuance to DYL of 2,000,000 ordinary shares and 2,000,000 options to acquire ordinary shares in
Rum Jungle. The options can be exercised on or before the date which is five years from the issue
date at a price equal to the IPO issue price.
Deep Yellow Ltd and Rum Jungle Ltd
Establish a Joint Venture on
Six Uranium Properties in Northern Territory
07-60 Deep Yellow Ltd and Rum Jungle Ltd Page 2
C. OTHER RELEVANT ITEMS
1. A joint venture agreement (JVA) will be entered into on transfer of the properties from DYL to
Rum Jungle. Rum Jungle will be the Manager of that JVA.
2. Rum Jungle will become a participant in the JV with a 50% stake, however it shall be deemed to
have acquired a further 20% to move to an interest of 70%, if it sole funds expenditure for the JV
of AUD$2M within four years of the commencement date.
3. From completion Rum Jungle will pay all outgoings and maintain all the tenements and keep any
joint venture agreements in good standing. DYL will provide all the administrative and statutory
expenditure requirements necessary for this to be achieved until the transaction is completed
and ownership can be transferred.
4. Upon completion of a bankable feasibility study each party will have the right to decide whether
to participate in mining operations at the area that is the subject of the study. If one party
decides not to participate in mining operations then the other party will have the right to acquire
the relevant JVA interest for 15% of the in-ground value of the uranium as referenced (defined
by JORC Code in lbs and multiplied by the current uranium spot price per lb) in the feasibility
study. At election the consideration may be any combination of cash and shares, shares held by
either party to be limited to no more than 20% of the issued share capital of the other party at the
time.
As previously stated the DYL Board’s rationale for the divestment of these projects is to allow DYL to focus
on its advanced exploration projects in Namibia, the Mt. Isa district and other priority regional targets close to
already established DYL bases and personnel throughout Australia. In addition there will be the opportunity
for further benefit to DYL’s shareholders through the retention of a significant direct stake in each project and
a retained equity interest in Rum Jungle.
“Whilst DYL has a growing team of experienced uranium exploration personnel, the DYL Board recognises
that it makes sense for DYL to focus on its’ main priority projects and give a new company the opportunity to
focus on and aggressively advance these projects that might not otherwise get the levels of attention and
funding that they require.” Deep Yellow’s Managing Director, Dr Leon Pretorius said today.
“Given Rum Jungle’s objective of becoming a uranium explorer, DYL and its shareholders will benefit from
Rum Jungle’s focused efforts as DYL will become a significant shareholder of Rum Jungle once listed and
will remain a stakeholder in the projects going forward.”
‘We are very pleased to be entering into this transaction with DYL and look forward to welcoming DYL as a
shareholder and joint venture partner. We are now focused on finalising an IPO prospectus in readiness for
listing on the ASX”, Rum Jungle Director, Mr. David Muller, said today.
COMPANY CONTACTS:
Deep Yellow Limited Rum Jungle Uranium Ltd
Leon Pretorius 61 8 9286 6999 David Muller 61 8 8942 0385
Martin Kavanagh 61 8 9286 6999 Email: [e-mail]
Email: [e-mail]