Discussions...would be very wary of investing in countries with no prior uranium mining experience. What you must realize is that Paladin was the only company that tackled and built

DISCUSSION WITH JOHN BORSHOFF ‐ CEO & MANAGING DIRECTOR OF DEEP YELLOW LIMITED PAGE 1 OF 7

ASX:DYL OTCQX:DYLLF | FWB:JMI | NSX:DYL

John Borshoff CEO & Managing Director

►SmithWeekly: We are joined by John Borshoff of specialty uranium company, Deep Yellow. The company is listed on the Australian Stock Exchange under symbol DYL, on the OTCQX under symbol DYLLF and on the Frankfurt Stock Exchange under symbol JMI. Deep Yellow also has a listing on the Namibian Stock Exchange under symbol DYL. For those who don't know John, he and his team were key players in the founding and success of Paladin Energy, the severely outperforming uranium business during the last uranium cycle. Uranium investors and industry management teams should take note of what John and his team accomplished during the last cycle as it sets the bar for the entire industry. John if you don't mind, I'd like to start off with a couple questions here. On the news side, just recently, we had a potential near term production scenario with Berkeley Energia where most folks believed there was some near term production coming online. You've known that this project was never a statistic for production and the market was likely surprised by the news that the project likely won't move forward anytime soon. The question remains unanswered and yet grows larger: Who will actually successfully bring a notable mine online during this current new cycle? ►John: This is a difficult question as there are few capable teams in the junior sector of the industry at this time with the ability to bring on a new conventional mine that will have notable impact. The problems that can arise can be technical, geopolitical, environmental or whatever. Few teams exist in this hopeful producer category with proven broad spectrum uranium track records that have dealt with the broad range of issues that can confront a uranium development. We in Deep Yellow are among that tiny group that can do it. ►SmithWeekly: People seem to overlook what can happen in the desert of west Namibia. Ok, same question but who did it last time during the 2000-2009 period? Again, a notable globally significant mine? ►John: Well, the only people who have established a publicly listed company in the past 30 years with two modern conventional uranium mines of scale was Paladin...the company I led. That has been a remarkable contribution to the uranium industry because we had the opportunity to bring in new technologies, upgrade thinking, and most existing conventional mines were sitting on 1970's-1980's technology, not efficient. You need to understand the whole uranium business from the 1970's and that enthusiasm of technology that ensued at startup which did remarkably well from no reactors to around 400 by the end of that century, 1999. Then it all went dead, very few people

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Discussions


continued, understood, and many left the industry. Expertise diminished and here we are today where everybody looks at opportunity through the deposits themselves. But because of the difficulty and peculiar nature of this metal, geopolitically, technically, and its exotic nature, it's not just a matter of looking at a deposit alone but matching it up with people who can deliver of which, as I mentioned there are very few. There is no doubt that the upside for uranium is terrific and I think this upside is unique in the sense that if you pick the right management that have done this before you'll get a double banger out of it. Everything will go up in the cycle, but some will go up in extraordinary fashion if done right. ►SmithWeekly: Here is a side question for you. When you hang up your uranium hat at night, what things do you enjoy on your time off? ►John: In that very little time off, I am at a stage now where I can apply almost everything to my hobbies and things that I enjoy most. Apart from the whole uranium and nuclear side, I have a farm about 300km from Perth where I was bought up. It is my sort of therapeutic pill if you like. I mix with people that are down to earth and are real good grounders. Apart from that is my family and gardening. I am farmer at heart. ►SmithWeekly: Deep Yellow has had a recent series of new discoveries and discovery extensions. Does the proximity and makeup of these discoveries support a similar setup to what was done with the development of Langer Heinrich? ►John: Yes. That is the whole aim. I was intrigued by the Deep Yellow potential and the previous players, I believe, did not fully expose that prospectivity. They focused too quickly on the intersections, followed them up, and lost the big picture. They found a tree, but they missed the forest. We've always said there is potential for 100-150 million pounds in these palaeodrainages that are similar to Langer Heinrich. We are hopeful that this can be developed as a Langer Heinrich analog with innovative technology to make a plant even more efficient than what Langer Heinrich is now. We turned a tier 3 deposit at Langer Heinrich into a tier 1 performer. There is no reason to not believe we will do the same at the Reptile/Tumas Projects. ►SmithWeekly: What are your thoughts, from an investor point of view, on these emerging publicly traded vehicles that buy and store physical uranium and the entrance of royalty business models into the uranium mining space? ►John: I have fairly strong opinions about this. The ones that store uranium have a use-by-date. They are, at the moment, accumulating uranium at reasonable value and their returns will never be extraordinary but will be good. Once the market tightens, it will be more difficult to get product, so they become a spot sale contributor. They have a place, but you've got to look at them in the context of time. If you look at them like an ETF, they will pick up bits and pieces as uranium prices go up but they won't be market makers in terms of pricing because they need the upside to get the positive value out of it. In summary, they are good and good to have for a time, but their longer life, I believe, may not be that profitable because they eventually will have to compete against utilities for product. The royalty companies have been a success in gold and precious metals. That market is different and is highly liquid compared to uranium. I don't like what royalty companies do because if I buy a company or asset that has had a royalty business come in and give finance for a royalty, I have to seriously look at this added royalty factor built into the economics for which then my shareholders get diminished returns. I think they contaminate value for shareholders and a genuine producer. However, I think that in a market that has difficulty getting capital the


current custodians of assets are forced to sacrifice something for their future and survival. I am very careful as a potential producer what financial penalty gets imposed once that extra royalty cuts in and this can affect the overall operating costs of a project. ►SmithWeekly: Great points. Interesting to consider this because most folks have not thoroughly thought through this so it is worth pointing this out. A good piece of information, thank you. Moving on, in your view, what characteristics and jurisdictions should potential investors consider when looking for a good uranium exploration/development company? ►John: So, they should look at a situation where if the price moves, they could be hopeful that the regulations, environmental issues, enthusiasm of particular governments is such that a practical project can come online more quickly than other competitor jurisdictions. I would be very wary of investing in countries with no prior uranium mining experience. What you must realize is that Paladin was the only company that tackled and built a new uranium mine in a country that had no prior history or experience related to uranium mining regulation. This was in Malawi. This became a very difficult job. Even though there was 60 years of uranium mining by this time, all uranium mining was restricted to Australia, Canada, U.S., South Africa and the old USSR (where everything was a secret business) and no one had tackled uranium mining in a new jurisdiction like Paladin did. Jurisdiction is really important and not just looking at good old steadies like the U.S., Canada, and Australia, but ones that you can be hopeful that your investment in a deposit can turn into a production more quickly. That said, the companies that are mono projects are also risky. I regard them like a single tree and what happens with a tree is that it is there, rooted to the ground and it cannot move. It's got no legs. When the climate changes and it doesn't suit its needs, the tree doesn't survive. A mine is similar, it is locked into that local environment and one jurisdictional “climate”. You need diversity. You need a company that has projects globally. This is the same model I used with Paladin. This was a big selling point with utilities that is why they had interest in the company. We had immediate projects for development and a pipeline of projects beyond that. So, the jurisdictional diversity is really important as well and which is my ambition with Deep Yellow. Then, of course, on top of this, having the expertise which cannot be overstated. If you have a great gold deposit you can be absolutely assured that there are many competent gold industry managements able to get it efficiently mined. Copper, gold, silver, and whatever metal you want to call it is the same. Everyone says they have good management and of course there are good ones. With uranium and its tortured history, this is not the case. Value is not just a good deposit. Value is how do you get this opportunity out there producing when so few people have done it and that is a unique factor about uranium that all investors should consider. ►SmithWeekly: Right. You can have a really good asset and poor management can destroy that asset value. Instead of mining a successful project, the management mines the shareholders. This includes those who venture into jurisdictions where they shouldn't be. It is irresponsible of management. During this cycle, will Australia wake up and break ground on a new uranium mining project? ►John: That's not a question that I look at because if you're looking at a pipeline of projects then it is a contextual issue. Those who have a single project in Australia will have difficulty only in the sense that West Australia, Queensland etc. has governments that currently are not pro-uranium. That is regarded as temporary. The value of projects in these jurisdictions in Australia depends on your strategy. I pencil these in for production post 2025. In a strange way, the government then is looking after these assets while focusing in other jurisdictions developing the other projects with faster timelines. You can build part of your project pipeline around this type of thinking and in this way that government can become your friend rather than your enemy in terms of managing your project pipeline for the longer term.


In Australia, you have Olympic Dam where uranium production is consequential to their copper. They will continue with uranium output come what may. With regard to the other hopefuls, they will be trying to develop their deposits, but I believe there are no projects of any size coming in before 2023 and I believe the uranium price will be moving before that. The trouble is people are advancing their projects as if they are going to be developed tomorrow. There is not much value in that. The feasibility studies can stand as are for a couple of years. There is plenty of time. ►SmithWeekly: Do you think Australia will actually build a nuclear power plant for the first time in its history? ►John: I think that the whole question, the mix between renewables and traditional technology is now at the beginning of better understanding that renewables on their own are periodic producers and batteries are not going to come in to the level needed to supplement their downtime for a very long time. So, you need the mix of assured production of electricity and allow the benefits of all forms of energy to come into effect. The recent ICPP report that came out a few weeks ago stated the world must aim for zero emissions by 2050 if it is to have a chance limiting damaging temperature change. In that case nuclear must become big brother to provide that component of zero emission electricity production to counter main climate change issues. Gas and coal will also be needed under this regime but to a lesser extent. If it is heavily reduced emissions that will drive future electricity production that means more nuclear and it will become an essential part of the overall solution to the new strategic energy mix that needs to be deployed. ►SmithWeekly: There is no way any of these policy makers and central planners are going to meet their goals without significant nuclear involvement. The U.S. Department of Energy, with Rick Perry at the helm, is pushing that way with the current administration. Russia is leading the way with international nuclear reactor development and the U.S. is falling a bit behind leading the world with this work. I think they are trying to reverse that and increase their world share of the market but have so far failed to get anything done. There is no doubt China, India, and others are pushing hard in the nuclear thesis for zero emissions. Australia seems to be weighing their options about a first reactor in the country. If it isn't a conventional plant, perhaps a fleet of SMRs. All considered, who is your nearest competitor in the uranium business? ►John: Look I think that a group that is well run with a good management led by Mark Chalmers, a guy that worked for me, is Energy Fuels in the U.S. You've got to look at the share price as it might be a bit overheated currently, but they have a plan and things are going well for them. You need to look at the amount of opportunity there is for them and their assets are restricted to the U.S. which may or may not be a good thing. I also think Boss Resources out of Australia is a good opportunity for an early smaller producer. It is an ISR project but they've broken through with some good resin technology that will help them overcome some problems the project had in a previous life and Boss has the potential get some value out of their operation when it starts. Nexgen and Fission have evolved at a point to where little value is going to be forthcoming by just building the resource base alone. People sometimes think, "I will just drill to get extra pounds and my market cap will go up continually on such news". Companies however do eventually reach a plateau to where no amount of additional resource will change the value. So where is the upside for them from here on? Who is going to develop it one might ask? The projects are terrific and it is a now matter of how they manage the coming 10 years


before they actually become producers. They are not a speculators sort of stock because the people who already own it have already made the money in that group. ►SmithWeekly: We like Energy Fuels increasingly for the go to U.S. vehicle. The Athabasca Basin has been overly promoted. It's all we hear about. It will be a long time before anything of new significance comes online there. They have big capital and red tape hurdles along with timelines that folks haven't properly calculated. Then, who is going to build it? Only a select few have built in the Athabasca. It is a good resource district for uranium, but it has timing challenges and few who have been successful there. Great mineralization but lacking in all other categories including investor patience. John, for the folks who might not have or know about Deep Yellow but who are considering the company, can you warm them up to Namibia, the sort of number one blue chip country in all of Africa. ►John: Namibia is one of these rare African countries. It was colonized by Germany back in the 19th century and that German backbone is still there in parts and has given that country an order and attitude that I believe to be different than most African countries. That is a positive legacy that some might think is eroding but nevertheless that culture and approach is an underlying stabilizer for that country. When you look at countries that have developed substantial uranium mines, Namibia is a stand out where the Rössing mine came into production early during the period of civil war with no problems. Around 30 years later, Paladin brought Langer Heinrich into production. We had an extraordinary run gaining all the approvals in time as there is a good understanding of the government and services with regards to uranium mining and its needs. Then the Chinese, through the Husab mine, came in and spent around USD $3 billion building a new mine which is currently in ramp up phase. Arguably, Paladin still has the most efficient mining infrastructure at Langer Heinrich as compared with the competing mines in Namibia. There is no other country like Namibia that has this sort of positive history with uranium. Langer Heinrich is mothballed but that is a result of where the uranium cycle is at present. Deep Yellow is there as a result of Paladin because I helped form the company as the exploration arm of Paladin while we were focusing on Langer Heinrich development. Even though this was a separate company, Paladin supported it. Deep Yellow has the exploration grounds today as a result. It is warm bed for me if you like. There are several reasons why I chose Deep Yellow as the one company that I think was good to start with. One of those reasons being that it had a clean share register: No private equity investors involved and no Chinese investors, which is a complexity of ownership that I don't like in terms of value creation. So Deep Yellow ticked the boxes on many fronts for me and there were very few companies at the time when I was looking that were not compromised in their shareholder make up post Fukushima where big shareholders overstayed their positions and are now trying to exit with destabilizing effect. I know of 2-3 companies where this is happening. Back to Deep Yellow: Great jurisdiction, the assets I have never doubted and where the value upside is big knowing that exploration will produce significant resource upgrade. You can add millions of pounds costing $0.50 to a $1 per pound for discovery whereas purchasing an asset, although can be accretive, has a different situation and value. Getting those extra pounds in your system through successful exploration creates high value for the shareholders.


►SmithWeekly: One of things that was alarming to us was the fact that Paladin went into the Ministry of Mines, applied for a mine permit, and I'd have to check the filings again, but it was absolutely impressive when you get quick processing and acceptance upon a properly completed application in Namibia. I don't have the filings in front of me, but it was something like 8-10 months time. John, you've been there before so your rolodex has the keys for another expedited trip. First class preferred access. ►John: The thing is, Langer, at the stage we became involved through Paladin, was an existing project. It was discovered in 1986 by a south African company and they converted the exploration license to a mining lease. The project still needed the feasibility and environmental studies. The big thing was, and I really understood this, the skepticism of the government when a junior comes in and says, "Look, I am going to develop a uranium mine, I need to find $300 million U.S. dollars, I need to get banks on board to finance this, and I need sales agreements with utilities". You know, there is a lot of disbelief with stakeholders when it comes to explaining your vision and what big things you plan to do to make it all happen, all coming from an unproven junior. That was where I was grateful for my history pre-Paladin and the experience I gained in uranium working for a huge uranium company that in actual fact found Key Lake and it is the reason why Cameco was formed. These are some of the strong headwinds you come across when you try to develop a mining operation, especially in uranium...but in Namibia everything went to plan. We got approvals and we went by the rules to where government ministers and high-level public servants came to trust our word and actions. It worked out well for everyone at that stage. It was a complex interplay of things to get this operation going. ►SmithWeekly: Switching gears, what is a good source for unknowing investors about obtaining information when reactors under construction are planned to startup? ►John: The best place to go is to the WNA website. This is the World Nuclear Association and it has a fabulous information section on worldwide reactors and their status. I know the guy who started that off in the early years and his legacy now has been carried on. WNA is an up to date authoritive site to visit, it is based out of London, and people should use that for learning about both the uranium and nuclear sector. Go there and you can learn about all aspects of the industry. ►SmithWeekly: Well John, we are sure you have other things to do today. Before we leave, are there any further comments? We are near 2019, what's going to happen and tell us about what Deep Yellow is going to do? ►John: The uranium sector is in a really interesting position. There have been events to try to short circuit the supply/demand situation with Cameco and KazAtomProm trying to reduce supply. As always, the hype is exaggerated against what is anyhow a positive reality. What is the positive the reality? The reality is that over the past few months the price has moved from around $22 to $28 per pound, which is modest but is at least moving the right way. The uranium holding funds have come in and have soaked up some supply. The utilities are not participating in the market yet. It is traders, funds, a bit of Cameco picking up stock in an opportunistic way. What is interesting is that looking at the equities of uranium companies and their share prices. The positive interest in share price value in this period of positive change has not occurred in many stocks. In fact, just compare October/November 2017 and 2016 share prices to the same period in 2018 and you will see not a lot has occurred even though there is interest with people wanting to deploy more money in uranium because there

is a change happening. There is however still a bit of time before companies can get enough interest to raise a decent amount of capital for projects without diluting themselves excessively. They can't build their project until, I believe, the uranium price goes plus $60 per pound for serious commitments to growth to start happening.


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For more information about John Borshoff, his team, and Deep Yellow, visit:

www.DEEPYELLOW.com.au

Uranium is one of the few commodities that will allow great opportunities to happen in the next few years. Deep Yellow is evaluating how it will leverage into this opportunity base. We are developing a very cost-effective resource base in Namibia in readiness to respond quickly to development when the time comes. I am not going to rush into development. We know clearly what we want to do. Sprott is still supporting us among others wanting to put capital in our business, should we want it. At present we have enough for what we want to do now. ►SmithWeekly: There is no reason to be in a rush because the development there can go quite quick. Refer to the filings with Paladin from around 2000-2008, some 6000 pages to find out how quick things can move when properly aligned and when management has a clearly defined strategy. When looking at other uranium businesses, it is amazing how quickly capital is consumed with drill programs as compared to Deep Yellow. On a pound for pound discovered basis, Deep Yellow does it efficiently as compared to many of the capital burners out there. I am sure shareholders at Deep Yellow very much appreciate the capital stewardship performed by management. Well done so far. John, we appreciate you taking the time. Thanks again for joining and for your trusting SmithWeekly to hold these conversations. It's been a pleasure. ►John: Well look I must go. It was great talking with you. If any further questions come up, let me know. From Australia, have a good day. Twitter.com/SmithWeekly 28 OCT 2018

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http://www.deepyellow.com.au/

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Discussions...would be very wary of investing in countries with no prior uranium mining experience. What you must realize is that Paladin was the only company that tackled and built