Vimy Resources : Deep Yellow and Vimy agree to a proposed $658 million merger

NEWS RELEASE

31 March 2022

DEEP YELLOW AND VIMY AGREE TO A PROPOSED $658 MILLION1 MERGER

TO CREATE A NEW GLOBAL URANIUM PLAYER

HIGHLIGHTS

•  Deep Yellow and Vimy have agreed to a merger by a Scheme of Arrangement, under which Deep Yellow will acquire 100% of the Vimy Shares on issue

•  Vimy Shareholders will receive 0.294 Deep Yellow Shares for every Vimy Share held on the Scheme record date

•  The merger transaction implies 28.5¢2 per Vimy Share representing a premium of 35.3% to the 30-day VWAP and a 18.8% premium to the closing Vimy Share price on 25 March 2022 (being the last trading day for Vimy Shares and Deep Yellow Shares prior to this announcement)

•  Upon implementation of the Scheme, Deep Yellow shareholders will hold 53% of the Merged Group and Vimy Shareholders will hold 47%3

•  The Scheme is unanimously recommended by the Board of Vimy and each director of Vimy intends to vote all Vimy Shares they control in favour of the Scheme, in the absence of a Superior Proposal, and subject to an Independent Expert opining (and continuing to opine) that the Scheme is in the best interests of Vimy Shareholders4

•  The merger is expected to create a new global uranium player with significant scale, cash resources of $106 million5, one of the largest uranium Mineral Resource inventories globally (389Mlb 6 ) and two advanced, world class assets in Tier-1 uranium mining jurisdictions

•  Deep Yellow and Vimy will host a joint investor call at 10AM AWST (1PM AEDT) today, 31 March 2022

Deep Yellow Limited (ASX: DYL; OTCQX: DYLLF) (Deep Yellow) and Vimy Resources Limited (ASX: VMY; OTCQB: VMRSF) (Vimy) are pleased to announce that they have entered into a Scheme Implementation Deed (SID), under which the two companies propose to merge by way of a recommended court-approved scheme of arrangement between Vimy and its shareholders (Scheme).

1 Market capitalisation on a fully diluted basis is based on closing share price as of 25 March 2022 (being the last trading day for Vimy Shares and Deep Yellow Shares prior to this announcement). Presented market capitalisation for Vimy and Pro Forma market capitalisation does not account for the Scheme's implied offer price and resulting offer equity value. Refer to the accompanying investor presentation titled, "Deep Yellow and Vimy Merger" for further information.

2 Implied consideration per Vimy Share is based on the last closing price of Deep Yellow Shares on 25 March 2022 (being the last trading day for Vimy Shares and Deep Yellow Shares prior to this announcement).

• 3 In both cases on a fully diluted basis.

• 4 See SID attached for details.

• 5 Proforma cash based on 31 December 2021 cash balance and adjusted for the Vimy equity raise of $17M undertaken in March 2022. Includes ~$1m of cash proceeds from exercising in-the-money options. Refer to the accompanying investor presentation titled, "Deep Yellow and Vimy Merger" for further information.

6 Combination of resources from Deep Yellow (273Mlbs) and Vimy Resources (116Mlbs), which reflect the companies' latest available Measured + Indicated + Inferred Resources presented on an attributable basis (i.e. % ownership basis). Deep Yellow Resource base assumes 100% ownership of Tumas, Tubas and Omahola and 85% ownership of Aussinanis. Oponona has an option to acquire 5% of the Reptile Project, however the option is yet to be exercised. See Annexure A and Annexure B of this announcement.

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On implementation of the Scheme, the merger of Deep Yellow and Vimy (Merger) will combine the two companies to form a merged group (Merged Group) with complementary asset bases, leveraging Deep Yellow's development, construction and operational expertise to unlock the development potential of the Mulga Rock Uranium Project (Mulga Rock), located in Western Australia. Combined with the future development of Deep Yellow's Tumas Project (Tumas) in Namibia, the Merged Group is expected to have the scale to rapidly advance its pipeline of organic growth opportunities and be well positioned to pursue additional disciplined value accretive growth.

Under the terms of the Scheme, each shareholder of Vimy (Vimy Shareholder) will receive 0.294 Deep Yellow ordinary fully paid shares (Deep Yellow Share) for every ordinary fully paid Vimy share (each a Vimy Share) held on the Scheme record date. If the Scheme is approved and implemented, Deep Yellow shareholders will hold 53% of the Merged Group and Vimy Shareholders will hold 47% of the Merged Group, in both cases on a fully diluted basis.

The Vimy Board unanimously recommends that Vimy Shareholders vote in favour of the Scheme, in the absence of a Superior Proposal and subject to the Independent Expert opining (and continuing to opine) that the Scheme is in the best interest of Vimy Shareholders7. Subject to those same qualifications, each Vimy director intends to vote all Vimy Shares they control in favour of the Scheme. As at the date of this announcement, the Vimy Board collectively holds 0.42% of Vimy Shares8.

The Vimy Board has received a statement from Paradice Investment Management Pty Ltd (Paradice), the largest shareholder of both Vimy (owning 7.52% of Vimy Shares on issue) and Deep Yellow (owning 7.88% of Deep Yellow Shares on issue), advising that Paradice intends to vote or cause to be voted all the shares that it holds in Vimy in favour of the Scheme, in the absence of a superior proposal and subject to the Independent Expert opining that the Scheme is in the best interest of Vimy Shareholders (and subject to that opinion being maintained up to the date of the Scheme meeting).

John Borshoff, Managing Director and Chief Executive Officer of Deep Yellow, commented: "This Merger has the potential to be a significant value-creating opportunity for both Deep Yellow and Vimy Shareholders. The Merger combines two world class assets, both in Tier-1 mining jurisdictions, into a single group with scale and know-how. The expanded strong technical team of Deep Yellow, together with Vimy personnel, positions us well to bring both projects online when uranium prices support the generation of long-term, sustainable positive cash flows. Our vision has been to deliver growth organically and inorganically to Deep Yellow shareholders and I am very pleased we have started to achieve that in this process. This transaction also builds on the pipeline of exploration assets able to add growth organically and critically, creating a platform for additional value accretive acquisitions."

Steven Michael, Managing Director and Chief Executive Officer of Vimy, commented: "This Merger de-risks and underpins our path to development at Mulga Rock. The combined financial, processing and operating strengths of both companies will enable greater optimisation and the delivery of Mulga Rock, as well as an established exploration team that can unlock considerable value at Alligator River. The Merger provides Vimy Shareholders the opportunity to share in the expected significant benefits of being part of a larger, geographically diverse Merged Group, with the expertise to develop the full portfolio of assets in the near term."

7 See SID attached for details.

8 Based on Vimy ordinary shares on issue (undiluted). On a fully diluted basis, including Vimy Board performance rights and options, the Vimy Board holds 0.82%.

Chris Salisbury - Non-Executive Chairman of Deep Yellow commented: "This Merger represents an outstanding opportunity for both companies. It combines the strengths of both companies into a merged group of global scale, with outstanding assets and importantly a team with a track record of execution. The resultant Merged Group is well positioned for future growth in a sector that requires further consolidation.

The strategic importance of a merger such as this cannot be underestimated. In a time where energy security is at the forefront of government thinking globally, the value of a well credentialled company with a diverse asset base, places this company in a strong position when compared to its peers. The Merger represents a first step in the consolidation of the uranium sector required to deliver long-term sustainable supply."

The Hon. Cheryl Edwardes AM - Non-Executive Chairman of Vimy commented: "Vimy has made significant advancements in the development of Mulga Rock and I am proud of the team's achievement in reaching substantial commencement. As the company now moves to the next phase of development with a clearer pathway to production, I view this Merger as a key step to the successful development of the project. I encourage Vimy Shareholders to support the Merger and am excited about the future of what the Merged Group can deliver."

The board and senior management of the Merged Group will comprise representatives from Deep Yellow and Vimy which is detailed further in the Leadership and Integration section below.

STRATEGIC RATIONALE AND MERGER HIGHLIGHTS

•  Combination of two advanced assets leveraged to the uranium price recovery and the drive for clean base load power

  • o Two advanced uranium assets, with annual production capacity potential of 3.0Mlbs and 3.5Mlbs for Deep Yellow and Vimy respectively - potentially one the largest on the ASX

  • o Geographically diverse - differentiating itself from other single asset uranium juniors

  • o A combined Mineral Resource base of 389Mlbs9, one of the largest in the world and potentially the largest on the ASX

  • o A combined portfolio of complementary assets in Tier-1 uranium mining jurisdictions - Australia and Namibia

•  Potential for market re-rating with increased scale and capital markets profile

  • o The Merged Group is estimated to have a pro-forma market capitalisation of approximately $658 million10, cash and equivalents of approximately $106 million11 and no balance sheet debt12

  • o Potential for shareholders to benefit from the Merged Group attracting greater market interest, as the Merged Group will have an increased likelihood of inclusion in additional indices

9 Combination of resources from Deep Yellow (273Mlbs) and Vimy Resources (116Mlbs), which reflect the companies' latest available Measured + Indicated + Inferred Resources presented on an attributable basis (i.e. % ownership basis). Deep Yellow Resource base assumes 100% ownership of Tumas, Tubas and Omahola and 85% ownership of Aussinanis. Oponona has an option to acquire 5% of the Reptile Project, however the option is yet to be exercised. See also Annexure A and Annexure B of this announcement.

10 Market capitalisation on a fully diluted basis is based on closing share prices on ASX as at 25 March 2022 (being the last trading day for Vimy Shares and Deep Yellow Shares prior to this announcement). Presented market capitalisation for Vimy and Pro Forma market capitalisation does not account for the Scheme's implied offer price and resulting equity value. Refer to the accompanying investor presentation titled, "Deep Yellow and Vimy Merger" for further information.

11 Proforma cash based on 31 December 2021 cash balance and adjusted for the Vimy equity raise of $17M undertaken in March 2022. Includes ~A$1m of cash proceeds from exercising in-the-money options. Refer to the accompanying investor presentation titled, "Deep Yellow and Vimy Merger" for further information.

12 As of 31 December 2021

• o Potential to benefit from additional liquidity, as the Merged Group will satisfy a greater number of minimum investment thresholds for fund managers and qualify for broader research coverage

• o Enhanced financial strength and financing flexibility with the aim of fast-tracking funding and development timelines once uranium prices reach incentive levels

• o Creates a leading independent uranium platform in Tier-1 uranium jurisdictions and positioned to become a supplier of choice to major utilities

•  Highly credentialled uranium team with a proven track record of successfully delivering projects from exploration to production

  • o Combined Board and management team have a track record of successfully financing and developing uranium projects, and have deep experience in uranium marketing, contracting and sales

  • o A strong technical team with proven expertise across a broad range of uranium deposits, processing technologies, environmental and regulatory regimes, able to accelerate development and optimise processing routes

  • o A team with extensive industry knowledge able to deliver significant value creation opportunities

  • o Result-oriented mindset to drive innovation and tangible value creation for shareholders

•  Significant growth optionality through exploration and existing "pounds in the ground"

  • o The Merged Group will have a highly prospective portfolio of exploration opportunities providing a pipeline for organic growth, including the Alligator River Uranium Project (Alligator River) in the Northern Territory, Australia and the Omahola Uranium Project in Namibia

  • o The combined exploration team will form one of the most experienced teams for a uranium company on the ASX, with the goal of delivering significant shareholder value

  • o Significant growth optionality through "pounds in the ground" across the existing project portfolio

•  Platform for value-accretive growth and uranium sector consolidation

  • o The Merged Group provides scale with a significant uplift to market capitalisation and a platform better able to pursue larger, high quality uranium assets with more financial flexibility

  • o The Merged Group will maintain its strong focus on establishing a multi-project, global uranium company through disciplined development and mergers and acquisitions

  • o Dual pillar approach focussed on current advanced assets (Mulga Rock & Tumas) while expanding the platform through timely acquisitions to develop larger scale with high quality mining assets

  • o Extensive database (own intellectual property) of global mining operations based on extensive due diligence and research and well positioned to initiate industry consolidation

  • o Establishing a multi-project, global uranium company aiming to sustain up to 10+ Mlbs per annum with multi-mine capability

•  Continued strong commitment to sustainability and ESG

  • o The Merged Group recognises the importance of Health and Safety, and ESG principles, and understands it is critical in guiding sustainable practices and creating long-term value for all its stakeholders

  • o Provides a strong platform to grow and evolve ESG objectives as the Merged Group progresses towards its aim of becoming a global uranium Tier-1 producer

• o Deep Yellow was the recent winner of the 2021 AAMEG Africa Awards in the Emerging ESG Leader category

• o The Merged Group aims to support local communities in developing a sustainable economic environment with long lasting benefits

•  Aim to complete Feasibility Studies by end CY22/CY23 to have two projects in the development pipeline

  • o Mulga Rock (Western Australia):

    •  Vimy has completed a Definitive Feasibility Study (DFS) and has advised the market of additional works including base metals, drilling / mining studies and base metal recovery optimisation work

    •  Deep Yellow has a comprehensive team of highly experienced uranium professionals available to work on these studies and lead identification of the optimal processing route and review all mining, production, capex and opex assumptions to optimise value

    •  The Merged Group will look to produce a revised DFS that optimises the value of Mulga Rock by undertaking additional works

  • o Tumas (Namibia):

    •  The Tumas DFS is on track for completion by end CY22 and Deep Yellow will work with the Vimy technical team on elements of process that may be incorporated from Mulga Rock

    •  Deep Yellow recently advised the market that studies undertaken to date for the DFS have generally confirmed, and in some cases improved upon PFS assumptions.

TRANSACTION SUMMARY

The Merger is to be implemented by way of the Scheme, under which Deep Yellow will acquire 100% of the Vimy Shares. Vimy Shareholders will receive 0.294 Deep Yellow Shares for every Vimy Share held on the Scheme record date. Deep Yellow shareholders will hold 53% of the Merged Group and Vimy Shareholders will hold 47% of the Merged Group, in both cases on a fully diluted basis.

Upon implementation of the Scheme, Deep Yellow will have approximately 733 million Deep Yellow Shares on issue.

Key conditions to the implementation of the Scheme include, amongst others:

•  Vimy has at least a net cash of $17.0 million;

•  Vimy Shareholders approving the Scheme by the requisite majorities;

•  Court approval of the Scheme;

•  An Independent Expert opining that the Scheme is in the best interests of Vimy Shareholders, and not adversely changing or publicly withdrawing that conclusion;

•  No material adverse change or prescribed event (each as defined in the SID) occurring in relation to either Deep Yellow or Vimy; and

•  Other conditions customary for a public transaction of this nature.

The SID includes standard exclusivity arrangements (including "no shop", "no talk" and "no due diligence" restrictions and notification obligations) in favour of both parties, a "matching

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