Deep Yellow snares uranium rights to Xstrata tenements

Deep Yellow Ltd has struck a deal with Xstrata Group subsidiary, Mount Isa Mines Ltd, whereby Deep Yellow can ultimately acquire 100 per cent of the uranium rights to six Xstrata-held tenements.

The tenements cover a total of 504 square kilometres immediately west of the Mt Isa townsite/minesite.

The agreement provides Deep Yellow with four years in which to explore the tenements for uranium with an option (subject to DYL spending at least $10 million on exploration in the first four years of the agreement and a number of other conditions being met) for an additional period of five years in which to continue exploration or apply for a uranium mine lease.

The six exploration permits for minerals are known collectively as the Isa West Tenements and importantly they cover extensive basalt and sediment sequences of the prospective Haslingden Group which hosts the Valhalla and Skal (Summit/Paladin) and Queens Gift (DYL) uranium deposits.

The tenements contain a number of known uranium occurrences mainly located and explored by Queensland Mines in the 1970's.

As part of the Agreement, Deep Yellow will be given access to an extensive exploration database over the tenements held by Xstrata in their Mt Isa office, including detailed airborne radiometric and magnetic survey data.

Shares in Deep Yellow fell 4 cents or 15.7 per cent to close at 24 cents each today.