ASX RELEASE

6 April 2016

UraniumSA Limited ("UraniumSA")

ASX Code: USA

ABN 48 119 978 013

Ground Floor

28 Greenhill Road

WAYVILLE SA 5034

Phone +61 8 8132 0577

Fax +61 8 8132 0766

www.uraniumsa.com.au [email protected]

BOARD OF DIRECTORS

Alice McCleary Chairman Martin Janes Director Russel Bluck Director & Geoscience Manager

David Paterson Director & Acting CEO

PROJECTS

South Australia

Samphire ELs 4979, 5426 (JV)

Murninnie EL 5440

Wild Horse Plains EL 4693 (JV) Muckanippie EL 4694

ISSUED CAPITAL

6 April 2016

Shares on Issue: 187,859,273 Quoted shares: 187,859,273

Unlisted Options: 9,650,000

INVESTOR INQUIRIES

[email protected]

Inquiries regarding this report and company business may be directed to:

David Paterson - Acting CEO

+61 8 8132 0577

+61 417 823 654

VISIT OUR WEBSITE

www.uraniumsa.com.au

SHARE PURCHASE PLAN

DEMERGER OF SAMPHIRE PROJECT URANIUM ASSETS

UraniumSA PLACEMENT - post demerger

UraniumSA advises that its directors propose a significant restructure of the company to protect and support the existing uranium assets comprising the Samphire Project located 20 km south of Whyalla in South Australia.

The plan involves the demerger of a restructured Samphire Uranium Pty Ltd (SUPL) to Samphire Uranium Limited ('SUL') as a separate standalone unlisted public company. SUPL is and will remain the owner of the Samphire Project Uranium Assets. (refer Appendix 3)

The restructure will include the completion of two capital raisings to provide working capital to ensure that the ongoing entities have sufficient funds, management structures and operational flexibility to support their ongoing activities.

The elements of the proposal are detailed below and will require shareholder approval at a general meeting (refer pages 2 - 6 for additional detail including an indicative timetable).

Share Purchase Plan (SPP)

UraniumSA will shortly release full details of a SPP focussed on raising approximately $400,000. Each Shareholder will be entitled to subscribe for additional shares in the company to a maximum value of $15,000.

Taylor Collison have been appointed broker to the SPP.

Demerger of Samphire Project Uranium Assets

Subject to shareholder approval, shareholders in UraniumSA will receive a pro-rata in-specie distribution of shares in a restructured unlisted public company, SUL.

The proposed assets of SUL are detailed below. It is anticipated SUL will benefit from a recovery of the uranium market.

UraniumSA Placement - post demerger

UraniumSA has for many quarters indicated that it was seeking and evaluating other opportunities in the energy and wider resources sector. This process continues and has been extended to businesses outside the resources sector.

UraniumSA will continue its business of minerals exploration.

UraniumSA has appointed Taylor Collison to assist with identifying opportunities referred to above. In addition to the funds raised from the SPP, the mandate with Taylor Collison is anticipated to bring up to $1.0 million in new UraniumSA equity

- post the proposed demerger.

Re-compliance with Chapters 1 and 2 of the ASX Listing Rules may be required depending upon the nature and scale of any acquisition subsequently progressed by UraniumSA.

Share Purchase Plan (SPP)

Shareholders who were registered as holders of fully paid ordinary shares in UraniumSA (Company) at 7.00pm CST on 5 April 2016 (Record Date) with a registered address in Australia or New Zealand will be eligible to participate in the SPP.

Under the SPP, eligible shareholders will be entitled to subscribe for up to $15,000 worth of new fully paid ordinary shares in the Company at an issue price of $0.017 (1.7 cents per share), without brokerage, commission or other transaction costs.

Taylor Collison have agreed to be Broker to the SPP. The SPP is not underwritten.

The Company is focussed on raising $400,000 from the SPP. Allocation of shares will likely be on a "first come, first served basis". The Company reserves the right to scale back applications to ensure regulatory compliance and may close the SPP before the indicative closing date.

Directors of UraniumSA intend participating in the SPP.

Full details and terms of the SPP and related documentation will be released on ASX on or about 15 April 2016.

Demerger of Samphire Project Uranium Assets

UraniumSA directors have for some time considered a demerger of the Samphire Project Uranium Assets. More recently in discussions with its advisers and market participants the strategy focus has moved to the demerger option. This release details the key elements of transactions which your directors believe are in the best interest of all shareholders. More detailed information will be provided in a Notice of Meeting which will be despatched to all shareholders in coming weeks.

The formation of SUL and demerger from UraniumSA constitutes the divestiture of UraniumSA's major asset. This requires shareholder approval at an extraordinary general meeting (EGM) of the company and ongoing compliance with ASX Listing Rules. All eligible shareholders in UraniumSA will participate in the demerger on a pro-rata basis.

Resolutions for shareholder approval at the EGM will include:

1. Amendments if required to UraniumSA constitution to facilitate the demerger.

2. Approval of the demerger of SUL from UraniumSA.

3. Approval of the UraniumSA placement to be conducted by Taylor Collision post demerger re LR 7.1

4. Approval of issue of shares to various directors in lieu of fees and entitlements outstanding re LR 10.11

Pre and Post diagrams of organisational structure appears as Appendix 3.

UraniumSA believes that a demerger transaction is now the best means of maintaining the value of the Samphire Project Uranium Assets at a reduced cost inside an unlisted public company to be called Samphire Uranium Limited (SUL). This will leave the listed entity UraniumSA to continue its other exploration initiatives and pursue other value adding activities.

UraniumSA will continue to hold EL4694 Muckanippie which is prospective for base metals and gold. In addition it holds 3 exploration licence applications prospective for base metals, uranium and other minerals. (refer ASX releases 12 and 13 February 2014 and ASX Quarterly Activity Reports - September and December 2015)

All shareholders will hold the same number of shares in UraniumSA immediately after the demerger as they held immediately before the demerger. The demerger will not affect either the total number of UraniumSA shares on issue or the number of UraniumSA shares held by each shareholder.

UraniumSA Placement - post demerger

In addition to the funds raised from the SPP, the mandate with Taylor Collision is anticipated to bring up to $1.0 million in new UraniumSA equity - post the proposed demerger. A resolution will be put to shareholders at the EGM seeking approval of this placement and ensuring compliance with Listing Rule 7.1.

The placement price will not be set until after the SUL demerger. Participants will be sophisticated and / or institutional investor clients of Taylor Collison.

Appendix 1 Indicative Timetable - subject to change at discretion of the Company

Appendix 2 indicative pro-forma balance sheets for UraniumSA and Samphire Uranium Limited post demerger