ACN 061 681 098

Ref: 402368_1.DOC

12 November 2015

Dear Sir/Madam

30 September 2015 Quarterly Financial Report and MD&A

Attached please find the Quarterly Financial Report for the three months ended 30 September 2015 including News Release, Management Discussion and Analysis, Interim Financial Statements and Certifications as required in accordance with Canadian reporting requirements.

Yours faithfully Paladin Energy Ltd

ALEXANDER MOLYNEUX

Interim CEO

Level 4, 502 Hay Street, Subiaco, Western Australia 6008 Postal: PO Box 201, Subiaco, Western Australia 6904

Tel: +61 (8) 9381 4366 Fax: +61 (8) 9381 4978 Email:[email protected] Website: www.paladinenergy.com.au

NEWS RELEASE

ACN 061 681 098

FINANCIAL REPORT FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2015 AND OUTLOOK

Perth, Western Australia - 12 November 2015: Paladin Energy Ltd ('Paladin' or 'the Company')(ASX:PDN / TSX:PDN) announces the release of its Unaudited Consolidated Financial Report for the three months ended 30 September 2015. The Unaudited Consolidated Financial Report is appended to this News Release.

Operations

HIGHLIGHTS

• Langer Heinrich Mine (LHM) produced11.083Mlb U3O8for the three months ended 30 September 2015, down 1% from the September 2014 quarter.

• C1 cost of production2:

  • C1 unit cash cost of production of US$27.82/lb (vs. September quarter guidance of US$27.00/lb to US$30.00/lb).

  • C1 unit cash cost of production decreased by 16% from US$33.03/lb in the September 2014 quarter to US$27.82/lb in the September 2015 quarter.

    
    

    Sales and revenue

• Sales revenue of US$36.9M for the three months ended 30 September 2015, selling 0.800MlbU3O8.

• Average realised uranium sales price for the quarter was US$46.12/lb U3O8compared to the average TradeTech weekly spot price for the quarter of US$36.48/lb U3O8.

  Corporate

• Repurchased US$20M of the US$274M Convertible Bonds due April 2017 for approximately US$18.5M.

• Cash flow optimisation initiatives implemented.

• Cash and cash equivalents at 30 September 2015 of US$108.4M (vs. guidance pro-forma for repurchase of Convertible Bonds due in April 2017 of US$101.5M to US$111.5M).

• Underlying EBITDA3for the three months ended 30 September 2015 of US$6.4M, a US$21.5M turnaround from a negative underlying EBITDA of US$15.1M for the three months ended 30 September 2014.

  
  

  
  

  1 LHM production volumes and unit C1 cost of production include an adjustment to in-circuit inventory relating to leached uranium within process circuit.

  2 C1 cost of production = cost of production excluding product distribution costs, sales royalties and depreciation and amortisation before adjustment for impairment. C1 cost, which is non-IFRS information, is a widely used 'industry standard' term.

  3 EBITDA = The Company's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) represents profit before finance costs, taxation, depreciation and amortisation, impairments, foreign exchange gains/losses, restructure costs and other income. EBITDA, which is non-IFRS information, is a widely used 'industry standard' term.

  
  

  
  

  Level 4, 502 Hay Street, Subiaco, Western Australia 6008 Postal: PO Box 201, Subiaco, Western Australia 6904

  Tel: +61 (8) 9381 4366 Fax: +61 (8) 9381 4978 Email:[email protected] Website: www.paladinenergy.com.au

• Underlying all-in cash expenditure per pound of uranium production for the three months ended 30 September 2015 of US$46.25/lb, a decrease of 27% compared to the three months ended 30 September 2014 of US$63.86/lb.

  
  

  Outlook

• Subsequent quarters to be cash flow positive at current spot uranium prices and foreign exchange rates in line with forecast to be cash flow neutral4for FY2016 on an 'all-in' basis.

• Key elements of FY2016 guidance maintained including:

  • LHM production 5.0Mlb to 5.4MlbU3O8.

  • Weighted average sales price premium to spot of approximately US$4/lb.

  • LHM C1 cash costs in the range of US$25/lb to US$27/lb (i.e., 7-14% lower than FY2015).

• Key elements of guidance for quarter to 31 December 2015 include:

  • Uranium sales in the range of 1.5Mlb to 1.7Mlb.

  • C1 cash costs within the full-year guidance range (i.e., US$25/lb to US$27/lb).

  • Quarter-end cash balance in the range of US$110M to US$120M.

    
    

    Results

    (References below to 2015 and 2014 are to the equivalent three months ended 30 September 2015 and 2014 respectively).

    
    

    Safety and sustainability

    Safety performance continues to improve. The Company's 12 month moving average Lost Time Injury Frequency Rate5(LTIFR) was 1.39 as compared to 2.41 last quarter and 4.10 for the three months ended 30 September 2014.

    
    

    Langer Heinrich Mine (LHM)

    LHM produced 1.083Mlb U3O8for the three months ended 30 September 2015, down 1% from the September 2014 quarter. Key production drivers included:

     Ore milled: 847,016t (2014: 734,226)

  • Feed grade: 706ppm U3O8(2014: 786ppm U3O8).

     Overall recovery: 82.2% (2014: 85.6%).

  • Bicarbonate Recovery Plant (BRP) operating at greater than 200% of design.

    C1 cost of production for the quarter decreased by 16% from US$33.03/lb in the September 2014 quarter to US$27.82/lb in the September 2015 quarter due to lower production volume.

    
    

    Kayelekera Mine (KM) remains on care and maintenance

  • Nano-filtration unit commissioned at water treatment plant at the end of September 2015.

  • Application for renewal of licence to discharge treated water submitted in September 2015 with the renewal expected to be granted by 30 November 2015.

    
    

    4Excluding one-off restructuring and implementation costs of approximately US$6M and not taking into account any capital management or strategic initiatives, such as the repurchase of US$20M of the Convertible Bonds due April 2017. 5All frequency rates are per million personnel hours.

    
    

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    Profit and Loss

    Total sales volume for the quarter was 0.800Mlb U3O8(2014: 1.250Mlb). Sales volumes are expected to fluctuate quarter-on-quarter due to the uneven timing of contractual commitments and resultant delivery scheduling to customers, and also fluctuations between U3O8production and U3O8drummed. Sales, U3O8production and U3O8drummed volumes, and inventories are expected to be comparable on an annualised basis.

    Sales revenue for the quarter decreased by 5% from US$39.0M in 2014 to US$36.9M in 2015, as a result of a 36% decrease in sales volume, which was partially offset by a 47% increase in realised sales price. There were no sales from KM in this quarter (2014: 0.100Mlb). The last of KM finished goods were sold in December 2014.

    
    

    The average realised uranium sales price for the three months ended 30 September 2015 was US$46.12/lb U3O8(2014: US$31.16/lb U3O8), compared to the TradeTech weekly spot price average for the quarter of US$36.48/lb U3O8.

    Gross Profit for the quarter increased by 707% from US$1.4M in 2014 to US$11.3M in 2015.

    Underlying EBITDA for the three months ended 30 September 2015 of US$6.4M, a US$21.5M turnaround from a negative underlying EBITDA of US$15.1M for the three months ended 30 September 2014.

    Net loss after tax attributable to members of the Parent for the quarter of US$16.4M (2014: Net loss US$38.8M).

    
    

    Cash flow

    Cash outflow from operating activities for the quarter was US$52.3M, after net interest payments of US$5.7M and exploration expenditure of US$0.4M. Cash receipts from customers was only US$0.8M as the cash from the sales for the quarter of US$36.9M was only received in October 2015.

    Cash outflow from investing activities for the quarter totalled US$4.2M:

    • plant and equipment acquisitions of US$0.9M; and

    • capitalised exploration expenditure of US$3.3M (including US$1.2M for the acquisition of the Carely Bore Uranium Deposit).

Cash outflow from financing activities for the quarter of US$18.0M is attributable to the repurchase of US$20M April 2017 Convertible Bonds for US$18.0M (excluding accrued interest).

Cash position and capital management

Cash of US$108.4M at 30 September 2015 (vs. guidance pro-forma for repurchase of Convertible Bonds due in April 2017 of US$101.5M to US$111.5M).

Repurchased US$20M of the US$274M Convertible Bonds due April 2017 for approximately US$18.5M (including accrued interest).

The documents comprising the Unaudited Consolidated Financial Report for the three months ended 30 September 2015, including the Management Discussion and Analysis, Financial Statements and Certifications are attached and will be filed with the Company's other documents on Sedar (sedar.com) and on the Company's website (paladinenergy.com.au).