PALADIN ENERGY LTD

ACN 061 681 098

Ref: 383470

14 May 2015

ASX Market Announcements

Australian Securities Exchange

20 Bridge Street

SYDNEY NSW 2000

By Electronic Lodgement

Dear Sir/Madam

31 March 2015 Interim Financial Report and MD&A

Attached please find the Interim Financial Report for the nine months ended 31 March 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

GILLIAN SWABY Company Secretary

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

PALADIN ENERGY LTD

ACN 061 681 098

NEWS RELEASE For Immediate Distribution

PALADIN ENERGY: FINANCIAL REPORT FOR THE NINE MONTHS ENDED

31 MARCH 2015

Perth, Western Australia - 14 May 2015: Paladin Energy Ltd ('Paladin' or 'the Company')(TSX:PDN / ASX:PDN) announces the release of its consolidated Financial Report for the nine months ended 31 March 2015. The Financial Report is appended to this News Release.

OPERATIONS

HIGHLIGHTS

Langer Heinrich Mine (LHM) produced(1)1.234Mlb U3O8for the three months ended 31 March 2015, down

10% from the last quarter.

C1 cost of production(2):

 LHM C1 unit cost of production for the quarter increased by 3% from US$28.6/lb in the December

2014 quarter to US$29.4/lb in the March 2015 quarter.

FY2015 production guidance remains at 5.0 - 5.2Mlb U3O8.

SALES AND REVENUE

Sales revenue of US$125.3M for the nine month period ended 31 March 2015, selling 3.601Mlb U3O8.

Average realised uranium sales price for the nine months was US$34.80/lb U3O8compared to the average TradeTech spot price for the period of US$35.6/lb U3O8.

 Uranium spot price increased to US$39.40/lb at the end of March 2015, an increase of 11% during the quarter. Spot price at end of December 2014 was US$35.50/lb.

 Japan reactor restart programme continued to make progress towards implementation.

CORPORATE

 Successful recapitalisation completed with issue of a US$150M convertible bond.

 US$300M November 2015 convertible bond paid out by tender offer on 2 April 2015 (US$289.25M) with the balance US$10.75M to be paid out on 18 May 2015 through the exercise of the optional redemption right.

 Future cost optimisation focus continues for both production and corporate costs.

(1) LHM production volumes and unit C1 cost of production for the quarters ended December 2014, September 2014, June 2014, March 2014 and

December 2013 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.

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

Results

(References below to 2015 and 2014 are to the equivalent nine months ended 31 March 2015 and 2014 respectively).

 Safety and Sustainability:

- Lost time injury (LTI) frequency rate substantially reduced due to new initiatives and improvements implemented across the Group.

 Langer Heinrich Mine (LHM):

- LHM produced 1.234Mlb U3O8for the three months ended 31 March 2015, down 10% from the previous quarter's production of 1.377Mlb U3O8.
Feed grade for the quarter: 734ppm U3O8.

 Recovery: 88.4% an increase of 0.2% from the last quarter.

 Ore feed for the quarter of 860,337t, constrained mainly by the pre-leach thickener #2 centre well failure which, as reported in February, caused 12 days loss of full production.

 Bicarbonate Recovery Project (BRP) successfully commissioned in March and operating above design.

- LHM unit C1 cost of production for the March 2015 quarter increased by 3% to US$29.4/lb U3O8from US$28.6/lb in the December 2014 quarter as a result of the lower production, although total US$ C1 costs of production decreased by 8% to US$36.3M.

 Cost Reduction Initiatives:

- BRP successfully commissioned in March and operating above design. The extent of this project's success has far-reaching implications for the Langer Heinrich operation now and into the future. BRP is expected to exceed design benefit by up to 100% and establish a new paradigm in carbonate uranium processing.
- The cost optimisation strategy will remain focused on process recovery, operator training and continuity of operation, all of which are capable of delivering sustained benefits in the short and medium term.
- Target for LHM is C1 unit cost below US$26/lb by the end of FY2015, and US$22/lb in FY2017 (in real terms) focusing primarily on reagent recycling, increased recovery, plant utilisation and mining cost reduction.

 Kayelekera Mine (KM) remains on care and maintenance:

- Restart study well advanced and completion of this evaluation is expected by the end of June 2015.
- Post quarter controlled release of treated water commenced to maintain water balance.

 Profit and Loss:

- Total sales volume for the nine months of 3.601Mlb U3O8. (2014: 6.853Mlb).
- Sales revenue for the nine months decreased 52% from US$259.6M in 2014 to US$125.3M in 2015, as a result of an 8% decrease in realised sales price, and a 47% decrease in sales volume predominantly due to KM being placed on care and maintenance. The average realised uranium sales price for the nine months ended 31 March 2015 was US$34.80 U3O8(2014: US$37.90/lb U3O8), compared to the TradeTech weekly spot price average for the nine months of US$35.60/lb U3O8. Higher uranium sales of around 1.7Mlb are anticipated for the June quarter with an average sales price expected above the average for the nine months, reflecting the delivery of volumes into defined price contracts.
- Gross Profit for the nine months of US$4.6M is a turnaround from a US$27.6M gross loss (including a gross loss of US$35.3M from KM) in 2014.
- Net loss before tax attributable to members of the Group for the nine months was US$71.9M. (2014: Net loss
US$274.9M)

377092_4 Page 2

 Cash Flow:

- Cash outflow from operating activities for the nine months was US$47.2M, after net interest payments of US$14.9M and exploration expenditure of US$1.2M.
- Cash outflow from investing activities for the nine months totalled US$12.8M:

 plant and equipment acquisitions of US$9.7M, including, the BRP

equipment and spiral heat exchangers at LHM; and,

 capitalised exploration expenditure of US$3.2M.

- Cash inflow from financing activities for the nine months of US$443.0M is mainly attributable to:

 the balance of proceeds received from the sale of a 25% interest in LHM of US$170M, the proceeds from the entitlement offer of US$119.7M, from the share placement to HOPU of US$52.7M, and from the convertible bond issue of $150M, all of which has been partially offset by a US$35.4M repayment of the LHM project finance and syndicated loan facility, US$1.5M in syndicated loan facility establishment costs, US$3.0M in costs attributable to the sale of a 25% interest in LHM, US$5.7M in equity capital raising costs and US$3.8M in convertible bond issue costs.

 Cash Position:

- Cash of US$469.6M at 31 March 2015.
- Balance of proceeds from the sale of a 25% interest in LHM of US$170M, US$119.7M proceeds from the entitlement offer, US$52.7M proceeds from the share placement to HOPU and US$150M proceeds from the convertible bond issue.
- US$35.4M repayment of the LHM project finance facility and syndicated loan and costs attributable to the capital raisings.

 Production Guidance

- Paladin's FY2015 production guidance remains at 5.0 - 5.2Mlb U3O8.

 Sales Volumes

- Uranium sales volumes are expected to fluctuate quarter-on-quarter due to the uneven timing of contractual commitments and resultant delivery scheduling by customers. Sales, production volumes and inventories are expected to be comparable on an annualised basis.

 Capital Management

- On 31 March 2015, Paladin issued a US$150M convertible bond. The issue structure included a US$100M convertible bond issued on 13 February 2015 and, as a result of Paladin exercising an upsize option, an additional US$50M issued on 25 March 2015. The US$100M was issued to high quality institutional investors, whilst the US$50M was issued to Leader Investment Corporation, a controlled subsidiary of China Investment Corporation (CIC).
- The investment by CIC provides Paladin with additional funding flexibility and bolsters Paladin's cash position, thereby further reducing the need for any additional funding in the medium term and enabling the Company to fully capitalise on its strategic value. More importantly, Paladin's new relationship with CIC, as one of the largest sovereign wealth funds in the world, sets a possible platform for Paladin's future development and growth to become a true Tier 1 uranium producer amongst its peers.
- The US$150M convertible bond carries a coupon of 7% per annum and is convertible into Paladin shares at an initial conversion price of US$0.356 per share, representing a conversion premium of 25% above the reference price of Paladin shares at the time of pricing and are due 31 March 2020.
- Proceeds from the convertible bond were used to fund the concurrent tender offer to acquire the outstanding US$300M convertible bond due November 2015. On 2 April 2015, Paladin repurchased US$289.25M of the US$300M convertible bonds. On 17 April 2015, Paladin exercised its optional redemption right for the remaining US$10.75M convertible bonds, settling on 18 May 2015.

377092_4 Page 3

 Uranium Outlook

- As reported by TradeTech, volume in the near-term spot market rose over the March quarter registering a total transactional quantity of 15.2Mlb, as compared to 9.0Mlb for the comparable period of 2014, an increase of close to 70%. While the spot price ended the December quarter at US$35.50/lb, the spot price for near- term delivery rose at a fairly steady rate over the March quarter ending at US$39.40/lb, an increase of almost
11%.
- The uranium Term Price, which had risen from US$45.00/lb to US$50.00/lb in the December quarter, remained stable through the March quarter. As previously reported, the global term contracting volume reached about 80Mlb during CY2014, a significant increase over the CY2013 level of just over 20Mlb. However, as anticipated, U.S. utilities began to test the all-important long-term market (2017-2018 and beyond) late in the March quarter, with additional requests for offers expected during the June quarter. This term activity is likely to result in upward pressure on the Term Price through the remainder of the year.
- Paladin remains convinced that production cut-backs across the sector instituted in CY2014, coupled with the recent operational production issues incurred during the March quarter at two major uranium production facilities, have contributed to increasing tightness in near-term supply.
- In mid-March, Chinese authorities approved construction of two reactors at the Hongyanhe NPP located in Liaoning Province, the first approvals in the post-Fukushima era. Additionally, on 9 April, the National Development and Reform Commission gave approval for the construction of the Fuqing 5 & 6 reactors (Fujian Province), which must now receive approval from the State Council.
- In Japan, Sendai 1 & 2 (Kyushu Electric Power Company) continued to progress towards restarting, as the District Court in Kagoshima rejected a petition requesting that the governmentally-approved restart be halted. The Sendai reactors could restart by June. In mid-February Takahama 3 & 4 (Kansai Electric Power Company) received safety approvals from the Nuclear Regulatory Authority with operations likely during the second half of 2015, depending upon the outcome of a District Court injunction halting the restart (Kansai Electric has appealed the provisional ruling). Finally, in early April, the ruling Liberal Democratic Party proposed a long-term energy plan for Japan that envisions nuclear providing at least 20% of electricity compared to the pre-Fukushima level of 27%.
- On 15 April 2015, Cameco announced that the company had signed a long-term uranium sales agreement with the Department of Atomic Energy of India calling for the delivery of 7.1Mlb U3O8over the period 2015-
2020. While not the first uranium agreement by a Western uranium supplier and the Indian government, this
contract is being heralded as a watershed event and will likely result in further such contracting in support of the growing Indian civilian nuclear power programme.

The documents comprising the Financial Report for the nine months ended 31 March 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).

Generally Accepted Accounting Practice

The news release includes non-GAAP performance measures: C1 cost of production, non-cash costs as well as other income and expenses. The Company believes that, in addition to the conventional measures prepared in accordance with GAAP, the Company and certain investors use this information to evaluate the Company's performance and ability to generate cash flow. The additional information provided herein should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

Declaration

The information in this announcement that relates to minerals exploration and mineral resources is based on information compiled by David Princep BSc, FAusIMM (CP) who has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code). Mr Princep is a full-time employee of Paladin Energy Ltd. Mr. Princep consents to the inclusion of the information in this announcement in the form and context in which it appears.

377092_4 Page 4

Conference Call

Conference Call and Investor Update is scheduled for 06:30 Perth & Hong Kong, Friday 15 May 2015;
18:30 Toronto and 23:30 London, Thursday 14 May 2015. Details are included in a separate news release dated 11 May
2015.

Contacts

For additional information, please contact:

John Borshoff

Managing Director/CEO
Tel: +61-8-9381-4366 or Mobile: +61-419-912-571
Email: [email protected]

Craig Barnes

Chief Financial Officer
Tel: +61-8-9381-4366 or Mobile: +61-424- 724-416
Email: [email protected]

Andrew Mirco

Investor Relations Contact (Perth)
Tel: +61-8-9381-4366 or Mobile: +61-409-087-171
Email: [email protected]

Greg Taylor

Investor Relations Contact (Toronto)
Tel: +1-905-337-7673 or Mobile: +1-416-605-5120
Email: [email protected]

377092_4 Page 5

PALADIN ENERGY LTD

A.C.N.061 681 098

FINANCIAL REPORT

FOR THE NINE MONTHS ENDED

31 MARCH 2015

PALADIN ENERGY LTD

Table of Contents - Third Quarter Report 31 March 2015

Page

Management Discussion and Analysis……………………………........................................ 3

Consolidated Income Statement…………………………………...... .................................... 19

Consolidated Statement of Comprehensive Income……………………………………… .... 20

Consolidated Statement of Financial Position………………………………………..... ......... 21

Consolidated Statement of Changes in Equity……………………… ................................... 22

Consolidated Statement of Cash Flows………………………………................................... 23

Notes to the Consolidated Financial Statements…………………………. ........................... 24

The financial report covers the Group consisting of Paladin Energy Ltd (referred throughout as the

Company or Paladin) and its controlled entities.

377461_6 2

PALADIN ENERGY LTD

Management Discussion and Analysis For the Nine Months Ended 31 March 2015

(All figures are in US dollars unless otherwise indicated)

The following Management Discussion and Analysis ('MD&A') for Paladin Energy Ltd ('Company') and its controlled entities ('Group') should be read in conjunction with the Consolidated Financial Statements for the nine months ended 31 March 2015. The effective date of this report is

14 May 2015.

The financial information presented in this MD&A has been extracted from the attached financial statements. For the purpose of preparing our MD&A, we consider the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in market price or value of our shares; or (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) it would significantly alter the total mix of information available to investors. We evaluate materiality with reference to all relevant circumstances, including potential market sensitivity.

Additional information relating to the Company and its operations, including the Company's

Quarterly Activities Report for each of the periods ended 30 September 2014, 31 December

2014 and 31 March 2015, and the most recent Annual Report for the year ended 30 June 2014 and other public announcements are available atwww.paladinenergy.com.au.

FORWARD LOOKING STATEMENTS

Some of the statements contained in this MD&A, including those relating to strategies and other statements, are predictive in nature, and depend upon or refer to future events or conditions, or include words such as 'expects', 'intends', 'plans', 'anticipates', 'believes', 'estimates' or similar expressions that are forward looking statements. Forward looking statements include, without limitation, the information concerning possible or assumed further results of operations as set forth herein. These statements are not historical facts but instead represent only expectations, estimates and projections regarding future events and are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations generally.

The forward looking statements contained in this MD&A are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. The future results of the Group may differ materially from those expressed in the forward looking statements contained in this MD&A due to, among other factors, the risks and uncertainties inherent in the business of the Group. The Company does not undertake any obligation to update or release any revisions to these forward looking statements to reflect events or circumstances after the date of this MD&A or to reflect the occurrence of anticipated events.

NON IFRS MEASURE

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 a non-IFRS measure, is a widely used 'industry standard' term. We use this measure as a meaningful way to compare our performance from period to period. We believe that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate our performance. C1 cost information has been extracted from the financial statements and is unreviewed. For an analysis of total cost of sales refer to Note 11 to the financial statements. Refer to page 7 and 10 for reconciliation.

377461_6 3

PALADIN ENERGY LTD

Management Discussion and Analysis For the Nine Months Ended 31 March 2015

(All figures are in US dollars unless otherwise indicated)

OVERVIEW

The Group has two uranium mines in Africa1, uranium exploration projects in Australia, Africa and Canada, and a strategy to become a major uranium mining house. The Company is incorporated under the laws of Western Australia with a primary share market listing on the Australian Securities Exchange ('ASX') and additional listings on the Toronto Stock Exchange ('TSX') in Canada; as well as the Munich, Berlin, Stuttgart and Frankfurt Stock Exchanges in Europe; and the Namibian Stock Exchange in Africa.

1 Langer Heinrich Mine, Namibia (operating). Kayelekera Mine, Malawi (on care and maintenance).

377461_6 4

PALADIN ENERGY LTD

Management Discussion and Analysis For the Nine Months Ended 31 March 2015

(All figures are in US dollars unless otherwise indicated)

The main activities and results during the three months ended 31 March 2015 were: OPERATIONS*

Langer Heinrich Mine (LHM) produced 1.234Mlb U3O8for the three months ended

31 March 2015, down 10% from the last quarter.

- Feed grade for the quarter: 734ppm U3O8.

- Recovery: 88.4% an increase of 0.2% from the last quarter.

- Ore feed for the quarter of 860,337t, constrained mainly by the pre-leach thickener #2 centre well failure, which as reported in February, caused 12 days loss of full production.

- Bicarbonate Recovery Project (BRP) successfully commissioned in March and operating above design. The extent of this project's success has far-reaching implications for the Langer operation now and into the future. BRP is expected to exceed design benefit by up to 100% and establish a new paradigm in carbonate uranium processing.

 Kayelekera Mine (KM) remains on care and maintenance.

- Completion of restart study well advanced and expected by the end of June 2015.

- Post quarter controlled release of treated water commenced to maintain water balance.

 C1 cost of production:

- LHM unit C1 cost of production for the March 2015 quarter increased by 3% to

US$29.4/lb U3O8from US$28.6/lb in the December 2014 quarter.

Paladin's FY2015 production guidance remains at 5.0 - 5.2Mlb U3O8.

 Lost time injury (LTI) frequency rate substantially reduced due to new initiatives and improvements implemented across the Group.

SALES AND REVENUE

Sales revenue of US$16.7M for the quarter, selling 0.440Mlb U3O8at an average price of US$38.0/lb U3O8reflecting the timing of sales contracts. Sales revenue of US$125.3M for the nine months, selling 3.601Mlb U3O8at an average of US$34.8/lb.

CORPORATE INITIATIVES

 Successful recapitalisation completed with the issue of a US$150M convertible bond.

- US$300M November 2015 convertible bonds paid out by tender offer on 2 April 2015 (US$289.25M) with the balance US$10.75M to be paid out on 18 May 2015 through the

exercise of the optional redemption right.

OTHER

 Uranium spot price increased to US$39.40/lb at the end of March 2015, an increase of 11% during the quarter. Spot price at end of December 2014 US$35.50/lb.

 Japan reactor restart programme continued to progress towards implementation.

 The Company's cost optimisation focus continues for both production and corporate costs.

* LHM production volumes and unit C1 cost of production for the quarters ended December 2014, September

2014, June 2014, March 2014 and December 2013 include an adjustment to in-circuit inventory relating to leached uranium within the process circuit.

377461_6 5