Fax Coversheet

ACN 061 681 098

Ref: 409017

10 May 2016

ASX Market Announcements Australian Securities Exchange 20 Bridge Street

SYDNEY NSW 2000

By Electronic Lodgement

Dear Sir/Madam

31 March 2016 Interim Financial Report and MD&A

Attached please find the Interim Financial Report for the nine months ended 31 March 2016 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 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:paladin@paladinenergy.com.au Website: www.paladinenergy.com.au

NEWS RELEASE

ACN 061 681 098

FINANCIAL REPORT FOR THE NINE MONTHS ENDED 31 MARCH 2016 AND OUTLOOK Perth, Western Australia - 10 May 2016: Paladin Energy Ltd ("Paladin" or "the Company")(ASX:PDN / TSX:PDN) announces the release of its Unaudited Consolidated Financial Report for the nine months ended 31 March 2016. The Unaudited Consolidated Financial Report is appended to this News Release.

Operations

HIGHLIGHTS

  • LangerHeinrich Mine (LHM) produced11.302MlbU3O8forthe three months ended 31 March 2016, up 3% from the December 2015 quarter.

  • Record low C1 unit cash cost of production2for the March 2016 quarter of US$24.13/lb (vs. guidance of US$23.00/lb to US$25.00/lb), a decrease of 5% from US$25.38/lb in the December 2015 quarter.

    Sales and revenue

  • Sales revenue of US$20.6M for the three months ended 31 March 2016, selling 0.595Mlb U3O8.

  • Average realised uranium sales price for the quarter was US$34.67/lb U3O8compared to the average TradeTech weekly spot price for the quarter of US$32.73/lb U3O8.

    Corporate

  • Underlying EBITDA3for the three months ended 31 March 2016 of negative US$0.8M, a US$5.4M improvement from a negative underlying EBITDA of US$6.2M for the three months ended 31 March 2015.
  • Underlying all-in cash expenditure4per pound of uranium produced for the three months ended 31 March 2016 of US$31.60/lb, a decrease of 33% compared to the three months ended 31 March 2015 of US$46.87/lb.
  • Repurchased an additional US$25M of Convertible Bonds due April 2017 to reduce outstanding amount to US$212M.
  • Repaid and terminated the US$56.4M LHM Syndicated Facility.
  • Cash and cash equivalents at 31 March 2016 of US$21.4M, a decrease of US$115.4M from US$136.8M at 31 December 2015. Guidance previously provided was for the 31 March 2016 cash balance to be in the range of US$100M to US$110M, with such guidance provided prior to the implementation of the Convertible Bond repurchase and the repayment of the LHM Syndicated

    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.

    4 Underlying All-In Cash Expenditure = total cash cost of production plus capital expenditure, KM care & maintenance expenses, corporate costs, exploration costs and debt servicing costs and repayments. Underlying All-In Cash Expenditure, which is a non-IFRS measure, is widely used in the mining industry as a benchmark to reflect operating performance.

    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:paladin@paladinenergy.com.au Website: www.paladinenergy.com.au

    Facility in the March quarter, which resulted in adjusted guidance pro-forma for those items of US$19M to US$29M.

    Outlook

  • Issues with performance of water return sumps from LHM tailings storage facility no. 3 (TSF3)willlikely result in the loss of approximately 150,000lb U3O8productionduring the quarter to 30 June 2016 resulting in reduced annual production guidance and increased C1 cash cost guidance for the quarter.

  • LHM TSF3 return water issue will not affect sales guidance or forecast 30 June 2016 cash balance.
  • Key elements of current FY2016 guidance:

    • LHM production approximately 4.8Mlb U3O8(vs. previous5.0Mlb).

    • Weighted average sales price premium to spot of approximately US$4/lb (no change).
    • LHM C1 cash costs in the range of US$24/lb to US$26/lb (no change).
  • All-in cash expenditure for the full-year FY2016 range of US$38/lb to US$40/lb (no change).
  • Company continues to be on track to be cash flow neutral5excluding one-off restructuring costs and capital management or strategic initiatives for FY2016 full-year.
  • Key elements of guidance for quarter to 30 June 2016 include:
    • Uranium sales in the range of 1.75Mlb to 2.10Mlb (no change).
    • C1 cash costs in the range of US$25/lb to US$27/lb. (vs. previous US$23/lb to US$25/lb).
    • Quarter-end cash balance in the range of US$45M to US$65M (no change).

      Results

      (References below to 2016 and 2015 are to the equivalent three months ended 31 March 2016 and 2015 respectively).

      Safety and sustainability

      The Company's 12 month moving average Lost Time Injury Frequency Rate6(LTIFR) was 1.4 as compared to 2.1 at the end of the last quarter and 2.3 for the quarter to 31 March 2015. The Company achieved 635 Lost Time Injury (LTI) free days at the Kayelekera Mine (KM) and 51 LTI free days at the Langer Heinrich Mine (LHM) at the end of this quarter. One lost time injury occurred at LHM in this quarter.

      Langer Heinrich Mine (LHM)

      Langer Heinrich Mine (LHM) produced 1.302Mlb U3O8for the three months ended 31 March 2016, up 6% from 2015.

      Ore milled of 981,083t, up 14% vs. 2015.

    • Average plant feed grade of 705ppmU3O8, down 4% vs.2015.

    • Overall recovery of 85.5%, down 3% vs. 2015.

    • Record low quarterly C1 cash cost of production of US$24.13/lb (vs. guidance of US$23.00/lb to US$25.00/lb).

      5 Excluding 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$37M of the Convertible Bonds due April 2017.6 All frequency rates are per million personnel hours.

      Kayelekera Mine (KM) remains on care and maintenance

    • Quarterly activities at site focussed on water treatment and monitoring.

    • Exploration in the March quarter continued the surface geophysical surveys, stream sediment sampling and geological mapping previously undertaken in areas around the mine.

      Profit and Loss

      Total sales volume for the quarter was 0.595Mlb U3O8(2015: 0.440Mlb). 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 increased by 22% from US$17.1M in 2015 to US$20.8M in 2016, as a result of a 35% increase in sales volume, which was partially offset by a 9% decrease in realised sales price.

      The average realised uranium sales price for the three months ended 31 March 2016 was US$34.67/lb U3O8(2015: US$38.03/lb U3O8), compared to the TradeTech weekly spot price average for the quarter of US$32.73/lb U3O8.

      Gross Profit for the quarter increased by 200% from US$0.7M in 2015 to US$2.1M in 2016.

      Underlying EBITDA for the three months ended 31 March 2016 of negative US$0.8M, a US$5.4M improvement from a negative underlying EBITDA of US$6.2M for the three months ended 31 March 2015.

      Net loss after tax attributable to members of the Parent for the quarter of US$15.1M (2015: Net loss US$12.6M).

      Cash flow

      Cash outflow from operating activities for the quarter was US$32.4M, primarily due to payments to suppliers and employees of US$35.3M and net interest paid of US$6.4M, which were partially offset by receipts from customers of US$9.5M.

      Cash inflow from investing activities for the quarter totalled US$1.5M:

      • receipt of US$2.0M, balance of the proceeds from the sale of aircraft;

      • receipt of US$0.2M from sale of investments;

      • partially offset by plant and equipment acquisitions of US$0.7M.

Cash outflow from financing activities for the quarter of US$84.6M is attributable to the repurchase of additional US$25M April 2017 Convertible Bonds for US$23.0M (excluding accrued interest), repayment of the entire US$56.4M remaining drawn under the LHM syndicated loan facility and US$5.2M distribution to CNNC by way of repayment of intercompany loans assigned to CNNC.

Cash position and capital management

Cash of US$21.4M at 31 March 2016 vs. adjusted guidance in the range of US$19M to US$29M, after adjusting for the implementation of the Convertible Bond repurchase and the repayment of the LHM Syndicated Facility in the March quarter.

Repurchased an additional US$25M of the US$237M Convertible Bonds due April 2017, during the quarter ended 31 March 2016, for approximately US$23.5M (including accrued interest). US$62M was repurchased in total during the nine-months for approximately US$57.5M (including accrued interest).

The documents comprising the Unaudited Consolidated Financial Report for the nine months ended

31 March 2016, 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).

5 Excluding 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$37M of the Convertible Bonds due April 2017.6 All frequency rates are per million personnel hours.

Paladin Energy Ltd. published this content on 10 May 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 10 May 2016 08:01:03 UTC.

Public permalinkhttp://www.publicnow.com/view/C07D155B4C4B0CE212D548612BB29A60CBE040AD