MAINTAINING OUR FOCUS ANNUAL REPORT 2015 a Nnual Report Nnual Designed by PE 2 16750 by Designed

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MAINTAINING OUR FOCUS ANNUAL REPORT 2015 a Nnual Report Nnual Designed by PE 2 16750 by Designed Paladin Energy Ltd MAINTAINING OUR FOCUS ANNUAL REPORT 2015 A nnual Report Designed by PE_2_16750 by Designed Follow Paladin at www.paladinenergy.com.au 2015 Paladin Energy Ltd THE YEAR AT A GLANCE Bicarbonate Deleveraging Recovery Plant balance sheet commissioned Retained key personnel to develop next World class asset pipeline generation in expanded and enhanced uranium mines Safety Operations performance further significantly optimised with improved costs reduced About Paladin ............................................................................ 01 Financial Report ........................................................................ 64 Chairman’s Letter ...................................................................... 04 Contents of the Financial Report ................................................. 64 Consolidated Income Statement ................................................. 65 Insights From The Interim CEO ................................................ 05 Consolidated Statement of Comprehensive Income ................... 66 Nuclear Power – Getting Back on Track .................................. 06 Consolidated Statement of Financial Position ............................. 67 Management Discussion and Analysis ................................... 08 Consolidated Statement of Changes in Equity ............................ 68 Review of Operations ................................................................... 09 Consolidated Statement of Cash Flows ....................................... 70 Health and Safety ....................................................................... 23 Notes to the Consolidated Financial Statements ..........................71 Financial Review ......................................................................... 25 Directors’ Declaration .................................................................116 Sustainable Development ........................................................ 34 Independent Audit Report ..........................................................117 Environment ................................................................................ 34 Additional Information .................................................................119 Corporate Social Responsibility .................................................. 37 Corporate Directory ....................................................................124 Our People .................................................................................. 43 Corporate Governance Statement .......................................... 45 Directors' Report ....................................................................... 46 Remuneration Report .................................................................. 52 Paladin Energy Ltd ACN 061 681 098 The annual report covers the Group consisting of Paladin Energy Ltd (referred throughout as the Company or Paladin) and its controlled entities. Paladin Energy Ltd is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Paladin Energy Ltd, Level 4 502 Hay Street Subiaco WA 6008 Through the use of the internet, we have ensured that our corporate reporting is timely, complete, and available globally at minimum cost to the Company. All press releases, financial statements and other information are available on our websitewww.paladinenergy.com.au KEY ANNUAL DATA UE EN V E R S S E E L L A A S S 5.373 8 198.6 Mlb U O MILLION PRODUCTIO ICH N NR EI H R E G N A L 5.043 8 Mlb U O TOTAL PRODUCTION LANGER HEINRICH MINE C1 COST OF PRODUCTION 9,000,000 31.5 8,000,000 31.0 7,000,000 30.5 6,000,000 30.0 5,000,000 lb 29.5 4,000,000 U$$/lb 29.0 3,000,000 28.5 2,000,000 28.0 1,000,000 27.5 F Y2011 FY2012 FY2013 FY2014 FY2015* F Y2011 FY2012 FY2013 FY2014 FY2015* * Production reduced in FY2015 mainly due to Kayelekera being on care and maintenance since February 2014. PALADIN ENERGY LTD ANNUAL REPORT 2015 1 OUR ACHIEVEMENTS WHAT WE SET OUT TO DO IN 2015 Achieved Ongoing ✕ Not achieved 2015 production guidance for Langer Heinrich Improve health and safety performance across in the range of 5.4 to 5.8Mlb the Group. U3O8 Revised guidance 5.0 to 5.2Mlb – U3O8 Increase value through strategic partnerships. Achieved 5.04Mlb. Strengthen balance sheet through continued Continue to reduce unit production costs debt reduction. at Langer Heinrich via: Maintain Kayelekera Mine in operational – Focused cost management ready status. - Optimisation of existing processes - Ongoing development and introduction of process innovation. Advance approvals process to enable a Field Leach Trial at Manyingee. ABOUT PALADIN ABOUT WHAT WE PLAN TO DO IN 2016 2016 production guidance for Langer Heinrich in Strengthen balance sheet through debt reduction. the range of 5.0Mlb to 5.4Mlb . U3O8 Continue to increase efficiency and productivity Focussed cost reduction and optimisation efforts at Langer Heinrich through successful process to achieve group-wide sustainability. innovation. KEY ACHIEVEMENTS FOR THE YEAR July 2014 March 2015 Settlement of sale of 25% minority interest in Key optimisation success at Langer Heinrich. Langer Heinrich to subsidiary of China National Bicarbonate Recovery Plant (BRP) commissioned Nuclear Corporation for US$190M. Successful and operating above design. refinancing of Langer Heinrich financing facility. April 2015 December 2014 Completion of repurchase of US$300M CBs, due Entitlement offer and institutional placement November 2015. raises A$205M. Cornerstone strategic investor – HOPU Clean Energy (Singapore) Pte. Ltd – on June 2015 register with 15% equity. Strategic acquisition of Carley Bore uranium deposit to consolidate and enhance Manyingee project. February 2015 Issue of US$100M senior unsecured convertible June 2015 bonds (CB) issued to high quality institutional Historic decision by Canadian government to exempt investors. Paladin from the Non-Resident Ownership Policy in relation to the Michelin Project in Newfoundland March 2015 and Labrador. Additional US$50M CBs issued to subsidiary of China Investment Corporation (CIC). 2 PALADIN ENERGY LTD ANNUAL REPORT 2015 PALADIN TODAY OVERVIEW Paladin’s value is based on five key drivers - production, quality pipeline, proven team, industry positioning and sustainability of operations. OPERATIONS Langer Heinrich Mine Kayelekera Mine Focus on process optimisation and cost reduction. Placed on care and maintenance due to low uranium prices and non-profitability. Successful process innovation at Langer Heinrich should provide a pathway to C1 cash costs1 Maintaining plant, infrastructure and substantially lower than recent experience. critical aspects of intellectual property and operational knowhow to allow for a quick restart, when justified. Care and maintenance to preserve the orebody to recommence production once the uranium price provides sufficient incentive (circa US$75/lb). 1 Refer to ‘Non IFRS Measure’ in Financial Review section. ABOUT PALADIN ABOUT INNOVATION POSITIONING GOING & PROJECT PIPELINE FORWARD Proven track record in mining Only non-aligned, independent, pure-play and processing innovation. uranium producer. Established in-house Long-term business strategy and vision technical strength. is to continue to strengthen through key partnerships. Consolidating a unique, geographically diversified Maintain Paladin as a partner of choice. asset base. Technical innovation, process optimisation and cost reduction an ongoing focus. Project pipeline able to drive organic growth. OUR VALUES Create shareholder wealth by developing the considerable opportunities Paladin has and continues to generate. Become a major player in the global uranium supply market. Operate at global best practice with particular emphasis on safety and the environment. Reward employee performance and provide a fulfilling work environment. Contribute to the growth and prosperity of the countries in which Paladin operates by conducting operations in an efficient and effective manner and by seeking out opportunities for expansion. Respond to the attitudes and expectations of the communities in which it operates as part of its commitment to corporate social responsibility. Act with integrity, honesty and cultural sensitivity in all of its dealings. PALADIN ENERGY LTD ANNUAL REPORT 2015 3 CHAIRMAN'S LETTER RICK CRABB CHAIRMAN Dear Fellow Shareholder The further retreat in the uranium price and overall deterioration in global equity markets during the 2015 financial year presented continued ongoing challenges for your Company. During 2014 the uranium spot price touched a nine-year low, but has since recovered and now shows signs of an ongoing upward trend, notwithstanding some volatility. During this challenging period, the Paladin Board and Mr Alexander Molyneux is currently serving as Interim management nevertheless completed a number of CEO and with the support of the Board continues to focus important steps to progress recapitalisation of the on the goals the Company has set for FY2016. Company, as outlined in this Annual Report. I am pleased that the Company has continued to maintain Although production at the Langer Heinrich Mine was high standards in health and safety and environmental down 13% during the year, the temporary technical issue management. I encourage shareholders to study the which resulted in the reduction was rectified and a solid sustainable development reports in this Annual Report production outlook is expected.
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