Quarterly Activities Report for period ending 30 June 2009

HIGHLIGHTS

• Langer Heinrich quarterly production sustained above nameplate at 693,116lb and marginally up on theb March 2009 quarter.
  • recoveries achieved for the June 2009 quarter were significantly higher than the March quarter (74.5%) averaging more than 82%.
  • sales during the quarter of 445,000lb at an average price of US$51.27/lb U3O8 for a total revenue of US$22.8M.
• Langer Heinrich Stage II construction expected to be completed in July 2009. Construction and commissioning commenced during the quarter and is 95% complete. New nameplate of 3.7Mlb is expected to be achieved during the September quarter.
• Langer Heinrich Stage III expansion go ahead approved by the Board. Production budgeted to increase to 5.2Mlb from December 2010 quarter at an estimated capital cost of US$71M.
• Kayelekera in its final stages of commissioning and commenced ramp-up during the June 2009 quarter. Commercial production should be achieved during the September 2009 quarter.
• FY2009 total production was up 60% on the previous year at 2,737,572lb. A combination of commissioning and ramp-up delays now resolved caused the shortfall to targeted production of 3Mlb for the year. Paladin maintains its production target of 6.6Mlb for FY2010.