MOUNT ISA URANIUM

Paladin reported that Langer Heinrich exceeded Stage I nameplate design production for the fourth consecutive full quarter with 693,116lb U3O8 produced versus 650,000lb U3O8 for nameplate (i.e. 6% above design). Production for the 12 months ending June 2009 amounted to 2,702,972lb. Mining was performed in both Pit A and the new Pit D. 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. The 3.3Mlb pa Kayelekera Uranium Project commenced final commissioning and ramp-up during the June quarter 2009. Commercial production is expected to be achieved during the September quarter with first production planned to be shipped out towards the end of the September 2009 quarter. Albeit still very much in its commissioning and ramp-up phase, Kayelekera produced 34,600lb during the June quarter. At Isa a new drilling programme recently started at Skal is expected to result in a new resource in the December quarter.

Paladin Energy reported that Langer Heinrich production for the quarter ended March 2009 amounted to 685,874 lb U3O8. Mining was performed in both Pit A and the new Pit D. The process plant efficiency was a challenge during the quarter as a result of mining moving into Pit D and the operation initiating a high percentage of this feed into the plant. The construction phase of the Stage II expansion to 3.7Mlb pa U3O8 is entering the final phase. At the same time the 3.3Mlb pa Kayelekera Uranium Project commenced commissioning in the March quarter and the production ramp-up is ready to commence late April 2009. At Skal East, located approximately 300 m east of Skal North and South, drilling has identified a new uranium mineralisation zone in north-east trending albites along a strike length of 250m. The centre of the mineralization is up to 30 m thick narrowing to the north and south. An initial resource estimation for the Skal East deposit has now been completed and is reported at 3.9 Mt grading 455 ppm U3O8 for 3.9 Mlb U3O8.

Reported that the main Valhalla deposit now has a strike length in excess of 1,100 m. The mineralisation extends from surface to a depth of over 650 m and is structurally controlled with a characteristic southerly plunge. Valhalla South is located approximately 600 m along strike to the south east of the main mineralised zone and has a strike length of at least 400 m.