PDN Paladin Energy Ltd

Paladin Energy Ltd (TSX:PDN)(ASX:PDN) ("Paladin" or the "Company") notes that,
on February 7, 2014 the Company advised its Kayelekera Mine in Malawi was to be
placed on Care and Maintenance (C&M) status due to reasons beyond the Company's
control and related to the depressed uranium prices. The Company stated at the
time that processing of ore would continue during a rundown phase until reagents
and consumables on site had been depleted, anticipated to be by April/May of
this year. Accordingly, the Company provides the following update on the status
of the transition to C&M at Kayelekera.


On May 21, uranium production (including circuit inventory clean up) ceased at
the Kayelekera Mine and the operation now will cease supplying the global
uranium market, resulting in a reduction in global supply for the foreseeable
future of around 3.3Mlb U3O8 pa.


This outcome is an unfortunate but direct consequence of the continuing
deterioration in the uranium price. Certain estimates now place up to 60% of
current annual global production with costs above the current spot price, which
is unsustainable.


Paladin considers that by placing Kayelekera on C&M and preserving a large part
of the uranium resources of the deposit for future production, this project has
become a considerable asset of the Company. This is in light of the continuous
improvements in operating performance achieved over the last two years and
particularly the last 9 months demonstrating that this project can be operated
in future with costs in the first quartile of global producer costs (once
national grid power is connected).


Paladin is committed to maintaining the mine and its infrastructure at
Kayelekera in good working order to facilitate a rapid resumption of production
when market conditions make it possible to do so profitably. Production at this
project can now be recommenced with minimal risk and within a short lead-time of
about 9 months. This will allow Paladin to take advantage of any increase in the
uranium spot price in a relatively rapid manner.


Paladin has previously stated that the incentive price for operational restart,
considering the looming supply shortfall, is US$70 to US$75/lb U3O8. At this
price, and the demonstrated operating costs of the project, the future value of
this de-risked project to the Company is clearly substantial.


While on C&M, Paladin intends to continue exploration activities with the
objective of identifying and delineating additional uranium resources in order
to enhance the long term future of Kayelekera.


In successfully establishing the first modern resin-in-pulp plant for a
conventional uranium mining operation, Paladin has created a valuable
technological asset. The Company believes this treatment process will likely
replace older, less efficient technologies currently in use, for future
developments because of the distinct advantages it delivers. This position has
recently been further enhanced with the successful addition of nano-filtration
technology (patent pending) to the process, which has materially reduced
operating costs.


Said John Borshoff, Managing Director and CEO: "On behalf of the Paladin Board
and Senior Management, I would like to express our appreciation to Paladin's
employees for their focused dedication to the Kayelekera Mine development and
operation. Paladin looks forward to the day when Kayelekera will resume its role
as a significant contributor to the Company's production profile."


ACN 061 681 098

FOR FURTHER INFORMATION PLEASE CONTACT: 
Paladin Energy Ltd
John Borshoff
Managing Director/CEO
+61-8-9381-4366 or Mobile: +61-419-912-571
john.borshoff@paladinenergy.com.au


Paladin Energy Ltd
Greg Taylor
Investor Relations Contact
+1 905 337-7673 or Mobile: +1 416-605-5120 (Toronto)
greg.taylor@paladinenergy.com.au

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