Paladin Africa Ltd

Paladin (Africa) Ltd Paladin (Africa) Ltd is a member of the Paladin Energy Ltd group of companies and is the corporate entity that holds the group's interest in the Kayelekera Mine. The Malawi Government holds a 15% shareholding in this company. Background The Kayelekera Mine (KM) is located in northern Malawi, 52km west (by road) of the provincial town of Karonga at the northern end of Lake Malawi, and 575km by road north of the capital city, Lilongwe. The Central Electricity Generating Board of Great Britain (CEGB) discovered the high grade Kayelekera sandstone uranium deposit in the early 1980's. CEGB spent US$9 million working on the project over an 8-year period, culminating in a full feasibility study in 1991 assessing the viability of a conventional open pit mining operation. This study indicated that the project was uneconomic using the mining model adopted and the low uranium prices prevailing at that time. The project was abandoned in 1992 due largely to the poor outlook for uranium, as well as privatisation of CEGB and resultant pressure to return to its core business. The Company acquired the Kayelekera Project from Balmain Resources Pty Ltd (Balmain) in February 1998 under a joint venture agreement whereby the Company could earn an 80% interest in the project. In October 1999, the Company acquired a further 10% interest to bring the Company’s equity to 90%. In July 2005, the Company announced the purchase of the remaining 10% stake held by Balmain for a consideration of A$5,372,250. The consideration was satisfied by the issue of 4,350,000 ordinary fully paid shares at an issue price of A$1.235 per share. KM is owned 100% by Paladin (Africa) Limited (PAL) a subsidiary of Paladin. In July 2009, Paladin issued 15% of equity in PAL to the Government of Malawi under the terms of the Development Agreement signed between PAL and the Government in February 2007.