Paladin Explanatory Statement 22 December 2017 …

1 Paladin ENERGY LTD (subject to a deed of company arrangement) ACN 061 681 098 Explanatory Statement 22 December 2017 This Explanatory Statement provides information to shareholders of Paladin Energy Ltd (subject to a deed of company arrangement) ( Paladin ) on a proposed capital restructure of Paladin (Proposed Restructure). The Proposed Restructure will be affected through a deed of company arrangement (DOCA) entered into by Paladin and the Deed Administrators (among others) on 8 December 2017 . If the DOCA is implemented, approximately 98% of the ordinary shares in Paladin will be transferred to certain creditors of Paladin and other investors in exchange for the extinguishment of the majority of Paladin s existing debts and the raising of US$115m in new funds.

2 Leave will be sought from the Supreme Court of New South Wales by the Deed Administrators under section 444GA of the Corporations Act to enable the transfer to occur (s444GA Application). Initial directions hearings for the s444GA Application were held at the Supreme Court of New South Wales on Tuesday, 12 December 2017 and Thursday, 21 December 2017 . A further directions hearing has been scheduled for Tuesday, 2 January 2018, where the Deed Administrators will seek a final hearing date and a timetable for preparation of the matter for final hearing. If you wish to appear at the directions hearing to make submissions on the timetable to be set down by the Court and/or oppose the s444GA Application at the final hearing, you will need to file with the Court, and serve on the Deed Administrators, a notice of appearance in the prescribed Court form and any affidavit evidence on which you intend to rely.

3 A separate announcement will be made by the Deed Administrators on the ASX with regards to the timetable received from the further directions hearing and the required procedure to be followed by those persons who wish to object to the s444GA Application. This is an important document. Shareholders (and their advisors and any other interested parties) should read this Explanatory Statement and accompanying Independent Expert s Report (in Appendix 1) carefully and in their entirety before making a decision regarding whether or not to take any action in respect of the s444GA Application. If you have any questions on the information in this document, you should consult your legal or other professional advisor.

4 This document is not for public release, publication or distribution, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia). This document is not an offer of securities for sale in the United States. Any such securities may not be offered or sold in the United States absent registration under the United States Securities Act of 1933, as amended (the Securities Act) or an exemption from the registration requirements of the Securities Act. No public offering of securities will be made in the United States of America or in any other jurisdiction where such an offering is restricted or prohibited.

5 2 Contents 1 Important Information .. 3 Purpose of this document .. 3 Effect of the Proposed Restructure on Shareholders .. 3 Status of this document .. 4 Defined terms .. 4 2 Background to the administration of Paladin .. 4 Introduction .. 4 Appointment of Deed Administrators .. 5 Summary of current debt arrangements .. 6 3 What is the DOCA? .. 7 Overview .. 7 Terms of the DOCA .. 7 Conditions precedent to the DOCA .. 8 Effect of the 8 No consideration is payable for the transfer of Shares .. 8 What must the court be satisfied of in making an order under s444GA? .. 8 What are the trust arrangements and how will Shares be distributed?

6 9 4 Effect of the Proposed Restructure on Paladin .. 9 Current structure .. 9 Why is the Proposed Restructure required? .. 9 Effect of Proposed Restructure on assets and liability of Paladin .. 10 Substantial Shareholders after the Proposed Restructure .. 10 Board and senior management .. 11 Other equity on issue .. 12 Intentions for Paladin .. 12 5 Advantages and disadvantages for Shareholders .. 12 Advantages of the Proposed Restructure for Shareholders .. 12 Disadvantages of the Recapitalisation Proposal for Shareholders .. 13 6 s444GA Application what you need to know .. 14 What is the status of the s444GA Application? .. 14 How can you participate at the Court hearing?

7 14 What is the Independent Expert s conclusion? .. 14 What other information is available to assist you? .. 15 What is the timetable for the s444GA Application? .. 15 What if I do nothing? .. 15 7 Additional information .. 16 ASIC relief .. 16 ASX relief .. 16 Tax consequences .. 16 Material interests of the directors of Paladin .. 17 Material interests of the Deed Administrators .. 17 Further 17 8 Signature of Paladin .. 17 Schedule 1 Glossary .. 18 Appendix 1- Independent Expert s Report .. 21 3 1 Important Information Purpose of this document This document is an Explanatory Statement issued by Paladin in connection with the DOCA.

8 If the s444GA Application is approved and the DOCA implemented, 98% of the Shares you own in Paladin will be transferred to the Share Recipients or third parties (as otherwise outlined in section ) (via the Trustees) for nil consideration to you in accordance with the terms of the DOCA and you will cease to own 98% of your Shares. This Explanatory Statement has been provided to you by Paladin , to assist you to understand: (a) the s444GA Application to the Court for approval to transfer 98% of your Paladin Shares as part of the DOCA approved at the second meeting of creditors held on 7 December 2017 ; (b) the Proposed Restructure and its effect on you as a Shareholder; (c) the steps which you need to take if you wish to appear at the Court hearing on the s444GA Application; and (d) further information which may assist you in deciding whether to take action in respect of the s444GA Application.

9 An Independent Expert s Report prepared by PPB Advisory, which contains an objective valuation of the Shares, is attached to this document at Appendix 1. The opinion set out in the Independent Expert s Report is that the Shares have nil value. Shareholders should carefully read this Explanatory Statement and the Independent Expert s Report in their entirety before making a decision regarding the s444GA Application. If you are in any doubt as to the action you should take, you are recommended to obtain your own personal financial advice from your stockbroker, bank manager, solicitor, accountant and/or other independent professional adviser.

10 Effect of the Proposed Restructure on Shareholders If the Proposed Restructure is implemented, there are a number of negative consequences for Shareholders. Your shareholding will be substantially reduced as approximately 98% of the Shares held by each current Shareholder (rounded down) will be transferred to new holders. Initially, 98% of your Shares will be transferred to the Trustees who will hold the Shares on trust for the Acting Beneficiaries or Share Recipients, and then to the Share Recipients (including EDF or those persons to whom EDF has sold its claims, Bondholders, subscribers in the New Note Issue and underwriters of the New Note Issue) or third parties (see section which contains further detail in relation to the trust arrangements and how the Shares will be distributed.)