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ABN 28 102 747 133

ANNUAL REPORT

FOR THE YEAR ENDED 30 JUNE 2009

CORPORATE DIRECTORY

Directors

Graham Carman (Managing Director) John Gaskell (Non-Executive Director) Stephen Lonergan (Non-Executive Director and Company Secretary)

Registered Office and principal place of business

Suite 202, 122 Walker St North Sydney NSW 2060 Telephone: 61 2 9955 7130 Facsimile: 61 2 8920 3576 Email: [email protected]

Share Registry

Registries Limited Level 2, 28 Margaret Street Sydney, NSW 2000 Telephone: 61 2 9290 9600 Facsimile: 61 2 9279 0664

Auditors

PKF Level 10, 1 Margaret Street Sydney, NSW 2000

Stock Exchange Listing

The Company is listed on The Australian Securities Exchange (ASX)

Home Exchange : Sydney

ASX Code : Shares – PDM

Web Page

http://www.paradigmmetals.com.au

Page LETTER FROM THE BOARD……………………………………………………………………….. 3 OPERATIONS REPORT…………………………………………………………………………...…4 DIRECTORS’ REPORT………………………………………………………………………….…. 7 AUDITOR’S INDEPENDENCE DECLARATION……..……………………………………….…. 12 INCOME STATEMENT……………………………………………………………………….......... 13 BALANCE SHEET…………………………………………………………………...………........... 14 STATEMENT OF CHANGES IN EQUITY….……………………………………………………. 15 CASH FLOW STATEMENT….…………………………………………………………………….. 16 NOTES TO THE FINANCIAL STATEMENTS…………………………………………………… 17 DIRECTORS’ DECLARATION……………………………………………………………………. 41 INDEPENDENT AUDITOR’S REPORT…………………………………………………………... 42 CORPORATE GOVERNANCE STATEMENT………………………………………………...... 44 ADDITIONAL SHAREHOLDER INFORMATION……………………………………………….. 47

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Dear Shareholder,

Your Company has been active over the past year in advancing its existing exploration projects and also acquiring, at minimum initial expense, new and prospective tenements. At the same time, the Board is acutely aware of the necessity for strict control of administrative costs and for ensuring that every dollar spent in the ground has the best chance to add value for shareholders.

We have sought to expand your Company’s exploration portfolio by the acquisition of two recently granted tenements prospective for gold and base metals in the Lachlan Fold Belt of New South Wales. The first is the Rosedale gold project located near Bathurst, and the other is the Kangiara gold - base metals project located adjacent to our Democrat project near Boorowa. Both of these new projects have abundant old workings indicating gold and base metal mineralization and both have been subject to relatively minor prior drilling. Reconnaissance exploration work, including some preliminary RC drilling at Rosedale, has confirmed the prospectivity of both of these tenements. More targeted drill programmes are planned shortly at both localities. A third tenement application has been made over part of the Temora gold field in central western NSW.

In following up the encouraging initial drill results during 2008 at Frogmore near Boorowa NSW, an EM geophysical survey located a conductor 1 kilometer south of the relatively high-grade Pride of Frogmore copper lens that constitutes a “drill ready” target.

At Blue Bush, about 140 km north of Cloncurry in Queensland, our proposed 2-hole diamond drilling programme qualified the Company for a grant of $50,000 from the Queensland Department of Mines and Energy. Paradigm also attracted a joint venture partner who will spend up to $125,000 to acquire an initial 25% interest in the project with the option to earn 50% by spending a further $600,000 on drilling. The initial drill programme, currently in progress, should not require any Paradigm funding. Also near Cloncurry, the Toolebuc joint venture with Exco Resources returned interesting results for vanadium and molybdenum in shallow drilling.

Your Company transferred ownership of the North Cadia project near Orange NSW to a third party in return for a $100,000 net cash payment with the prospect of further payments should future exploration discover economic mineralisation of a defined size.

Subsequent to the 30 June reporting period, Paradigm announced a Share Purchase Plan to raise $758,000 by offering shareholders up to $15,000 in shares at 3.5 cents per share. The raising was over 600% oversubscribed and a substantial scale back was necessary. Simultaneously a further $380,000 was raised at the same price of 3.5 cents per share via a private placement. Paradigm is now well placed to fund its proposed exploration projects, while continuing to seek new opportunities.

Directly after the last AGM in November last year Dick Austen AO, who had been Chairman since the Company’s inception in 2002, retired from the Board to pursue his extensive family business interests. The remaining Board members decided that at the Company’s current stage of development and in keeping with good governance principles it was unnecessary to appoint a new Chairman for the time being, and your Board currently comprises one Executive and two Non Executive Directors. We wish to express, on your behalf, our sincere gratitude to Dick Austen for his past service and wish him well for the future.

We look forward to an exciting year ahead advancing our gold and base metal prospects.

Yours sincerely,

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John Gaskell Graham Carman Stephen Lonergan

PARADIGM METALS LIMITED

OPERATIONS REPORT

FOR THE YEAR ENDED 30 JUNE 2009

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Figure 1. Location map showing principal Paradigm projects in the Lachlan Fold Belt of New South Wales

Rosedale Gold - Silver (EL 7343)

During the year a new gold project was identified and staked by the Company. Results of past exploration at Rosedale include a 1979 Jododex drill hole intercept of 13m at 0.8g/t gold and 20g/t silver at 100m depth still in mineralization at base of hole. Minor drilling was carried out by other explorers in the mid 1980s with encouraging initial results but no further drilling has been done until now. We believe Rosedale is an exciting project opportunity for the Company, located just 18km from the recent McPhillamys gold discovery of Newmont – Alkane (see Figure 1). Rosedale also lies on an extension of the same controlling regional fault.

Gold and silver mineralisation at Rosedale is associated with extensive sericite-silica-pyrite alteration which can be mapped at surface for 2km along strike. Paradigm completed 6 percussion holes for 382m and 28 air-core holes for 577m immediately after grant of the exploration licence. One hole intercepted 26m at 0.3g/t gold from 12m in strongly weathered and altered rocks. Gold at McPhillamys is leached near the surface, and we believe this is also the case at Rosedale, hence gold grades at depth are likely to increase. The Rosedale gold-silver structure appears to have significant width potential, and the style of mineralization suggests good depth potential as well.

The results from the initial drilling at Rosedale indicate that we have tested only a small part of the Rosedale goldsilver system, and that further drilling is required. Upcoming work in the latter half of calendar 2009 will include an IP geophysical survey and percussion drilling, likely to be followed by diamond drilling into 2010.

Kangiara & Democrat Gold - Base Metals (EL 6274 & EL 7273)

The old Kangiara mine produced about 500,000 oz silver, 7,000 tonnes lead, and 3,000 oz gold in early 1900s from underground workings with sulphide ores smelted on site. The combined Kangiara - Democrat project area covers 3km strike length and consists of more than 100 old pits and shallow workings. Numerous exploration targets exist on these under-explored exploration licences.

Exploratory drilling in the 1980s discovered disseminated and stringer-vein gold-silver-lead-zinc sulphide mineralisation to the south of the old Kangiara mine workings including:

26m at 0.8g/t gold, 10g/t silver, 3% lead+zinc from 70m in PDH-11, and
12m at 105g/t silver, 2.3% lead+zinc from 78m in PDH-12.

PARADIGM METALS LIMITED

OPERATIONS REPORT

FOR THE YEAR ENDED 30 JUNE 2009

Following compilation of past exploration data and acquisition of new surface geochemistry, a number of targets have been identified at Kangiara for volcanic-hosted massive sulphide (VHMS) and disseminated or stringer style mineralisation. In particular, a strata bound target trending northeast-southwest located between the Kangiara and Democrat workings has a strong surface geochemical response and has been virtually untested by past drilling.

An initial RC percussion drilling program will be carried out at Kangiara during September – October 2009. Further drilling programmes are planned for early 2010.

Frogmore Copper (EL 6590)

No drilling was carried out at Frogmore during the year, although the Company has continued to assess the project for copper potential with geophysical surveys following the highly promising copper drill intersections of 2008. Ground electromagnetic (EM) geophysics carried out during December 2008 found a conductor, possibly associated with a buried sulphide body, 1km south of the Pride of Frogmore prospect where our best drill results have been obtained. A drilling programme is being considered for early 2010 calendar year.

Temora Gold (ELA 3746)

A new Exploration Licence Application (ELA 3746) was made in August 2009 to cover part of the Temora gold field, located the central west region of NSW. The new application covers a large number of old gold workings, in particular at the Sebastopol workings, located 100km south of Barrick’s Cowal gold mine. The new application sits adjacent to the Gilmore Suture, an important regional fault which is believed to control the location of a number of gold deposits. Initial exploration will comprise of compilation of past results, surface sampling and geophysical prospecting.

White Rock Tungsten (EL 6274)

No drilling was carried out at the White Rock tungsten project during the financial year. The Company continues to seek expressions of interest from third parties to farm into the project.

Blue Bush Copper - Gold (EPM 15324)

Paradigm signed a Joint Venture Agreement in July 2009 with Sydney-based unlisted public company Northwest Discovery Ltd (NWD) on the Blue Bush project located 140km northwest of Cloncurry Queensland (see Figure 2). NWD has the right to earn up to 50% of the project by funding drilling up to a total cost of $725,000. At that stage, a 50:50 joint venture will be entered into.

An initial drilling programme consisting of two diamond holes is currently in progress. The drilling is targeting geophysical anomalies at Blue Bush that could be indicative of significant sulphide mineralisation associated with an iron oxide copper gold system. This drilling will be funded by NWD to earn NWD an initial 25% interest in 10 of 21 sub-blocks of EPM 15324. In addition, Paradigm was successful during the year in qualifying for $50,000 of drill funding under Round 3 of the Collaborative Drilling Initiative of the Queensland Department of Mines and Energy.

Paradigm will continue to be manager of the joint venture with NWD while it holds at least a 50% ownership.

Cloncurry Exco Joint Venture (Various exploration permits - PDM 50%)

Paradigm and Exco Resources Ltd carried out 1100 metres of air core drilling during the financial year on the 50:50 Toolebuc Cloncurry Joint Venture (Figure 2). The Toolebuc Formation, the principal target rock unit, contains vast quantities of low grade vanadium and molybdenum mineralisation in shallow flat-lying deposits as oxide minerals. Two tested areas contain shallow vanadium and molybdenum mineralisation over a combined area of approximately 100 km[2] . However, economic extraction of the vanadium and molybdenum from the oxides is yet to be successfully demonstrated.

The Toolebuc Formation also contains low grade uranium in narrow phosphate-bearing limestone beds. The best uranium intersection was 8m grading 94 ppm U3O8 from 16m depth beneath the base of weathering.

PARADIGM METALS LIMITED

OPERATIONS REPORT

FOR THE YEAR ENDED 30 JUNE 2009

No drilling is planned for the Cloncurry joint venture during 2010. We are continuing to evaluate new opportunities within our large tenure position for other commodities including copper and gold.

Jactim Uranium (EPM 15323)

Paradigm has yet to complete any significant field work at the Jactim uranium project located 80km north of Cloncurry. The area was staked because of a strong radiometric uranium response in outcrops corresponding to mapped Toolebuc Formation. These outcrops will be visited and sampled during the September 2009 quarter.

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Figure 2. Location map showing Paradigm projects in the Cloncurry & Mt Isa region of Queensland

Corporate

The principal objective of the Company remains to significantly add to shareholder wealth through a large deposit discovery. Paradigm Metals has continued to be an active explorer during a difficult period attributable to the global financial crisis. Our projects are well located in terms of prospective geology, proximity to world-class deposits, and access to transport and large town infrastructure. Proximity of our NSW projects close to our Sydney base has allowed the Company certain cost and time efficiencies as well.

The Company continues to be tightly run, operating with minimal overhead with 2 non-executive directors and two full-time employees including the Managing Director. For the fiscal year ending 30 June 2009, the Company recorded a net cash outflow of $580,410. Cash at the end of the financial year ending 30 June 2009 was $640,734. However the cash position has now significantly improved with the completion of the Share Purchase Plan (SPP) and share placement raising an additional $1,130,000 in August 2009. The SPP issue was well supported with 43% of the Company’s shareholders taking part, and I wish to thank all participating shareholders for their strong support of the Company in the SPP raising. I would also like to welcome all of our new shareholders.

The new funds will be utilised towards the drilling of the Company’s exciting gold and base metal projects in NSW and Queensland. We look forward to updating our shareholders on the results of these drilling programmes during the 2010 financial year.

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Graham D Carman, PhD, MAUSIMM Managing Director

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT

FOR THE YEAR ENDED 30 JUNE 2009

The Directors of Paradigm Metals Limited hereby present the financial report of the Company and its controlled entities for the year ended 30 June 2009.

DIRECTORS

The names of Directors of the Company who held office during the period and were in office at the date of this report unless otherwise stated are:

� Graham Carman, PhD, MAUSIMM (Managing Director)

Term of office: Managing Director since September 2003.

Dr Carman graduated with a Bachelor of Science (Hons) from Victoria University of Wellington New Zealand in 1986. He spent several years exploring in Western Australia, North Queensland and Lihir Island in Papua New Guinea, completing a PhD at Monash University in 1994. He was seven years in Peru, firstly with Rio Tinto Exploration and then with Savage Resources Ltd (latterly Pasminco Ltd) as Exploration Manager until 2000. Dr Carman then returned to Australia as Exploration Manager Australia for Pasminco prior to founding Paradigm in 2002. Dr Carman performs the functions of chief executive officer and chief financial officer of the Company.

Directorships of other listed companies:

None.

� John Gaskell (Non-Executive Director)

Term of office: Director since November 2002.

Mr Gaskell was Managing Director of Savage Resources Limited (Savage) from August 1997 until March 1999. He played a leading role in the growth of Savage from a junior NSW coal miner in 1992 to an international metal and mining company. He was involved in establishing Savage’s ownership of the Ernest Henry gold-copper mine in Queensland, the acquisition of zinc mines and a refinery in Tennessee and the development of Savage’s exploration in North and South America. Mr Gaskell graduated as a geologist from the University of Leeds in 1966 and has been involved in the exploration industry worldwide in a number of public and private companies since then. Mr Gaskell is Chairman of the Company’s Audit Committee.

Directorships of other listed companies:

Dominion Mining Limited since December 2004.

� Stephen Lonergan (Non-Executive Director and Company Secretary)

Term of office: Director since November 2002.

Mr Lonergan is a commercial lawyer based in Sydney. He has some 30 years’ experience in the Australian and international mining industry having been General Counsel of the Pancontinental Mining Group, a partner in the law firm Baker and McKenzie, and General Counsel and Company Secretary of Savage Resources Ltd. Mr Lonergan is currently General Counsel and Company Secretary of CBH Resources Ltd. Mr Lonergan is an Honours graduate in law from the Australian National University and holds a Masters degree in law from McGill University, Montreal. Mr Lonergan is a member of the Company’s Audit Committee.

Directorships of other listed companies:

Finders Resources Limited since March 2005.
Alternate director CBH Resources Ltd from 19 March 2008 to 11 July 2008.
Richard Austen (Retired at the Annual General Meeting in November 2008)

Term of office: Non-Executive Chairman from December 2002 to November 2008.

Richard Harvey (Alternate to Richard Austen who retired during the year)

PRINCIPAL ACTIVITIES

The consolidated entity operates predominantly in the mining exploration industry throughout New South Wales and Queensland.

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT

FOR THE YEAR ENDED 30 JUNE 2009

OPERATING RESULT

The loss of the consolidated entity for the financial year after providing for income tax amounted to $1,735,120 (2008: $1,573,930).

The net assets of the consolidated entity decreased by $1,682,872 due to the write off of exploration and evaluation expenditure.

REVIEW OF OPERATIONS

A review of the operations of the Company during the financial year and the results of those operations is set out in the Operations Report.

DIVIDENDS

No dividends were paid or declared since the start of the financial year.

CHANGES IN STATE OF AFFAIRS

During the year, there were no significant changes in the state of affairs of the Company.

SUBSEQUENT EVENTS

The Company completed a Share Purchase Plan (SPP) to raise $758,000 at an issue price of 3.5 cents per ordinary share. The SPP was well supported, and closed on 21 August 620% oversubscribed. SPP applicants were scaled back on a pro rata basis according to the size of their holding on the Record Date of 28 July 2009.

The Company also completed a share placement to professional and sophisticated investors on 14 August 2009 raising approximately $380,000 (inclusive of fees and costs). The issue price was 3.5 cents per ordinary share. The share placement was within the Company’s 15% placement capacity.

On 15 July 2009 the company announced that it has signed a joint venture agreement with unlisted public company Northwest Discovery Ltd (NWD) to farm into the Company's Blue Bush project. NWD has the right to earn up to 50% of the project by funding $750,000 of drilling costs. An initial investment of $125,000 for funding the first 2 diamond drill holes will earn NWD a 25% interest in the project.

DIRECTORS’ SHARES AND OPTIONS

No securities in the Company were issued to a Director during the year in connection with their provision of services.

MEETINGS OF DIRECTORS

During the financial year, 12 meetings of Directors (including meetings of committees of Directors) were held. Attendances by each Director during the year were:

DIRECTOR	Director Meetings	Director Meetings	Audit Committee	Audit Committee
	NUMBER ELIGIBLE	NUMBER ATTENDED	NUMBER ELIGIBLE TO	NUMBER
	TO ATTEND		ATTEND	ATTENDED
Richard Austen	5	4	-	-
Graham Carman	12	12	-	-
John Gaskell	12	12	2	2
Stephen Lonergan	12	12	2	2
Richard Harvey (Alternate	5	5	-	-
to R Austen)

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT

FOR THE YEAR ENDED 30 JUNE 2009

REMUNERATION REPORT

Remuneration of Directors is approved by the Board and is set in aggregate within the maximum amount approved by the shareholders from time to time. The performance of the Directors is reviewed annually. No component of any Directors’ remuneration is based on meeting any particular performance criteria.

The remuneration and terms and conditions of employment for the Managing Director are reviewed annually having regard to performance and comparative remuneration information in respect of other listed mineral exploration companies in Australia, and approved by the Board, as required. The Company’s performance as a minerals exploration entity depends on retaining energetic and innovative management. The Directors believe that this remuneration policy is successful, as evidenced by the retention of the Managing Director and the progress made by the Company in the 2009 financial year.

No Director or executive of the Company has received a benefit other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors and executives shown below.

Remuneration paid to the Directors and key management personnel during the year was as follows;

	PRIMARY BENEFITS	PRIMARY BENEFITS	PRIMARY BENEFITS	PRIMARY BENEFITS			POST EMPLOYMENT	POST EMPLOYMENT	Equity Compen- sation	Equity Compen- sation
	Salaries and Fees		Cash Bonuses		Non Monetary		Superannuation		Options / Shares		TOTAL
	2009	2008	2009	2008	2009	2008	2009	2008	2009	2008	2009	2008
	$	$	$	$	$	$	$	$	$	$	$	$
Richard Austen	20,139	55,000	-	-	-	-	-	-	-	-	20,139	55,000
Graham Carman	148,536	138,700	-	-	-	-	22,664	50,000	-	-	171,200	188,700
John Gaskell	10,000	-	-	-	-	-	30,000	40,000	-	-	40,000	40,000
Stephen Lonergan	-	-	-	-	-	-	40,000	40,000	-	-	40,000	40,000
	178,675	193,700		-	-	-	92,664	130,000	-	-	271,339	323,700

DIRECTORS’ SHAREHOLDINGS

The following tables set out each Director’s relevant direct or indirect interest in the securities of Paradigm Metals Limited as at 30 June 2009:

Fully Paid Ordinary Shares

Director Richard Austen Graham Carman John Gaskell Stephen Lonergan Total	Balance as at 1st July 2008 Issues Disposals Balance as at 30th June 2009 No’s No’s No’s No’s 3,513,260 - - 3,513,260 3,083,300 - - 3,083,300 1,041,675 - - 1,041,675 562,500 - - 562,500
	8,200,735 - - 8,200,735

No share options were granted to or held by any Director during the year.

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT

FOR THE YEAR ENDED 30 JUNE 2009

DIRECTORS' AND OFFICERS' INDEMNITIES AND INSURANCE

The Company has entered into deeds with each of the Directors and the Company Secretary under which the Company has agreed to indemnify the Directors and the Company Secretary on a full indemnity basis and to the full extent permitted by law for losses or liabilities incurred as an officer of the Company.

During the financial year, the Company has paid an insurance premium in respect of a contract insuring each of the Directors and Company Secretary of the Company named in this report, against all liabilities and expenses arising as a result of work performed in their respective capacities, to the extent permitted by law. Disclosure of the total amount of the premium and the nature of the liabilities in respect of such insurance is prohibited by the policy.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied to the court under S237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company or intervened in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.

During the year no proceedings were brought or intervened on behalf of the Company with leave of the court under S237 of the Corporations Act 2001.

ENVIRONMENTAL REGULATIONS

The Company participates in mineral exploration activities covered by mineral exploration licences governed by the respective States. These licences specify the environmental regulations applicable to the exploration of minerals. There have been no known breaches of the environmental obligations of the Company’s contracts or licences.

FUTURE DEVELOPMENTS

Disclosure of information regarding likely developments in the operations of the Company in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the Company. Accordingly, this information has not been disclosed in this report.

NON-AUDIT SERVICES

Non-audit services are approved by resolution of the audit committee and approval is provided in writing to the Board of Directors. Non-audit services provided by the auditors of the consolidated entity during the year are detailed below. The Directors are satisfied that the provision of the non-audit services during the year by the auditor did not compromise the general principles relating to auditor independence in accordance with APES110, code of ethics for professional accountants set by the Accounting Professional and Ethics Standards Board.

Amounts paid or payable to an auditor for non-audit services provided during the year by the auditor to any entity that is part of the consolidated entity	2009 $	2008 $
Taxation and Advisory Services	9,840	9,960

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT

FOR THE YEAR ENDED 30 JUNE 2009

AUDITOR’S INDEPENDENCE DECLARATION

In accordance with the Audit Independence requirements of the Corporations Act 2001 , the Directors have received and are satisfied with the “Audit Independence Declaration” provided by the Company’s external auditors PKF. The Audit Independence Declaration has been attached as part of this Directors’ Report on the following page.

Signed in accordance with a resolution of the Directors made pursuant to Section 298(2) of the Corporations Act 2001 .

For and on behalf of the Directors,

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Dr Graham Carman Managing Director

Dated: 18 September 2009

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES AUDITOR’S INDEPENDENCE DECLARATION

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To: The Directors

Paradigm Metals Limited

AUDITOR'S INDEPENDENCE DECLARATION

As lead auditor for the audit of Paradigm Metals Limited for the year ended 30 June 2009, I declare that to the best of my knowledge and belief, there have been:

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Paradigm Metals Limited and the entities it controlled during the year.

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PKF Dated this 18[th] day of September 2009

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Tim Sydenham Partner Sydney Office

Tel: 61 2 9251 4100 | Fax: 61 2 9240 9821 | www.pkf.com.au

PKF | ABN 83 236 985 726

Level 10, 1 Margaret Street | Sydney | New South Wales 2000 | Australia

DX 10173 | Sydney Stock Exchange | New South Wales

PKF East Coast Practice is a member of PKF Australia Limited a national association of independent chartered accounting and consulting firms each trading as PKF. The East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast Practice is also a member of PKF International, an association of legally independent chartered accounting and consulting firms.

Liability limited by a scheme approved under Professional Standards Legislation

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES INCOME STATEMENT

FOR THE YEAR ENDED 30 JUNE 2009

INCOME STATEMENT Financial year ended 30 June 2009 Note Continuing operations Other income 2 Employee benefit expense Depreciation Other expenses 3 Share of Joint Venture Losses Loss before income tax Income tax 4 Loss for the year attributable to members of the parent entity Earnings/(loss) per share: Basic (cents per share) 19 Diluted (cents per share) 19 Dividend per share	CONSOLIDATED ENTITY 2009 2008 $ $ 46,305 114,206 (234,562) (244,877) (8,305) (8,540) (1,537,493) (1,423,267) (1,065) (11,452) (1,735,120) (1,573,930) - - (1,735,120) (1,573,930) (2.4) cents (2.4) cents (2.4) cents (2.4) cents - -	PARENT ENTITY 2009 2008 $ $ 99,700 157,106 (234,562) (258,077) (8,305) (8,540) (492,099) (1,900,988) - -
		(635,266) (2,010,499) - -
		(635,266) (2,010,499)

The above Income Statement should be read in conjunction with the accompanying notes.

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES BALANCE SHEET

AS AT 30 JUNE 2009

BALANCE SHEET As at 30 June 2009

Note CURRENT ASSETS Cash and cash equivalents 20 Trade and other receivables 5 Other current assets 6 Share of Joint Venture Current Assets 15 Total current assets NON-CURRENT ASSETS Plant and equipment 7 Financial assets 8 Other non-current assets 6 Share of Joint Venture Non Current Assets 15 Total non-current assets TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 9 Short term provisions 10 Share of Joint Venture Current Liabilities 15 Total current liabilities NON-CURRENT LIABILITIES Long term provisions 10 Total non-current liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 11 Share options reserve Accumulated losses TOTAL EQUITY	CONSOLIDATED ENTITY 2009 2008 $ $ 640,734 1,221,144 2,918 3,635 49,309 312,445 13,144 15,688 706,105 1,552,912 30,471 34,618 - - 2,245,274 3,116,399 165,481 153,136 2,441,226 3,304,153 3,147,331 4,857,065 9,328 74,029 28,407 10,698 9,644 832 47,379 85,559 16,318 5,000 16,318 5,000 63,697 90,559 3,083,634 4,766,506 8,655,918 8,655,918 88,061 35,813 (5,660,345) (3,925,225) 3,083,634 4,766,506	PARENT ENTITY 2009 2008 $ $ 640,734 1,221,144 11,669 3,635 26,519 68,688 - -
		678,922 1,293,467
		30,471 34,618 3 3 - - - -
		30,474 34,621

		709,397 1,328,088
		9,328 74,029 28,407 10,698 - -
		37,735 84,727
		16,318 5,000
		16,318 5,000
		54,053 89,727
		655,343 1,238,361
		8,655,918 8,655,918 88,061 35,813 (8,088,636) (7,453,370)
		655,343 1,238,361

The above Balance Sheet should be read in conjunction with the accompanying notes.

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2009

STATEMENT OF CHANGES IN EQUITY

Consolidated Entity Balance at 1 July 2007 Shares issued during the year Options issued during the year Options exercised during the year Reserve transfer on lapse of options Loss for year Balance at 30 June 2008 Balance at 1 July 2008 Options issued during the year Loss for the year Balance at 30 June 2009	Issued capital Option reserve Accumulated losses Total $ $ $ $ 7,283,597 1,125,358 (3,052,255) 5,356,700 800,000 - - 800,000 - 30,631 - 30,631 572,321 (419,216) - 153,105 - (700,960) 700,960 - - - (1,573,930) (1,573,930)
	8,655,918 35,813 (3,925,225) 4,766,506
	8,655,918 35,813 (3,925,225) 4,766,506 - 52,248 - 52,248 - - (1,735,120) (1,735,120)
	8,655,918 88,061 (5,660,345) 3,083,634

Parent Entity Balance at 1 July 2007 Shares issued during the year Options issued during the year Options exercised during the year Reserve transfer on lapse of options Loss for year Balance at 30 June 2008 Balance at 1 July 2008 Options issued during the year Loss for year Balance at 30 June 2009	Issued capital Option reserve Accumulated losses Total $ $ $ $ 7,283,597 1,125,358 (6,143,831) 2,265,124 800,000 - - 800,000 - 30,631 - 30,631 572,321 (419,216) - 153,105 - (700,960) 700,960 - - - (2,010,499) (2,010,499) 8,655,918 35,813 (7,453,370) 1,238,361 8,655,918 35,813 (7,453,370) 1,238,361 - 52,248 - 52,248 - - (635,266) (635,266) 8,655,918 88,061 (8,088,636) 655,343

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES CASHFLOW STATEMENT

FOR THE YEAR ENDED 30 JUNE 2009

CASH FLOW STATEMENT Financial year ended 30 June 2009 Cash flows from operating activities Note Receipts from other income Payments to suppliers and employees Interest received Net cash used in operating activities 20 Cash flows from investing activities Purchase of plant and equipment Proceeds from tenement deposits New tenement deposits Investment – Toolebuc Resources P/L Net receipt from disposal of tenement Capitalised exploration expenditure Net cash used in investing activities Cash flows from financing activities Proceeds from issue of equity securities (net of issue costs) Payment to wholly owned subsidiaries Net cash provided by/(used in) financing activities Net decrease in cash held Cash at the beginning of financial year Cash at the end of financial year 20	CONSOLIDATED ENTITY 2009 2008 $ $ 3,315 3,315 (531,081) (608,167) 42,655 110,556 (485,111) (494,296) (4,159) (6,377) 50,000 - (20,000) (7,500) (35,000) (75,000) 100,000 - (186,140) (1,321,675) (95,299) (1,410,552) - 953,105 - - - 953,105 (580,410) (951,743) 1,221,144 2,172,887 640,734 1,221,144	PARENT ENTITY 2009 2008 $ $ 60,010 3,315 (569,774) (554,180) 42,655 110,556
		(467,109) (440,309)
		(4,159) (6,377) - - - - (35,000) (75,000) - - - -
		(39,159) (81,377)
		- 953,105 (74,142) (1,383,162)
		(74,142) (430,057)
		(580,410) (951,743) 1,221,144 2,172,887
		640,734 1,221,144

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2009

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The financial report covers Paradigm Metals Limited and its controlled entities. Paradigm Metals Limited is a listed public company incorporated and domiciled in Australia.

Scope of financial statements

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards including Australian Accounting Interpretations adopted by the Australian Accounting Standards Board and the Corporations Act 2001. The financial report of Paradigm Metals Limited and controlled entities and Paradigm Metals Limited as an individual parent entity complies with all Australian equivalents to International Financial Reporting Standards (AIFRS) in their entirety. Compliance with AIFRSs ensures that the financial report conforms with International Financial Reporting Standards (IFRSs).

Reporting Period

The financial report is presented for the year ended 30 June 2009.

Authorisation of financial report

The financial report was authorised for issue on 18 September 2009 by the Directors.

Basis of Preparation

The accounting policies set out below have been consistently applied to all years presented.

Reporting Basis and Conventions

The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2009

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

a) Principles of Consolidation

A controlled entity is one which Paradigm Metals Limited has the power to control the financial and operating policies of so as to obtain benefits from its activities.

A list of controlled entities is contained in Note 14 to the financial statements. All controlled entities have a 30 June financial year end.

The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Paradigm Metals Limited (‘Company’ or ‘parent entity’) as at 30 June 2009 and the results of all controlled entities for the year then ended. Paradigm Metals Limited and its controlled entities together are referred to in this financial report as the consolidated entity. The effects of all transactions between entities in the consolidated entity are eliminated in full.

Where control of an entity is obtained during a financial year, its results are included in the consolidated income statement from the date on which control commences. Where control of an entity ceases during a financial year its results are included for that part of the year during which control existed.

b) Financial Assets and Financial Liabilities

Financial assets and financial liabilities are recognised on the balance sheet when the Company becomes party to the contractual provisions of the financial instrument.

A financial asset is derecognised when the contractual rights to the cash flows from the financial assets expire or are transferred and no longer controlled by the entity. A financial liability is removed from the balance sheet when the obligation specified in the contract is discharged or cancelled or expires.

Upon initial recognition a financial asset or financial liability is designated as at fair value through profit or loss except for investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured.

A gain or loss arising from a change in the fair value of a financial asset or financial liability classified as at fair value through profit or loss is recognised in profit or loss.

Financial assets not measured at fair value comprise loans and receivables. These are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are measured at amortised cost using the effective interest method.

Available-for-sale financial assets include other financial assets, comprising investments in subsidiaries, not included in the above categories. Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity.

Financial liabilities comprise of trade and other payables, provisions and borrowings are measured at amortised cost using the effective interest method.

Trade accounts payable represent the principal amounts outstanding at balance date plus, where applicable, any accrued interest.

The amortised cost of a financial asset or a financial liability is the amount initially recognised minus principal repayments, plus or minus cumulative amortisation of any difference between the initial amount and maturity amount and minus any write-down for impairment or uncollectibility.

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2009

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

c) Revenue Recognition

(i) Revenue from rendering of services

Revenue from rendering of services is recognised when the outcome of a transaction involving the rendering of services can be estimated reliably and when the other contractual obligations of the entity are performed.

(ii) Interest revenue

Interest revenue is recognised using the effective interest method. It includes amortisation of any discount or premium.

d) Leases

Lease of assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, are transferred to the Company were classified as finance leases. Finance leases are capitalised, recording an asset and a liability equal to the present value of the minimum lease payments, including any guaranteed residual values. Leased assets are amortised on a straight-line basis over their estimated useful lives where it is likely that the Company will obtain ownership of the asset or over the term of the lease. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as an expense on a straight line basis over the lease term unless another systematic basis is more representative of the time pattern in which benefits are diminished.

Lease incentives under operating leases are recognised as liabilities. The incentives are recognised as a reduction of expenses on a straight line basis unless another systematic basis is more representative of the time pattern in which benefits are diminished.

e) Income taxes

Income taxes are accounted for using the comprehensive balance sheet liability method whereby:

the tax consequences of recovering (settling) all assets (liabilities) are reflected in the financial statements;
current and deferred tax is recognised as income or expense except to the extent that the tax relates to equity items or to a business combination;
a deferred tax asset is recognised to the extent that it is probable that future taxable profit will be available to realise the asset; and
deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability settled.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of the assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the recognition of an asset or liability, excluding a business combination, where there is no effect in accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the year when the asset is realised or liability settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the group will derive sufficient

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2009

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by law.

Tax consolidation legislation

Paradigm Metals Limited and its wholly-owned Australian controlled entities have formed an income tax consolidated group under the tax consolidation regime. The tax consolidated group does not have a tax sharing and funding agreement in place.

f) Foreign Currency Transactions and Balances

Functional and Presentation Currency

The functional currency of each of the group’s entities is measured using the currency of the primary economic environment in which the entity operates in. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency.

Transaction and Balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year end exchange rate. Non monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non Monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the income statement, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of non monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the income statement.

g) Cash and Cash Equivalents

Cash and cash equivalents comprise:

(i) cash on hand and at call deposits with banks or financial institutions, net of bank overdrafts;

(ii) investments in money market instruments; and (iii) cash in transit.

h) Receivables

Trade accounts receivables and other receivables represent the principal amounts due at balance date plus accrued interest and less, where applicable, any unearned income and provision for doubtful accounts. An estimated doubtful debt is made when collection of the full amount is no longer probable.

i) Financial Assets – Investments in Controlled Entities

Investments in controlled entities are measured on a cost basis. The carrying amounts of investments are reviewed annually by the Directors to ensure they are not in excess of recoverable amounts of these assets.

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2009

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

j) Property, Plant and Equipment

Property, plant and equipment are included at cost. Assets in plant and equipment (except for capitalised leased assets) are depreciated on a straight line basis over their estimated useful lives. The depreciation rates used for each class of assets are as follows:

Class of Fixed Asset Depreciation Rate Office Equipment 5% - 50% Leasehold Improvements 5%

On disposal of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognised as a gain or loss.

k) Impairment Of Assets

At each reporting date, the Company reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement. In assessing value in use, the estimated future cash flows discounted to their present value using a pre-tax discount rate.

l) Contingent Liabilities

A contingent loss is recognised as an expense and a liability if it is probable that future events will confirm that, after taking into account any related probable recovery, an asset has been impaired or a liability incurred and, a reasonable estimate of the amount of the resulting loss can be made.

m) Short Term Employee Benefits

Short term employee benefits are employee benefits (other than termination benefits and equity compensation benefits) which fall due wholly within 12 months after the end of the period in which employee services are rendered. They comprise wages, salaries, social security obligations, short-term compensation absences, profit sharing and bonuses payables within 12 months and non-mandatory benefits such as medical care, housing, car and service goods.

The provision for employee entitlements to wages, salaries and annual leave represents the amount that the Group has a present obligation to pay resulting from employee services provided up to balance date. The provision has been calculated after taking into consideration estimated future increases in wages and salaries and past experience regarding staff departures and includes related on-costs.

The undiscounted amount of short-term benefits expected to be paid is recognised as an expense.

n) Long Term Employee Benefits

Long term employee benefits include long-service leave payable 12 months or more after the end of the period in which employee service are rendered.

o) Events after the Balance Sheet Date

Assets and liabilities are adjusted for events incurring after the balance date that provide evidence of conditions existing at the balance date. Important after balance date events which do not meet these criteria are disclosed in Note 23 to the financial statements.

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2009

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

p) Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown exclusive of GST.

q) Exploration and evaluation expenditure

Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. An area of interest refers to an individual geological area where the presence of a mineral deposit is considered favourable or has been proved to exist, and in most cases will be an individual tenement. Exploration and evaluation expenditure is recognised in relation to an area of interest when the rights to tenure of the area of interest are current and either:

(a) such expenditure is expected to be recovered through successful development and commercial exploitation of the areas of interest; or

(b) the exploration activities in the area of interest have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves and active and significant operations in, or in relation to, the area of interest are continuing.

Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching and sampling associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest.

Exploration and evaluation assets are assessed for impairment when the facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount.

r) Restoration Provision

Where applicable, a provision for material rehabilitation and restoration obligations is recognised. The amount recognised includes the cost of reclamation and site rehabilitation after taking into account restoration works that are carried out during exploration. Costs are determined from estimates of future costs. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date taking into account the risks and uncertainties surrounding the obligation. Where the time value of money is material, the amount of the provision is the present value of the expected future cash flows required to settle the obligation. In each subsequent reporting period, the amount of the provision may be adjusted by any change in the estimated future rehabilitation and restoration costs of existing and new workings, and any discount associated with the change in the life of the project and the discount rate.

s) Comparative Figures

Where required by accounting standards, the reclassification of comparatives has been performed in order to conform to the changes in presentation for the current financial year.

t) Earnings per Share

Basic earnings per share

Basic earnings per share is determined by dividing the operating profit or loss after income tax attributable to the members of the Company, by the weighted average number of ordinary shares outstanding during the financial period.

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2009

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share by taking into account any reduction in earnings per share that will arise from the exercise of options outstanding during the financial period.

u) New Australian Accounting Standards

The following Australian Accounting Standards have been issued or amended and are applicable to the company but are not yet effective. They have not been adopted in preparation of the financial statements at reporting date.

Accounting Standards

AASB No.	Title	Issue Date	Operative Date (Annual reporting periods beginning on or after)
8, 2007-3	Operating Segments	Feb 2007	1 Jan 2009
101, 2007-8	Presentation of Financial Statements (Amended)	Sept 2007	1 Jan 2009
123, 2007-6	Borrowing Costs (Amended)	June 2007	1 Jan 2009
Revised 3, 2008-3	Business combinations(Amended)	Mar 2008	1 Jul 2009
2008-7	Amendments to Australian Accounting Standards – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate	Jul 2008	1 Jan 2009

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2009

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material financial impact on the financial statements of the consolidated entity.

v) Share Based Payments

Equity settled share based payments are measured at the fair value of the equity instrument at grant date. Fair value is measured by the Black Scholes model.

The fair vale determined at the grant date of the equity-settled share based payment is expensed on a straight line basis over the vesting period, based on the consolidated entity’s estimate of the shares that will eventually vest.

Where the share based payment is for a capital item, the fair value expense is recorded in the balance sheet and treated accordingly.

w) Significant Judgement and Key Assumptions

The Directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Company.

The Company assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined.

x) Interests in Joint Ventures

The consolidated group’s share of the assets and liabilities, revenue and expenses of joint venture operations are included in the appropriate items of the consolidated financial statements. Details of the consolidated group’s interests are shown at Note 15.

The consolidated group’s interest in joint venture entities are brought to account using the proportionate consolidation method of accounting in the consolidated financial statements. The parent entity’s interests in joint venture entities are brought to account using the cost method.

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2009

NOTE 2: REVENUE Operating activities Interest received Income from related parties Non-operating activities Rent received NOTE 3: LOSS FOR THE YEAR (a) Other Expenses comprised as follows: Exploration expenditure - Write-off capitalised expenditure Write down of amounts receivable from subsidiaries Write down of investment in Joint Venture Directors fees Administration expenses Rental expenses on operating leases - minimum lease payments Share based payments	CONSOLIDATED ENTITY 2009 2008 $ $ 42,655 110,556 - - 3,650 3,650 46,305 114,206 (1,221,460) (968,867) - - - - (100,139) (130,000) (163,304) (260,911) (41,202) (34,119) (11,388) (29,370) (1,537,493) (1,423,267)	PARENT ENTITY 2009 2008 $ $ 42,655 110,556 53,395 42,900 3,650 3,650
		99,700 157,106
		- - (115,003) (959,424) (35,000) (499,999) (100,139) (130,000) (189,367) (248,076) (41,202) (34,119) (11,388) (29,370)
		(492,099) (1,900,988)

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2009

NOTE 4: INCOME TAX Income tax recognised in profit / (loss) The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax as follows: Loss from operations Prima facie tax benefit on loss from ordinary activities before income tax at 30% (2008: 30%) Consolidated Entity Parent Entity Add: tax effect of non-allowable items Less: tax effect of timing differences not brought to account Deferred tax assets not brought to account Income tax attributable to the entity	CONSOLIDATED ENTITY 2009 2008 $ $ (1,735,120) (1,573,930) (520,536) (472,179) - - (520,536) (472,179) 2,492 2,562 (6,779) (21,003) 524,823 490,620 - -	PARENT ENTITY 2009 2008 $ $ (635,266) (2,010,499) - - (190,580) (603,149)
		(190,580) (603,149) 2,492 2,562 (6,779) (2,728) 194,867 603,315
		- -

As at 30 June 2009, the Company had estimated unrecouped operating income tax losses of $ 8,796,294 (2008: $8,271,471). The benefit of these losses of $2,638,888 (2008: $ 2,481,441) has not been brought to account as realisation is not probable.

The benefit will only be obtained if:

(i) The Company derives future assessable income of a nature and an amount sufficient to enable the benefits from the deductions for the losses to be realized.

(ii) The Company continues to comply with the conditions for deductibility imposed by the law;

(iii) No changes in tax legislation aversely affect the Company in realising the benefit from the deductions for the losses.

As at 30 June 2009 there were no franking credits available for subsequent financial years.

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2009

NOTE 5: TRADE AND OTHER RECEIVABLES Amounts receivable from: Trade receivables Wholly owned subsidiaries and Joint Ventures - provision for impairment of receivables from wholly owned subsidiaries and Joint Ventures NOTE 6: OTHER ASSETS CURRENT Prepayments GST receivable Tenement deposits Capitalised Exploration costs – Held for sale (a) NON-CURRENT Tenement deposits Exploration expenditure capitalised: - exploration and evaluation phases (a) (a) Movement in carrying amounts Balance at beginning of the year Exploration expenditure capitalised Exploration expenditure written off Tenements sold Carrying amount at end of year	CONSOLIDATED ENTITY 2009 2008 $ $ 2,918 3,635 - - - - 2,918 3,635 22,221 23,865 4,298 44,823 12,500 55,000 10,290 188,757 49,309 312,445 52,500 40,000 2,192,774 3,076,399 2,245,274 3,116,399 3,265,156 3,004,079 259,368 1,229,944 (1,221,460) (968,867) (100,000) - 2,203,064 3,265,156	PARENT ENTITY 2009 2008 $ $ 11,669 3,635 5,535,856 5,602,942 (5,535,856) (5,602,942)
		11,669 3,635
		22,221 23,865 4,298 44,823 - - - -
		26,519 68,688
		- - - -
		- -
		- - - - - - - -
		- -

Recoverability of the carrying amount of exploration assets is dependent on successful development and commercial exploration or sale of the respective areas of interest.

During the year the Consolidated entity disposed of the North Cadia tenement for $150,000, the carrying value was $100,000 and costs to sell were $50,000 therefore there was nil gain on disposal. Refer to Note 14 for details of expenses incurred.

Capitalised costs amounting to $186,140 (2008: $1,321,675) have been included in the cash flows from investing activities in the cash flow statement.

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2009

NOTE 7: PLANT AND EQUIPMENT Plant and equipment at cost Accumulated depreciation Total plant and equipment Movement in carrying amounts: Balance at beginning of year Additions Depreciation Carrying amount at end of year NOTE 8: FINANCIAL ASSETS Investment in wholly owned subsidiaries (Note 14) NOTE 9: TRADE AND OTHER PAYABLES CURRENT Unsecured liabilities: Trade payables Sundry payables and accrued expenses	CONSOLIDATED ENTITY $ $ 2009 2008 62,019 57,860 (31,548) (23,242) 30,471 34,618 34,618 36,781 4,158 6,377 (8,305) (8,540) 30,471 34,618 - -	PARENT ENTITY $ $ 2009 2008 62,019 57,860 (31,548) (23,242)
		30,471 34,618
		34,618 36,781 4,158 6,377 (8,305) (8,540)
		30,471 34,618
		3 3
	9,328 67,598 - 6,431 9,328 74,029	9,328 67,598 - 6,431
		9,328 74,029

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2009

NOTE 10: PROVISIONS Consolidated Entity Opening balance at 1 July 2008 Amounts used Additional Provision Balance at 30 June 2009 Parent Entity Opening balance at 1 July 2008 Amounts used Additional Provision Balance at 30 June 2009	Tenement Employee Total Restoration Benefits $ $ $ 5,000 10,698 15,698 - - - - 29,027 29,027
	5,000 39,725 44,725
	5,000 10,698 15,698 - - - - 29,027 29,027
	5,000 39,725 44,725

Analysis of total provisions: Current Non-current	CONSOLIDATED ENTITY PARENT ENTITY 2009 2008 2009 2008 $ $ $ $ 28,407 10,698 28,407 10,698 16,318 5,000 16,318 5,000
	44,725 15,698 44,725 15,698

Provision for tenement restoration:

The restoration provision represents the present value of the Directors' best estimate of the future sacrifice of economic benefit that will be required for meeting environmental obligations for existing tenements after exploration activities have been completed. The provision is reviewed annually by the Directors.

Provision for employee benefits:

A provision has been recognised for employee entitlements relating to annual leave due within 1 year.

A provision has been recognised for employee benefits relating to long service leave. The calculation of the present value of future cash flows in respect of long service leave is based on historical data. The measurement and recognition criteria relating to employee benefits have been included in Note 1 to this report. There is uncertainty around the exact timing of the cash outflows in relation to the above amounts.

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2009

NOTE 11: ISSUED CAPITAL

CONSOLIDATED AND PARENT ENTITY

(a) Ordinary Shares Ordinary Shares at beginning of reporting period Ordinary Shares at reporting date	$ Number 8,655,918 72,180,082
	8,655,918 72,180,082

At reporting date the Company had 72,180,082 (2008: 72,180,082) authorised Ordinary Shares of no par value. Ordinary Shares entitle the holder to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary Shares entitle the holder to one vote, either in person or by proxy, at a meeting of the Company.

(b) Options

Effect of share-based payment transactions Expenses arising from share-based payment transactions Expenses arising from share-based payment transactions capitalised as exploration costs	CONSOLIDATED ENTITY PARENT ENTITY 2009 2008 2009 2008 $ $ $ $ 11,388 29,370 11,388 29,370 40,860 1,261 40,860 1,261 52,248 30,631 52,248 30,631 Number of options 2009 Weighted average exercise price $ Number of options 2008 Weighted average exercise price $
Movement during the financial year

Opening number of options	1,170,000 32,306,149 1,200,000 0.20 870,000 0.204 - (29,993,649) - (2,012,500) 0.076
Granted during the financial year
Lapsed during the financial year
Exercised during the financial year
Closing number of options	2,370,000 0.20 1,170,000 0.216

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2009

NOTE 11: ISSUED CAPITAL (CONTINUED)

Details of options outstanding as at end of year

Details of options outstanding as at end of year
Grant date Expiry date	% Exercisable at 30 June 2009 30 June 2009 Outstanding Option No. Exercise Price $ Fair value at issued date


Sempra Metals & Concentrates LLC 19 May 2008 19 May 2013	100 800,000 0.20 0.11
1 (Employee) 22 May 2007 22 May 2010	100 300,000 0.25 0.15
1 (Employee) 8 May 2008 22 May 2010	100 70,000 0.25 0.11
Sempra Metals & Concentrates LLC 3 July 2008 3 July 2013	100 1,200,000 0.20 0.19
	100 2,370,000

NOTE 12: AUDITOR’S REMUNERATION Amounts received or due and receivable by the auditor of the Company for: Audit or review of the financial reports of the Company Taxation services Advisory Services - Share Issue	CONSOLIDATED ENTITY PARENT ENTITY 2009 2008 2009 2008 $ $ $ $ 38,500 41,000 38,500 41,000 9,840 7,460 9,840 7,460 - 2,500 - 2,500
	48,340 50,960 48,340 50,960

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2009

NOTE 13: KEY MANAGEMENT PERSONNEL COMPENSATION

Directors

The names of persons who were directors of Paradigm Metals Limited at any time during the financial year are Richard Austen (alternate Richard Harvey), Graham Carman, Stephen Lonergan, and John Gaskell.

Gaskell.
	PARENT ENTITY	PARENT ENTITY
	AND CONSOLIDATED	AND CONSOLIDATED
	2009	2008
	NUMBER	NUMBER
Aggregate numbers of shares and share options of
Paradigm Metals Limited held directly, indirectly, or
beneficially by Directors of the Company or the
consolidated entity or their Director related entities at
balance date:
Ordinary shares	8,200,735	8,200,735
Options over unissued ordinary shares	-	-

Key management personnel

The following were key management personnel at various times during the reporting year:

Graham Carman – Managing Director

Richard Austen – Director

John Gaskell – Director

Stephen Lonergan - Director

The aggregate compensation made to key management personnel of the Company and consolidated entity are set out below: -

	CONSOLIDATED ENTITY PARENT ENTITY 2009 $ 2008 $ 2009 $ 2008 $
Short Term Employee Benefits Post Employment Benefits Other Payments Termination Benefits Share based payment Total	178,675 193,700 178,675 193,700 92,664 130,000 92,664 130,000 - - - - - - - - - - - -
	271,339 323,700 271,339 323,700

The Company has taken advantage of the relief provided by ASIC Class Order 06/50 and has transferred the detailed remuneration disclosures to the Directors’ report.

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2009

NOTE 14: RELATED PARTY TRANSACTIONS

Transactions between related parties are on	normal commercial terms and conditions, no more favourable	normal commercial terms and conditions, no more favourable
than those available to other parties unless otherwise stated. These are unsecured and will be settled in cash.
Controlled Entities of Paradigm Metals Ltd	Country of	Percentage Owned
	Incorporation	2009 2008
		% %
Paradigm NSW Pty Limited	Australia	100 100
Paradigm Queensland Pty Limited	Australia	100 100
Tungsten NSW Pty Limited	Australia	100 100

Transactions with related parties Loans to Subsidiaries Loans to Subsidiaries Provision against Loan to Subsidiaries Amount due from Subsidiaries Loans to Joint Ventures Loan to Joint Venture Provision against loan to Joint Venture Amount due from joint Venture Other related parties Payment of Directors' fees to Dick Austen and Associates Pty Limited Payment of Director’s fees to Gaskell Superannuation Pty Ltd Sub-lease rent received from John Gaskell (Director) Amount due from John Gaskell (Director) at 30 June	PARENT ENTITY 2009 2008 $ $ 5,535,856 5,578,003 (5,535,856) (5,578,003) - - - 24,939 - (24,939) - - 20,139 50,000 30,000 - 3,650 3,650 669 334	PARENT ENTITY 2009 2008 $ $ 5,535,856 5,578,003 (5,535,856) (5,578,003) - - - 24,939 - (24,939) - - 20,139 50,000 30,000 - 3,650 3,650 669 334
		-
		24,939 (24,939)
		-
		50,000 - 3,650 334

During the year Paradigm completed the sale of its exploration license at North Cadia in NSW to Gold and Copper Resources Pty Ltd (GCR). A requirement of the deal was that a 2% NSR royalty on the exploration license be removed at the time of the sale. The Royalty Holder (being 14 individuals) agreed to this cancellation in consideration for a payment of $50,000 of the $150,000 received from GCR. As the Directors of the Company are among those 14 individuals, the following amounts were received by each Director:

Graham Carman	11,000	-
John Gaskell	2,100	-
Stephen Lonergan	2,100	-

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2009

NOTE 15: JOINT VENTURE

During the prior year the company entered into a Joint Venture agreement with Exco Resources Limited. Together with Paradigm the two companies jointly control Toolebuc Resources Pty Limited specifically incorporated to explore for uranium and other minerals near Cloncurry.

Paradigm’s 50% interest in the Joint Venture entity is accounted for in the consolidated financial statements using the proportional consolidation method of accounting. Paradigm’s interest in the Joint Venture is reflected below:

Current Assets Non – Current Assets Total Assets Current liabilities Total Liabilities Revenues Expenses Loss Before Income Tax Income Tax Expenses Loss after Income Tax Expense	CONSOLIDATED ENTITY 2009 $ 2008 $ 13,144 15,688 165,481 153,136 178,625 168,824 9,644 832 9,644 832 - - (1,065) (11,452) (1,065) (11,452) - - (1,065) (11,452)	PARENT 2009 $ - - - - - - - - - -	ENTITY 2008 $ - -
			-
			-
			-
			- - -
			-
			-
			-

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2009

NOTE 16: FINANCIAL RISK MANAGEMENT

Capital Management

The Group's capital structure consists of deposits with banks, tenement deposits, accounts receivable and payable and loans to and from controlled entities.

Management controls the capital of the consolidated entity in order to ensure that the consolidated entity can fund its exploratory operations and continue as a going concern.

Due to the early stage nature of the consolidated entity’s business, the consolidated entity’s capital is limited to ordinary share capital.

There are no externally imposed capital requirements.

Management effectively manages the consolidated entity’s capital by assessing the consolidated entity’s financial risks and adjusting its capital structure in response to changes in these risks.

There have been no changes in the strategy adopted by management to control the capital of the consolidated entity since the prior year. The group does not have any borrowings.

Financial Instruments

As at 30[th] June 2009, the consolidated entity held the following financial instruments:

Consolidated Group Financial Assets Cash assets Receivables Tenement Deposits Total Financial Assets Financial Liabilities Trade and sundry payables Total Financial Liabilities Net Financial Assets	Non-Interest Bearing Interest Bearing 1 Year or Less 1 to 5 Years 2009 2008 2009 2008 2009 2008 $ $ $ $ $ $ 2,053 25,803 638,681 1,195,341 - - 2,918 3,635 - - - - 65,000 95,000 - - - -	Total 2009 2008 $ $ 640,734 1,221,144 2,918 3,635 65,000 95,000
	69,971 124,438 638,681 1,195,341 - -	708,652 1,319,779
	9,328 74,029 - - - -	9,328 74,029
	9,328 74,029 - - - -	9,328 74,029
	60,643 50,409 638,681 1,195,341 - -	699,324 1,245,750

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2009

Parent Entity Financial Assets Cash assets Receivables Total Financial Assets Financial Liabilities Trade and sundry payables Total Financial Liabilities Net Financial Assets	Non-Interest Bearing Interest Bearing 1 Year or Less 1 to 5 Years 2009 2008 2009 2008 2009 2008 $ $ $ $ $ $ 2,053 25,803 638,681 1,195,341 - - 11,669 44,823 - - - -	Total 2009 2008 $ $ 640,734 1,221,144 11,669 44,823
	13,722 70,626 638,681 1,195,341 - -	652,403 1,265,967
	9,328 74,029 - - - -	9,328 74,029
	9,328 74,029 - - - -	9,328 74,029
	4,394 (3,403) 638,681 1,195,341 - -	643,075 1,191,938

Risk Exposures

Interest Rate Risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market interest rates. The consolidated entity’s exposure to interest rate risk is shown below:

Cash flow sensitivity analysis for floating rate financial instruments:

The following table details the effects on net profit and equity if the interest rate was to increase by 5% and decrease by 5%. This assumes that all other variables remain constant.

	Consolidated	Entity		Parent Entity
	Profit/(Loss)/Equity		Profit/(Loss)/Equity
	2009	2008	2009	2008
	$	$	$	$
Increased by 5%	31,533	59,767	31,533	59,597
Decreased by 5%	(31,533)	(59,767)	(31,533)	(59,597)

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2009

Credit Risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets, is the carrying amount net of any provision for impairment of those assets, as disclosed in the balance sheet and notes to the financial statements. Neither the consolidated entity or the parent entity has any material credit risk exposure to a single receivable or group of receivables under financial instruments entered into by the consolidated entity.

Liquidity Risk

Liquidity risk is the risk that the consolidated entity will not be able to meet its financial obligations associated with financial liabilities as and when they fall due.

The consolidated entity manages liquidity risk by monitoring cash flows and the maturity profiles of financial assets and liabilities to ensure that it will always have sufficient liquid resources to meet its liabilities as and when they fall due.

The consolidated entity's financial liabilities as at 30th June 2009 consist of trade payables and amounts due to the joint venture partner only. No contractual interest-bearing liabilities were held within the consolidated entity.

The cash flows associated with trade and other payables equals the carrying value and will be fully paid with 6 months of the Balance Sheet date.

Fair values of financial instruments

It is noted that the carrying value of all financial instruments at the Balance Sheet date are equal to their fair value.

NOTE 17: COMMITMENTS FOR EXPENDITURE

PARENT ENTITY CONSOLIDATED ENTITY

(a) Exploration expenditure commitments

Within 1 year 1-5 years >5 years	2009 2008 $ $ 468,000 567,000 568,000 415,000 - - 1,036,000 982,000	2009 2008 $ $ - - - - - -
		- -

Included in the above are commitments relating to the joint venture of $160,000.

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2009

Tenement holdings and related commitments are regularly reviewed, and there is no certainty that a tenement will be held for the full period of its grant. The consolidated entity is required to meet minimum committed expenditure requirements to maintain current rights of tenure on exploration tenements. These obligations may be subject to renegotiation, may be farmed out or may be relinquished. The expenditure commitments shown cover commitments for all current tenement holdings for a period of 2 years from reporting date.

(b) Operating Lease Commitments

The property lease is a non-cancellable lease with a term of two years, commencing April 2008. The lease allows for subletting of all lease areas.

Within 1 year 1-5 years	CONSOLIDATED ENTITY 2009 2008 $ $ 35,126 39,957 - 33,837 35,126 73,794	PARENT ENTITY 2009 2008 $ $ 37,625 39,957 - 33,837
		37,625 73,794

NOTE 18: SEGMENT INFORMATION

The consolidated entity operates predominantly in the mining exploration industry throughout New South Wales and Queensland.

NOTE 19: EARNINGS PER SHARE (a) Reconciliation of earnings to net Loss Net loss after tax Loss used in the calculation of basic EPS and dilutive EPS (b) Weighted average number of ordinary shares outstanding during the year used in the calculation of basic EPS Weighted average number of options outstanding Weighted average number of ordinary shares outstanding during the year used in the calculation of dilutive EPS	CONSOLIDATED ENTITY 2009 2008 $ $ (1,735,120) (1,573,930)
	(1,735,120) (1,573,930)
	72,180,082 65,203,678 - -
	72,180,082 65,203,678

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2009

NOTE 20: NOTES TO THE CASH FLOW STATEMENT

(a) Reconciliation of cash and cash equivalents Cash at bank Rental Bond (b) Reconciliation of cash flows from operations with loss after income tax Loss after income tax Non cash flows in loss Depreciation Provision for impairment of receivables from wholly owned subsidiaries and Joint Ventures Exploration expenditure written off Share option expense Changes in Assets and Liabilities Decrease/(increase) in trade and other receivables Decrease/(increase) in other assets Increase/(decrease) in other payables Increase/(decrease) in other provisions Net cash used in operating activities	CONSOLIDATED ENTITY 2009 2008 $ $ 630,399 1,210,809 10,335 10,335 640,734 1,221,144 (1,735,120) (1,573,930) 8,305 8,540 - - 1,221,460 968,867 11,388 29,370 2,361 (3,635) 42,169 17,110 (64,701) 50,184 29,027 9,198 (485,111) (494,296)	PARENT ENTITY 2009 2008 $ $ 630,399 1,210,809 10,335 10,335
		640,734 1,221,144
		(635,265) (2,010,499) 8,305 8,540 150,003 1,459,423 - - 11,388 29,370 (8,035) (3,635) 42,169 17,110 (64,701) 50,184 29,027 9,198
		(467,109) (440,309)

NOTE 21: SUPERANNUATION COMMITMENTS

The consolidated entity contributes to industry based superannuation plans which provide accumulated benefits to permanent employees. The level of contributions is determined by Superannuation Guarantee legislation. The consolidated entity has no responsibility for the administration or performance of these industry based funds.

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2009

NOTE 22: CONTINGENT LIABILITIES

In 2008 Paradigm purchased the tenement site of White Rock from Copper Strike Limited and Sherwood Ventures Pty Limited (“the vendors”). The purchase agreement includes terms obliging Paradigm to pay the vendors $0.5 million on the announcement to the ASX of a defined Indicated Mineral Resource, and $1.5 million after the first of (i) completion of a positive Project Feasibility Study, or (ii) a decision to mine.

NOTE 23: SUBSEQUENT EVENTS

The following significant subsequent events have taken place between the end of the financial year and the date of this report:

Share capital raising

On 27 July 2009 the company announced the launch of a Share Purchase Plan (SPP) to allow current shareholders the opportunity to subscribe for additional shares. The SPP raised a total of $758,000. On 14 August 2009 the company announced that it had completed a share placement to professional and sophisticated investors raising approximately $380,000. The effect of the share capital raisings is to increase the number of shares on issue to 104,661,119 shares on issue.

Joint Venture Partner at Blue Bush

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES DIRECTORS’ DECLARATION

FOR THE YEAR ENDED 30 JUNE 2009

The Directors of the Company declare that:

In the Directors’ opinion the financial statements and notes on pages 13 to 40, and the remuneration disclosures that are contained in the Remuneration Report in the Directors’ Report, set out on page 9, are in accordance with the Corporations Act 2001, including;
(i) Giving a true and fair view of the Company’s and the consolidate entity’s financial position as at 30 June 2009 and of their performance, for the financial year ended on that date; and

(ii) complying with Australian Accounting Standards (including the Australian Accounting interpretations) and Corporations Regulations 2001.

The financial report also complies with International Financial reporting Standards as disclosed in Note 1; and
The remuneration disclosures that are contained in the Remuneration Report in the Directors’ report comply with Australian Accounting standard AASB 124: Related Party Disclosures, the Corporations Act 2001 and the Corporations Regulations 2001; and
There are reasonable grounds to believe that the Company will beable to pay its debts as and when they become due and payable.
the Directors have been given the declarations required by section 295A of the Corporations Act 2001

Signed in accordance with a Resolution of the Directors.

On behalf of the Directors

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Graham D Carman

Dated: 18 September 2009

Sydney

PARADIGM METALS LIMITED INDEPENDENT AUDIT REPORT

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INDEPENDENT AUDITOR’S REPORT

To the members of Paradigm Metals Limited

Report on the Financial Report

We have audited the accompanying financial report of Paradigm Metals Limited, which comprises the balance sheet as at 30 June 2009, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the Directors’ Declaration for both Paradigm Metals Limited (the company) and the consolidated entity. The consolidated entity comprises the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The Directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 . This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In note 1, the directors also state that, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements , that compliance with the Australian Equivalents to International Financial Reporting Standards (AIFRS) ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Tel: 61 2 9251 4100 | Fax: 61 2 9240 9821 | www.pkf.com.au PKF | ABN 83 236 985 726

Level 10, 1 Margaret Street | Sydney | New South Wales 2000 | Australia

DX 10173 | Sydney Stock Exchange | New South Wales

Liability limited by a scheme approved under Professional Standards Legislation

PARADIGM METALS LIMITED INDEPENDENT AUDIT REPORT

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Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 .

Auditor’s Opinion

In our opinion:

(a) the financial report of Paradigm Metals Limited is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2009 and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 ; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Report on the Remuneration Report

We have audited the Remuneration Report included under the heading ‘Remuneration Report’ in the Directors’ Report for the year ended 30 June 2009. The Directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s Opinion

In our opinion the Remuneration Report of Paradigm Metals Limited for the year ended 30 June 2009, complies with Section 300A of the Corporations Act 2001 .

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PKF

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Tim Sydenham

Partner

Sydney

Dated this 18[th] September 2009

PARADIGM METALS LIMITED

CORPORATE GOVERNANCE STATEMENT

FOR THE YEAR ENDED 30 JUNE 2009

The following sets out how the Company is currently implementing the ASX “Corporate Governance Principles and Recommendations” dated August 2007 ("the Principles"). A copy of this Statement is available on the Company's website: www.paradigmmetals.com.au .

Principle 1: Lay solid foundations for management and oversight

The Board has formally retained all functions except those delegated from time to time to the Managing Director. Currently, the following functions are so delegated;

1 Management of the Company’s exploration program consistent with the plans and budgets approved by the Board.
2 Management of the Company’s financial records.
3 Compliance with all ASIC and ASX reporting requirements, subject to prior Board approval.
4 Representation and promotion of the Company to the investment markets.
5 Engagement (subject to prior Board approval) of employees and supervision of employees and contractors.
6 Management of the Company’s occupational health and safety and environmental protection obligations.
7 Identification, development and presentation of business development opportunities consistent with the Company’s commitments to its stakeholders.

Apart from the foregoing there is no published Board Charter. A letter of appointment has been entered into between each Director and the Company. The Managing Director's performance is evaluated each year by the Board essentially against the exploration results and budget outcomes for the past year. The Managing Director's performance was evaluated on this basis during the year.

Given the size of the Company, there is no induction procedure for senior executives.

Principle 2: Structure the board to add value

It is recommended by the Principles that the majority of the Board should be independent Directors. Two Directors (Messrs Gaskell and Lonergan) are considered to be independent Directors. The Managing Director fulfils the role of Chief Executive Officer. The skills and experience of each Director and his period in office are set out on page 7.

The letter of appointment for each Director confers the right to seek independent legal advice at the Company’s expense, subject to prior agreement of the other Directors which will not be unreasonably refused.

The independent Directors meet from time to time to discuss issues relating the Company without management being present. There is currently no formal Chairman, however either of the independent Directors acts as Chairman as required.

The Board has not established a Nominations Committee as it considers that there is no current need for such Committee. Consequently, there are no procedures for the selection and appointment of new directors. Should a Board vacancy arise, the Board as a whole will meet to decide on an appointee.

The Board has free and unfettered access to the executives in the Company and to the Company Secretary. The term of office held by each Director as at the date of this report is as follows:

	Date of appointment	Retire by rotation
MrCarman	18November 2002	Notrequired toretire
MrGaskell	07 November 2002	2009AGM
Mr Lonergan	07 November 2002	2010AGM

The period for which each of these Directors has held office is disclosed elsewhere in this Annual Report. The Board as a whole has considered its performance during the year and has (relevant Directors excepted) reviewed the performance of individual Directors, with particular regard to meeting attendance, contributions and participation in strategy and development.

PARADIGM METALS LIMITED CORPORATE GOVERNANCE STATEMENT

FOR THE YEAR ENDED 30 JUNE 2009

The Company Secretary monitors Board policy and provides assurance that statutory procedures are followed. The Company Secretary coordinates timely completion and dispatch of board agenda and papers. The Company Secretary is appointed and removed by the Board.

New employees are inducted into the Company Codes of Conduct and procedures on commencement of employment. The Company follows a procedure to ensure regular education of employees occurs in their sphere of expertise, monitored by the CEO. This may include regular attendance to conferences, education classes, mine sites, etc.

Principle 3: Promote ethical and responsible decision-making

The Company has adopted a Code of Conduct and a policy on Trading in the Company’s Securities and other governance policies which are available on the Company’s web site.

Principle 4: Safeguard integrity in financial reporting

The Board has adopted a policy requiring the Managing Director to state in writing to the Board that the Company’s financial reports present a true and fair view, in all material respects, of the Company’s financial condition and operational results are in accordance with relevant accounting standards. In addition, standard audit procedures require management to provide a Management Representation Letter relating to these matters. The Board has established a practice of meeting periodically with the Company’s Auditors, without management being present, to enable the auditors to freely express any concerns in this area.

The Company has established an Audit Committee comprising two independent Directors being John Gaskell (Chairman) and Stephen Lonergan, whose qualifications are set out on page 7. The Audit Committee has met twice during the year.

The formal charter of the Audit Committee is to give assurance to the Board that all financial statements and reports to be adopted by the Board are consistent with all applicable reporting requirements and are, in all respects, accurate and not misleading. Additionally, the Audit Committee is the mechanism through which the Company’s Auditors will interface with the Board.

The Company's auditor is PKF which has a policy of rotating the audit Partner each five years.

Principle 5: Make timely and balanced disclosure

The Company has adopted a formal Continuous Disclosure Policy and this is available on the Company’s website.

Principle 6: Respect the rights of shareholders

The Company maintains a website to facilitate shareholder communication and participation, including an email service. No formal communications policy has been adopted. The Company’s auditor attends the Annual General Meeting and is available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditors report.

Principle 7: Recognise and manage risk

Risk faced by the Company is a standing agenda item for Board meetings. The suite of risks faced by the Company as a mining exploration entity are comparatively limited and for this reason a formal risk management policy has not yet been adopted. The Board actively discusses specific risks, and puts in place provisions to deal with these risks. An example is that the Company has addressed the risk of being exposed to fraud, and adapted its banking procedures to minimise exposure to this risk. The Company has also put in place insurance to cover this risk.

PARADIGM METALS LIMITED CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2009

The Board has adopted a requirement that the Managing Director should state to the Board in writing that: - the statement given in accordance with best practice recommendation 4.1 (the integrity of financial statements) is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board, and;
the Company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

It should be noted that the Company does not maintain a Risk Management Committee because of the simplicity of its operations solely as a mining exploration entity. This function remains with the Board.

Principle 8: Remunerate Fairly and Responsibly

Given the small size of the Board and that there are only two employees, the Board has not established a Remuneration Committee but remuneration issues are considered by the Board as a whole. There is a clear distinction in the remuneration of the non executive Directors and that of Management. The Company complies with the guidelines in the Principles for non executive Director remuneration.

The Company does not maintain any equity-based remuneration scheme other than an employee option scheme.

The main remuneration issues relate to the salary of the Managing Director, Directors fees, and rates paid to consultants and contractors relating to the provision of their services. These terms are set by reference to market terms paid by similar companies.

The only senior executive employed by the Company is the Managing Director whose remuneration package is currently as follows:
gross salary of $150,000 per annum inclusive of superannuation effective from 1 January 2009 and reviewed annually. The salary package of the Managing Director was decreased by 22% from 1 January 2009 as part of cost cutting measures taken by the Company;
the contract has no specified term but may be terminated with three months notice on either side;
expenses incurred in the performance of Company business are refunded;
the employment contract has no provision for non-monetary components such as share option benefits, salary bonuses, or non-cash benefits.

The fees paid to Directors are considered appropriate compared with market, the size of the Company, and the requirements for Directors to inform and involve themselves in the affairs of the Company. Individual Directors fees are a fixed amount per annum, and there are no retirement benefits provided to Directors. The aggregate amount payable as Directors fees in any year is a fixed amount (up to $150,000) approved by shareholders.

Remuneration paid to Directors during the past year is set out in the Remuneration Report contained in the Financial Statements included in this Annual Report.

PARADIGM METALS LIMITED ADDITIONAL SHAREHOLDER INFORMATION

FOR THE YEAR ENDED JUNE 2009

Paradigm Metals Limited

Analysis of Holdings

(a) Security Holdings

Paradigm Metals Limited Analysis of Share Holdings as at 10-09-2009	Paradigm Metals Limited Analysis of Share Holdings as at 10-09-2009


Security Classes	Holdings Ranges	Holders	Total units	%
Fully Paid Ordinary Shares	1-1,000 1,001-5,000 5,001-10,000 10,001-100,000 100,001-99,999,999,999 Totals	63 37 163 606 182 1,051	12,553 142,179 1,523,891 24,561,716 78,420,780 104,661,119	0.012 0.136 1.456 23.468 74.928 100.000

(b) Unmarketable Parcels (UMP) at 10-09-2009

Paradigm Metals Limited
Security Class	Total Securities	UMP Holders	UMP Securities	UMP %
Fully Paid Ordinary Shares	104,661,119	120	280,339	0.268

(c) The names of substantial shareholders listed in the holding Company’s register as at 10 September 2009 are:

Shareholder

Sempra Metals & Concentrates LLC

Number of ordinary shares 8,000,000

(d) Voting Rights

The voting rights attached to each class of equity security are as follows:

Ordinary shares: Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands.
Options: Do not have voting rights attached.

PARADIGM METALS LIMITED ADDITIONAL SHAREHOLDER INFORMATION

FOR THE YEAR ENDED JUNE 2009

e) 20 Largest Share Holders

Paradigm Metals Limited Fully Paid Ordinary Shares Top 20 Holdings as at 10-09-2009

Holder Name	Balance at 10-09-2009	%
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
	8,000,000	7.644
PHILLIAN PTY LTD	3,941,831	3.766
MR GRAHAM DONALD CARMAN	3,511,860	3.355
COLIN JOHN HOUGH	2,778,571	2.655
MIXAM HOLDINGS PTY LIMITED	2,066,071	1.974
GASKELL SUPERANNUATION PTY LIMITED	1,470,246	1.405
MRS SANDRA ANNE COOMBES	1,428,571	1.365
KAZAKCO PTY LIMITED	1,228,571	1.174
BARON NOMINEES PTY LIMITED	1,091,595	1.043
THE SUD SHOP PTY LTD	1,085,714	1.037
MR RAUL USED	1,028,571	0.983
EDNA SECURITIES PTY LTD	1,000,000	0.955
FINANCE ASSOCIATES PTY LTD	1,000,000	0.955
MR DAVID RAYMOND BOOTHEY	988,485	0.944
MR NICHOLAS CHARLES RICHARDS	940,009	0.898
DIAMOND T & BAR PASTORAL CO PTY LTD	937,500	0.896
MR STEPHEN LONERGAN	890,636	0.851
CRAWFORD PROPERTIES PTY LTD	849,345	0.812
MRS ANNETTE MIZON	849,345	0.812
SERLETT PTY LTD	830,875	0.794
	35,917,796	34.318
Total IC	104,661,119

PARADIGM METALS LIMITED ADDITIONAL SHAREHOLDER INFORMATION

FOR THE YEAR ENDED JUNE 2009

(f) Granted tenements and applications held by subsidiaries, joint ventures, as at 10 September 2009

Project	Interest (%)	Tenement	Holder	Location
Frogmore White Rock Federal Kangiara Rosedale Temora Jacktim Bluebush Wynberg-1 Wynberg-2 Wynberg-3 Wynberg-4 Wynberg-6 Wynberg-7 Longford-1 Longford-2 *North Cadia	100 100 100 100 100 application 100 100 50 50 50 50 50 50 50 50 0	EL 6590 EL 6274 EL 6983 EL 7273 EL 7343 ELA 3746 EPM 15323 EPM 15324 EPM 15325 EPM 15906 EPM 15931 EPM 16073 EPM 16200 EPM 17306 EPM 15208 EPM 16113 EL 6588	Tungsten NSW Pty Ltd Tungsten NSW Pty Ltd Tungsten NSW Pty Ltd Tungsten NSW Pty Ltd Tungsten NSW Pty Ltd Paradigm NSW Pty Ltd Paradigm Queensland Pty Ltd Paradigm Queensland Pty Ltd Toolebuc Resources Pty Ltd Toolebuc Resources Pty Ltd Toolebuc Resources Pty Ltd Toolebuc Resources Pty Ltd Toolebuc Resources Pty Ltd Toolebuc Resources Pty Ltd Toolebuc Resources Pty Ltd Toolebuc Resources Pty Ltd Transferred to Gold & Copper Ltd April 2009	Boorowa, NSW Boorowa, NSW Boorowa, NSW Boorowa, NSW Bathurst, NSW Temora, NSW Cloncurry Region, QLD Cloncurry Region, QLD Cloncurry Region, QLD Cloncurry Region, QLD Cloncurry Region, QLD Cloncurry Region, QLD Cloncurry Region, QLD Cloncurry Region, QLD Cloncurry Region, QLD Cloncurry Region, QLD Orange, NSW

the Company may receive additional cash payments contingent on the discovery by Gold and Copper Resources Pty Ltd of a mineral resource (in gold equivalent terms) of a pre-defined size.

AI assistant

IODM LIMITED — Annual Report 2009

65131_rns_2009-09-17_b3623704-4fa2-4d10-87fe-95c3f46a9cbe.pdf

ABN 28 102 747 133

CORPORATE DIRECTORY

Directors

Registered Office and principal place of business

Share Registry

Auditors

Stock Exchange Listing

Home Exchange : Sydney

Web Page

TABLE OF CONTENTS

Dear Shareholder,

PARADIGM METALS LIMITED

OPERATIONS REPORT

FOR THE YEAR ENDED 30 JUNE 2009

Rosedale Gold - Silver (EL 7343)

Kangiara & Democrat Gold - Base Metals (EL 6274 & EL 7273)

PARADIGM METALS LIMITED

OPERATIONS REPORT

FOR THE YEAR ENDED 30 JUNE 2009

Frogmore Copper (EL 6590)

Temora Gold (ELA 3746)

White Rock Tungsten (EL 6274)

Blue Bush Copper - Gold (EPM 15324)

Cloncurry Exco Joint Venture (Various exploration permits - PDM 50%)

OPERATIONS REPORT

FOR THE YEAR ENDED 30 JUNE 2009

Jactim Uranium (EPM 15323)

Corporate

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT

FOR THE YEAR ENDED 30 JUNE 2009

DIRECTORS

� Graham Carman, PhD, MAUSIMM (Managing Director)

Term of office: Managing Director since September 2003.

Directorships of other listed companies:

� John Gaskell (Non-Executive Director)

Term of office: Director since November 2002.

Directorships of other listed companies:

� Stephen Lonergan (Non-Executive Director and Company Secretary)

Term of office: Director since November 2002.

Directorships of other listed companies:

Term of office: Non-Executive Chairman from December 2002 to November 2008.

PRINCIPAL ACTIVITIES

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT

FOR THE YEAR ENDED 30 JUNE 2009

OPERATING RESULT

REVIEW OF OPERATIONS

DIVIDENDS

CHANGES IN STATE OF AFFAIRS

SUBSEQUENT EVENTS

DIRECTORS’ SHARES AND OPTIONS

MEETINGS OF DIRECTORS

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT

FOR THE YEAR ENDED 30 JUNE 2009

REMUNERATION REPORT

DIRECTORS’ SHAREHOLDINGS

Fully Paid Ordinary Shares

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT

FOR THE YEAR ENDED 30 JUNE 2009

DIRECTORS' AND OFFICERS' INDEMNITIES AND INSURANCE

PROCEEDINGS ON BEHALF OF THE COMPANY

ENVIRONMENTAL REGULATIONS

FUTURE DEVELOPMENTS

NON-AUDIT SERVICES

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT

FOR THE YEAR ENDED 30 JUNE 2009

AUDITOR’S INDEPENDENCE DECLARATION

Dated: 18 September 2009

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES AUDITOR’S INDEPENDENCE DECLARATION

To: The Directors

Paradigm Metals Limited

AUDITOR'S INDEPENDENCE DECLARATION

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES INCOME STATEMENT

FOR THE YEAR ENDED 30 JUNE 2009

AS AT 30 JUNE 2009

BALANCE SHEET As at 30 June 2009

STATEMENT OF CHANGES IN EQUITY

PARADIGM METALS LIMITED AND CONTROLLED ENTITIES CASHFLOW STATEMENT

IODM LIMITED Annual Report 2009