IODM LIMITED — Capital/Financing Update 2009

Jul 29, 2009

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30 July 2009

Company Announcements Australian Securities Exchange Exchange Centre Level 6, 20 Bridge Street Sydney NSW 2000.

Dear Sir/Madam,

Please find enclosed documentation relating to the Company’s Share Purchase Plan (SPP) including an explanatory letter to shareholders and a copy of the Terms and Conditions of the SPP. The SPP documentation will be posted out to qualifying shareholders together with an Application Form on Friday 31 July 2009.

Yours sincerely,

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Stephen J Lonergan Company Secretary

Paradigm Metals Ltd ABN 28 102 747 133 Suite 202, 122 Walker Street, North Sydney, AUSTRALIA 2060 Ph: +61 (2) 9955-7130 Fax: +61 (2) 8920-3576 E-mail: info@paradigmmetals.com.au

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Suite 202, 122 Walker St, North Sydney NSW 2060 Australia

Ph: 02 9955-7130 Fax: 02 8920-3576

Email: info@paradigmmetals.com.au

www.paradigmmetals.com.au

30 July 2009

Dear Shareholder

Share Purchase Plan Closing date – 5pm (Sydney time) 21 August 2009

On behalf of the Board of Paradigm Metals Limited (ASX:PDM), I am pleased to offer you the opportunity to participate in PDM’s Share Purchase Plan (“SPP”). Under the SPP, you may increase your PDM shareholding by subscribing for up to $15,000 of PDM shares at 3.5 cents per share, without any brokerage or other costs.

Updated information on PDM’s recent activities and performance is available on the PDM website at www.paradigmmetals.com.au and, for your ready reference, I enclose a copy of your Company’s most recent Quarterly Activities Report.

The Directors have advised that they will each take up their full entitlements in the SPP.

The SPP

Enclosed is a personalised Application Form for the SPP. You can subscribe for any number of PDM shares (there is no minimum) at 3.5 cents per share up to a maximum of 428,571 shares ($15,000). The Company is limited to issuing 21,654,025 shares under the SPP and, if subscriptions are received in excess of this number, all subscribers will be cut back prorata.

You may participate simply by paying for shares by BPAY or by completing the personalised Application Form and returning it with your cheque in the prepaid envelope enclosed.

In parallel with the SPP, the Company may place up to 10,827,012 shares at the same price as the SPP with professional and sophisticated investors.

Over the past year the Company has reduced administrative costs to the minimum but has nevertheless continued to maintain exploration on its properties in NSW and has acquired a new and exciting gold prospect at Rosedale. Paradigm now has several enticing gold and base metals prospects in regional NSW which it is anxious to drill. It believes that the SPP will enable shareholders to acquire additional shares at an attractive price and position shareholders to the upside in any discovery in these pending drilling programmes.

Paradigm is well positioned with several rapidly advancing gold and gold‐base metals projects which could become significant discoveries for the Company with additional drilling. We are planning at least 2 drill programmes at our cornerstone Rosedale and Kangiara projects over the next 12 months commencing in July‐August. Shareholders can also benefit from any successes at the Blue Bush project near Cloncurry Queensland, which has recently been farmed out and will be drilled in August‐September this year.

Indicative timetable – key dates

SPP Record Date	28 July 2009 (7pm Sydneytime)
Despatch of SPP offers	30 July 2009
SPP Opening Date	31 July 2009
SPP Closing Date	21 August 2009 (5pm Sydneytime)
Issue of shares under the SPP	24 August 2009
Despatch date for holding statements	25 August 2009
Quotation of shares on ASX	25 August 2009

Applications close at 5.00pm (Sydney time) on 21 August 2009.

The issue price of 3.5 cents per share represents a 19% discount to the average closing price over the last 5 trading days prior to the announcement of the SPP.

The formal Terms and Conditions of the SPP are set out in the attachment to this letter. You should be aware of the risk that the market price of PDM shares may change between the date of this offer and the date when the shares are issued so that the shares you apply for may be worth more or less than 3.5 cents when you receive them.

Should you wish to discuss any information contained in this letter further, please contact the Managing Director, Graham Carman, phone 02 9955‐7130.

Yours faithfully,

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Stephen Lonergan Company Secretary

PDM is a gold and copper explorer and developer with its key projects located in the Lachlan Fold Belt of New South Wales and the Cloncurry region of Queensland

PARADIGM METALS LIMITED SHARE PURCHASE PLAN TERMS AND CONDITIONS

The following are the Terms and Conditions applicable to the Share Purchase Plan (SPP) approved by the Directors of Paradigm Metals Limited (ABN 28 102 747 133) as announced on 20 July 2009. The offer under the SPP is dated 30 July 2009. By accepting the offer to acquire shares under this SPP, you agree to be bound by these Terms and Conditions and the Constitution of the Company.

Eligibility

Each shareholder who is entered in the Company register of members as at 7:00 pm AEST on 28 July 2009 (Record Date) and who has a registered address in Australia or New Zealand (a Participant) is eligible to participate in the SPP. Each offer to all Participants is made on the same terms and conditions.

Participation optional

Participation in the SPP is optional and you should seek independent advice from a licensed adviser if you are unsure whether you should participate in the SPP.

Number of shares that can be purchased

You may apply for any number of shares at 3.5 cents per share up to an aggregate subscription of $15,000. There is no minimum subscription.

ASIC Class Order 09/425 requires that each shareholder may only purchase up to A$15,000 worth of shares under the SPP. This value is the same for all shareholders, irrespective of how many shares you hold on the Record Date. This limit also applies to you even if you receive more than one offer from the Company (for example, if you are both a sole and joint eligible shareholder, or if you are a shareholder with more than one holding under a separate account, you can only apply for shares under the SPP up to the maximum value of A$15,000).

Trustees and Nominees

A trustee or nominee who is expressly noted on the Company share register as holding shares on account of a beneficiary may apply, on behalf of each such beneficiary, for shares up to the maximum amount. On application for these shares the Custodian must provide to the Company the certifications specified in ASIC Regulatory Guide RG125.21.

To the extent that a trustee or nominee holds shares on account of a beneficiary resident outside Australia or New Zealand, it is the responsibility of the registered holder to ensure that any acceptance compiles with all applicable foreign laws.

Withdrawing your subscription

Contributions may not be withdrawn, in whole or part, during or after the offer period. Any acceptance to participate in this SPP is irrevocable.

Offer is non-renounceable

The offer of shares under the SPP is nonrenounceable which means that Participants cannot transfer their entitlement to purchase shares under the SPP to another person.

No transaction costs

No brokerage or other transaction costs are payable by Participants.

Open and Close of offer

The offer will open on 31 July 2009 (Opening Date) and close at 5:00 pm (Sydney time) on 21 August 2009 (Closing Date) (subject to the Company’s right to vary the Closing Date).

Application Form

Applications to participate in the SPP must be made using the enclosed Application Form or by making payment by Bpay[i] and must be received by the Company’s Share Registry with the correct payment no later than the Closing Date. By returning the Application Form or by making payment by Bpay, you agree to be bound by these Terms and Conditions.

Issue price

The issue price for each share under the SPP will be 3.5 cents per share.

The market price of the Company shares may change after the shares are offered under the SPP. However this will not affect the price at which the Participant will receive Company shares under the SPP. This means that the issue price for shares under the SPP may be higher or lower than the market price of Company shares at the date of allotment.

If a Participant subscribes for more shares than provided for in the Application Form, the excess amount paid will be refunded to the Participant without interest.

Shares to be offered

Shares allotted under the SPP will rank equally in all respects with existing fully paid ordinary shares.

i ® Registered to BPAY Ltd ABN 69 079 137 518

PARADIGM METALS LIMITED SHARE PURCHASE PLAN TERMS AND CONDITIONS

Promptly after allotment, application will be made by the Company for shares allotted under the SPP to be listed for quotation on the official list of Australian Securities Exchange. This is expected to occur on or about 25 August 2009 . Transaction Confirmation Statements will be despatched to Issuer Sponsored and CHESS participants for shares allotted under the SPP.

No brokerage, commissions, stamp duty or other transaction costs will be payable by Participant for their application for, or allotment of, shares under the SPP.

Change of Offer

The Company may change, suspend or terminate the SPP of these Terms and Conditions at any time whether because of a change of law, ASIC requirements or policy of the ASIC or any other circumstance relevant to the SPP or the Company. If the Company does this, it will make the requisite disclosures to the market. Failure to notify shareholder of changes to, suspension or termination of the SPP or these Terms and Conditions will not invalidate the change, suspension or termination.

The Company reserves the right to issue no shares under the SPP or fewer shares than an eligible shareholder applies for under the SPP if the Company believes the issue of those SPP shares would contravene ASIC requirements or policy, any law or any ASX Listing Rule. No interest will be paid on money refunded. The Company’s rights to change, suspend or terminate the SPP may be exercised by the Board of the Company (Board) or any delegate of the Board.

Applications and notices

Applications and notices given to the Company for the SPP must be in writing and in such form as the Company may from time to time require. Such applications and notices will be effective on receipt by the Company subject to:

• a. these Terms and Conditions; and

• b. in the case of applications, acceptance by the Company before the closing date for cash payments

Applications must be received 5:00 pm (Sydney time) on 21 August 2009. Applications received after that time may not be accepted.

Right to scale back

The Company has the right to scale back the number of shares applied for pursuant to the SPP so the number of shares to be issued will not exceed the maximum number permitted to be issued under the ASX Listing Rules. Any scale back shall be done on a fair and equitable basis as may be determined by the Company in its discretion. Application moneys in respect of shares not issued will be refunded to applicants. No interest will be paid on money refunded.

Questions

If you have any questions about the SPP or your entitlement, please contact the Company at: Suite 202, 122 Walker Street

North Sydney NSW 2060 Phone: 02 9955-7130 Fax: 02 8920-3576 Email: info@paradigmmetals.com.au Website: www.paradigmmetals.com.au

Variations, waivers and resolution of disputes The Company reserves the right to:

• (a) vary the closing date and share issue date for the SPP;

• (b) waiver compliance with any of these Terms and Conditions;

• (c) refuse to allot shares where it believes there has been a breach of these Terms and Conditions; and

• (d) settle in any matter it thinks fit any disputes or anomalies which may arise in connection with the SPP.

Dispute Resolution

The Company may settle any dispute in relation to the SPP or the Terms and Conditions of the SPP in any matter it thinks fit, whether generally or in relation to any shareholder, applications or shares. The Company’s decision will be conclusive and binding.