IODM LIMITED - Capital/Financing Update 2012

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17 October 2012

Company Announcements Office Australian Securities Exchange Level 4, Exchange Centre 20 Bridge Street Sydney NSW 2000

Dear Sir / Madam

NON-RENOUNCEABLE ENTITLEMENT ISSUE

Paradigm Metals Limited ( Company ) announces a non- renounceable entitlement issue of one (1) fully paid ordinary share in the capital of the Company ( Share ) for every one (1) Share held by eligible shareholders at an issue price of $0.008 per Share to raise approximately $1,694,215 ( Entitlement Issue ) ( Offer ).

The Entitlement Issue is fully underwritten jointly by Cunningham Peterson Sharbanee Securities Pty Ltd trading as “CPS Securities” and Taylor Collison Limited (together the Underwriters). The Offer will result in the issue of 211,776,860 new Shares. The Company’s directors (Directors) have indicated that it is each Director’s present intention to subscribe for part of his respective entitlements.

The Offer is being made only to shareholders of the Company (Shareholders) named on its register of members at 5.00pm on 26 October 2012, whose registered address is in Australia or New Zealand.

New Shares will rank equally with all fully paid ordinary shares in the capital of the Company already on issue.

The prospectus relating to the Offer has been lodged with the Australian Securities and Investments Commission and a copy accompanies this announcement

The timetable and important dates of the Offer* are set out below:

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: [email protected]

Lodgement of Prospectus with ASIC	16 October 2012
Notice sent to Shareholders	18 October 2012
Ex Date	22 October 2012
Record Date for determining Shareholder entitlements	26 October 2012
Prospectus despatched to Shareholders	30 October 2012
Closing Date of Offer	15 November
	2012
Despatch date/Shares entered into shareholders security holdings	19 November
	2012

* These dates are indicative only and subject to change. The Company reserves the right, subject to the Corporations Act, the ASX Listing Rules and other applicable laws, to vary the dates of the Offer, including extending the Closing Date or accepting late applications, either generally or in particular cases, without notifying you. You are encouraged to submit your application as soon as possible. Any extension of the Closing Date will have a consequential effect on the date of the issue of the securities. The Offer does not require the approval of shareholders.

The purpose of the Offer is to raise approximately $1,694,215 and the Company intends to apply the funds raised from the Offer towards:

apply the funds raised from the Offer towards:
Proceeds of the Offer (full subscription)	$
Exploration work at the Yellow Mountain Gold Project	300,000
Exploration work on other existing projects	200,000
Assessment and acquisition of new project opportunities	600,000
Working capital	466,206
Expenses of the Offer	128,009
Total	1,694,215

The use of funds set out above is a “best estimate” only. It is important to recognise that the use of funds may be subject to change in line with results, circumstances and other opportunities.

The capital structure of the Company on completion of the Offer will be as follows:

Shares
	Number
Shares on issue at date of Prospectus	211,776,860
Shares offered pursuant to the Offer	211,776,860
Total Shares on issue after completion of the Offer	423,553,720

Options

Options
	Number
Unlisted exercisable at $0.10 on or before 30 November 20121	22,110,249
Unlisted exercisable at $0.20 on or before 7 May 20131	2,000,000
Options offered pursuant to the Offer	Nil
Total Options on issue after completion of the Offer1	24,110,249

Note:1 All of these Options may be exercised by the Option holders prior to the Record Date in order to participate in the Entitlement Issue.

In calculating entitlements under the Entitlement Issue, fractions will be rounded up to the nearest whole number.

Yours faithfully

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Stephen J Lonergan Company Secretary

PARADIGM METALS LIMITED ACN 102 747 133

ENTITLEMENT ISSUE PROSPECTUS

For a non-renounceable entitlement issue of one (1) Share for every one (1) Share held by Shareholders at an issue price of $0.008 per Share to raise approximately $1,694,215 ( Offer ).

UNDERWRITERS AND LEAD MANAGERS

The Offer is conditionally fully underwritten by CPS Securities and Taylor Collison jointly (together, the Underwriters ). The Underwriters will also act as lead managers to the Offer. Refer to Section 9.2 for details regarding the terms of the Underwriting Agreement.

IMPORTANT NOTICE

This document is important and should be read in its entirety. If after reading this Prospectus you have any questions about the Shares being offered under this Prospectus or any other matter, then you should consult your stockbroker, accountant or other professional adviser.

The Shares offered by this Prospectus should be considered as speculative.

1.	SUMMARY OF IMPORTANT DATES AND IMPORTANT NOTES ....................................... 2
2.	CORPORATE DIRECTORY .............................................................................................. 6
3.	DIRECTOR’S LETTER ....................................................................................................... 7
4.	OPERATIONS ................................................................................................................. 8
5.	DETAILS OF THE OFFER ................................................................................................ 11
6.	PURPOSE AND EFFECT OF THE OFFER ......................................................................... 19
7.	RIGHTS AND LIABILITIES ATTACHING TO THE SHARES ................................................ 23
8.	RISK FACTORS ............................................................................................................ 25
9.	ADDITIONAL INFORMATION ...................................................................................... 32
10.	AUTHORITY OF DIRECTORS ......................................................................................... 42
11.	DEFINITIONS ............................................................................................................... 43

1. SUMMARY OF IMPORTANT DATES AND IMPORTANT NOTES

TIMETABLE AND IMPORTANT DATES*

Lodgement of Prospectus with ASIC 16 October 2012 Notice sent to Shareholders 18 October 2012 Ex Date 22 October 2012 Record Date for determining Shareholder Entitlements 26 October 2012 under the Entitlement Issue Prospectus despatched to Shareholders 30 October 2012 Entitlement Issue Closing Date 15 November 2012 Notification of under subscriptions 16 November 2011 Despatch date/Securities in relation to Entitlement Issue 19 November 2012 entered into security holders security holdings

These dates are determined based upon the current expectations of the Directors and may be changed in accordance with the ASX Listing Rules. Subject to the Listing Rules and the Corporations Act, the Directors reserve the right to extend the Closing Date for the Offer, or to cancel the Entitlement Issue at their discretion without prior notice. Should this occur, the extension will have a consequential effect on the anticipated date of issue for the Shares offered under this Prospectus.

IMPORTANT NOTES

Shareholders should read this document in its entirety and, if in doubt, should consult their professional advisors.

This Prospectus is dated 16 October 2012 and a copy of this Prospectus was lodged with the ASIC on that date. The ASIC and ASX take no responsibility for the content of this Prospectus or the merits of the investment to which this Prospectus relates.

The expiry date of this Prospectus is 5:00pm EDST on that date which is 13 months after the date this Prospectus was lodged with the ASIC ( Expiry Date ). No Shares will be allotted or issued on the basis of this Prospectus after the Expiry Date.

Applications for Shares offered pursuant to this Prospectus can only be submitted on an original Entitlement and Acceptance Form.

No person is authorised to give information or to make any representation in connection with this Prospectus which is not contained in this Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus.

It is important that investors read this Prospectus in its entirety and seek professional advice where necessary. The Shares the subject of this Prospectus should be considered highly speculative.

This Prospectus is a transaction specific prospectus for an offer of continuously quoted securities (as defined in the Corporations Act) and has been prepared in accordance with Section 713 of the Corporations Act. It does not contain the same level of disclosure as an initial public offering prospectus. In making representations in this Prospectus

regard has been given to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters may reasonably be expected to be known to investors and professional advisers whom potential investors may consult.

OFFER IS MADE IN AUSTRALIA AND NEW ZEALAND

This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer. In particular, the Offer (and any Shortfall Offer) is only being made in Australia and New Zealand.

The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Failure to comply with these restrictions may violate securities laws. Applicants who are resident in countries other than Australia and New Zealand should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed. In particular, this Prospectus may not be distributed in the United States or any other country except Australia and New Zealand.

The Offer to New Zealand investors is made pursuant to the New Zealand Securities Act (Overseas Companies) Exemption Notice 2002. Pursuant to this Exemption Notice, the only members of the public to whom the Shares are offered in New Zealand under the Offer are those who, at the time of the offer, are holders of Shares in the Company.

ELECTRONIC PROSPECTUS

Any person accessing the electronic version of this Prospectus for the purpose of making an investment in the Company must be an Australian or New Zealand resident and must only access the Prospectus from within Australia or New Zealand.

The Corporations Act prohibits any person passing onto another person an Entitlement and Acceptance Form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. Any person may obtain a hard copy of this Prospectus free of charge by contacting the Company.

RISK FACTORS

Potential investors should consider that the investment in the Company involves a number of risks including (but not limited):

Item	Description	Further Details in Prospectus

Executive Management Risk	The Company does not currently have an employee executive management team and is reliant on consultant and contract services. There is no guarantee the Company will be successful in securing suitable executive management.	8.2
Future Funding	There is likely to be a requirement in the future for the Company to raise additional funding. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its exploration programs as the case may be.	8.3

Key People	The responsibility of overseeing the Company’s operations and strategic management depends substantially on its Directors and key contractors. There can be no assurance that there will not be a detrimental impact on the Company if one or more of these persons ceases their involvement with the Company.	8.4
New business opportunities	The Company’s business strategy and business model depends in part on the successful completion of acquiring new business opportunities and on the effective and successful running of a targeted acquisition. There can be no guarantee that: (a) the Directors will identify suitable business targets; (b) that any associated due diligence undertaken in relation to a target will reveal all relevant facts or uncover all significant liabilities; (c) that the Company will be able to obtain the funding required to complete any acquisition or do so on terms that are acceptable to the Company; (d) that any acquisition will be successfully completed; (e) that the Company will be able to engage and retain suitably qualified personal to assist in running the operations of any acquisition; and (f) that any acquisition will be profitable. If any new business opportunity is acquired by the Company, it will carry with it specific risks in relation to the location and nature of the opportunity. Also, ASX may require the Company to re-comply with Chapters 1 and 2 of the ASX Listing Rules if it considers the acquisition to be a significant change to the Company’s activities. For full details please refer to Sections 8.5 to 8.8 of this Prospectus.	8.5 to 8.8
Dilution	At the conclusion of the Offer, there will be up to an additional 211,776,860 Shares on issue thereby causing the shareholdings of a Shareholder to be diluted by 50% (if a Shareholder does not take up their full Entitlement). Additionally, future equity offerings by the Company may dilute the percentage ownership of the Company by existing Shareholders.	8.11
Activities	Mineral exploration activities are subject to a number of risks including but not limited: (a) there can be no guarantee of an economic mineral deposit found on the Company’s current or future projects or that any discovery can be economically exploited; (b) risks associated with Native Title claims and determinations over projects i.e. compensation; (c) risks associated with compliance with aboriginal heritage obligations;	8.13 to 8.17

	(d) risks associated with current and future environmental obligations of the Company; (e) actual exploration costs may materially differ from estimates and assumptions; and (f) if any exploration tenement is not renewed for any reason the Company may suffer damage through loss of opportunity to explore and develop.	(d) risks associated with current and future environmental obligations of the Company; (e) actual exploration costs may materially differ from estimates and assumptions; and (f) if any exploration tenement is not renewed for any reason the Company may suffer damage through loss of opportunity to explore and develop.

The above list of risk factors ought not to be taken as exhaustive of the risks faced by our Company and you should refer to the additional risk factors in Section 8 of this Prospectus before deciding whether to apply for Shares pursuant to this Prospectus.

FORWARD-LOOKING STATEMENTS

This Prospectus contains forward-looking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other similar words that involve risks and uncertainties.

These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this Prospectus, are expected to take place.

Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of our Company, the Directors and our management.

We cannot and do not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this prospectus will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements.

We have no intention to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this prospectus, except where required by law.

These forward looking statements are subject to various risk factors that could cause our actual results to differ materially from the results expressed or anticipated in these statements. These risk factors are summarised above and set out in detail in Section 8 of this Prospectus.

2. CORPORATE DIRECTORY

Directors

Share Registry*

Mr Brian McMaster (Non-Executive Director) Dr Graham Carman (Non-Executive Director) Mr Stephen Lonergan (Non-Executive Director)

Boardroom Pty Limited Level 7 207 Kent Street SYDNEY NSW 2000

Telephone: (02) 9290 9600 Facsimile: (08) 9279 0664

Company Secretary

Mr Stephen Lonergan

Solicitors to the Company

Steinepreis Paganin Lawyers and Consultants Level 4, The Read Buildings 16 Milligan Street PERTH WA 6000

Registered Office

Underwriters and Lead Managers

Suite 202 122 Walker St NORTH SYDNEY NSW 2060 Telephone: +61 2 9955 7130 Facsimile: +61 2 8920 3576

CPS Securities Level 45 108 St Georges Terrace PERTH WA 6000

Taylor Collison Limited Level 16 211 Victoria Square ADELAIDE SA 5000

Website

www.paradigmmetals.com.au

ASX Code

PDM

*These parties have been included for information purposes only. They have not been involved in the preparation of this Prospectus and have not consented to being named in the Prospectus.

3. DIRECTOR’S LETTER

Dear Shareholder

The Board is pleased to offer Shareholders with a registered address in Australia or New Zealand the opportunity to participate in a non-renounceable entitlement issue of Shares on the basis of one (1) new Share for every one (1) Share held by Shareholders at an issue price of $0.008 per Share to raise up to approximately $1,694,215 (before expenses) ( Entitlement Issue ).

All Shareholders registered as at 7.00pm (EDST) on the Record Date of 26 October 2012 will be entitled to participate in the Entitlement Issue.

The Closing Date for acceptances of the Offer is 5.00pm (EDST) on 15 November 2012.

The Offer is conditionally fully underwritten by CPS Securities and Taylor Collison jointly (together, the Underwriters ) and any Shares not taken up by Shareholders pursuant to the Offer will be allocated to the Underwriters in equal proportions (to a maximum of 211,776,860 Shares). The underwriting of the Offer is on standard terms and conditions for an agreement of this nature. A summary of the material terms of the underwriting agreement is set out in Section 9.2 of this Prospectus.

Garrison Equities has agreed to sub-underwrite the Offer up to $500,000. Garrison Equities is a related party of the Company by virtue of being controlled by Company Director, Mr Brian McMaster (a director of, and shareholder in, Garrison Equities). Refer to Section 9.3 of this Prospectus for details of the sub-underwriting arrangements.

The Directors have indicated that it is each Director’s present intention to subscribe for part of their Entitlement under the Offer. The table set out in Section 9.4 of this Prospectus summarises the Directors’ interests in Securities at the date of this Prospectus.

The funds raised from the Offer will provide the Company with a capital injection to be applied towards continued exploration at the Yellow Mountain Project near Condobolin NSW and other existing projects, the evaluation of new business opportunities and general working capital purposes. Further details on the use of funds are set out in Section 6.1 of this Prospectus.

The Board takes this opportunity to thank all Shareholders for their past support and looks forward to your continued support in the future.

Yours faithfully

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Brian McMaster Director

4. OPERATIONS

4.1 Background

Despite having a number of early stage exploration projects with strong potential, the Company believes that in the current investment climate Shareholders will be better served with access to more advanced projects. The Company intends to continue with exploration programs at its existing projects but will prioritise work as circumstances require.

As the Company has announced to ASX, the Company has continued to review new business opportunities for acquisition in both Australia and overseas. The Company is seeking acquisitions in the mining and minerals sector and minerals exploration sector generally. As at the date of this Prospectus, the Company has not yet identified any appropriate targets for acquisition.

4.2 Business opportunity evaluation

The Board is of the view that there is no pre-determined financial criteria that will constrain the Directors in assessing potential business opportunities.

The Board would prefer that, following any acquisition and any associated capital raising, the Company would have net tangible assets (after expenses of the associated capital raising are deducted) sufficient to satisfy the requirements of the ASX Listing Rules (currently $2,000,000 although will increase to $3,000,000 for applications made to ASX on and from 1 November 2012) including sufficient working capital to appropriately exploit the relevant business opportunity that is invested in or acquired. The Board notes this will require the Company to seek further financing upon completion of the Offer as and when the Board determines it is necessary to do so.

To this end, the Board will consider and evaluate potential business opportunities in Australia and overseas suitable for a listed public company that satisfy one or more of the following criteria:

(a) of a sufficient size and development to be capable of generating support in the market place to raise further funds;
(b) capacity to add value to the Company in the medium term; and
(c) quality management in place or have the ability to attract such people.

The financial data that will be taken into account in assessing potential opportunities will include an assessment of: the past and projected earnings and profits of any project, the nature of the project assets, the division between tangible and intangible assets, the cash flow attributes, the projected rate of return on equity employed, the projected earnings per share, the price earnings ratio underlying any proposed acquisition price, the capacity of any potential business to support the raising of necessary funds to fund both the acquisition and the working capital requirements of the business to be acquired, the potential internal rate of return that will be earned from the investment in the short, medium and long term, the amount of capital expenditure required and the amount of any other form of expenditure that may be required.

When assessing any new opportunity, the Board’s decision to acquire that opportunity will be based on what they believe is in the best interests of all Shareholders. In addition, pursuant to the ASX Listing Rules, Shareholder approval for the acquisition of a new opportunity may be required.

The Board has been, and will continue, their review of business opportunities. However, the Directors are unable to provide any reasonable estimate of how long it may take to identify and secure business opportunities. Although an investment in the Company should be considered speculative in nature, the Board is confident, through their collective business experience, as well as through the expertise of professional advisers with whom the Board will consult from time to time, that the Company will be able to make investments for the benefit of Shareholders.

In order to secure any business opportunity or opportunities identified by the Company, the company will require additional funding. Please refer to Section 8 of this Prospectus for associated risks.

4.3 Directors

Brian McMaster Non-Executive Director

Mr McMaster is a Chartered Accountant, a registered and official liquidator and has almost 20 years' experience in the area of corporate reconstruction and turnaround and performance improvement. Mr McMaster’s experience includes numerous reorganisations and turnarounds, including being instrumental in the recapitalisation and listing of 12 Australian companies on the ASX. Recently, Mr McMaster was a partner of the restructuring firm Korda Mentha and prior to that was a partner at Ernst & Young. Mr McMaster’s experience includes significant working periods in the United States, South America, Asia and India.

Mr McMaster is currently an executive director of ASX listed Range River Gold Limited, an ASX listing company that entered into administration on 21 April 2011 and is currently subject to a deed of company arrangement. Mr McMaster was appointed a director of the company on 12 April 2012 (after the company entered into administration). Mr McMaster is also an executive director of ASX listed Copper Range Limited, Sunseeker Minerals Limited, Lindian Resources Limited and Strzelecki Metals Limited and a non-executive director of Alloy Steel Corporation Limited.

As at the date of this Prospectus, Mr McMaster is not a nominee or a representative of a substantial Shareholder in the Company. As set out in Section 9.3 of this Prospectus Garrison Equities has agreed to sub-underwrite the Offer up to $500,000. Garrison Equities is a related party of the Company by virtue of being controlled by Company Director, Mr Brian McMaster (a director of, and shareholder in, Garrison Equities). As set out in Section 9.4 of this Prospectus, and assuming Garrison Equities takes up its full sub-underwriting commitment and Mr McMaster takes up his full Entitlement, then Mr McMaster’s relevant interest in the voting power in the Company will increase from 3.08% to 17.83%.

It is anticipated that Mr McMaster will be available on a daily basis for matters concerning the Company.

Mr McMaster’s extensive company board experience and corporate turnaround and performance improvement expertise will assist the Board to evaluate the structural and financial aspects necessary to operate and profit from current assets and future business opportunities of the Company.

Graham Carman Non-Executive Director

Dr Carman graduated with a Bachelor of Science (Hons) from Victoria University of Wellington, New Zealand, in 1986. He spent several years exploring for gold in Western Australia, North Queensland and Lihir Island in Papua New Guinea, completing a PhD at Monash University in 1994. He was six years exploring for gold-copper and zinc deposits in Peru, firstly with Rio Tinto and then as Exploration Manager of Savage Resources Ltd (now later Pasminco Ltd) until 2000. Several significant discoveries of gold and base-metals were made during this time. Dr Carman returned to Melbourne to manage the exploration programs in Australia for Pasminco Ltd. Dr Carman was the Managing Director of the Company from 8 November 2002 to 2 December 2011.

Dr Carman is currently the President and CEO of Darwin Resources Corp, a TSXVlisted Company. .

As at the date of this Prospectus, Dr Carman is not a nominee or a representative of a substantial Shareholder in the Company.

It is anticipated that Dr Carman will be available on a daily basis for matters concerning the Company.

Dr Carman’s extensive mineral exploration experience in Australia and overseas will assist the Board to evaluate the technical aspects necessary to operate and profit from current assets and any future mineral exploration opportunities of the Company.

Stephen Lonergan Non-Executive Director

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, Sydney, and General Counsel and Company Secretary of Savage Resources Ltd. Mr Lonergan was General Council and Company Secretary for CBH Resources Ltd prior to its takeover in 2010. 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 currently a director of Finders Resources Ltd and KBL Mining Ltd.

As at the date of this Prospectus, Mr Lonergan is not a nominee or a representative of a substantial Shareholder in the Company.

It is anticipated that Mr Lonergan will be available on a daily basis for matters concerning the Company.

Mr Lonergan’s extensive company board experience and mining law expertise will assist the Board to evaluate the commercial and legal aspects associated to operate and profit from current assets and future business opportunities of the Company.

5. DETAILS OF THE OFFER

5.1 Offer

By this Prospectus, the Company offers for subscription approximately 211,776,860 Shares pursuant to a non-renounceable entitlement issue to Shareholders of one (1) Share for every one (1) Share held on the Record Date at an issue price of $0.008 per Share.

Fractional entitlements will be rounded up to the nearest whole number.

Based on the capital structure of the Company (and assuming no existing Options are exercised prior to the Record Date), the maximum number of Shares to be issued pursuant to the Offer is approximately 211,776,860. The Offer will raise approximately $1,694,215 before costs. The purpose of the Offer and the use of funds raised are set out in Section 6.1 of this Prospectus.

The Company currently has a total of 24,110,249 Options on issue as at the date of this Prospectus all of which may be exercised by the Options holders prior to the Record Date in order to participate in the Offer. These Options are currently ‘out of the money’ and accordingly, it is unlikely that any will be exercised prior to the Record Date. Please refer to Section 6.2 of this Prospectus for information on the exercise price and expiry date of the Options on issue.

All of the Shares offered under this Prospectus will rank equally with the Shares on issue at the date of this Prospectus. Please refer to Section 7 of this Prospectus for further information regarding the rights and liabilities attaching to the Shares.

The purpose of the Offer and the intended use of funds raised are set out in Section 6.1 of this Prospectus.

5.2 How to accept the Offer

Eligible Shareholders may do any of the following:

(a) take up their full Entitlement under the Offer and apply for Shortfall Shares in excess of their Entitlement (please see below);
(b) take up their full Entitlement under the Offer but not apply for Shortfall Shares in excess of their Entitlement (please also see below);
(c) partially take up their Entitlement (please also see below); or
(d) decline to take up their Entitlement by taking no action (please see below).

The Offer is a pro rata offer to Eligible Shareholders. Eligible Shareholders who do not take up their Entitlements in full will not receive any amounts in respect of the Entitlements that they do not take up, and will have a reduced (i.e. diluted) percentage shareholding in the Company after implementation of the Offer.

Entitlements cannot be traded on ASX or any other exchange, nor can they otherwise be transferred. If you do nothing, then a number of new Shares equal to the number of new Shares not taken up under your Entitlement will be made available to Eligible Shareholders who apply for Shortfall Shares in excess of their Entitlement. If there is not sufficient demand from Eligible Shareholders who applied for Shortfall Shares in excess of their Entitlement then the Underwriters will

subscribe, or procure subscribers, for the new Shares which are the subject of your Entitlement.

If you are an Eligible Shareholder and wish to take up your Entitlement in full or in part

What you need to do

If you are an Eligible Shareholder and you:

(a) wish to take up all or part of your Entitlement; or
(b) wish to take up all of your Entitlement and also apply for Shortfall Shares in excess of your Entitlement,

you have the following two options.

OPTION 1 - PAY VIA BPAY® PAYMENT

For payment by BPAY®, please follow the instructions on the Entitlement and Acceptance Form. You can only make a payment via BPAY® if you are the holder of an account with an Australian financial institution that supports BPAY® transactions. Please note that should you choose to pay by BPAY®:

(a) you do not need to submit the Entitlement and Acceptance Form but are taken to have made the declarations on that Entitlement and Acceptance Form; and
(b) if you do not pay for your Entitlement in full, you are deemed to have taken up your Entitlement in respect of such whole number of Shares which is covered in full by your application monies.

It is your responsibility to ensure that your BPAY® payment is received by the share registry by no later than 5:00pm (EDST) on the Closing Date. You should be aware that your financial institution may implement either cut-off times with regards to electronic payment and you should therefore take this into consideration when making payment. Any application monies received for more than your final allocation of Shares (only where the amount is $1.00 or greater) will be refunded. No interest will be paid on any application monies received or refunded.

The Entitlement stated on your personalised Entitlement and Acceptance Form may be in excess of your actual Entitlement. Any Application Monies received for more than your total Entitlement will be deemed to be an application for Shortfall Shares.

Details of how to apply for Shortfall Shares under the Shortfall Offer are set out in Section 5.8 of this Prospectus.

OPTION 2 – PAY VIA CHEQUE, BANK DRAFT OR MONEY ORDER

Submit your completed personalised Entitlement and Acceptance Form together with a cheque, bank draft or money order.

To follow this OPTION 2, you should:

(a) complete the personalised Entitlement and Acceptance Form accompanying this Prospectus in accordance with the instructions set

out on that form, and indicate the number of Shares you wish to subscribe for; and

(b) return the Entitlement and Acceptance Form to the Share Registry (the address is below) together with a cheque, bank draft or money order which must be:
(i) in respect of the full Application Monies (being $0.008 per Share multiplied by the number of Shares you wish to subscribe for – if you are not taking up all of your Entitlement or you are applying for Shortfall Shares you will need to calculate this amount yourself);
(ii) in Australian currency drawn on an Australian branch of a financial institution; and
(iii) made payable to 'Paradigm Metals Limited’ and crossed 'Not Negotiable'.

You should ensure that sufficient funds are held in relevant account(s) to cover the Application Monies. If the amount of your cheque for Application Monies (or the amount for which the cheque clears in time for allocation) is insufficient to pay in full for the number of Shares you have applied for in your Entitlement and Acceptance Form, you will be taken to have applied for such lower number of whole Shares as your cleared Application Monies will pay for (and to have specified that number of Shares on your Entitlement and Acceptance Form). Alternatively, at the discretion of the Company, your Application will be rejected.

Cash payments will not be accepted. Receipts for payment will not be issued. You need to ensure that your completed Entitlement and Acceptance Form and cheque, bank draft or money order is received at the Share Registry at the following address by no later than 5.00pm (EDST) on 15 November 2012 (subject to variation):

By post to: Paradigm Metals Limited C/- Boardroom Pty Limited GPO Box 3993 SYDNEY NSW 2001

For the convenience of Eligible Shareholders, a reply paid envelope addressed to the Share Registry has been enclosed with this Prospectus. If mailed in Australia, no postage stamp is required.

Entitlement and Acceptance Forms (and payments for Application Monies) may be accepted if received after the Closing Date at the absolute discretion of the Company.

Entitlement and Acceptance Forms (and payments for Application Monies) will not be accepted at the Company's registered or corporate offices.

Details of how to apply for Shortfall Shares under the Shortfall Offer are set out in Section 5.8 of this Prospectus.

If you are an Eligible Shareholder and do not wish to take up your Entitlement

If you are an Eligible Shareholder and you do not wish to take up your Entitlement, do nothing. If you do nothing, then new Shares representing your

Entitlement will be made available to Eligible Shareholders who apply for Shortfall Shares in excess of their Entitlement, or will otherwise be subscribed for by, or by persons nominated by, the Underwriters and the Company.

You should also note that, if you do not take up your Entitlement, then – although you will continue to own the same number of Shares and may acquire Shares – your percentage shareholding in the Company will be reduced.

5.3 Implications of acceptance

Returning a completed Entitlement and Acceptance Form or paying any Application Monies by BPAY® will be taken to constitute a representation by you that:

(a) you have received a copy of this Prospectus and the accompanying Entitlement and Acceptance Form, and read them both in their entirety;
(b) you agree to all the terms and conditions of the Offer as set out in this Prospectus; and
(c) you acknowledge that once the Entitlement and Acceptance Form is returned, or a BPAY® payment instruction is given in relation to any Application Monies, the application may not be varied or withdrawn except as required by law.

5.4 Minimum subscription

The Offer is conditionally fully underwritten and therefore the minimum subscription is the maximum subscription.

5.5 Underwriting

The Offer is conditionally fully underwritten by Underwriters CPS Securities and Taylor Collison jointly under the Underwriting Agreement. The Underwriters are not related parties of the Company and none of the Underwriters are associates of any other Underwriter. Details of the Underwriting Agreement are set out in Section 9.2 of this Prospectus.

5.6 Effect of the entitlement issue on voting power in the Company

The issue of Shares under the Offer and the underwriting and the subunderwriting will not have an effect on the control of the Company.

The Underwriters will allocate the Shortfall to its sub-underwriters and/or clients such that neither the Underwriters, the sub-underwriters nor any of the Underwriters’ clients, individually, will have a voting power in the Company in excess of 20% after the issue of the Shortfall.

5.7 Non-renounceable

The Offer is non-renounceable. Accordingly, a Shareholder may not sell or transfer all or part of their Entitlement.

5.8 Shortfall Offer

The offer of the Shortfall is a separate offer pursuant to this Prospectus. Shares not taken up by Eligible Shareholders will form part of the Shortfall Offer. The issue price of any Shares offered pursuant to the Shortfall Offer will be $0.008 each, which is the issue price at which the Offer has been made to Eligible Shareholders.

(a) Eligible Shareholders

Eligible Shareholders may, in addition to their Entitlement, apply under the Shortfall Offer, regardless of the size of their present holding up to a maximum number of Shortfall Shares that is equal to 25% of their Entitlement. Eligible Shareholders who wish to apply for Shortfall Shares above their Entitlement can complete the appropriate boxes on the Entitlement and Acceptance Form accompanying this Prospectus and return it together with a cheque for the value of those Shortfall Shares (at $0.008 per Shortfall Share) to the Share Registry.

(b) Other investors

Other investors identified by the Underwriters can apply for Shortfall Shares by completing the Shortfall Application Form attached to this Prospectus and returning it together with a cheque for the value of those Shortfall Shares (at $0.008 per Shortfall Share) to the Share Registry.

Shortfall Shares will only be issued if the Offer is undersubscribed and will only be issued to the extent necessary to make up any shortfall in subscriptions. The Directors at the direction of the Underwriters reserve the right to reject any application for Shortfall Shares or to allot a lesser number of Shortfall Shares than applied for or not proceed with the issuing of the Shortfall Shares or part thereof. If the number of Shares issued is less than the number applied for in an Entitlement and Acceptance Form or Shortfall Application Form, surplus Application Monies will be refunded in full as soon as practicable after the closing date of the Shortfall Offer. Interest will not be paid on Application Monies refunded.

The Company reserves the right to allot to an Applicant a lesser number of Shortfall Shares than the number for which the Applicant applies, or to reject an Application, or to not proceed with the Shortfall Offer or issue of any Shortfall Shares.

5.9 Entitlement and Acceptance Form and Shortfall Application Forms are binding

A completed and lodged Entitlement and Acceptance Form or Shortfall Application Form, together with the application monies for the number of Securities applied for, cannot be withdrawn and constitutes a binding application for the number of Securities specified in the Entitlement and Acceptance Form or Shortfall Application Form on the terms set out in this Prospectus. The Entitlement and Acceptance Form and Shortfall Application Form do not need to be signed to be binding.

If the Entitlement and Acceptance or Shortfall Application Form is not completed correctly, the Company, in its absolute discretion, can reject it or treat it as valid. The Company’s decision as to whether to accept or reject an Entitlement and Acceptance Form or Shortfall Application Form or how to construe, amend or complete it is final.

5.10 ASX Listing

Application for official quotation by ASX of the Shares offered pursuant to this Prospectus will be made within 7 days after the date of this Prospectus. If approval is not obtained from ASX before the expiration of 3 months after the date of issue of this Prospectus, (or such period as modified by the ASIC), the Company will not issue any Shares and will repay all application monies for the Securities within the time prescribed under the Corporations Act, without interest.

The fact that ASX may grant official quotation to the Shares is not to be taken in any way as an indication of the merits of the Company or the Shares now offered for subscription.

5.11 Allotment of Shares

Shares issued pursuant to the Offer will be allotted as soon as practicable after the Closing Date. The Company will allot the Shares on the basis of a Shareholder’s Entitlement. Where the number of Shares issued is less than the number applied for, or where no allotment is made, surplus application monies will be refunded without any interest to the applicant as soon as practicable after the Closing Date.

Shares issued pursuant to the Shortfall Offer will be allotted in accordance with the Underwriting Agreement. Where the number of Shares issued is less than the number applied for, or where no allotment is made surplus application monies will be refunded without any interest to the Applicant as soon as practicable after the closing date of the Shortfall Offer.

Pending the allotment and issue of the Shares or payment of refunds pursuant to this Prospectus, all application monies will be held by the Company in trust for the Applicants in a separate bank account as required by the Corporations Act. The Company, however, will be entitled to retain all interest that accrues on the bank account and each Applicant waives the right to claim interest.

Holding statements for Shares issued under the Offer will be mailed in accordance with the ASX Listing Rules and timetable set out at the commencement of this Prospectus and for Shortfall Shares issued under the Shortfall Offer as soon as practicable after their issue.

5.12 Overseas Shareholders

This Offer does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus.

It is not practicable for the Company to comply with the securities laws of overseas jurisdictions having regard to the number of overseas Shareholders, the number and value of Options these Shareholders would be offered and the cost of complying with regulatory requirements in each relevant jurisdiction.

Accordingly, the Offer is not being extended and Shares will not be issued to Shareholders with a registered address which is outside Australia or New Zealand.

The Offer is being made in New Zealand pursuant to the Securities act (Overseas Companies) Exemption Notice 2002.

Shareholders resident in Australia or New Zealand holding Shares on behalf of persons who are resident overseas are responsible for ensuring that taking up an Entitlement under the Offer does not breach regulations in the relevant overseas jurisdiction. Return of a duly completed Entitlement and Acceptance Form will be taken by the Company to constitute a representation that there has been no breach of those regulations.

5.13 Taxation implications

The Directors do not consider that it is appropriate to give Applicants advice regarding the taxation consequences of applying for Securities under this Prospectus, as it is not possible to provide a comprehensive summary of the possible taxation consequences. The Company, its advisers and officers, do not accept any responsibility or liability for any taxation consequences to Applicants. Potential Applicants should, therefore, consult their own professional tax adviser in connection with the taxation implications of the Securities offered pursuant to this Prospectus.

5.14 Clearing House Electronic Sub-Register System (CHESS) and issuer sponsorship

The Company will not be issuing share certificates. The Company participates in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company. Because the sub-registers are electronic, ownership of Securities can be transferred without having to rely upon paper documentation.

Electronic registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with a statement (similar to a bank account statement) that sets out the number of Shares allotted to them under this Prospectus. The notice will also advise holders of their Holder Identification Number or Security Holder Reference Number and explain, for future reference, the sale and purchase procedures under CHESS and issuer sponsorship.

Further monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month.

5.15 Privacy Act

If you complete an application for Shares, you will be providing personal information to the Company (directly or by the Company’s share registry). The Company collects, holds and will use that information to assess your application, service your needs as a Shareholder, facilitate distribution payments and corporate communications to you as a Shareholder and carry out administration.

The information may also be used from time to time and disclosed to persons inspecting the register, bidders for your securities in the context of takeovers, regulatory bodies, including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the Company’s share registry.

You can access, correct and update the personal information that we hold about you. Please contact the Company or its share registry if you wish to do so at the relevant contact numbers set out in this Prospectus.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (Cth) (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the

application for Shares, the Company may not be able to accept or process your application.

6. PURPOSE AND EFFECT OF THE OFFER

6.1 Purpose of the Offer

The purpose of the Offer is to raise approximately $1,694,215 (before expenses). The proceeds of the Offer are planned to be used in accordance with the table set out below:

Proceeds of the Offer (full subscription)	$	%
Exploration program at the Yellow Mountain Gold Project1	300,000	17.7
Exploration program on other existing projects1	200,000	11.8
Assessment of business opportunities2	600,000	35.4
Working capital3	466,206	27.5
Expenses of the Offer4	128,009	7.6
Total	1,694,215	100%

Notes:

Costs projected for the planned exploration program in the 12 months following completion of the Offer.
Refer to Section 4.2 of this Prospectus for further details in relation to the assessment of business opportunities. In order to secure any business opportunity or opportunities identified by the Company, the company will require additional funding. Such funding is not guaranteed. Please refer to Section 8 of this Prospectus for associated risks.
Working capital (together with existing cash reserves) is sufficient to meet budgeted operating costs for at least 12 months. The budgeted operating costs include director fees/salaries, rent, ASX listing fees, professional services fees (e.g. audit, legal and share registry).
Refer to Section 9.9 of this Prospectus for further details relating to the estimated expenses of the Offer.

On completion of the Offer, the Board believes our Company will have sufficient working capital to achieve its objectives set out above.

The above table is a statement of current intentions as of the date of this Prospectus. As with any budget, intervening events (including exploration success or failure) and new circumstances have the potential to affect the manner in which the funds are ultimately applied. The Board reserves the right to alter the way funds are applied on this basis.

6.2 Effect of the Offer and pro forma consolidated balance sheet

The principal effect of the Offer will be to (assuming full subscription and assuming no existing Options are exercised prior to the Record Date):

(a) increase the cash reserves by approximately $1,566,206 (after deduction the expenses for the Offer) immediately after completion of the Offer; and
(b) increase the number of Shares on issue from 211,776,860 to 423,553,720 Shares following completion of the Offer.

6.3 Pro-forma balance sheet

The audited Statement of Financial Position as at 30 June 2012 and the unaudited pro forma balance sheet as at 30 June 2012 shown on the following page have been prepared on the basis of the accounting policies normally adopted by the Company and reflect the changes to its financial position.

The pro-forma Statement of Financial Position has been prepared assuming all Entitlements are accepted, no Options are exercised prior to the Record Date and including expenses of the Offer.

The pro-forma balance sheet has been prepared to provide investors with information on the assets and liabilities of the Company and pro-forma assets and liabilities of the Company as noted below. The historical and pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements. The Company’s audited Financial Statements for the 2011-2012 year are available on the Company’s website.

Pro-forma statement of financial position – 30 June 2012

Note CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other current assets Share of Joint Venture Current Assets Total current assets 1 NON-CURRENT ASSETS Plant and equipment Other non-current assets Exploration and evaluation assets Share of Joint Venture Non-Current Assets Total non-current assets TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Share of Joint Venture Current Liabilities Total current liabilities	Actual Audited 30 June 2012 $ Pro-forma 30 June 2012 $ 408,502 2,180,175 1,001 1,001 85,822 85,822 1,041 1,041
	496,366 2,268,039
	55,739 55,739 12,500 12,500 3,354,624 3,354,624 60,370 60,370
	3,483,233 3,483,233

	3,979,599 5,751,272
	(20,962) (20,962) (6,663) (6,663)
	(27,625) (27,625)

NON-CURRENT LIABILITIES

Long term provisions Total non-current liabilities TOTAL LIABILITIES NET ASSETS EQUITY Share capital 1 Share options reserve Accumulated losses Total Equity	(5,000) (5,000)
	(5,000) (5,000)

	(32,625) (32,625)

	3,946,974 5,718,647
	10,927,027 12,698,700 367,712 367,712 (7,347,765) (7,347,765)
	3,946,974 5,718,647

Pro-forma transactions

The pro-forma statement of financial position reflects the following transactions as if those transactions had taken place as at 30 June 2012. The cash and share capital balances have been adjusted for the following share transactions that have been/ are to be conducted subsequent to 30 June 2012:

a) Share Placement - 7 September 2012.

Placement of 27,500,000 ordinary shares @ 0.8 cents per share raising $220,000 before transaction costs of $14,533.

b) Non-renounceable entitlement issue – October 2012.

The issue of 1 share for each existing share resulting in the issue of 211,776,860 shares @ 0.8 cents per share raising $1,694,215 before transaction costs of $128,009 pursuant to this prospectus.

6.4 Effect on capital structure

A comparative table of changes in the capital structure of the Company as a consequence of the Offer is set out below, assuming that the Offer is fully subscribed and assuming no existing Options are exercised prior to the Record Date.

	Number
Shares on issue at date of Prospectus	211,776,860
Shares offeredpursuant to the Offer	211,776,860
Total Shares on issue after completion of the Offer	423,553,720

Options

	Number
Unlisted exercisable at$0.10 on or before 30 November 2012	22,110,249
Unlisted exercisable at $0.20 on or before 7 May2013	2,000,000
Options offeredpursuant to the Offer	Nil
Total Options on issue after completion of the Offer	24,110,249

7. RIGHTS AND LIABILITIES ATTACHING TO THE SHARES

7.1 Terms of Shares

The following is a summary of the more significant rights and liabilities attaching to Shares to be issued pursuant to this Prospectus. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders. To obtain such a statement, persons should seek independent legal advice.

Full details of the rights and liabilities attaching to Shares are set out in the Company’s Constitution, a copy of which is available for inspection at the Company’s registered office during normal business hours.

7.2 General meetings

Shareholders are entitled to be present in person, or by proxy, attorney or representative to attend and vote at general meetings of the Company.

Shareholders may requisition meetings in accordance with Section 249D of the Corporations Act and the Constitution of the Company.

7.3 Voting rights

Subject to the Constitution and to any rights and restrictions attaching to any class of shares, at meetings of shareholders or other classes of shareholder, each shareholder entitled to attend and vote may attend and vote in person or by proxy or by attorney and, where the shareholder is a body corporate, by representative.

On a show of hands every Shareholder present having the right to vote at the meeting has one vote. On a poll every Shareholder present has one vote for each fully paid Share and, the case of partly paid Shares or Share held by the Shareholder, a fraction of a vote equivalent to the proportion which the amount paid (but not credited) is of the total amounts paid and payable (excluding amounts credited) on the Share or Shares held.

7.4 Dividend rights

Subject to the Corporations Act and to any special rights or restrictions attached to any Shares, Directors may from time to time authorise the Company to pay interim and final dividends which appear to the Directors to be justified by the profits of the Company.

7.5 Winding-up

If the Company is wound up, the liquidator may, with the authority of a special resolution, divide among the Shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the Shareholders or different classes of Shareholders.

7.6 Transfer of Shares

Generally, Shares in the Company are freely transferable, subject to formal requirements, the registration of the transfer not resulting in a contravention of or failure to observe the provisions of a law of Australia and the transfer not being in

breach of the Corporations Act and the Listing Rules.

7.7 Future increase in capital

The allotment and issue of any Shares is under the control of the Directors of the Company. Subject to restrictions on the issue or grant of securities contained in the Listing Rules, the Constitution and the Corporations Act (and without affecting any special right previously conferred on the holder of an existing share or class of shares), the Directors may issue Shares as they shall, in their absolute discretion, determine.

7.8 Variation of rights

Under Section 246B of the Corporations Act, the Company may, with the sanction of a special resolution passed at a meeting of Shareholders vary or abrogate the rights attaching to Shares.

If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class), whether or not the Company is being wound up, may be varied or abrogated with the consent in writing of the holders of three quarters of the issued shares of that class, or if authorised by a special resolution passed at a separate meeting of the holders of the shares of that class.

8. RISK FACTORS

8.1 Introduction

The Shares offered under this Prospectus are considered speculative, and involve investors being exposed to risk. The Directors strongly recommend potential applicants examine the contents of this Prospectus and consult their professional advisers before deciding whether to apply for Shares pursuant to this Prospectus.

There are specific risks which relate directly to the Company’s business. In addition, there are other general risks, many of which are largely beyond the control of the Company and the Directors. The Company will seek to mitigate risks where possible and where the Directors consider it prudent to do so.

The risks identified in this section, or other risk factors, may have a material impact on the financial performance of the Company and the market price of the Shares.

The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed.

Risks specific to the Company

8.2 Lack of executive management

The Company’s management currently consists of three non-executive directors. The Board is aware of the need to have sufficient management to properly supervise the exploration and (if successful) the development of the projects in which the Company has, or will in the future have, an interest and the Board will continually monitor the management roles in the Company. To this end, the Company currently has non-executive directors with significant experience in the resource sector and a CEO engaged as a consultant who has significant resources sector expertise, particularly in exploration. The Directors intend to retain additional consultants as required to manage the Company’s activities.

As the Company’s projects require an increased level of involvement the Board will look to appoint additional management and/or consultants when and where appropriate to ensure proper management of the Company’s current and future projects. However, there is a risk that the Company may not be able to secure personnel with the relevant experience at the appropriate time which may impact on the Company’s ability to complete all of its preferred exploration programs within its preferred timetable.

8.3 Future funding

The Company will in the future need to raise additional funding. The Company’s ability to raise capital or other funding is not able to be forecast at this time. If the Company is unable to raise the required funds in the future it may not be able to continue to carry on its business and you may lose your investment.

The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income from its current or future operations, the Company may require further financing in addition to amounts raised under the capital raising.

Any additional equity financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the

Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its exploration programs as the case may be. There is however no guarantee that the Company will be able to secure any additional funding or be able to secure funding on terms favourable to the Company.

8.4 Key people

The responsibility of overseeing the Company’s operations and strategic management depends substantially on its Directors and key contractors. There can be no assurance that there will not be a detrimental impact on the Company if one or more of these persons ceases their involvement with the Company.

8.5 Business opportunities - general

The Company’s business strategy and business model depends in part on the successful completion of acquiring business opportunities and on the effective and successful running of the Company or project acquired. There can be no guarantee that the Directors will be able to identify a suitable business targets to acquire, that any acquisition will be successfully completed, or that the company or project acquired will be profitable, which may have a material adverse effect on the Company’s business, financial condition or results of operations.

If any new business opportunity is acquired by the Company, it will carry with it specific risks in relation to the location and nature of the opportunity.

8.6 Business opportunities – due diligence

The Company intends to conduct appropriate, practicable and focused due diligence in respect of any business opportunities presented to the Company, with the objective of identifying any material issues that may affect the decision to proceed with any proposed acquisitions. During the due diligence process, the Company will be forced to rely on the information that is available to it, including publicly-available information. Information may not be available from or on behalf of the relevant target company or project where the target does not consider the transaction to be in the best interests of shareholders. Any information that is provided or obtained from available sources may not be accurate at the time of delivery and/or remain accurate during the due diligence process and in the run-up to any acquisition. More broadly, there can be no assurance that the due diligence undertaken will reveal all relevant facts or uncover all significant liabilities or that the due diligence will result in a successful acquisition. If the due diligence investigation fails to identify key information in respect of the target of an acquisition, the Company may be forced to write-down or write-off assets in respect of the target acquired, which may have a material adverse effect on the Company’s business, financial condition or results of operations.

8.7 Business opportunities – financing

As set out in Section 6.1 of this Prospectus, part proceeds of the Offer will be used to identify and carry out due diligence on potential business opportunities the Company identifies. Currently, no such opportunities have been identified. In order to secure any business opportunity identified by the Company, the Company will require additional funding. It is likely the Company may be required to seek additional equity or debt financing in order to fully finance an acquisition and its completion and there can be no guarantee that the

Company will be able to obtain the funding required or do so on terms that are acceptable to the Company. Current global market conditions are having a significant impact on the availability and terms of debt financing. If the Company is unable to fully finance an acquisition, it may need to be cancelled or significantly restructured, either of which may have a material adverse effect on the Company’s business, financial condition or results of operations.

The Company may also require additional financing to fund the Company or project acquired in an acquisition and this may include making substantial equity commitments in cash; the failure to obtain such financing or to secure it on acceptable terms may have a material adverse effect on the Company or project acquired, the impact of which may extend to the Company’s business, financial condition or results of operations.

8.8 Business opportunities – personnel

The Company will look to the personnel with existing expertise in any acquired business opportunity to assist in the running and operations of the target following any acquisition and to support the Company once it becomes the operator of the target. However, there can be no assurance that the relevant personnel required for these purposes will remain with the target company or project following an acquisition or that if they depart, the Company will be able to replace such personnel with individuals of similar expertise and of a similar calibre. Changes in personnel may have a material adverse effect on the target company or project’s operations in turn on the Company, its financial condition or results of operations.

8.9 Business opportunities - duties of Directors to other companies

Mr Brian McMaster, Dr Graham Carman and Mr Stephen Lonergan are also directors of other companies and are mindful of their fiduciary duties to those entities. These Directors will discharge their duties in accordance with the Corporations Act and principles of good corporate governance. This may result in opportunities identified by these Directors not necessarily being offered to the Company which may adversely impact the timing of completion of an acquisition by the Company.

8.10 Business opportunities - re-compliance with ASX Listing Rules

The ASX may indicate in respect of the acquisition of one or more business opportunities that the Company will be required by ASX to re-comply with Chapters 1 and 2 of the ASX Listing Rules. In this case shareholder approval will be required and the Company’s listed Securities will be suspended from trading on ASX. Any suspension will occur from the date shareholder approval is acquired until the Company successfully re-complies with Chapters 1 and 2 of the ASX Listing Rules. Whether ASX requires re-compliance will depend on whether or not the business opportunity will constitute a significant change to the Company’s activities and if so, the Company would be required to satisfy various conditions, including, having net tangible assets (after expenses of the associated capital raising are deducted) sufficient to satisfy the requirements of the ASX Listing Rules (currently $2,000,000 although will increase to $3,000,000 for applications made to ASX on and from 1 November 2012) including sufficient working capital to appropriately exploit the relevant business opportunity that is invested in or acquired (which will require a further capital raising and the issue of a separate prospectus even where full subscription of the Offer is achieved) and shareholder spread (a minimum number of Shareholders holding not less than $2,000 worth of Shares).

If ASX requires re-compliance by the Company in respect of one or more business opportunities and the Company is unable to satisfy these requirements (and any other conditions to the acquisition) it will not be able to acquire the business opportunity.

Until the Company is able to realise value from its current assets or complete an acquisition and subsequently realise value from that asset, or any other assets that may be acquired in the future, it is likely to incur ongoing operating losses.

8.11 Dilution

At the conclusion of the Offer, there will be up to an additional 211,776,860 Shares on issue thereby causing the shareholdings of Shareholders who do not take up their full Entitlement to be diluted by 50%. Additionally, future equity offerings by the Company may dilute the percentage ownership of the Company by existing Shareholders. In certain circumstances, securities issued by the Company in the future may have rights, preferences or privileges attached to them that are senior to or otherwise adversely affect those attached to the Shares.

Mining industry specific risks

8.12 Environmental risks

Mining operations have inherent risks and liabilities associated with safety and damage to the environment and the disposal of waste products occurring as a result of mineral exploration. The occurrence of any such safety or environmental incident could delay exploration or increase exploration costs. Events, such as unpredictable rainfall or bushfires may impact on the Company’s ongoing compliance with environmental legislation, regulations and licences. Significant liabilities could be imposed on the Company for damages, clean up costs or penalties in the event of certain discharges into the environment, environmental damage caused by previous operations or non-compliance with environmental laws or regulations.

The disposal of mining and process waste and mine water discharge are under constant legislative scrutiny and regulation. There is a risk that environmental laws and regulations become more onerous making the Company’s operations more expensive.

Approvals are required for land clearing and for ground disturbing activities. Delays in obtaining such approvals can result in the delay to anticipated exploration programs.

It is the Company’s intention to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws.

8.13 Failure to satisfy expenditure commitments

Interests in tenements are governed by the Mining acts and regulations that are current in jurisdictions in which the tenements are granted and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to, or its interest in, its current or future tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments.

8.14 Title

Mining and exploration tenements are subject to periodic renewal. There is no guarantee that the current or future tenements will be approved or maintained. Renewal of the term of a granted tenement is at the discretion of the relevant government authority. Renewal conditions may include increased expenditure or work commitments or compulsory relinquishment of the areas comprising the Company’s current or future projects. The imposition of new conditions or the inability to meet those conditions may adversely affect the operations, financial position and/or performance of the Company.

8.15 Native Title and access risk

Exploration and mining activities can be affected by land claim compensation considerations. Some of the Company’s tenements are subject to the Native Title Act 1993 (Cth). It is possible that aboriginal sacred sites found within tenements held by the Company may preclude exploration and mining activities and the Company may also experience delays with respect to obtaining permission from the traditional owners to explore and extract resources. The Company must also comply with Aboriginal heritage legislation requirements and access agreements which require heritage survey work to be undertaken ahead of the commencement of exploration and mining activities.

8.16 Exploration risks

No assurance can be given that exploration will be successful or that a commercial mining operation will eventuate.

The ultimate success and financial viability of the Company depends on the discovery and delineation of economically recoverable ore reserves, design and construction of efficient mining and processing facilities, and competent operational and managerial performance.

There is no assurance that exploration and development of the mineral interests held by the Company (which are all at an exploration stage), or any other projects that may be acquired by the Company in the future, will result in the discovery of an economic deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be profitably exploited.

Development of a commercial mining operation is also dependent on the Company's ability to obtain necessary titles and governmental and other regulatory approvals.

8.17 Exploration costs

The exploration costs of the Company are based on certain assumptions with respect to the method and timing of exploration. By their nature, these estimates and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions. Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice, which may materially and adversely affect the Company’s viability.

8.18 Joint Venture Risk

The Company is subject to the risk that changes in the status of any of the Company’s current or any future joint ventures (including changes caused by

financial failure or default by a participant in the joint venture) may adversely affect the operations and performance of the Company.

8.19 Market conditions

The Company's ability to benefit from any future mining operations will depend on market factors, some of which may be beyond its control. The world market for minerals is subject to many variables and may fluctuate markedly.

General risks

8.20 Economic risks

General economic conditions, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities.

8.21 Market conditions

Share market conditions may affect the value of the Company’s quoted securities regardless of the Company’s operating performance. Share market conditions are affected by many factors such as:

(a) general economic outlook;
(b) interest rates and inflation rates;
(c) currency fluctuations;
(d) changes in investor sentiment toward particular market sectors;
(e) the demand for, and supply of, capital; and
(f) terrorism or other hostilities.

The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource exploration stocks in particular. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company.

8.22 Dividends

Any future determination as to the payment of dividends by the Company will be at the discretion of the Directors and will depend on the financial condition of the Company, future capital requirements and general business and other factors considered relevant by the Directors. No assurance in relation to the payment of dividends or franking credits attaching to dividends can be given by the Company.

8.23 Taxation

The acquisition and disposal of Shares will have tax consequences, which will differ depending on the individual financial affairs of each investor. All potential investors in the Company are urged to obtain independent financial advice about the consequences of acquiring Shares from a taxation viewpoint and generally.

To the maximum extent permitted by law, the Company, its officers and each of their respective advisors accept no liability and responsibility with respect to the taxation consequences of subscribing for Shares under this Prospectus.

8.24 Investment speculative

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the Shares offered under this Prospectus

Therefore, the Shares to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Shares.

Potential investors should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for Shares pursuant to this Prospectus.

9. ADDITIONAL INFORMATION

9.1 Continuous disclosure obligations

The Company is a “disclosing entity” (as defined in Section 111AC of the Corporations Act) for the purposes of Section 713 of the Corporations Act and, as such, is subject to regular reporting and disclosure obligations. Specifically, like all listed companies, the Company is required to continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of the Company’s Securities.

This Prospectus is a “transaction specific prospectus”. In general terms a “transaction specific prospectus” is only required to contain information in relation to the effect of the issue of securities on the Company and the rights attaching to the securities. It is not necessary to include general information in relation to all of the assets and liabilities, financial position, profits and losses or prospects of the issuing company.

This Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX and does not include all of the information that would be included in a prospectus for an initial public offering of securities in an entity that is not already listed on a stock exchange. Investors should therefore have regard to the other publicly available information in relation to the Company before making a decision whether or not to invest.

Having taken such precautions and having made such enquires as are reasonable, the Company believes that it has complied with the general and specific requirements of ASX as applicable from time to time throughout the 3 months before the issue of this Prospectus which required the Company to notify ASX of information about specified events or matters as they arise for the purpose of ASX making that information available to the stock market conducted by ASX.

Information that is already in the public domain has not been reported in this Prospectus other than that which is considered necessary to make this Prospectus complete.

The Company, as a disclosing entity under the Corporations Act states that:

(a) it is subject to regular reporting and disclosure obligations;
(b) copies of documents lodged with the ASIC in relation to the Company (not being documents referred to in Section 1274(2)(a) of the Corporations Act) may be obtained from, or inspected at, the offices of the ASIC; and
(c) it will provide a copy of each of the following documents, free of charge, to any person on request between the date of issue of this Prospectus and the Closing Date:
(i) the annual financial report most recently lodged by the Company with ASIC;
(ii) any half-year financial report lodged by the Company with the ASIC after the lodgement of the annual financial report referred to in (i) and before the lodgement of this Prospectus with ASIC; and

(iii) any continuous disclosure documents given by the Company to ASX in accordance with the ASX Listing Rules as referred to in Section 674(1) of the Corporations Act after the lodgement of the annual financial report referred to in (i) and before the lodgement of this Prospectus with ASIC.

Copies of all documents lodged with the ASIC in relation to the Company can be inspected at the registered office of the Company during normal office hours.

Details of documents lodged by the Company with ASX since the date of lodgement of the Company’s latest annual financial report and before the lodgement of this Prospectus with the ASIC are set out in the table below:

Date	Description of Announcement
01/10/2012	Retirement of Director
18/09/2012	Amended Annual Report to Shareholders
17/09/2012	Appendix 3Y Brian McMaster
14/09/2012	Director Appointment and Appendix 3X
14/09/2012	Annual Financial Report

ASX maintains files containing publicly available information for all listed companies. The Company’s file is available for inspection at ASX during normal office hours.

The announcements are also available through the Company’s website www.paradigmmetals.com.au.

9.2 Underwriting Agreement

Pursuant to an agreement between CPS Securities, Taylor Collison and the Company ( Underwriting Agreement ), CPS Securities and Taylor Collison (together, the Underwriters ) have jointly agreed to fully underwrite the Offer of 211,776,860 Shares ( Underwritten Shares ).

Pursuant to the Underwriting Agreement, the Company has agreed to pay the Underwriters (following completion of the Offer) each:

(a) an underwriting fee of 2.5% (excluding GST) of the value of the Offer, being $42,355 per Underwriter; and
(b) a management fee of 0.5% (excluding GST) of the capital raised under the Offer, being $8,471 per Underwriter,

and to reimburse the Underwriters for expenses for the Offer.

If the Shortfall is less than the full amount under the Offer, the Shortfall will be allocated to each Underwriter on a pro-rata basis in equal shares.

The Underwriting Agreement allows the Underwriters to appoint sub-underwriters at its sole discretion.

The obligation of the Underwriters to underwrite the Offer is subject to certain events of termination. These events of termination are considered standard for an agreement of this nature. Each Underwriter may terminate its obligations under the Underwriting Agreement on the occurrence of specified events, including if:

(a) ( Document ): the Company does not lodge this Prospectus on the date of this Prospectus or the Offer is withdraw;
(b) ( No Listing Approval ): approval for quotation of the Underwritten Shares within 3 business days of the Closing Date is given and is then subsequently withdrawn, withheld or qualified;
(c) ( Non compliance with key disclosure requirements ): it transpires that this Prospectus does not contain all information required by the Corporations Act;
(d) ( Restriction on allotment ): the Company is prevented from allotting the Underwritten Shares within the time required by this Agreement, the Corporations Act, the Listing Rules, any statute, regulation or order of a court of competent jurisdiction by ASIC, ASX or any court of competent jurisdiction or any governmental or semi governmental agency or authority;
(e) ( ASIC application ): an application is made by ASIC for an order under section 1324B or any other provision of the Corporations Act in relation to the Offer prior to the date which is 3 business days after the Closing Date, and that application has not been dismissed or withdrawn; and
(f) ( Takeovers Panel ): the Takeovers Panel makes a declaration that circumstances in relation to the affairs of the Company are unacceptable circumstances under Pt 6.10 of the Corporations Act, or an application for such a declaration is made to the Takeovers Panel.

Each Underwriter may also terminate its obligations under the Underwriting Agreement on the occurrence of specified events if in the reasonable opinion of each Underwriter reach in good faith, the event has or is likely to have, or those events together have or could reasonably be expected to have, a material adverse effect (on the Offer, the market for Shares or the financial position or operations of the Company) or could give rise to a liability of each Underwriter under the Corporations Act. The specific events include if:

(a) ( Misleading Documents ): it transpires that there is a statement in this Prospectus that is misleading or deceptive or likely to mislead or deceive, or that there is an omission from this Prospectus or if any statement in this Prospectus becomes misleading or deceptive or likely to mislead or deceive or if the issue of this Prospectus is or becomes misleading or deceptive or likely to mislead or deceive;
(b) ( Hostilities ): there is an outbreak of hostilities or a material escalation of hostilities (whether or not war has been declared) after the date of the Underwriting Agreement involving Australia, or a terrorist act is perpetrated on Australia or any diplomatic, military, commercial or political establishment of Australia anywhere in the world;
(c) ( Indictable offence ): a director or senior manager of the Company is charged with an indictable offence;

(d) ( Default ): default or breach by the Company under the Underwriting Agreement of any terms, condition, covenant or undertaking;
(e) ( Incorrect or untrue representation ): any representation, warranty or undertaking given by the Company in the Underwriting Agreement is or becomes untrue or incorrect;
(f) ( Contravention of Constitution or Act ): a contravention by the Company of any provision of its constitution, the Corporations Act, the Listing Rules or any other applicable legislation or any policy or requirement of ASIC or ASX;
(g) ( Adverse change ): an event occurs which gives rise to a material adverse effect or any adverse change or any development including a prospective adverse change after the date of the Underwriting Agreement in the assets, liabilities, financial position, trading results, profits, losses, prospects, business or operations of the Company;
(h) ( Misleading information ): any information supplied at any time by the Company or any person on its behalf to each Underwriter in respect of any aspect of the Offer or the Issue or the affairs of the Company is or becomes misleading or deceptive or likely to mislead or deceive;
(i) ( Change in Act or policy ): there is introduced, or there is a public announcement of a proposal to introduce, into the Parliament of Australia or any of its States or Territories any Act or prospective Act or budget or the Reserve Bank of Australia or any Commonwealth or State authority adopts or announces a proposal to adopt any new, or any major change in, existing, monetary, taxation, exchange or fiscal policy;
(j) ( Prescribed Occurrence ): a prescribed occurrence (which includes various corporate actions i.e. share buy backs, share reductions) occurs;
(k) ( Suspension of debt payments ): the Company suspends payment of its debts generally;
(l) ( Event of Insolvency ): an event of insolvency occurs in respect of the Company;
(m) ( Judgment against the Company ): a judgment in an amount exceeding $100,000 is obtained against the Company and is not set aside or satisfied within seven days;
(n) ( Litigation ): litigation, arbitration, administrative or industrial proceedings are after the date of the Underwriting Agreement commenced against the Company;
(o) ( Board and senior management composition ): there is a change in the composition of the Board or a change in the senior management of the Company before the issue of the Underwritten Shares without the prior written consent of each Underwriter;
(p) ( Change in shareholdings ): a takeover offer or scheme of arrangement pursuant to Chapter 5 or 6 of the Corporations Act is publicly announced in relation to the Company;

(q) ( Timetable ): there is a delay in any specified date in the Timetable which is greater than 3 Business Days, without the prior written consent of each Underwriter;
(r) ( Force Majeure ): a force majeure affecting the Company's business or any obligation under the Underwriting Agreement lasting in excess of seven days occurs;
(s) ( Certain resolutions passed ): the Company passes or takes any steps to pass a resolution under Section 254N, Section 257A or Section 260B of the Corporations Act or a resolution to amend its constitution without the prior written consent of each Underwriter;
(t) ( Capital Structure ): the Company alters its capital structure in any manner not contemplated by this Prospectus;
(u) ( Market Movement ): the S&P Materials index falls by more than 7.5% after the date of execution of the Underwriting Agreement;
(v) ( Investigation ): any person is appointed under any legislation in respect of companies to investigate the affairs of the Company;
(w) ( Hostilities ): hostilities not presently existing commence (whether war has been declared or not) or a major escalation in existing hostilities occurs (whether war has been declared or not) involving any one or more of Australia, New Zealand, the United States of America, the United Kingdom any member state of the European Union, Indonesia, Japan, Russia or the Peoples Republic of China, or a terrorist act is perpetrated on any of those countries or any diplomatic or political establishment of any of those countries elsewhere in the world, or a national emergency is declared by any of those countries; or
(x) ( Adverse Change in Financial Markets ): there occurs any material adverse change or material adverse disruption to the political or economic conditions of financial markets in Australia, the United Kingdom, the United States of America or the international financial markets or any change or development involving a prospective change in national or international political, financial or economic conditions.

The Underwriting Agreement also contains a number of indemnities, representations and warranties from the Company to the Underwriters that are considered standard for an agreement of this type.

9.3 Sub-underwriting Agreement

Each Underwriter has entered into a sub-underwriting agreement with Garrison Equities Pty Ltd ( Sub-underwriter ), whereby the Sub-underwriter will subunderwrite each Underwriter’s underwriting commitment pursuant to the Underwriting Agreement in equal shares up to a sub-underwriting commitment of 62,500,000 Shares in aggregate ( Sub-underwriting Commitment ). The value of the Sub-underwriting Commitment is $500,000 in aggregate. The Sub-underwriter will be paid a Sub-underwriting fee of 5% (excluding GST) of its Sub-underwriting Commitment to each Underwriter. The value of the sub-underwriting fee payable to the Sub-Underwriter is $25,000 in aggregate.

Garrison Equities is a related party of the Company by virtue of being controlled by Company Director, Mr Brian McMaster (a director of, and shareholder in, Garrison Equities).

9.4 Directors’ interests

Other than as set out below or elsewhere in this Prospectus, no Director nor any firm in which such a Director is a partner, has or had within 2 years before the lodgement of this Prospectus with the ASIC, any interest in:

(a) the formation or promotion of the Company;
(b) property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer pursuant to this Prospectus; or
(c) the Offer pursuant to this Prospectus,

and no amounts have been paid or agreed to be paid (in cash or Securities or otherwise) to any Director or to any firm in which any such Director is a partner or director, either to induce him to become, or to qualify him as, a Director or otherwise for services rendered by him or by the firm in connection with the formation or promotion of the Company or the offer of Securities pursuant to this Prospectus.

Directors’ relevant interests in Securities of the Company at the date of this Prospectus are:

Name	Shares	Options	Entitlement
Brian McMaster	6,513,3341	Nil	6,513,334
Graham Carman	5,420,7462	317,9153	5,420,746
Stephen Lonergan	2,123,969	166,6674	2,123,969

Notes:

1 Consisting of 2,500,000 Shares held by Garrison Capital Pty Ltd and 4,013,334 Shares held by Vega Funds Pty Ltd . As set out in Section 9.3 of this Prospectus, Garrison Equities, a company that Mr McMaster is a director and shareholder of, has entered into an agreement with the Underwriters to sub-underwrite up to 62,500,000 Shares under any Shortfall. Accordingly, assuming that Mr McMaster subscribes for his full entitlement, there is a Shortfall and 62,500,000 Shares are issued to Garrison Equities under the Sub-underwriting Agreement, then Mr McMaster’s relevant interest in the voting power in the Company will increase from 3.08% to17.83%.
2 Consisting of 4,397,170 Shares held by Graham Carman, 202,076 Shares held by Graham Carman’s superfund account and 821,500 Shares held by Sally Carman.
3 Options exercisable at $0.10 on or before 30 November 2012.
4 Options exercisable at $0.10 on or before 30 November 2012.

The Board recommends all Shareholders take up their Entitlement and advises that all Directors intend to take up part of their respective Entitlements.

9.5 Remuneration

The Company currently does not have any executive Directors. Remuneration of an executive Director is decided by the Board, without the affected executive Director participating in that decision-making process. The total maximum remuneration of non-executive Directors is initially set by the Constitution and subsequent variation is by ordinary resolution of Shareholders in general meeting in accordance with the Constitution, the Corporations Act and the ASX Listing Rules, as applicable. The determination of non-executive Directors’ remuneration within that maximum will be made by the Board having

regard to the inputs and value to the Company of the respective contributions by each non-executive Director. The current amount has been set at an amount not to exceed $150,000 per annum.

A Director may be paid fees or other amounts (i.e. non-cash performance incentives such as Options, subject to any necessary Shareholder approval) as the other Directors determine where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director. In addition, Directors are also entitled to be paid reasonable travelling, hotel and other expenses incurred by them respectively in or about the performance of their duties as Directors.

The following table shows the total (and proposed) annual remuneration paid to both executive and non-executive directors.

Director	Current Year	Previous Year
Brian McMaster	$44,000	Nil
Graham Carman	$44,000	$140,8661
Stephen Lonergan	$44,000	$44,000

Note

1 Graham Carman was an Executive Director for a portion of the previous year.

9.6 Interests of experts and advisers

Other than as set out below or elsewhere in this Prospectus, no:

(a) person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus;
(b) promoter of the Company; or
(c) underwriter (but not a sub-underwriter) to the issue or a financial services licensee named in this Prospectus as a financial services licensee involved in the issue,

holds, or has held within the 2 years preceding lodgement of this Prospectus with the ASIC, any interest in:

(d) the formation or promotion of the Company;
(e) any property acquired or proposed to be acquired by the Company in connection with:
(i) its formation or promotion; or
(ii) the Offer; or
(f) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of these persons for services provided in connection with:

(g) the formation or promotion of the Company; or

(h) the Offer.

Each of the parties referred to in this Section:

(a) does not make, or purport to make, any statement in this Prospectus other than those referred to in this Section; and
(b) to the maximum extent permitted by law, expressly disclaim and take no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this Section.

Cunningham Peterson Sharbanee Securities Pty Ltd ( CPS Securities ) will be paid an underwriting fee of $42,355 and management fee of $8,471 in respect of the Offer. In the 24 months prior to the date of this Prospectus, CPS Securities has not been paid any fees by the Company. CPS Securities has no relevant interest in the Shares and therefore will have no Entitlement under the Entitlement Issue.

Taylor Collison Limited ( Taylor Collison ) will be paid an underwriting fee of $42,355 and management fee of $8,471 in respect of the Offer. In the 24 months prior to the date of this Prospectus, Taylor Collison has not been paid any fees by the Company other than $45,781 for fees in relation to a rights issue in December 2010, and $14,533 for fees in relation to a placement in September 2012. Taylor Collison has no relevant interest in the Shares and therefore will have no Entitlement under the Entitlement Issue.

Garrison Equities Pty Ltd ( Garrison Equities ) will be paid a sub-underwriting fee of $25,000 in respect of the Offer. In the 24 months prior to the date of this Prospectus, Garrison Equities has not been paid any fees by the Company. Garrison Equities has no relevant interest in the Shares and therefore will have no Entitlement under the Entitlement Issue. Garrison Equities is a related party of the Company by virtue of being controlled by Company Director, Mr Brian McMaster (a director of, and shareholder in, Garrison Equities). Mr McMaster’s interests in the Company’s Securities are set out in Section 9.4 of this Prospectus. Assuming Garrison Equities takes up its full sub-underwriting commitment and Mr McMaster takes up his full Entitlement, then Mr McMaster’s relevant interest in the voting power in the Company will increase from 3.08% to17.83%.

Steinepreis Paganin act as solicitors to the Company. Steinepreis Paganin will be paid approximately $8,000 for services in relation to this Prospectus. In the past two years, Steinepreis Paganin has not been any paid fees by Company.

9.7 Consents of experts and advisers

Pursuant to Section 716 of the Corporations Act, Cunningham Peterson Sharbanee Securities Pty Ltd has given and have not withdrawn its consent to being named as an Underwriter in relation to the Offer in this Prospectus in the form and context in which it is named. Cunningham Peterson Sharbanee Securities Pty Ltd has not caused or authorised the issue of this Prospectus, do not make or purport to make any statement in this Prospectus and take no responsibility for any part of this Prospectus.

Pursuant to Section 716 of the Corporations Act, Taylor Collison Limited has given and have not withdrawn its consent to being named as an Underwriter in relation to the Offer in this Prospectus in the form and context in which it is named. Taylor Collison Limited has not caused or authorised the issue of this Prospectus, do not make or purport to make any statement in this Prospectus and take no responsibility for any part of this Prospectus.

Pursuant to Section 716 of the Corporations Act, Garrison Equities Pty Ltd has given and have not withdrawn its consent to being named as an Underwriter in relation to the Offer in this Prospectus in the form and context in which it is named. Garrison Equities Pty Ltd has not caused or authorised the issue of this Prospectus, do not make or purport to make any statement in this Prospectus and take no responsibility for any part of this Prospectus.

Pursuant to Section 716 of the Corporations Act, Steinepreis Paganin has given, and has not withdrawn its consent to being named as Solicitors to the Company in the Corporate Directory of this Prospectus in the form and context in which it is named. Steinepreis Paganin has not caused or authorised the issue of this Prospectus, does not make or purport to make any statement in this Prospectus and takes no responsibility for any part of this Prospectus.

9.8 Litigation

As at the date of this Prospectus, the Company is not involved in any legal proceedings and the Directors are not aware of any legal proceedings pending or threatened against the Company.

9.9 Expenses of Offer

In the event the Offer is fully subscribed, the expenses of the Offer will be as follows:

Item ASX Fees ASIC Fees Print and Mailing Expenses Management Fee Underwriting Fees Legal Total	$ 6,186 2,171 10,000 16,942 84,710 8,000
	128,009

9.10 Market price of Shares

The Company is a disclosing entity for the purposes of the Corporations Act and its Shares are enhanced disclosure securities quoted on ASX.

The highest, lowest and last market sale prices of the Company’s Shares on ASX during the three months immediately preceding the date of lodgement of this Prospectus with the ASIC and the respective dates of those sales were:

Highest						9 and 10 October 2012	$0.013
Lowest	17	to	20,	23	to	27, 30, 31 July, and 6 to 10	$0.006
						and 13 to 15 August 2012
Last						15 October 2012	$0.01

9.11 Electronic Prospectus

Pursuant to Class Order 00/44, the ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution of an electronic prospectus and electronic application form on the basis of a paper prospectus lodged with the ASIC, and the publication of notices referring to an electronic prospectus or electronic application form, subject to compliance with certain conditions.

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the Application Form. If you have not, please phone the Company and the Company will send you, for free, either a hard copy or a further electronic copy of the Prospectus, or both.

The Company reserves the right not to accept an application form from a person if it has reason to believe that when that person was given access to the electronic application form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

10. AUTHORITY OF DIRECTORS

This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

In accordance with Section 720 of the Corporations Act, each Director has consented to the lodgement of this Prospectus with the ASIC.

==> picture [193 x 64] intentionally omitted <==

Signed for and on behalf of Paradigm Metals Limited Brian McMaster Director

11. DEFINITIONS

Applicant means a Shareholder, a Underwriter, any sub-underwriter or other party instructed by the Underwriters who applies for Shares pursuant to the Offer or other party who applies for Shortfall Shares pursuant to the Shortfall Offer.

Application Monies means money submitted by Applicants in respect of applications.

ASIC means the Australian Securities and Investments Commission.

ASX Settlement Operating Rules means the settlement rules of the securities clearing house which operates CHESS.

ASX means the ASX Limited (ABN 98 008 624 691).

Board means the board of Directors unless the context indicates otherwise.

Business Day means a day on which trading takes place on the stock market of ASX.

Closing Date means the closing date of the Offer, being 5:00pm (EDST) on that date as set out in the timetable at Section 1 (unless extended) of this Prospectus.

Company means Paradigm Metals Limited (ACN 102 747 133).

Constitution means the Company’s Constitution as at the date of this Prospectus.

Corporations Act means the Corporations Act 2001 (Cth).

CPS Securities means Cunningham Peterson Sharbanee Securities Pty Ltd trading as “CPS Securities” (ABN 73 088 055 636).

Directors means the directors of the Company at the date of this Prospectus.

Dollar or “ $ ” means Australian dollars.

Entitlement means the entitlement of a Shareholder who is eligible to participate in the Offer.

Entitlement and Acceptance Form means the entitlement and acceptance form either attached to or accompanying this Prospectus in relation to the Offer.

EDST means eastern daylight savings time observed in Sydney, New South Wales.

Eligible Shareholder means a Shareholder of the Company as at the Record Date.

Garrison Equities means Garrison Equities Pty Ltd (ABN 62 156 569 069).

Listing Rules or ASX Listing Rules means the Listing Rules of the ASX.

Offer means the non-renounceable entitlement offer pursuant to this Prospectus of one (1) Share for every one (1) Share held by a Shareholder on the Record Date to raise approximately $1,694,215 and Offer has the same meaning.

Offer Period means the period commencing on the Opening Date and ending on the Closing Date.

Official Quotation means the grant by ASX of official quotation of all the Shares the subject of the Offer.

Opening Date means the opening date of the Offer as set out in Section 1 of this Prospectus.

Option means an option to acquire a Share.

Prospectus means this prospectus.

Record Date means 7:00pm (EDST) on that date as set out in the timetable at Section 1 of this Prospectus.

Securities means a Share or an Option.

Share means a fully paid ordinary share in the capital of the Company.

Share Registry means Boardroom Pty Limited.

Shareholder means a shareholder of the Company.

Shortfall or Shortfall Shares means those Shares under the Offer not applied for by Shareholders under their Entitlement .

Shortfall Application Form means the shortfall application form to be provided by the Company or the Underwriters, in their discretion, to investors who have expressed an interest in subscribing for Shortfall Shares.

Shortfall Offer means the offer of the Shortfall on the terms and conditions set out in Section 5.8 of this Prospectus.

Taylor Collison means Taylor Collison Limited (ABN 53 008 172 450).

Underwriters means together, CPS Securities and Taylor Collison, or each an Underwriter .

Underwriting Agreement means the underwriting agreement between the Underwriters and the Company, pursuant to which the Underwriters will underwrite the Offer to the amount of $1,694,215.

AI assistant

IODM LIMITED — Capital/Financing Update 2012

65131_rns_2012-10-16_3f8184fa-e99c-4624-b762-f40c70d91ae8.pdf

NON-RENOUNCEABLE ENTITLEMENT ISSUE

Shares

Options

Yours faithfully

PARADIGM METALS LIMITED ACN 102 747 133

ENTITLEMENT ISSUE PROSPECTUS

UNDERWRITERS AND LEAD MANAGERS

IMPORTANT NOTICE

TABLE OF CONTENTS

1. SUMMARY OF IMPORTANT DATES AND IMPORTANT NOTES

TIMETABLE AND IMPORTANT DATES*

IMPORTANT NOTES

OFFER IS MADE IN AUSTRALIA AND NEW ZEALAND

ELECTRONIC PROSPECTUS

RISK FACTORS

FORWARD-LOOKING STATEMENTS

2. CORPORATE DIRECTORY

Directors

Share Registry*

Company Secretary

Solicitors to the Company

Registered Office

Underwriters and Lead Managers

Website

ASX Code

3. DIRECTOR’S LETTER

Dear Shareholder

4. OPERATIONS

4.1 Background

4.2 Business opportunity evaluation

4.3 Directors

Brian McMaster Non-Executive Director

Graham Carman Non-Executive Director

Stephen Lonergan Non-Executive Director

5. DETAILS OF THE OFFER

5.1 Offer

5.2 How to accept the Offer

If you are an Eligible Shareholder and wish to take up your Entitlement in full or in part

What you need to do

OPTION 1 - PAY VIA BPAY® PAYMENT

OPTION 2 – PAY VIA CHEQUE, BANK DRAFT OR MONEY ORDER

Details of how to apply for Shortfall Shares under the Shortfall Offer are set out in Section 5.8 of this Prospectus.

If you are an Eligible Shareholder and do not wish to take up your Entitlement

5.3 Implications of acceptance

5.4

Minimum subscription

5.5

Underwriting

5.6 Effect of the entitlement issue on voting power in the Company

5.7 Non-renounceable

5.8 Shortfall Offer

(a) Eligible Shareholders

(b) Other investors

5.9 Entitlement and Acceptance Form and Shortfall Application Forms are binding

5.10 ASX Listing

5.11 Allotment of Shares

5.12

Overseas Shareholders

5.13

Taxation implications

5.14 Clearing House Electronic Sub-Register System (CHESS) and issuer sponsorship

5.15

Privacy Act

6. PURPOSE AND EFFECT OF THE OFFER

6.1 Purpose of the Offer

Notes:

6.2 Effect of the Offer and pro forma consolidated balance sheet

6.3 Pro-forma balance sheet

Pro-forma statement of financial position – 30 June 2012

Pro-forma transactions

6.4 Effect on capital structure

Shares

Options

7. RIGHTS AND LIABILITIES ATTACHING TO THE SHARES

7.1 Terms of Shares

7.2

General meetings

IODM LIMITED Capital/Financing Update 2012