IODM LIMITED — Interim / Quarterly Report 2015

Feb 25, 2015

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ABN 28 102 747 133

Half-year Financial Report 31 December 2014

Paradigm Metals Limited

CORPORATE DIRECTORY

Directors

Mr. Anthony Reilly (Executive Director) Dr. Nicholas Lindsay (Non-Executive Director) Mr. Brian McMaster (Non-Executive Director)

Chief Executive Officer

Mr. Anthony Reilly

Company Secretary

Mrs. Paula Cowan

Registered Office and Principal Place of Business

Level 1 330 Churchill Avenue SUBIACO WA 6008 Australia Telephone: + 618 9200 4491 Facsimile: + 618 9200 4469

Share Registry

Automic Registry Services Pty Ltd Level 1 7 Ventnor Ave WEST PERTH WA 6005 Telephone: + 618 9324 2099 Facsimile: + 618 9321 2337

Auditors

BDO Audit (WA) Pty Ltd 38 Station Street SUBIACO WA 6008

Stock Exchange Listing

Australian Securities Exchange ASX Code: PDM

Paradigm Metals Limited

Contents	Page
Directors’ Report	1
Auditor’s Independence Declaration	6
Consolidated Statement of Profit or Loss and Other Comprehensive Income	7
Consolidated Statement of Financial Position	8
Consolidated Statement of Changes in Equity	9
Consolidated Statement of Cash Flows	10
Notes to the Consolidated Financial Statements	11
Directors’ Declaration	14
Independent Auditor’s Review Report	15

Paradigm Metals Limited

DIRECTORS’ REPORT

The directors of Paradigm Metals Limited and its subsidiaries (“Paradigm” or the “Group”) submit the financial report of the Group for the half-year ended 31 December 2014. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

Directors

The names of directors who held office during or since the end of the half-year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.

Mr AnthonyReilly	Executive Director
Mr Brian McMaster	Non-Executive Director
Dr Nicholas Lindsay	Non-Executive Director(appointed 13 October 2014)
Dr Graham Carman	Former Non-Executive Director(resigned 13 October 2014)

Results

The loss after tax for the half-year ended 31 December 2014 was $1,576,916 (31 December 2013 loss of $774,795).

Review of Operations

Paradigm Metals Limited (“Paradigm”) reviewed opportunities for investment in Australia and overseas which culminated in the announcement on the 3[rd] November 2014 the details of an agreement to acquire up to 80% of the Caninde Graphite project in Ceara State, Brazil.

Caninde Graphite Project

This is an exceptional acquisition and growth opportunity for the Company with considerable work already completed on the project and represents an immediate opportunity for the Company to fast track a project towards development.

Highlights:

• Granted 15,614Ha project area

• Massive flake Graphite identified

• Multiple prospects identified, sampled and trenched  Analytical results for surface grab rock chip samples as high as 42.04% Cg.

• Brazil is a leading global producer and end user of graphite.

High grade trenching results including:

Pedra Preta Prospect

25.3 metres at 13.29% Cg, incl 9.3 metres at 20.76% Cg 7.2 metres at 13.01% Cg, 3 metres at 8.9% Cg

Mariana Prospect

4.5 metres at 8.25% Cg

Salgueiro Prospect

1.5 metres at 30.2% Cg 2 metres at 23.13% Cg

Sao Luis Prospect

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Paradigm Metals Limited

12 metres at 5.5% Cg 6 metres at 4.44% Cg 4 metres at 8.93% Cg

The project is located approximately 135 kilometres southwest of Fortaleza city (Capital of Ceara State, Brazil) and the closest city is Canindé, 25 km to northeast of the mineral properties, with approximately 74,000 inhabitants. The southern portion of the project is crossed by the paved highway BR-020.

The project comprises 17 individual tenements with sizes varying from 634 hectares up to 985 hectares, totalling 15,614 hectares. All areas have the exploration licenses granted (figure 1).

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Geologically, the project lies within the aleoproterozoic Ceara Complex which includes amphibolites, mica and Graphite schists, quartzites, para-and-ortho-gneisses from the Caninde upper unit and, quartzites, mica schists, metalimestones, amphibolites, gneisses from the Independência lower unit.

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Paradigm Metals Limited

To date, three (3) main types of Graphite occurrences have being recognised within the project. Type 1 is represented by stratabound massive Graphite bands or graphite-rich beds with thicknesses ranging from few centimetres to several metres and grades from 5 to 20% Cg, suggesting the best targets in terms of tonnage (figure 2). Type 2 comprises disseminated low grade graphite-bearing mica-schists with grades ranging from 0.2 to 2.0% Cg. Type 3 is related to massive Graphite discordant lenses or veins with thicknesses up to few metres and grades from 15 to 35% Cg, representing an opportunity for low tonnage and high-grade targets (figure 3).

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Previous exploration included regional mapping with 1,200 geo stations along 10,000 hectares, 144 soil samples, 160 rock grab or chip samples, 458 samples from 686 shallow to bed-rock pits and 538 metres of trenches which

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Paradigm Metals Limited

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produced 270 channel samples. As a result of this exploration programme, twelve (12) moderate to high grade Graphite targets were delineated, based on surface rock grab or chip sampling (figure 4).

Future Exploration

The company has reviewed existing data with a view to rapidly implement a drilling program on the priority Pedra Preta prospect.

The Ladies project (PDM 100%)

No work was carried out on EL 19016 and EL 25366 during the half-year.

The Company is in discussions with several parties interested in the future development of this project.

Yellow Mountain (PDM 30%, earning 51%)

No work was carried out on EL 6325 during the half year.

The Company and its joint venture partners made the decision to discontinue exploration on the Yellow Mountain project and to dissolve the joint venture.

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Paradigm Metals Limited

The Company submitted final regulatory reporting on the tenement which has subsequently been dropped and the Company has no further interest in or commitment to the project

White Rock (PDM 100%)

During the half year the Company entered into a conditional Tenement Sale Agreement with Strategic Metals Australia Pty Ltd to sell EL 6274 for $140,000 plus the return of $10,000 environmental bond.

All conditions precedent to the Tenement Sale were completed during the half year and the tenement transfer documentation has been lodged with the NSW Government Trade and Investment for approval.

Frogmore (PDM 100%)

No work was carried out on EL 6590 during the half year.

Four Mile Tank (PDM 100%)

No work was carried out on EPM 18294 during the half year

Corporate

During the period the Group appointed Dr Nicholas Lindsay as Non-executive Director and Dr Graham Carman resigned as Non-executive Director.

During the period the Company reached an agreement with CPS Capital Group Pty Ltd to underwrite a nonrenounceable rights issue to existing shareholders on a 1 for 2 basis at an issue price of $0.002 per Share with a free attaching listed option (exercisable at $0.002 and expiry of 31[st] December 2016) to raise $525,215 before costs.

Subsequent Events

The Company completed the allotment and issue of 218,107,428 shares pursuant to the renounceable entitlements issue on 28 January 2015.

There are no other significant events subsequent to the end of the reporting period.

Auditor’s Independence Declaration

Section 307C of the Corporations Act 2001 requires the Group’s auditors to provide the Directors of Paradigm Metals Limited with an Independence Declaration in relation to the audit of the financial report. A copy of that declaration is included within this report

This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001.

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Brian McMaster

Non-Executive Director

26 February 2015

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled and reviewed by Mr Paulo Brito. Mr Brito is a consulting geologist for Paradigm Metals Limited and is a member of AusIMM-The Minerals Institute, as well as a member of Australian Institute of Geoscientists.

Mr Brito has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Brito consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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DECLARATION OF INDEPENDENCE BY PHILLIP MURDOCH TO THE DIRECTORS OF PARADIGM METALS LIMITED

As lead auditor for the review of Paradigm Metals Limited for the half-year ended 31 December 2014, I declare that, to the best of my knowledge and belief, there have been:

1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

2. No contraventions of any applicable code of professional conduct in relation to the review.

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

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Phillip Murdoch Director

BDO Audit (WA) Pty Ltd

Perth, 26 February 2015

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees

Paradigm Metals Limited

Consolidated Statement of Profit or Loss and Other Comprehensive Income

for the half-year ended 31 December 2014

Note Continuing operations Other revenue Revenue Listing and public company expenses Accounting and audit expenses Consulting and directors’ fees Occupancy expenses Depreciation Employee benefit expense Loss on disposal of exploration asset 3 Impairment of exploration expenditure 3 Other expenses Loss before income tax Income tax expense Loss after income tax Other comprehensive income Total comprehensive loss for the half-year Loss per share Basic and diluted loss per share (cents per share)	2014 $ 5,955 5,955 (28,202) (52,293) (65,015) (45,000) (280) (71,450) (765,763) (520,649) (34,219) (1,576,916) - (1,576,916) - (1,576,916) (0.34)	2013 $
		19,238
		19,238
		(23,764) (51,343) (183,022) (60,000) (5,027) (69,017) - (361,849) (40,011)
		(774,795) -
		(774,795) -
		(774,795)
		(0.18)

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

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Paradigm Metals Limited

Consolidated Statement of Financial Position

as at 31 December 2014

Note Assets Current Assets Cash and cash equivalents Other receivables Total Current Assets Non-Current Assets Deferred exploration and evaluation expenditure 3 Plant and equipment Other receivables Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Total Current Liabilities Non-Current Liabilities Long term provisions Total Current Liabilities Total Liabilities Net Assets Equity Issued capital Reserves Accumulated losses Total Equity	31 December 2014 $ 377,759 13,497 391,256 2,265,106 1,023 96,782 2,362,911 2,754,167 174,928 174,928 5,000 5,000 179,928 2,574,239 13,268,800 103,409 (10,797,970) 2,574,239	30 June 2014 $
		669,399 55,362
		724,761
		3,185,035 1,303 89,381
		3,275,719
		4,000,480
		117,736
		117,736
		5,000
		5,000
		122,736
		3,877,744
		12,995,389 103,409 (9,221,054)
		3,877,744

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

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Paradigm Metals Limited

Consolidated Statement of Changes in Equity

Half-year ended 31 December 2014 Balance as at 1 July 2014 Total comprehensive loss for the half-year Loss for the half-year Total comprehensive loss for the half-year Transactions with owners in their capacity as owners Shares issued for part consideration of the Caninde Project Rights issue acceptances Transaction costs relating to issue of shares Balance at 31 December 2014 Half-year ended 31 December 2013 Balance as at 1 July 2013 Total comprehensive loss for the half-year Loss for the half-year Total comprehensive loss for the half-year Balance at 31 December 2013	Issued Capital $ Share Based Payment Reserve $ Accumulated Losses $ Total $
	12,995,389 103,409 (9,221,054) 3,877,744
	- - (1,576,916) (1,576,916)
	- - (1,576,916) (1,576,916)
	200,000 - - 200,000 89,000 - - 89,000 (15,589) - - (15,589)
	273,411 - - 273,411
	13,268,800 103,409 (10,797,970) 2,574,239
	12,995,389 103,409 (8,149,151) 4,949,647
	- - (774,795) (774,795)
	- - (774,795) (774,795)
	12,995,389 103,409 (8,923,946) 4,174,852

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

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Paradigm Metals Limited

Consolidated Statement of Cash Flows

for the half-year ended 31 December 2014

Cash flows from operating activities Payments to suppliers and employees Interest received Net cash outflow from operating activities Cash flows from investing activities Proceeds from the sale of exploration assets Tenement expenditure guarantees refunded Payments for exploration and evaluation expenditure Net cash outflow from investing activities Cash flows from financing activities Proceeds from issue of equity securities (net of issue costs) Proceeds from shares not yet issued Net cash inflow from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at the end of the period	2014 $	2013 $
	(246,158) 8,222 (237,936) 140,000 30,000 (308,661) (138,661)	(450,717) 26,379
		(424,338)
		505 - (246,612)
		(246,107)
	73,411 11,546	- -
	84,957	-
	(291,640) 669,399 377,759	(670,445) 1,681,925
		1,011,480

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

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Paradigm Metals Limited

Notes to the Consolidated Financial Statements

for the half-year ended 31 December 2014

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Corporate Information

This general purpose half-year financial report of Paradigm Metals Limited and its subsidiary (the Group) for the half-year ended 31 December 2014 was authorised for issue in accordance with a resolution of the directors on 26 February 2015.

Paradigm Metals Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange.

The nature of the operations and principal activities of the Group are described in the Director’s Report.

Basis of Preparation

This financial report for the half-year ended 31 December 2014 has been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001. The Group is a for profit entity for financial reporting purposes under Australian Accounting Standards.

These half-year financial statements do not include all notes of the type normally included within the annual financial statements and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial statements.

It is recommended that the half-year financial statements be read in conjunction with the annual financial statements for the year ended 30 June 2014 and considered together with any public announcements made by Paradigm Metals Limited during the half-year ended 31 December 2014 in accordance with the continuous disclosure obligations of the ASX listing rules.

For the purpose of preparing the interim report, the half-year has been treated as a discrete reporting period. The accounting policies adopted are consistent with those of the previous financial year.

New and amending Accounting Standards and Interpretations

The consolidated entity has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current reporting period.

The adoption of all of the new and revised Standards and Interpretations has not resulted in any changes to the consolidated entity’s accounting policies and has had no effect on the amounts reported for the current or prior periods.

NOTE 2: SEGMENT REPORTING

For management purposes, the Group is organised into one main operating segment, which involves exploration for gold and other minerals. All of the Company’s activities are interrelated, and discrete financial information is reported to the Executive Chairman (Chief Operating Decision Maker) as a single segment. Accordingly, all significant operating decisions are based upon analysis of the Group as one segment. The financial results from this segment are equivalent to the financial statements of the Group as a whole.

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Paradigm Metals Limited

Notes to the Consolidated Financial Statements

for the half-year ended 31 December 2014

NOTE 3: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE

OTE 3: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE
At beginning of the period Exploration expenditure during the period* Loss on disposal of exploration asset mpairment expense Total deferred exploration and evaluation expenditure	31 December 2014 $ 30 June 2014 $ 3,185,035 3,203,959 366,483 344,025 (765,763) - (520,649) (362,949)
	2,265,106 3,185,035

The ultimate recoupment of costs carried forward for exploration expenditure is dependent on the successful development and commercial exploitation or sale of the respective mining areas. The impairment loss relates to the withdrawal from various tenements held that the Group has made a decision to not continue exploration work and accordingly wrote down the carrying value to nil.

*Under the terms of the agreement to acquire up to 80% of the Caninde Graphite project in Ceara State, Brazil the Company can earn an initial 51% of the project as follows:

	Payment (US$)*	Exploration (US$)	Drilling (metres)
Initialpayment	$100,000
Within 12 months	$100,000		1,000
Within 24 months	$100,000		1,000
Within 36 months	$100,000	$2,000,000	1,000
* Mayelect to receivepayment in either cash or shares

Once the Company has earned a 51% interest it may earn an additional 19% interest as follows;

	Payment (US$)*	Exploration (US$)	Deliverables
Within 48 months	$100,000		PrefeasibilityStudy
Within 60 months	$100,000	$2,500,000	FeasibilityStudy
* Mayelect to receivepayment in either cash or shares

When the Company has delivered a Bankable Feasibility Study, Environmental Permitting and applied for a Mining License to earn its additional 19% interest, it may earn the final 10% interest (for a total of 80%) by paying US$100,000 and putting the project into commercial production within 72 months of the Agreement date.

The Company can withdraw from this agreement at any time by the provision of 30 days’ notice.

For the assignment of the rights and obligations of the Share Purchase Agreement the Company shall:

• Issue 100,000,000 (one hundred million) fully paid ordinary shares in the Company on the signing date;

• Issue 100,000,000 (one hundred million) fully paid ordinary shares in the Company after drilling 2,000 metres on the areas covered by the project tenements;

• Issue 100,000,000 (one hundred million) fully paid ordinary shares in the Company after a JORC resources report with +4Mt at +4%TGC is prepared.

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Paradigm Metals Limited

Notes to the Consolidated Financial Statements

for the half-year ended 31 December 2014

NOTE 4: ISSUED CAPITAL

(a) Issued and paid up capital

(a) Issued and paid up capital
Ordinary shares fully paid (b) Movements in shares on issue Opening balance Issue of shares Costs of issue Closing balance	13,268,800 12,995,389 2014 2013 Number of shares $ Number of shares $ 425,215,010 12,995,389 425,215,010 12,995,389 144,500,077 289,000 - - - (15,589) - -
	569,715,087 13,268,800 425,215,010 12,995,389

NOTE 5: DIVIDENDS

No dividends have been paid or provided for during the half-year (2013: nil).

NOTE 6: CONTINGENT LIABILITIES

There has been no change in contingent liabilities or contingent assets since the last annual reporting date.

NOTE 7: SUBSEQUENT EVENTS

There are no significant events subsequent to the end of the reporting period.

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Paradigm Metals Limited

DIRECTORS’ DECLARATION

In the opinion of the directors of Paradigm Metals Limited and its subsidiary (the ‘Group’):

1. The financial statements and notes thereto, as set out on pages 7 to 13, are in accordance with the Corporations Act 2001 including:

2. a. complying with Accounting Standard AASB 134: Interim Financial Reporting Corporations Regulations 2001 and other mandatory professional reporting requirements; and

3. b. giving a true and fair view of the Group’s financial position as at 31 December 2014 and of its performance for the half-year then ended.

4. there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.

This declaration is signed in accordance with a resolution of the Board of Directors made pursuant to s.303(5)(a) of the Corporations Act 2001.

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Brian McMaster Non-Executive Director

26 February 2015

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Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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INDEPENDENT AUDITOR’S REVIEW REPORT

To the members of Paradigm Metals Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Paradigm Metals Limited, which comprises the consolidated statement of financial position as at 31 December 2014, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the half-year ended on that date, notes comprising a statement of accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the half-year’s end or from time to time during the half-year.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2014 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Paradigm Metals Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Paradigm Metals Limited, would be in the same terms if given to the directors as at the time of this auditor’s review report.

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees

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Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Paradigm Metals Limited is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2014 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001

BDO Audit (WA) Pty Ltd

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Phillip Murdoch Director

Perth, 26 February 2015