Palladon Ventures Ltd.

Palladon Ventures Ltd.

January 05, 2007 09:30 ET

Palladon President's Letter

SALT LAKE CITY, UTAH--(CCNMatthews - Jan. 5, 2007) - Palladon Ventures Ltd. (TSX VENTURE:PLL)(FWB:PV-1) -

As the New Year begins and I reflect on what we have accomplished over the past year, it is exciting to see the progress we have made in the short time we have owned the Comstock/Mountain Lion Mine. From a mining project that sat idle for over 10 years with facilities that had been ransacked, shot at, and in some cases run over with vehicles on the property grounds, we now have a site that is in the first stages of becoming an active iron ore mine once again. Since we have acquired the mine we have accomplished the following:

1 Completed a NI 43-101 technical report dated Sept. 15, 2005, highlighting an inferred resource on the Comstock/Mountain Lion mine of 33,233,554 tons grading 47.7% iron, and an historic resource estimate on the Rex area of 111,234,000 tons at an average grade of 40.9% iron.

2 Demolished all of the existing structures on the site, cleared the site of all the waste, and prepared the site for modernization.

3 Surveyed the entire mill site to ensure that the new facilities are in the best possible location.

4 Secured Gilbert Development as our contract mining company, bringing their 15 years of experience in mining the Comstock/Mountain Lion ore body.

5 Secured the old Columbia Mining/US Steel/Geneva drill data dating to the 1930s and converted the hand-written data into a complete electronic copy that will contribute to development of our mine plan.

6 Worked with Samuel Engineering to complete the design and engineering studies and initiated the construction drawings for the new concentrator.

7 Engaged some of the finest consultants from the mining industry (and specifically the iron ore industry) to help us in the design of the mill.

8 Procured and refurbished a 15.5-ft by 23-ft ball mill, thus saving a tremendous amount of money (about USD $2,000,000) and time in obtaining the processing equipment with the longest delivery time.

9 Procured a transformer for our power substation and completed the subsurface grounding grid system.

10 Constructed two one-mile interchange tracks for train drop-off and pick-up by the Union Pacific Railroad and secured the Albany and Eastern Railroad to be the operator of our shortline railroad.

11 Built a strong relationship with the Union Pacific Railroad and agreed to terms for the shipment of ore to a port in California.

12 Developed an additional market for iron ore to be used in the cement industry, to which we are already shipping run-of-mine material.

I am very proud of our small and efficient staff that has worked long hours putting all of this together in such a short period of time when a project of this type could typically take significantly longer to complete. This is especially difficult in a time when we have a robust minerals industry and everyone is competing for contractors, equipment, and skilled workers. The next steps, which include the execution of port and sales contracts, are well underway. Once those terms are finalized and funding is in place, we will move ahead quickly to construct the new facility and begin shipping concentrate to the west coast. This is a large undertaking indeed, but one that is close to being realized. And, with the recent increase in iron ore prices and positive outlook for steel, we are optimistic about the future of Palladon. Once the final details are complete we will release a timeline and projection of start-up dates. We also look forward to increasing our presence in the cement industry, which is an ideal related business that provides consistent and short-term cash flow.

The Comstock/Mountain Lion project is not all that we have on the plate right now. Drill rigs are preparing to move forward on our gold properties in Nevada through our JV partner Maestro Ventures; we await word on the WUCC procurement of the Milford properties that should come in early January; and George Young is evaluating the best way to move the Argentinian gold properties forward. So, 2007 looks like a very exciting time for Palladon Ventures and for you, our shareholders.

At this time I would like to wish all of you a prosperous new year in 2007. We thank you all for your support and your patience as we move forward with these projects, and hope that the benefits of our labors will be realized by all in the near future.

On Behalf of the Board of Directors,

Donald G. Foot, Jr., President & Chief Operating Officer

About Palladon

Palladon Ventures Ltd. is a junior resource company focused on building production facilities at the Comstock/Mountain Lion iron mine in Iron County, Utah. Palladon also holds gold and copper exploration projects in Nevada, Utah and Argentina.

Cautionary statement: A qualified person has not done sufficient work to classify the historical estimate as current mineral resources, the issuer is not treating the historical estimate as current mineral resources and the historical estimate should not be relied upon.

The TSX Venture Exchange has not reviewed and does not take responsibility for the adequacy or accuracy of the contents hereof.

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