Palladon Ventures Ltd.

Palladon Ventures Ltd.

November 16, 2005 21:53 ET

Palladon Ventures Ltd.: 2005 Second Quarter Results

SALT LAKE CITY, UTAH--(CCNMatthews - Nov. 16, 2005) - Palladon Ventures Ltd. (TSX VENTURE:PLL)(FWB:PV1) reports the results of its operations for the quarter ended August 31, 2005. Highlights of the quarter include the completion of positive metallurgical testwork on iron ore from the Iron Mountain Project, the execution of an iron concentrate sales contract, the completion of preliminary engineering and design for mining and processing ore at the Iron Mountain Project, encouraging field work on the Company s gold and copper projects in Utah and Nevada, and the acquisition of an attractive addition to the Company s Argentine mineral portfolio.

Financial Results

The Company reported a profit for this quarter of $242,887 (August 31 2004 ($395,259)). This occurred due to the unrealized gain on foreign exchange of $1,063,905 for the quarter that offset the actual operating loss for the three months of $823,251. As of the end of August 31, 2005, the Company had $398,627 in cash, and $27,211,535 in mineral properties.

Project Development and Operations

The bulk of the Company s $27 million in mineral properties consists of its interests in the Iron Springs District ("the Iron Mountain Project") and the Western Utah Copper joint venture in Utah. The Company made significant progress in the development of both those projects during the quarter, and successfully negotiated for the refinancing and consolidation of its interests. Closing of the restructuring and refinancing occurred after the end of the quarter, complicating the preparation of the financial statements. The Company now has a 50% interest in the Iron Mountain Project, subject to a 5-year term loan of US$12.75 million with interest at 9.25%. The Company s partner is Luxor Capital Partners, LLP, who is also a major shareholder in the Company.

During the quarter, preliminary engineering design was completed for mine and mill facilities, a mining contactor was selected, surface work was commenced for a power substation, a port facility contract was negotiated, and negotiations progressed substantially on all aspects of rail handling and shipment.

The Company also vested in a 50% interest in the production portion of the Western Utah Copper joint venture, a transaction that was also negotiated during the quarter but closed subsequently. The Company has made significant progress in engineering and feasibility work on the project, and filed a NI 43-101 Technical Report after the end of the quarter. Ongoing drilling and other work was also carried out on the exploration portion of the joint venture. The Company believes that significant progress has been made in the exploration of the large areas that have been identified for copper and gold exploration potential.

The Company also performed field work consisting of geology and geochemical sampling on the Caldera gold project in Nevada. Encouraging results from assays of this work were returned from the laboratory after the end of the quarter. The Company plans to continue with its gold exploration projects in Nevada and Argentina as it advances work on Iron Mountain and Western Utah Copper Projects.

Liquidity, Capital Resources, and Financing Activities

During the quarter the Company renegotiated the terms of the Luxor financing agreement and agreed to replace the interim loan with a secured five-year term loan in the principal amount of US$12,750,000 to bear interest at 9.25% per annum, calculated quarterly (the "Term Loan"). The Term Loan proceeds were applied towards repayment of the outstanding interim loan provided by Luxor used to acquire the Iron Mountain properties. The balance of the proceeds under the Term Loan was applied towards working capital, out of which the Company contributed US$500,000 for working capital to the Iron Company for the operation of the Iron Project. As consideration for granting the term loan, the Company granted to Luxor 2,357,137 share purchase warrants exercisable at $0.62 per share for a period of two years. The closing of this transaction occurred subsequent to quarter end.

BCSC Cease Trade Order / TSX Venture Reinstatement

On November 8, 2005, the BCSC issued a cease trade order against the Company, for failing to file the interim financial statements and MD&A for the six month period ending August 31, 2005. The TSX Venture Exchange subsequently suspended the trading of Palladon s securities until the Company meets tier maintenance requirements. The Company has now filed the Interim Financial Statements and MD&A for the period ending August 31, 2005. Reinstatement with the TSX Venture Exchange is conditional upon receiving notification of all required regulatory approvals.

Union Pacific Railroad Company Retraction

On its news release dated November 4, 2005, The Company stated that costs incurred for rail exchange tracks near Iron Mountain will be
"reimbursed from the railroad during the first year of operations." This statement should be considered retracted as the Company is not at this time certain whether such a term will be a component of the final contract with the railroad.


Don Foot, President & Chief Operating Officer, Director

Some of the statements contained in this release are forward-looking statements, such as estimates and statements that describe Palladon s future plans, intentions, objectives or goals, including words to the effect that Palladon or management expects a stated condition or result to occur. Since forward-looking statements are not statements of historical fact and address future events, conditions and expectations, forward-looking statements involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated.

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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