Palladon Ventures Ltd.

Palladon Ventures Ltd.

September 28, 2005 18:48 ET

Palladon Ventures Ltd. Closes Long Term Loan to Refinance Iron Project Acquisition

BROOMFIELD, COLORADO--(CCNMatthews - Sept. 28, 2005) - Palladon Ventures Ltd. (TSX VENTURE:PLL) is pleased to announce that the Company and Luxor Capital Partners, LP ("Luxor") have completed and closed a secured long term loan in the principal amount of US$12,750,000 (the "Loan"), to refinance the acquisition of the Comstock/Mountain Lion Iron Project in Utah (the "Iron Project"), as previously announced. The Loan has an interest rate of 9.25% per annum, calculated quarterly and has a five year term. The Loan proceeds will be applied towards repayment of the outstanding bridge loan provided by Luxor that was used for the Iron Project acquisition (upon confirmation of certain title matters relating to a mortgage securing the Loan), with the balance to be applied towards working capital, out of which the Company will contribute US$500,000 for working capital for Palladon Iron Corporation (the "Iron Company"). Luxor has also provided a US$500,000 contribution to the Iron Company for the operation of the Iron Project.

As consideration for granting the Loan, the Company has granted to Luxor 2,357,137 share purchase warrants (the "Warrants"). The Warrants shall be exercisable at $0.62 per share for a period of two years.

In addition, Luxor has acquired a 50% interest in the Iron Company with the payment of US$3,000,000 and the forgiveness of fees and expenses which would otherwise be payable under the Loan. Out of the proceeds, the Company has paid a US$500,000 finder's fee to Western Utah Copper Company, the Company's former joint venture partner for the Iron Project, and Western Utah Copper Company has provided a release of any further claims or interest in the Iron Project or the Iron Company.

The Company anticipates repayment of the Loan from revenue that it will receive from the operation of the Iron Project, including revenue under its sales contract for the sale of iron ore to China that was announced on August 2, 2005.


George S. Young, President, Director

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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