Palladon Ventures Ltd.

Palladon Ventures Ltd.

November 04, 2005 12:43 ET

Palladon Ventures Ltd. Provides Update on Iron Mountain Project

SALT LAKE CITY, UTAH--(CCNMatthews - Nov. 4, 2005) - Palladon Ventures Ltd. (TSX VENTURE:PLL) is pleased to provide the following update on the Comstock/Mountain Lion mine on Iron Mountain, near Cedar City, Utah.

In spite of recent delays occasioned by material shortages in the wake of hurricanes in the Gulf Coast, the Company has made steady progress in commissioning the redevelopment of the historically productive mining facility. Given the strong demand and attractive pricing for iron ore concentrate product, the Company has made the determination to proceed with plans to double the originally planned production rate to produce 2,000,000 metric tons per year. This revised plan is also based on the positive reactions from numerous potential customers who recently analyzed our concentrates. The Company intends to sign additional contracts when construction schedules and completion dates are more fully known. Palladon entered into a contract in August with a Chinese purchaser for the sale of one million metric tons of iron ore concentrates over the next year.

Gilbert Development Corp. has been mobilized as the mining, processing and loading contractor for the project and continues to provide valued service in all areas of the development process. While the primary focus at present is the construction of the mill, Gilbert will engage in the more straightforward task of mining, processing, and stockpiling once the construction of facilities nears completion. Gilbert will mine an average of 200,000 metric tons of ore per month once formal mining commences. Stockpiled materials may be processed in addition to mined ore to reduce interruptions caused by adverse winter weather conditions.

The old power station at the project was dismantled after operations ceased a decade ago, and a new one is required. The Company is pleased to report that it has completed engineering and broken ground on the new substation. In spite of acute shortages occasioned by recovery efforts in the Gulf Coast, the Company has secured all needed wire and poles, and awaits a final commitment date on transformers. The design of the new substation will bring a more consistent power supply, connecting to a 138kVA line that can be expanded as power demands increase. The Company has saved over 60% of the costs by contracting out the work instead of using the power provider.

The Company is also pleased to announce that the Union Pacific Railroad has approved the project for major rail service, even as other major projects have been rejected. The Company recently learned that additional time will be required to complete modifications on the rail exchange tracks. Costs incurred for the completion of rail exchange tracks will initially be borne by the Company, however, will be reimbursed from the railroad during the first year of operations. Palladon has been able to reduce its construction costs for the rail exchange tracks by 50% by contracting out these processes and we will proceed with an aggressive completion schedule.

Cement is also scarce at this time; however, the Company has secured sources and will use the existing mill foundation to save on costs. A demolition crew is currently removing and salvaging the old facilities. A full time security firm has been contracted and has started providing surveillance and security measures onsite.

Palladon's management and advisory team have extensive managerial experience and expertise in metallurgical and mining engineering, mineral processing, and mining project development. The basis for our decision to redevelop the mine using only historic resource estimates and feasibility studies stems from the wealth of historic data available on the geologic occurrence, the attractive iron ore market at the present time, favorable operating cost estimates, and the properties of the project's magnetite iron product itself. Metallurgical testing has shown that minus 270 mesh ground iron ore can be upgraded to a commercial product at grades up to or in excess of 68% iron.

The Company intends to ship product in the first half of 2006 based on a very aggressive construction schedule. It should be understood that this schedule is in part contingent upon the availability of materials and the securing of additional project financing.

Previous estimates of project completion stated in press releases of August 2 and August 30, 2005, should be considered retracted. We wish to reiterate that although we are proceeding aggressively to construct an operational iron mining facility, we have not yet finalized the development schedule to provide a more specific date for the commencement of commercial production. We intend to provide updated financial and scheduling parameters as soon as possible, and hope that the completion of the mill and the decision to double its potential capacity will coincide with economically viable conditions as we enter the marketplace.

Looking to the future, Palladon intends to evaluate production scenarios above and beyond producing iron ore concentrates. Palladon received with the acquisition of the project an extensive definitive feasibility study conducted for Geneva Steel in 2001. The study demonstrates the amenability of the Iron Mountain ore to direct reduction processes to produce pig iron and steel, and also electricity from project cogeneration.


Don Foot, President & Chief Operating Officer, Director

There are no current resource statements available in reference to the Iron Mountain project, and although the historic estimates (114,097,000 metric tonnes (mt) at an average grade of 40.8% Fe) are considered by Palladon to be reliable, they should not be considered accurate until the Company performs work to further delineate and confirm the extent of iron mineralization on the project.

Developing mineral deposits is dependent on a number of criteria, including the technical skill of the management team. The commercial viability of a mineral deposit is dependent on a number of factors including size, grade, and proximity to infrastructure, as well as metal prices. Risks include having inadequate materials of sufficient grade to mine, and that processing and recovery methods may not be successful.

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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