Palladon Ventures Ltd.
TSX VENTURE : PLL
FRANKFURT : PV-1

Palladon Ventures Ltd.

December 22, 2006 15:55 ET

Palladon Ventures Ltd.: Report on Iron Project Capital Contributions and Other Agreements With Luxor Capital Partners, LP

SALT LAKE CITY, UTAH--(CCNMatthews - Dec. 22, 2006) - Palladon Ventures Ltd. (TSX VENTURE:PLL)(FWB:PV-1) (the "Company") wishes to announce that its joint venture partner in the Iron Project, Luxor Capital Partners, LP ("Luxor") has, since February of this year when the Company announced an equity funding of US$2M by Luxor to Palladon Iron Corporation ("PIC"), contributed a further US$1.1M of equity funding to PIC. Over the same period the Company has contributed approximately US$2.35M of equity funding to PIC. PIC has used this funding to complete renovation of the ball mill, continue engineering for the concentrator and engineering and procurement for the substation.

The Company and Luxor will receive one additional common share of PIC for each US$10,300 contributed. The Company will be issued its PIC shares upon completion of the financial review of PIC currently ongoing.

In addition, the Company and Luxor have agreed that in lieu of payment of US$597,405.20 representing outstanding interest and interest due on December 23 under the US$12.75M term loan provided by Luxor to the Company in order to finance the acquisition of the Iron Project (the "Term Loan"), Luxor shall exercise its right to have ownership in 58 PIC shares transferred from the Company to Luxor.

Upon completion of the PIC financial review it is estimated that Luxor will own 860 PIC shares (56%) and the Company will own 671 PIC shares (44%). Under the agreements reached with Luxor, the Company has the option to acquire an additional 189 PIC shares, thereby restoring its 50% equity interest in PIC, at exercise prices increasing from US$10,300/share if exercised prior to year's end to US$13,709/share if exercised in March or April of 2007. The Company intends to raise additional equity in the first quarter of 2007 to fully fund its option right and restore its 50% equity interest in PIC. So long as Luxor owns 50% or more of the equity in PIC, it shall have the right to appoint the officers of PIC.

The Company and Luxor have also agreed that in the event that Western Utah Copper Company ("WUCC") exercises its right to acquire the Company's interest in copper properties located in southwestern Utah, the Company will apply the US$3M cash portion of the consideration received from WUCC toward amounts due under the Term Loan and will, within 30 days of the effective date of the sale of its interest in the copper properties to WUCC, provide Luxor a further US$3M also to be applied to the Term Loan.

ON BEHALF OF THE BOARD OF DIRECTORS OF PALLADON VENTURES LTD.

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

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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