Palladon Ventures Announces Private Placement Financing to Buyout Joint Venture Partner in Iron Ore

Palladon Ventures Ltd. ('Palladon' or the 'Company') (TSX VENTURE:PLL)(FRANKFURT:PV-1) is pleased to announce that it has reached a definitive agreement, subject to regulatory approval, with its joint venture partner, Luxor Capital Partners, LP ('Luxor'), to acquire Luxor's interest in Palladon Iron Corporation ('PIC'). The transaction will allow the Company to fully consolidate PIC under Palladon's ownership and provide Palladon shareholders with 100% of the future economics in the Iron Mountain project. The total purchase price paid to Luxor for their interest in PIC will be US$65 million. The purchase price is comprised of US$40 million in cash payable to Luxor at closing and a deferred seller payment of US$25 million due to Luxor 12 months after the closing. The deferred seller payment will be fully secured by the assets of PIC and will carry interest at 11.6% with no prepayment penalty. The current loan agreement between Palladon and Luxor for the existing US$9.3 million note shall be amended so that the maturity date will be the same date on which the deferred seller payment is due. All other terms of the current loan agreement will remain unchanged. In addition, Luxor has agreed to invest up to US$8 million in the private placement at the stated terms described below. Subject to regulatory approval, the Company will conduct a private placement of up to 85,106,383 units (the 'Units') at a price of CDN$0.70 (US$0.705) per Unit, for gross proceeds of up to CDN$59,574,468 (US$60,000,000). Each Unit will consist of one common share and one quarter (1/4) of one transferable warrant. Each whole warrant will be exercisable at CDN$1.00 per warrant share for a period of eighteen (18) months from the closing date. The Company is working with a U.S.-based financial services firm and anticipates paying an advisory fee of six percent (6%) of the gross proceeds of the offering payable in cash or Units of the Issuer in respect of any Units sold. Proceeds will be used to purchase Luxor's interest in PIC and for project capital requirements. All securities issued in the private placement will be subject to a four-month hold period. The transactions are expected to close upon approval by the TSX Venture Exchange, and upon the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act ('HSRA'), if such HSRA filing is required. Donald G. Foot Jr., President and CEO of Palladon, commented, 'These are very exciting times for the Company and our shareholders. We will now control 100% of the project and will be fully focused on achieving our production targets and generating cash flows under our 5-year contract with China Kingdom International ('CKI'). We anticipate that acquiring Luxor's interest in PIC will add significant shareholder value. In addition, the Company's run-of-mine capex requirements will now be fully-funded, and we expect that the deferred seller payment and existing debt can be repaid from project cash flow. Luxor has been a good partner on the project and we appreciate their support. Luxor remains committed to the project and will become a larger shareholder in Palladon Ventures. We expect to conduct a conference call with investors shortly after the deal closes to provide further details on the transaction and our continued progress on the project.' On Behalf of the Board of Directors, Donald G. Foot, Jr., President and Chief Executive Officer About Palladon Palladon Ventures Ltd. is a junior resource company focused on redeveloping the Iron Mountain project in Iron County, Utah. Palladon also holds interests in gold exploration projects in Nevada, Utah and Argentina. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents herein.