Press Release Archive

To view the complete press release archive, please visit the news section of PalladonVentures.com

Work continues at Iron Mountain in anticipation of the resumption of ore mining and shipping of the first run-of mine ore.  There are a number of contractors on the site at this time working in every aspect of mine development and preparation of the facilities.

RAILCARS AND TRACK

The first 17 temporary, or bridge, railcars are now at the site and sitting on the interchange tracks (Figure 1).  When all are received, we will have between 400 and 500 cars in service.

Figure 1: Temporary Railcars on Interchange Tracks

Upgrade of the spur line to Iron Springs is still moving ahead rapidly with the expected completion date to be September 7, 2008.  Contractors must first remove the old existing ties and then replace them with cement ties.  The cement ties provide better stability on the curves than wooden ties.  Once the ties and rail are in place, the ballast that was crushed on-site is dumped on the tracks (Figure 2) to ensure good stability and drainage. Only a few thousand feet of rail is being replaced, and only when we upgrade from 90 lb. rail to 133 lb. rail.

Figure 2: Ballast Over New Rail and Ties

Once ballast has been added, the track is then groomed in preparation for use.  Figure 3 shows a groomed portion of the track with new cement ties on one of the most critical curves on the line.  We have now installed approximately 1600 of the 5400 ties that will be replaced.

Figure 3: Groomed Track

 

THE MINE

We have started to remove (layback) the north pit highwall (Figure 4) for safety to assure we will not have any sloughing of material once mining begins below this area.  This is purely for safety of the mining crew and to give us better access to the area that will be mined below.  All material being removed is being trucked to build the crushing pad behind the primary crusher.

Figure 4: North Pit Highwill Layback

The drilling crew is currently mobilizing and getting set-up on site to begin blasting.  Powder magazines are currently in the blasting shacks (Figure 5) at the site adjacent to the mining area. 

Figure 5: Blasting Shacks

A pad was poured and the Prill (Anfo) storage silo has been installed at the site (Figure 6).  The silo sits adjacent to the blasting shacks and will be the main blasting site for the crew.  In the background of Figure 6 you can see the DM 50 Blast Hole Drill ready to move into position at the mine.

Figure 6: Prill Storage Silo with Drill in the Background

 

ELECTRICAL

All secondary power is now in-place and Rocky Mountain Power has now installed the meters on the main power lines.  Power to the site should be activated this week.

Figure 7: Power Meters on Main Power Line

 

ANNUAL GENERAL MEETING

The AGM will be held at 9am on September 17, 2008 at the Palladon Ventures office in Salt Lake City, Utah.  We would like to get some idea of those that are attending, so if you are planning to come please email us at info@palladonventures.com.  In addition, if you are planning to meet at the mine site on September 18, 2008 please let us know so that we can arrange clearance at the site.

 

TIPPLE

Progress this week centered on transportation and installation of the tipple to replace the old one that was damaged by vandals over the years of inactivity (Figure 1) and had to be demolished.  The tipple is an integral part of the plant as it is used to weigh the iron ore and deliver it to the rail cars.

Figure 1: Old Tipple Being Demolished

The tipple was manufactured at Gilbert Development’s crusher manufacturing facility approximately 40 miles south of the mine.  The first two sections were then transported to the site for installation (Figure 2 and Figure 3).

Figure 2: Moving Tipple On Hwy 56

Figure 3: Tipple Bottom Section Entering Through Gate

Once the sections were received, installation started immediately.  The bottom section was unloaded and moved into position on the foundation (Figure 4). 

Figure 4: Unloading Bottom Section of Tipple

The Bottom section was bolted into place and then the second section was moved above the bottom section for installation (Figure 5).

Figure 5: Second Level of Tipple Being Placed

With both sections mounted, the welders started to secure the facility.  The next phase will be to add the bin that will hold the material for loading into the rail cars, and then connecting the conveyor system and the weigh scales.

Figure 6: Welding the Bottom Two Sections Together

 

CRUSHER

The large primary crusher is currently being installed at the site (Figure 7).  The primary crusher will handle all 2M tonnes of the mined ore while the smaller crusher that is currently crushing ballast, will be used for supplemental crushing and during scheduled maintenance.  This is an 84” horizontal impact crusher and is the largest one in the world.

Figure 7: Primary Crusher Installation

 

EXPLORATION

Palladon has signed an agreement with EDCON-PRJ to obtain an ultra-light airplane aeromagnetic survey over the Iron Mountain Project.  The area of the survey will cover the entire Iron Mountain area and will include future potential resource areas.  The data will be acquired along flight lines oriented E-W with 200-meter line spacing. Tie lines will be oriented approximately N-S with 800-meter line spacing.  A high sensitivity optically-pumped magnetometer will be used with the magnetic data sampled and recorded digitally at 0.1-second increments to a resolution of 0.01 nT.

This will be the first aeromagnetic survey completed on the entire area and will utilized current state-of-the-art technology with high-precision and resolution.   Areas identified as potential resource sites will be evaluated by the geology staff and drilling performed where applicable.

The survey will be completed by September 30, 2008.

 

Welcome to the first of the weekly updates that will be presented on the Iron Bull website. We hope that through these, you will be able to see the progress at the mine and be able better understand how quickly work is progressing. Any major items that represent critical path accomplishments will still be reported through press releases.

 

SITE PREPARATION

Palladon Iron along with its contract miner, Gilbert Development, has been working feverishly at the site in order to move into production. The first crusher (Figure 1) has been installed on-site and is in operation crushing ballast for the railroad refurbishment project. This crusher provides sufficient capacity to produce in excess of 2M metric tons of run-of-mine ore per year.

Figure 1: Crushing Plant

Ballast (Figure 2) is used on the track to provide a stable base and allow for good water drainage.  Not only was suitable ballast material found within the project area, eliminating the necessity of purchasing and delivering ballast from a third-party, it created a significant cost savings. When crushing the rock, two products are achieved,

Figure 2: Ballast Pile with Road Base Pile Behind

the ballast, and a fine product.  The fine material created when crushing the ballast has proved to make for a good road base and is being spread on all roads for tire protection (Figure 3). 

Figure 3: New Road Base being Distributed

The gravel has also been spread around the substation where it provides for a good solid base and excellent drainage to pull the water away from the electrical equipment.

Figure 4: Completed Substation with Gravel Base

An additional crusher, that will provide complete redundancy in crushing capability, will also be installed.  This is actually a larger crusher and will be utilized at times where we will be pushing tonnage, or when we are doing maintenance on the original crusher.  The second crusher also allows us to move to 4M metric tons per year as soon as that is approved through the railroad and the port.

Additionally, the stacker (Figure 5) has been installed and is ready for connection to permanent power.  The stacker is used to build up the stockpile for loading into the rail cars.  The radial stacker has a 48-inch belt that allows for blending while stacking.

Figure 5: Installed Stacker Ready for Positioning

Underneath the stockpile is a tunnel (Figure 6) that allows for the run-of-mine material to drop onto the belt and then be transported to the tipple where it will load the rail cars.  The stockpile tunnel has been installed with the belt to be installed shortly.

Figure 6: Conveyor System Under Stockpile

The tipple (Figure 7) is a structure that holds the material from the stockpile and loads it into the train.  There is a weigh-scale on the belt so that accurate loading of all material can be achieved and to insure that railcars are within the weight restrictions imposed by the Federal Railway Administration. This is a robust structure that sits across the railroad tracks such that the material drops directly into the cars through three ports above the car.  The cars are also weighed leaving the tipple structure so we have an accurate measurement of the weight in each car.  The foundation has now been poured which will be followed by lying of the tracks across the surface, and the erection of the tipple structure.

Figure 7: Tipple Foundation

Palladon Iron Corporation (Iron Bull Mining & Milling) has received approval of the Amended Notice of Intention to Commence Large Mining Operations, from the Utah State Division of Oil, Gas and Mining, pending payment of a small additional reclamation bond.  This approves the new dump designs and allows Palladon Iron to resume all mining activities.

 

RAILROAD

Palladon Iron signed a contract with Mountain States Contracting to replace 4,280 feet of 90-lb. rail with upgraded heavy duty 133-lb. rail (Figure 8) and 5,400 ties on the existing 14.6 mile short-line from the mine load-out facility to the interchange tracks at Iron Springs.  In this phase, about one-third of the ties will be replaced for added safety as loaded trains are moved down the two-percent grade track to the interchange.  Two additional phases of refurbishment are planned that will replace 100% of the ties over the next two years.

Figure 8: New Rail Ready for Installation

Mountain States is currently replacing the old weathered ties and the 90-pound rail (Figures 9 and 10) and estimate that it will be completed by the first week of September.  The maintenance work does not preclude operation on the tracks whenever it is deemed necessary.

Figure 9: Replacing Ties on the Rail

Figure 10: Tie and Rail Replacement

Palladon Iron has formed Palladon Iron Corporation Railroad (“PICR”) to act as the operating company of the shortline railroad. PICR is a wholly-owned subsidiary of Palladon Iron.

PICR and the Union Pacific Railroad have signed a track lease contract for the “Comstock Subdivision” of the UP effective August 1, 2008.  Through this agreement, PICR will be able to move all loaded and empty trains between the load-out facility at Iron Mountain and the interchange tracks. 

The Operating Agreement between the short-line operator and the PICR was signed August 1, 2008.  This allows our shortline operator to move all rail cars on the tracks and to interface with the UP.

The new test car is now on-site (Figures 11 and 12) and testing is underway today on the newly designed bottom-dump system.  Preliminary results of the first test have been very successful.  Once complete, the car will be sent to the port for additional testing.

Figure 11: Test Car From National Steel Car

Once all testing is complete, National Steel Car Company will then immediately begin construction of the permanent railcars for Palladon. It is estimated that the cars will be received in about 16 weeks.  Temporary cars will be used in the meantime.

Figure 12: Test Car with Bottom Dump Open

 

Other Highlights

All aspects of the project are in constant movement and we hope to have weekly updates on the progress.  Updated pictures and discussions will be presented.  We have been asked about investor visits to the site.  Unfortunately, with the amount of work in progress at the site and our concerns for safety, we will not hold any tours until after the AGM on September 17, 2008.  This will allow us to complete construction and start shipping before visitors arrive.  We appreciate your consideration in this matter.

Salt Lake City, Utah, August 6, 2008. Palladon Ventures Ltd. (“Company”) (TSX.V: PLL) (Frankfurt: PV-1) is pleased to announce that it will hold its Annual General Meeting on Wednesday September 17th 2008, at 9:00 a.m. at the Company’s corporate offices in Salt Lake City, Utah.

Palladon Iron Corporation (“Palladon Iron”) has initiated operations at the Iron Mountain facility in Cedar City, Utah in anticipation of the first shipment of iron ore from the site during the third quarter of 2008. Palladon Iron’s staff is now on-site at the Iron Bull Mining & Milling facility as work in all aspects of the operation moves forward.

Palladon’s Iron’s contract miner has installed the first crusher on-site which is in operation crushing ballast for the railroad refurbishment project. Not only was suitable ballast material found within the project area, eliminating the necessity of purchasing and delivering ballast from a third-party, it created a significant cost savings. An additional crusher, that will provide complete redundancy in crushing capability, will also be installed. Additionally, the stacker has been installed and is ready for connection to permanent power. With rock being crushed at the site, the substation gravel base is now complete and new roads are being graded and shaped with crushed fine material.

Palladon Iron Corporation (Iron Bull Mining & Milling) has received approval of the Amended Notice of Intention to Commence Large Mining Operations, from the Utah State Division of Oil, Gas and Mining, pending payment of a small additional reclamation bond. This approves the new dump designs and allows Palladon Iron to resume all mining activities.

Palladon Iron signed a contract with a rail contractor to replace 4,280 feet of 90-lb. rail with upgraded heavy duty 133-lb. rail and 5,400 ties on the existing 14.6 mile short-line from the mine load-out facility to the interchange tracks at Iron Springs. In this phase, about one-third of the ties will be replaced for added safety as loaded trains are moved down the two-percent grade track to the interchange. Two additional phases of refurbishment are planned that will replace 100% of the ties over the next two years.

Palladon Iron has formed Palladon Iron Corporation Railroad (“PICR”) to act as the operating company over the shortline railroad. PICR is a wholly-owned subsidiary of Palladon Iron.

PICR and the Union Pacific Railroad (“UP”) have signed a track lease contract for the “Comstock Subdivision” of the UP effective August 1, 2008. Through this agreement, PICR will be able to move all loaded and empty trains between the load-out facility at Iron Mountain, and the interchange tracks.

The Operating Agreement between the short-line operator and the PICR was signed August 1, 2008. This allows our shortline operator to move all rail cars on the tracks and to interface with the UP.

In order to keep our investors current with the rapid changes taking place at the Iron Mountain site, updates will be posted each Monday afternoon on www.ironbullmining.com. These will include pictures, progress reports and updated schedules.

“Things are moving ahead rapidly at the site as our mine office is fully functional and our contractors are diligently working to get the mine into operation and begin shipments,” said Donald G. Foot Jr., President and CEO of Palladon Ventures, Ltd.

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.

For Further Information Please Contact:

Donald G. Foot, Jr.
President and Chief Executive Officer
Palladon Ventures Ltd.
Tel: 801-521-5252
Fax: 801-521-5454
Email: info@palladonventures.com
Web: www.palladonventures.com
www.ironbullmining.com

WARNING: This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of up-coming work programs, permitting processes, the first shipment of iron ore from the site, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. Palladon Ventures Ltd. relies upon litigation protection for forward-looking statements.

The TSX Venture Exchange has not reviewed and does not take responsibility for the adequacy or accuracy of the contents hereof.

Linked below is a .pdf file copy of the Palladon Ventures Ltd. Corporate Update Conference Call, which also includes a Question & Answer session between President & Chief Executive Officer Mr. Foot and several others

Palladon Ventures Ltd. Corporate Update Conference Call July 23, 2008

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.

For Further Information Please Contact:

Donald G. Foot, Jr.
President and Chief Executive Officer
Palladon Ventures Ltd.
Tel: 801-521-5252
Fax: 801-521-5454
Email: info@palladonventures.com
Web: www.palladonventures.com
www.ironbullmining.com

Salt Lake City, Utah, July 16, 2008. Palladon Ventures Ltd. (TSX.V: PLL) (Frankfurt: PV-1), through its wholly-owned subsidiary, Palladon Iron Corporation, announces that the Company will host a conference call and live webcast to discuss the details of the start-up of the Iron Mountain mine near Cedar City, Utah.

Palladon President and CEO, Donald G. Foot, Jr., will hold an investor conference call and business update on Wednesday, July 23, 2008 at 12:00 p.m. Eastern Daylight Time, (9:00 a.m. Pacific Daylight Time). Members of the financial community will be invited to participate in a question and answer period at the end of the call. To participate in the call, please dial the following numbers:

416-340-2216 (Toronto) / 866-898-9626 (Toll-Free North America)

Replay:
416-695-5800 (Toronto) / 800-408-3053 Passcode: 32665287

Or Click Here

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.

For Further Information Please Contact:

Donald G. Foot, Jr.
President and Chief Executive Officer
Palladon Ventures Ltd.
Tel: 801-521-5252
Fax: 801-521-5454
Email: info@palladonventures.com
Web: www.palladonventures.com
www.ironbullmining.com

Salt Lake City, Utah, July 9, 2008. Palladon Ventures Ltd. (TSX.V: PLL) (Frankfurt: PV-1) is pleased to announce the appointments of Mr. John Cutler and Mr. Jared Sturdivant to the Board of Directors. In addition, Mr. Darrel Twede has joined the Company as the Acting Chief Operating Officer and Chief Technical Officer.

Mr. Cutler is a strategist with Swank Capital, LLC, a multi fund manager specializing in energy and natural resource investments. The firm manages funds across a number of strategies including the Dalrymple Global Resources Fund, LP set up to capitalize on the global demand for commodities through equity investments and futures contracts. Prior to joining Swank Capital, Mr. Cutler compiled over 30 years experience in the investment management and securities industries. He started his career as a portfolio manager with U.S. Trust Co. of New York in 1974. He subsequently held senior positions with major investment banking firms including CS First Boston and Smith Barney. Mr. Cutler also served as Vice President in the research group of John S. Herold, Inc. Mr. Cutler received a BS in Finance from the University of Virginia – McIntire School of Commerce in 1974. He also pursued further studies at The New York Institute of Finance and The New School, NYC.

Mr. Sturdivant is currently a Managing Director of JANA Partners LLC. Previously he was an investment analyst for Harvest Management LLC (2004–2005) focusing on distressed and special situation investments. He also previously worked as a restructuring and M&A Advisor for Conway, Del Genio, Gries & Co. LLC (2001–2003). Mr. Sturdivant graduated with a B.A. in Finance from the University of Texas at Austin in 2001, (magna cum laude).

Mr. Twede recently retired from FLSmidth Minerals, formerly known as Eimco where he was a project manager for the last 15 years with projects in Asia, South America, and the United States. Prior to his employment at Eimco, he worked at Evans & Sutherland in Salt Lake City as Program Manager where he managed domestic and international multi-million dollar programs in the simulation industry. He was employed at Kennecott Copper as a control systems engineer in the development of control systems in Kennecott’s operation. Mr. Twede received his M.S. in Electrical Engineering from the University of Utah, and is a past member of Eta Kappa Nu (HKN) Honor Society, the Institute of Electrical and Electronic Engineers (IEEE), and the Instrument Society of America (ISA). He received his Professional Engineer License in 1969 from the state of Utah.

The Company also announces that Dr. Michael G. Nelson has resigned from the Board of Directors at Palladon Ventures to focus on his assignments as a professor of Mining Engineering at the University of Utah.

The Company had hoped to have a conference call for investors this week but has postponed it as Mr. Foot is traveling to China. A detailed investor call will be scheduled for July 23, 2008 to give complete details of the start-up of the mine.

“We are very fortunate to have John Cutler and Jared Sturdivant join our Board,” said Donald G. Foot, Jr., President and CEO, Palladon Ventures Ltd. “Their experience in the financial markets will help to re-position our Board’s strength towards the operating concerns of the future. Darrel Twede brings a wealth of Project Management and plant start-up experience and will be a huge asset in a smooth start-up. In addition, other key positions at the site have now been filled with excellent additions. We are pleased to have attracted this talent for the Company at such a competitive time in our industry.”

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.

For Further Information Please Contact:

Donald G. Foot, Jr.
President and Chief Executive Officer
Palladon Ventures Ltd.
Tel: 801-521-5252
Fax: 801-521-5454
Email: info@palladonventures.com
Web: www.palladonventures.com
www.ironbullmining.com

Salt Lake City, Utah, July 2, 2008. Palladon Ventures Ltd. (TSX.V: PLL) (Frankfurt: PV-1) provides an update on progress at the Iron Mountain facility near Cedar City, Utah in anticipation of the start-up in the third quarter of 2008. Final construction of facilities and pre-production activities at the site are currently underway. As announced on June 27, 2008, Palladon has now acquired 100% of the project and has closed on financing more than adequate to fund all capital and operating costs to commence production of run-of-mine ore to fulfill the contract with China Kingdom, International (“CKI”).

Palladon Iron Corporation has signed a 5-year contract with Gilbert Development Corp. to be the Company’s contract miner on the Iron Mountain project. Gilbert will perform all mining duties at the site with the major elements including drilling, blasting, crushing, screening, hauling, blending, conveying and stacking and railcar loading, based on the mine plan developed to meet the contract. Palladon personnel will oversee Gilbert’s operations and will conduct all operations for the mix of ores to be hauled to the stockpile, survey primary elevations of the benches, toe and crest limits for the mining pit, and percentage grade on all roads, based on permitting requirements.

The site is being prepared for the installation of the crushers, load-out facility and the stacker. The new stacker, a 42-inch-by-170-foot swing-axel radial telestacker conveyor, was received at site and will be installed in the next two weeks. This rotary stacker is capable of blending and storage of approximately 130,000 tons of material prior to loading on the trains. The stacker is portable and can easily be relocated within the Iron Mountain property.

Palladon Iron has signed a contract with GSL Electric to provide secondary power at the site. The high-voltage power will be provided through the newly-erected 138kVA transmission distribution line and reduced to 4160 volts in the newly-constructed 13 MW substation. Power distribution will be to the crushers, radial stacker, conveyors, load-out, and office facilities through step-down transformers. All power poles, wire and switches for the 138kVA line are installed and ready for power. All power should be operational by August 1, 2008.

“This has been a very exciting last few months with the signing of the long-term contract with CKI and buying out Luxor Capital Group’s stake in the iron mine. Palladon now controls the entire project, has sufficient working capital, and is at a tremendous pace to begin shipping by Q3 of this year,” said Donald G. Foot Jr., President and CEO of Palladon Ventures, Ltd.

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.

For Further Information Please Contact:

Donald G. Foot, Jr.
President and Chief Executive Officer
Palladon Ventures Ltd.
Tel: 801-521-5252
Fax: 801-521-5454
Email: info@palladonventures.com
Web: www.palladonventures.com

Salt Lake City, UT, June 27, 2008. Palladon Ventures Ltd. (“Palladon” or the “Company”) (TSX.V: PLL) (Frankfurt: PV-1) is pleased to announce that it has completed the acquisition of its joint venture partner’s interest in Palladon Iron Corporation (“PIC”) from Luxor Capital Partners, LP (“Luxor”) under the terms announced on June 4, 2008.

The Company is also pleased to announce that it has closed its private placement announced June 4, 2008. The private placement consists of 87,375,169 units at a price of C$0.70 per unit (US$0.688 per unit) for gross proceeds of C$61,162,618 (US$60,022,667). Each unit consists of one common share plus one quarter of one common share purchase warrant. Each whole warrant will entitle the holder to purchase one additional common share at a price of C$1.00 per warrant share for a period of 18 months from closing.

The Company will also issue 871,885 units in lieu of cash to a U.S.-based financial services firm as part of the 6% advisory fee for the equity private placement.

All securities are subject to a four month hold period expiring October 27, 2008.

Management plans to hold an investor conference call within the next week to discuss the completed transactions and to provide an update on the Company’s progress on the project.

Furthermore, the Company is also pleased to announce that it has filed with the applicable Canadian securities regulatory authorities on SEDAR an updated Technical Report dated June 18, 2008 (the “Technical Report”) for its Iron Ore Project. The Technical Report will also be made available on the Company’s website at www.ironbullmining.com.

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.

For Further Information Please Contact:

Donald G. Foot, Jr.
President and Chief Executive Officer
Palladon Ventures Ltd.
Tel: 801-521-5252
Fax: 801-521-5454
Email: info@palladonventures.com
Web: www.palladonventures.com

Linked below is a copy of the .pdf file of the report for the Iron Springs District. The document contains information about the Iron resources and geology of the Iron Mountain area. The document was prepared by R. H. Russell, M.Sc., Licensed Geologist for Palladon Ventures Ltd.

Technical Report For the Iron Springs District

Soaring raw-materials costs are forcing the world’s steelmakers to shift strategy. Now, rather than seeking merger partners in their own industry in hopes of gaining market clout, they are trying to protect their access to iron ore and coal by investing in mines.

Steelmakers often owned their own mines in the industry’s early days because few other companies had the capital needed to operate them. But in today’s climate, their goal is to lessen their dependence on big mining companies, whose steep price increases are squeezing steel-making profits. The steel industry’s race for minerals, however, pits it directly against those mining giants, who are equally eager to snap up any coal or iron-ore deposits that go on the block.

A consortium made up of Chinese steelmakers and China’s sovereign wealth fund is entering the initial round of bidding for a stake in the iron-ore unit of Brazil’s Companhia Siderurgica Nacional SA, people familiar with the situation said Thursday. The group’s interest, though preliminary, shows the importance China places on securing supplies of ore and other natural resources amid the current commodities boom.

ArcelorMittal, the world’s largest steelmaker, having recently purchased a series of iron-ore mines in Africa, Canada and Russia and coal mines in Kazakhstan, India and South America, now touts itself as the “world’s fastest-growing mining group.” Last month, it spent $631 million to buy a 14.9% stake in Australia’s Macarthur Coal Ltd., the world’s largest producer of pulverized coal, a type of coking coal used in steelmaking, thwarting Swiss miner Xstrata PLC’s plans to take over Macarthur.

“Ensuring a reliable source of raw-material supply is more important than ever,” Lakshmi Mittal, chief executive of ArcelorMittal, said in an interview. The steelmaker, whose mines supply about 46% of its raw-material needs, has set aside $5 billion to buy enough of them to provide 70% of its needs by 2012.

Since 2003, the industry has been swept up in a wave of consolidation, with steelmakers bulking up to feed the developing world’s growing demand for bridges, buildings, power plants and other infrastructure projects. Among other deals, Arcelor SA of Luxembourg merged with Mittal Steel Co. of India and another Indian company, Tata Steel Ltd., merged with Britain’s Corus Group. Now that wave is decelerating.

Instead, steelmakers are plowing profits into reducing their vulnerability to spikes in raw-materials prices. In the past year, coal prices have more than doubled, while iron-ore prices have risen almost 70%.

“The structure of the steel industry is changing,” says Peter Fish, chairman of MEPS International Ltd., a London-based steel research and consulting firm. “It used to be that raw materials accounted for 15% of selling prices. They now account for about 50% of selling prices.”

While China is a huge consumer of steel, it is largely bereft of quality iron-ore deposits, which is why several Chinese steelmakers are moving to secure their own supplies.

CSN, one of Brazil’s leading producers of both steel and iron-ore has invited bids for all or part of Nacional Minerios SA, its unlisted iron-ore unit. Major Chinese producers including Baosteel Group Co., Shougang Group and Shagang Group, as well as China Investment Corp., a $200 billion investment pool run by the Chinese government, are interested in the unit, a person familiar with the matter said. But the composition of the consortium isn’t final, this person said.

CSN has hired Goldman Sachs Group Inc. as its financial adviser for the sale.

Last Friday, Sinosteel Corp., a state-owned Chinese steelmaker said it boosted its stake in Australian iron-ore group Midwest Corp, slightly to nearly 44%, boosting its efforts to take over Midwest.

Other, smaller Chinese steelmakers are also trying to line up more iron-ore. Tonghua Steel, the largest steelmaker in northeast China’s Jilin province, plans to buy or invest in eight mines near its mills. Company officials say Tonghua can supply only about 20% to 30% of its own iron-ore needs and has to turn the mining companies for the balance. The company hopes to increase its self-sufficiency in ore to more than 50% by the end of 2010.

Taiyuan Iron & Steel, a carbon-and stainless-steel producer in northern China’s Shanxi province has said it plans to raise its self-sufficiency to 80% from 50%. As Chinese steelmakers go on the prowl for resources, Marius Kloppers, chief executive of Australia-based mining giant BHP Billiton Ltd., one of the world’s biggest iron-ore producers, said he wouldn’t be surprised by a Chinese buy-up of his company’s shares.

The race for raw materials is also heating up in other parts of the world. Brazilian steelmaker Usinas Siderurgicas de Minas Gerais SA, or Usiminas, said it will spend $750 million to invest in more mines over the next five years to nearly quintuple its iron-ore output to 29 million metric tons a year. Usiminas already has spent $1 billion this year to buy miner J. Mendes and its subsidiaries. In India, Steel Authority of India Ltd. and Tata Steel signed a deal earlier this year to form a coal-mining joint venture.

Salt Lake City, UT, June 4, 2008. Palladon Ventures Ltd. (“Palladon” or the “Company”) (TSX.V: 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.

For Further Information Please Contact:

Palladon Ventures Ltd.
Email: info@palladonventures.com
Web: www.palladonventures.com

Cedar City, UT, May, 14, 2008. The long wait for the mines at Iron Mountain to reopen soon will be over. Palladon Iron Corp. recently announced that it has reached a five-year contract with China Kingdom International Minerals & Metals Co., Ltd., based out of Beijing.

Palladon Ventures, Inc., the parent company, purchased the iron-ore mine 20 miles west of Cedar City from bankrupt Geneva Steel in 2006.

“This agreement enables us to begin production because we now have a buyer,” said Frank Dolce, Palladon vice president of logistics. “There’s still a lot of work to be done, with transportation being the largest factor with use of the rails and solidifying a port on the West Coast, but we’re closer to completing those phases and are finalizing the details with shipping anticipated to begin the later part of this year.”

Longtime resident Evelyn Jones said the mines were once operated by Utah International and U.S. Steel. Her husband, the late York Jones, was the manager for Utah International.

When it closed in the late 1970s, the entire community was affected adversely because iron-ore mining was a key component of the area economy, she said.

“When the mines closed it really had a big effect of Cedar City because the (manufacturers) paid so much in taxes,” Jones said. “The city didn’t have any big industry to fill in when the mines closed and so it was quite economically devastating to have the mines shut down.”

Mayor Gerald R. Sherratt said half of the property tax revenues at that time were generated by the mining companies. When residents were forced to pick up where the mining industry left off, the entire town hit an economic slump, he said.

“The reopening of the mines will be a major economic boom and contribute to growth and improvement for the entire county,” Sherratt said. “Eventually, there will be excellent paying jobs, and increased use of the rails and more attention to Cedar City to build tourism.

“While we hate to see our resources going to China, every little bit helps,” he added.

Locally-owned company Gilbert Development Corp. will conduct contract mining at the Comstock Iron mine and will mobilize to produce iron-ore concentrate for sale to the international customer, Dolce said.

China Kingdom International and its Australian operating subsidiary, China Kingdom International Australia, will purchase the run-of-mine iron ore at an initial rate of 2 million metric tons, Dolce said.

The electric substation facility has been installed, grounded and charged, and it is ready to be connected to the Cedar City power grid. Once the pending shipping dates have been set and the mobilization of mining and shipping is off and running, Palladon anticipates reinvesting some of the revenues from the sales into a formal feasibility study to help finance the eventual construction of a processing plant on-site, according to a statement from the company.

“It’s been a long time coming, and we’re very excited that the project is moving forward because we know what the mines have meant to the community,” Dolce said. “The contract with CKI means that the production phase is under way and the shipping phase has started, and Palladon is well on its way to playing a key role in the community with the significant cash flow generated by this contract,” Dolce said.

Weaver, Jennifer. "Buyer Means Mine May Open Soon." Cedar City Daily News 14 May 2008: a1+.

• 5/8/2008--IRON COUNTY'S WWII-ERA ORE MINE TO SEE NEW LIFE


• 4/19/2008--PALLADON ANNOUNCES CONFERENCE CALL TO DISCUSS IRON ORE SALES AGREEMENT


• 4/1/2008--PALLADON SIGNS LONG-TERM IRON ORE SALES AGREEMENT
  
  
• 8/21/2007--IRON BULL MINING & MILLING POURS CONCRETE FOR SUBSTATION FOUNDATION


• 8/13/2007--EXPLORATION DRILLING AND JBR ENVIRONMENTAL


• 6/28/2007--PALLADON UNVEILS IRON BULL MINING AND MILLING TO THE IRON COUNTY COMMUNITY