SALT LAKE CITY, UTAH -- (Marketwire) -- 12/04/09 -- Palladon Ventures Ltd. ("Palladon" or the "Company") (TSX VENTURE: PLL)(FRANKFURT: PV-1) is pleased to announce that effective immediately the Company and Luxor Capital Partners, LP ("Luxor") have entered into a letter agreement (the "Letter Agreement"), subject to TSX Venture Exchange approval, to the extension agreement dated June 26, 2009 and to the standstill agreement dated October 15, 2009.

The Letter Agreement grants Palladon an irrevocable option (the "Payment Option") to acquire from Luxor the entirety of its outstanding loans including interest, currently equal to approximately $39.4 million (the "Loan Amount"), by paying $30 million on or before March 31, 2010.

In the event that the Company does not exercise the Payment Option on or before March 31, 2010, Luxor has agreed to reduce the then outstanding $41 million Loan Amount to $25 million, in exchange for transfer and assignment by the Company of 50% of the equity of Palladon Iron Corporation to Luxor (the "Luxor Equity"), subject to terms and conditions to be set out in a definitive agreement. Palladon Iron Corporation is Palladon's wholly owned subsidiary, through which it is pursuing development of the Iron Mountain Project, an iron ore deposit located in southwest Utah, USA.

The $25 million Loan Amount will then bear interest at the rate of three-month LIBOR plus 5%, with a minimum rate of 8%. At Palladon's option, all or any portion of the interest due on any interest payment date may be paid by adding such interest to the principal amount, with such unpaid interest accruing interest from such Interest Payment Date at the foregoing rate and being treated for all purposes as principal.

Furthermore, in the event that Palladon does not exercise the Payment Option on or before March 31, 2010, it shall have a three-year option to purchase 50% of the Luxor Equity for $18.75 million.

Palladon will use its best efforts to secure the required financing by the March 31, 2010 deadline. With the execution of the Letter Agreement the Company plans to raise a minimum of $1 million to fund ongoing operations and to continue advancing the Iron Mountain project on a number of fronts.

Palladon CEO John Cutler stated: "We are pleased to have reached this agreement with Luxor Capital whereby we have a clear path forward, the opportunity to retire the Luxor Loans at a significant discount and move forward with no debt on the balance sheet. By quantifying a firm repurchase price, this Letter Agreement allows Palladon to communicate a clear capital structure to investors interested in funding the Payment Option. The Company will announce its plan to fund the Payment Option as soon as is practicable."

On Behalf of the Board of Directors,

John W. Cutler, President and Chief Executive Officer

About Palladon

Palladon Ventures Ltd. is a junior resource company focused on advancing the Iron Mountain Project, an iron ore mine located west of Cedar City, Utah.

Disclaimer for Forward-Looking Information

Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding: (1) Palladon will use its best efforts to secure the required financing by the March 31, 2010 deadline and (2) Palladon's plans to raise a minimum of $1 million to fund ongoing operations and to continue advancing the Iron Mountain project on a number of fronts. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management's current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) a downturn in general economic conditions in North America and internationally, (2) the inherent uncertainties and speculative nature associated with mineral exploration and production, (3) a decreased demand for minerals, (4) any number of events or causes which may delay or cease exploration and development of the Company's property interests, such as environmental liabilities, weather, mechanical failures, safety concerns and labour problems; (5) the risk that the Company does not execute its business plan, (6) inability to retain key employees, (7) inability to finance operations and growth, (8) other factors beyond the Company's control; and (9) the risk that the Company will not be able to raise funds due to Luxor Capital Group. These forward-looking statements are made as of the date of this news release and, except as required by law, the Company assumes no obligation to update these forward-looking statements, or to update the reasons why actual results differed from those projected in the forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.