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Saturday, February 05, 2011 12:02:04 PM

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News Release - February 03, 2011
Palladon Ventures - CML Update


Vancouver, British Columbia -- February 3, 2011. Palladon Ventures Ltd. ("Palladon" or the "Company") (TSX-V: PLL.V) announces the following update from Dale Gilbert, CEO of CML Metals Corporation.


CML Metals Shareholder Update

Dear Shareholder,

I am pleased to provide an update concerning our financing and plant construction.


On Monday, January 31st CML closed the first $20mm tranche of a two-tranche, $45mm loan with Credit Suisse. The first tranche is fully collateralized by $20mm of the approximately $25.6mm cash the Company raised from its shareholders in December of 2010 and January of 2011. The proceeds of the first tranche will be used to fund capital expenditures related to the construction of the concentrate plant. The $25mm second tranche and the $20mm of cash collateral backing the first tranche will be released to fund the remaining capital expenditure required to construct the plant upon the Company meeting certain conditions, precedent to closing, including the production of an Independent Engineer's report satisfactory to Credit Suisse, in its sole discretion. The Company hopes to close the second tranche of the facility in the second quarter of 2011.

The terms of the facility include an interest rate equal to the following: a) between the closing of the facility and the earlier of: the funding of the second tranche, or the maturity of the first tranche (in the event the second tranche fails to close)- LIBOR + 3%; b) between the closing of the second tranche and the completion of the concentrate plant (including a ramp-up period)- LIBOR + 6%; c) thereafter- LIBOR + 5%. In the event the second tranche closes, the facility shall begin amortizing in the second half of 2012 with a final maturity date of January 2015. In the event the second tranche fails to close, the first tranche will mature on June 30, 2012.

Plant Construction

We continue to make substantial progress at CML as we begin to realize our goal of completing a 2mm ton per year concentrate facility at Iron Mountain. Construction has already commenced on the site, with earthwork being completed in preparation for the start of building construction in the forthcoming weeks. The building itself has been purchased and has entered into the final design and manufacturing process. Equipment procurement has started with the purchase of a SAG Mill (Semi-Autogenous Mill), the primary grinding mill in the plant and longest-lead time component, and RFQ's have been issued for most other major components.

The addition of Credit Suisse as a partner to our project is an exciting development and one that further validates all the hard work the CML team has put into this project the past year. The company is proud to be working with world class partners and their involvement in the project gives us even greater credibility in the industry. We'd also like to thank our financial advisors, RK Equity Advisors for arranging and structuring the financing. RK Equity remains on retainer with the Company as we seek to close the second tranche of the Credit Suisse facility and as continued financial advisors to the company.

Thank you for your continued support.

Dale Gilbert
CEO CML Metals Corporation

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