Abstract

The Iron Mountain area lies at the southwestern end of the elongate Iron Springs mining district, near the northeastern edge of the Basin and Range Province, in southwestern Utah, just west of the Colorado Plateau province. This area is characterized by generally northerly trending mountain ranges separated by broad valleys. The physiography of the area is principally the result of Tertiary, northerly trending normal or block (Basin and Range) faulting beginning more than 10 million years ago and continuing to the present time.

The Iron Springs district is a northeast-trending belt of magmatic-hydrothermal magnetite-hematite iron deposits surrounding three large, 22 to 21 Ma quartz monzonite laccoliths. The 5-kilometer- (3 mile-) wide by 35-kilometers (22 mile-) long district hosts some of the largest iron deposits in the western United States. The deposits are exposed in Iron Mountain, Granite Mountain, and Three Peaks mountains which are all cored by laccoliths. These igneous domes intruded into the sedimentary rocks and replaced favorable geologic units. The most permissive unit for replacement is the Middle Jurassic Homestake limestone member of the Carmel Formation, which generally hosts the massive magnetite and hematite bodies around the perimeters of the laccoliths.

Palladon Ventures Ltd. through its subsidiary Palladon Iron Corporation holds mineral property formerly held by Geneva Steel in Iron County, Utah. This property contains much of the known iron resources of the previously-productive portions of the Iron Springs district, including the Iron Mountain area. The mining history of the Iron Springs district extends back to 1851, and the district was perhaps the first mining area investigated and developed in the state of Utah. The total district production from inception to the present is estimated to be just under 100 million long tons of iron ore.

A compilation of historic resource estimates by Geneva Steel determined that the property now held by Palladon contains approximately 156.6 million metric tons of global indicated iron resources at a weighted average grade of about 44.0% Fe. Palladon believes that the iron resource can be significantly expanded and is currently working toward that end. The data from the drilling conducted over the past few decades demonstrate the existence of a number of iron-bearing replacement bodies flanking the Iron Mountain laccolith, most of which constitute the aforesaid resource. Future plans at Iron Mountain include upgrading the known and indicated iron resources to reserve status by confirmatory drilling in the Comstock/Mountain Lion deposits. The other major undeveloped deposit held by Palladon, the Rex deposit on the southwest flank of Iron Mountain, is also deep. Palladon is currently evaluating various mining techniques for this deposit.

Palladon, through its operating subsidiary Iron Bull Mining and Milling Company, is aiming to produce and ship initially about 2.0 million metric tons of iron ore per year from the Comstock/Mountain Lion deposit, with the goal of ultimately expanding that production to at least 4.0 million mt per year. However, Palladon presently is operating within the adverse economic climate created by the financial crisis of 2008 and the following world-wide economic downturn. Although the original plan was to ship run-of-mine ore from the Comstock/Mountain Lion deposit to a buyer in China, for economic and other reasons shipments have not yet been made. At the present time, Palladon is neither mining nor shipping any ore-grade material for steel manufacture.