More cash for Iron Mountain lifts Palladon

More money has come in and Palladon Ventures’ (PLL-V) shares are rising as a result.

The company’s partner at the Iron Mountain project near Cedar City, Utah has secured the second US$20 million tranche of a US$45 million loan which should clear the way for the company’s to finish up the construction of a concentrator at the site.

The capital was secured by Palladon’s partner at the project, privately-held CML Holdings – a company that was formerly known as Palladon Iron Corporation — with the funds coming from Credit Suisse.

The loan came with, as most loans from financial institutions to miners do, a hedge book which will see 62% of concentrate production from 2012 and 2013 sold on forward pricing. The hedge book breaks down as iron concentrate from 2012 being sold for US$144 per tonne and concentrate from 2013 will be sold for US$136 per tonne.
The concentrator is expected to be up and running by February of next year at a total capex of US$65 million. Once complete it will fulfill the company’s promise to do on-site processing of ore at Iron Mountain.

The project currently hosts probable iron reserves of 34 million tonnes with an average iron grade of 44.9%.

Midday in Toronto on July 29, the day after the news was released, the company’s shares were up 14% or 18¢ to $1.43 on 138,000 shares traded.

Iron Mountain will get a further infusion of cash thanks to a second financing deal that CML closed with Tangshan Investments. That deal will see Tangshan take a 10% stake in the company for $18 million. It also wins the right to appoint five CML directors.

Iron ore at the property was first discovered by Mormon pioneers back in 1849 and roughly 80 million tonnes of iron ore was produced in the area from 1869 to 1996.

Palladon bought the mine in 2005 and mining got underway in 2010. That mining, however, consisted solely of shipping run-of-the-mine ore to China.