Palladon bought out of copper project

Western Utah Copper has ended its joint venture with Vancouver-based Palladon Ventures (PLL-V) by buying it out of the Western Utah Copper project.

Western Utah is buying Palladon out for US$3 million in cash, and US$10 million payable as a 1% net smelter royalty from copper produced from known ore, and a 2% net smelter royalty from any copper from newly discovered ore bodies.

In Toronto on Jan. 9, Palladon shares remained unchanged at 36 on 2,000 shares traded.

The two companies had restructured the project in August of 2006 giving Western Utah the option to purchase Palladon’s interest on or before January 4, 2007.

Palladon originally earned-in back in 2003 by agreeing to finance and develop the project. That deal allowed Palladon to earn a 50% working interest in the project by updating a feasibility study and spending up to US$4 million over five years.

While the project still doesn’t have a NI 43-101 compliant resource estimate, historical drilling returned an intersect of 486 feet grading 0.70% copper.

Palladon says proceeds of the sale will be used to pay down principal on the outstanding term loan to Luxor Capital Partners on the debt outstanding for the Iron Mountain Project a project the company says will now be the focus of its efforts and cash resources.

Iron Mountain has a historic resource of 170 million tons grading 44% iron.

The company made its first iron sale in August of 2006 from stockpiles at Iron Mountain. The sale was for a 500 ton shipment coming from roughly 100,000 tons of iron ore with an average grade of 56% iron.