UPDATE: MONDAY, AUGUST 18, 2008

TIPPLE

Progress this week centered on transportation and installation of the tipple to replace the old one that was damaged by vandals over the years of inactivity (Figure 1) and had to be demolished. The tipple is an integral part of the plant as it is used to weigh the iron ore and deliver it to the rail cars.

Figure 1: Old Tipple Being Demolished

The tipple was manufactured at Gilbert Development’s crusher manufacturing facility approximately 40 miles south of the mine. The first two sections were then transported to the site for installation (Figure 2 and Figure 3).

Figure 2: Moving Tipple On Hwy 56

Figure 3: Tipple Bottom Section Entering Through Gate

Once the sections were received, installation started immediately. The bottom section was unloaded and moved into position on the foundation (Figure 4).

Figure 4: Unloading Bottom Section of Tipple

The Bottom section was bolted into place and then the second section was moved above the bottom section for installation (Figure 5).

Figure 5: Second Level of Tipple Being Placed

With both sections mounted, the welders started to secure the facility. The next phase will be to add the bin that will hold the material for loading into the rail cars, and then connecting the conveyor system and the weigh scales.

Figure 6: Welding the Bottom Two Sections Together

CRUSHER

The large primary crusher is currently being installed at the site (Figure 7). The primary crusher will handle all 2M tonnes of the mined ore while the smaller crusher that is currently crushing ballast, will be used for supplemental crushing and during scheduled maintenance. This is an 84” horizontal impact crusher and is the largest one in the world.

Figure 7: Primary Crusher Installation

EXPLORATION

Palladon has signed an agreement with EDCON-PRJ to obtain an ultra-light airplane aeromagnetic survey over the Iron Mountain Project. The area of the survey will cover the entire Iron Mountain area and will include future potential resource areas. The data will be acquired along flight lines oriented E-W with 200-meter line spacing. Tie lines will be oriented approximately N-S with 800-meter line spacing. A high sensitivity optically-pumped magnetometer will be used with the magnetic data sampled and recorded digitally at 0.1-second increments to a resolution of 0.01 nT.

This will be the first aeromagnetic survey completed on the entire area and will utilized current state-of-the-art technology with high-precision and resolution. Areas identified as potential resource sites will be evaluated by the geology staff and drilling performed where applicable.

The survey will be completed by September 30, 2008.