Conlon joined the Stags in January until the end of this campaign, and has since scored 5 goals.
"I have had a chat with Barry and said to him at this moment in time there will be nothing for him here," Dearden told the Nottingham Evening Post on Tuesday.
"When he was brought in, it was on the understanding that it was until the end of the season. It was only ever going to be long term if he did the business for me out on the pitch."
Fellow striker Martin Gritton, who has been on loan from Lincoln, has already been told that no deal will be offered to him for next season.