Mill work hampers NAP’s output

Maintenance work at the mill that serves North American Palladium‘s (PDL-T) Lac des les mine, near Thunder Bay, Ont., cut into palladium production during the first three months of 2003.

In the first quarter, 1.3 million tonnes of ore grading 2.7 grams per tonne were sent to the mill, resulting in 91,261 oz. palladium. The average recovery rate in the 3-month period was 77.3% for palladium.

In the final quarter of 2003, the mill extracted 94,114 oz. palladium from 1.5 million tonnes of ore grading 2.6 grams palladium, for a recovery rate of 75.1%.

Still, the latest quarter’s production represents a 55% increase over the year-earlier period, when head grades averaged 2 grams palladium.

The recent quarter’s haul also included 6,983 oz. platinum, 7,755 oz. gold, 600 tonnes nickel, and 971 tonnes copper.

Mill availability was slightly under budget during the quarter as the company worked to repair the semi-autogenous grinding circuit and install larger pump motors and pump boxes.

Meanwhile, NAP has sought approval from regulators to sell up to $100 million worth of shares, warrants, and stock purchase contracts over 25 months. The company did not say what it plans to do with the proceeds.

The company plans to build a 2,000-tonne-per-day underground mine at Lac des les at a cost of about $65 million.

Combined with the existing open-pit mine, the new operation is expected to generate $92 million in cumulative pretax cash flow at a palladium price of US$325 per oz.