NA Palladium closes Lac des les crusher

Vancouver — Problems with the primary crusher at its Lac des les mine in northwestern Ontario has prompted North American Palladium (PDL-T, PAL-X) to take the unit temporarily off-stream for repairs.

The disruption will affect the palladium operation’s milling circuit, which underwent intermittent stoppages throughout December due to the crusher issues. The mill will see a reduction in throughput to 7,500 from 9,000 tonnes per day during the downtime. Portable crushing units have been ordered to allow operations to resume while the main unit is being repaired.

Lac des les is an open-pit palladium producer with byproduct nickel, platinum, gold and copper. The company is developing an underground mine at Lac des les, targeting the Main High Grade zone beneath the ultimate pit floor. The program is expected to cost about $40 million with initial underground production anticipated in early 2006.

Lac des les produced about 140,000 oz. palladium (with about 128,000 oz. payable) in the first nine months of 2005, down significantly from the 246,000 oz. palladium produced in the corresponding period of 2004 due to lower grades and increased stripping ratios. Lac des les also produced 15,000 oz. platinum, 11,000 oz. gold, 4.4 million lbs. copper and 1.8 million lbs. nickel in the first three quarters of 2005.

North American Palladium’s hedge contract, guaranteeing a floor price of US$325 per oz. palladium, expired on June 30, 2005, negatively affecting revenues. The company now sells its output at either monthly average or spot prices. Fortunately for the company, spot palladium prices have rallied from the US$190-per-oz. level throughout most of 2005, to the recent US$265-per-oz. range.