The primary crusher and electrical substations at North American Palladium‘s (PDL-T, PAL-X) Lac des Iles mine in northwestern Ontario remain idled after a leak in the mine’s tailings dam on Feb. 4.
The company says the leak has been plugged with a mixture of solidified tailings and hay, and that a dam has been built to prevent further flooding. Work continues to pump the remainder of the water from the milling area.
NAP chief executive Jim Excell said in a prepared statement that the leak occurred in a contained area of the mine and thus “does not pose a threat to the surrounding environment.”
The mine’s open-pit and underground mining operations remain unaffected.
The latest crusher shutdown comes on the heels of an unscheduled shutdown in early January to replace the mainframe component. The work was done after the milling circuit suffered through intermittent stoppages throughout December owing to operational issue with the crusher.
Those interruptions in the crushing cycle clipped fourth quarter mill throughput and availability. The associated need to process stockpiled ore also push feed grades lower, and saw many chute blockages due to frozen rock chunks.
In the end, the mill managed to squeeze 36,833 oz. of palladium out of 1.1 million tonnes of ore averaging 1.47 grams palladium per tonne, for an average recovery rate of 70.7%. That compares with the 39,532 oz. recovered from 1.3 million tonnes of similar grade ore during the third quarter, when recoveries averaged just 62.9%. The improved recovery rate reflects ongoing improvements to the flotation circuit.
Overall, production in 2005 slipped by 43% from a year earlier to 177,167 oz. The average recovery rate rang in at 69.6%
Looking ahead, palladium production is expected to increase in 2006 as the mine’s underground operations kick in during the first quarter. Underground mining will target Main High Grade zone beneath the ultimate pit floor at a rate of 2,000 tonnes per day. The ore, averaging 6.62 grams palladium, will be combined with 13,500 tonnes a day from the open pit to yield a feed averaging 2.33 grams palladium per tonne. The underground operation will run for at least 5 years.
At the end of 2004, underground reserves stood at 3.5 million tonnes running 6.62 grams palladium, 0.4 gram platinum, 0.3 gram gold, plus 0.07% copper and 0.08% nickel, based on a cutoff grade of 4.5 grams palladium.
Another 600,000 tonnes of indicated resources grade 7 grams palladium, 0.4 gram platinum, 0.3 gram gold, 0.06% copper and 0.07% nickel. Inferred Resources come to 5.4 million tonnes of 6.1 grams palladium, 0.3 gram platinum, 0.3 gram gold, 0.07% copper and 0.12% nickel.
Shares in North American Palladium were off 49, or 4%, at $11.77 in afternoon trading in Toronto following the news on Feb. 8.
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