Vancouver — With underground operations now fully on-stream, North American Palladium’s (PDL-T, PAL-X) Lac des les mine, just north of Thunder Bay, Ont., showed improved performance over its second-quarter production period.
Palladium output for the latest quarter came in at 57,326 oz., a 22% rise over first-quarter production and up 19% from last year’s corresponding quarter. Additionally, byproduct metal production in the latest quarter was 5,487 oz. platinum, 4,200 oz. gold, 619,276 lbs. nickel and 1,258,978 lbs. copper.
Blending of richer ore from the recently commissioned Lac des les underground operations boosted average mill feed grade to 2.22 grams palladium per tonne in the latest 3-month period, up from 1.79 grams palladium in the first quarter and 1.78 grams in the second quarter of 2005. Higher recoveries were also realized in the most recent quarter with 73.1% for palladium (versus 70.2% in last year’s second quarter) from 1.1 million tonnes of ore processed from April 1 to June 30, an average of 12,105 tonnes per day.
North American Palladium reaped the benefit of a significant rally in the spot palladium price, which averaged US$347 per oz. over the latest quarter, up from US$290 per oz. in the first quarter and US$192 per oz. in last year’s second quarter.
Plagued by recent processing issues and equipment shortfalls, the company continues to improve operations at Lac des les. Mill availability rose to 88.3% in June with further refinements expected to boost the figure to over 90% later this year.
Earlier this year, the mine suffered a tailings dam leak that took production off-stream for almost two weeks, and in 2005, crusher problems negatively affected throughput resulting in a significant drop in metal production.
Proven and probable open-pit reserves at Lac des les, as of year-end 2005, was 13.5 million tonnes grading 2.13 grams palladium per tonne, 0.22 gram platinum per tonne, 0.16 gram gold per tonne, 0.07% copper and 0.06% nickel. Underground probable reserves stood at 3.5 million tonnes at 6.62 grams palladium, 0.4 gram platinum, 0.34 gram gold, 0.07% copper and 0.08% nickel.
Open-pit mining is currently in phase four at the Roby pit where the company expected to extract about 16 million tonnes of rock in 2006. It anticipates the strip ratio will drop to 2.1:1 this year compared to the 2005 strip ratio of 3.1:1.
About 18% of the mill feed is now supplied from underground operations, currently producing over 2,000 tonnes per day from the second and third stopes of the Main zone. Underground mining is targeting the main mineralized ultramafic intrusive unit that extends beneath the ultimate pit floor. The deeper Offset zone may be mined in the future.
Shares of North American Palladium trade in a 52-week range of $5.02-$14.88.
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