NA Palladium ups Lac des les resource

The world’s largest open-pit palladium deposit, and Canada’s only primary producer of the metal, just got bigger.

The Lac des les mine of North American Palladium (PDL-T) is situated near Thunder Bay, Ont., and consists of a 2,400-tonne-per-day flotation mill fed from adjacent open pits. Concentrates are trucked to Sudbury for custom-smelting and then shipped to Norway for refining.

Measured and indicated resources now stand at 38.8 million tonnes grading 2.4 grams palladium per tonne, plus 0.21 gram platinum, 0.21 gram gold, 0.075% copper and 0.092% nickel. This includes material already blocked out for mining, and represents a nearly 200% increase over the estimate reported in early 1998.

G.F. Raymond, an independent consulting engineer, calculated the resource using a cutoff grade of 1.37 grams palladium and incorporating results from 393 core and 183 percussion holes completed since the Roby zone was discovered in 1974. Nearly 80% of the resource falls in the measured category, with the remainder classified as indicated. (Based on its operating experience, the company excludes inferred mineralization.)

Mineralization in the Roby zone has been delineated over a strike length of 823 metres and down to a maximum depth of 396 metres. It remains open at depth and to the south.

The increase is welcome news to North American Palladium, which plans to expand annual production three-fold in an effort to reverse a nearly consistent string of losses since advancing the mine to production in 1993. To that end, in 1998 the company added new management and implemented new operating strategies, resulting in a small profit in each of the first and fourth quarters. That was followed by the more recent sinking of 48,000 metres of infill and stepout drilling.

“This marks a significant improvement,” says Keith Minty, president of North American Palladium. “We are turning the corner here.”

He notes that results from 13,000 metres of recent drilling are not included in the estimate and that metallurgical studies are determining if a lower grade can be milled. Current results alone add 700,000 oz. to the palladium content when the cutoff grade is lowered to 1 gram.

Minty adds that a feasibility study should begin in the coming weeks. Another $1 million is budgeted for the remainder of the year, adding to the $3.5 million spent so far.

Meanwhile, the search for platinum group elements (PGE) elsewhere in Ontario is sure to intensify, following independent decisions by South African majors Anglo American Platinum and Impala Platinum to option a combined 25,000 ha near Sudbury.

Amplats, the world’s largest producer of PGEs, can earn half-interests in more than 18,000 ha owned or under option to Pacific North West Capital (PFN-A). To do so, it must pay $300,000 upfront and spend $4 million on exploration over the next five years, of which $1.5 million has been committed for the first two years.

Janes is the most advanced property, having several showings outlined over a strike length of 500 metres. Limited drilling along that zone has returned up to 9.03 grams combined platinum, palladium and gold per tonne, plus copper and nickel, over 3.06 metres.

Mineralization is hosted by the Nipissing Diabase, where it contacts the surrounding sedimentary rocks, and has been traced down to 80 metres below surface. Results show it to contain three to seven times as much palladium as platinum, with gold typically assaying less than 0.5 gram.

Impala, second to Amplats in PGE production, can earn 60% interest in the nearby 7,104-ha River Valley property of Mustang Minerals (mmin-c). That property overlies a gabbro-anorthosite intrusion of the same name and is still at the preliminary exploration stage.

To earn its interest, Impala must spend $6 million over five years and pay $215,000 in cash over four years.

Both agreements have yet to be approved by regulators.