North American Palladium (PDL-T) hopes to have the mill at its Lac des les palladium mine in northwestern Ontario running through ore at the rate of 15,000 tonnes per day by the end of September.
The company has taken a major step towards meeting its goal by commissioning a major expansion at the mine. The entire process circuit has been tested and preparations are under way for the mill to increase throughput to the nameplate capacity. The primary crusher is processing ore and the new mill recently produced its first palladium-rich concentrate.
The final price tag for the expansion is estimated at $220 million, up from the original $208 million. The increase is due to scoping changes and the replacement and retrofitting of several poorly fabricated, vendor-supplied components, including a rebuilt pebble crusher.
The production estimate for 2001 has been lowered to 150,000 oz. palladium, down from the original 200,000 oz. The decrease takes into account delays in the delivery of loading equipment and concentrator components from suppliers. Second-quarter earnings should fall in line with the $3.7 million (or 7 per share) earned on revenue of $20.2 million in the first quarter of this year.
In 2002 and 2003, production estimates are upped to more than 300,000 oz. Over the 17-year mine life, average annual metal production is pegged at 250,000 oz. palladium, 23,000 oz. platinum, 18,000 oz. gold, 6 million lbs. copper and 2 million lbs. nickel. In 2000, the miner produced 95,116 oz. palladium, 6,074 oz. platinum and 6,035 oz. gold, plus copper and nickel. Cash costs averaged US$142 per oz. palladium.
The company plans to drill up to 65,000 metres of core in 2001. The program is aimed at expanding the identified palladium resource at Lac des Iles and testing new targets. About 75% of the year’s exploration budget will be aimed at mine site exploration, including several deep holes (up to 1,000 metres in depth) to test the down-plunge extension of the Shear zone.
The current mine plan envisages an ultimate pit depth of 400 metres. Drilling during 2000 indicated that the higher-grade Shear zone, which forms the deposit’s core, averages 6.5 grams palladium over 17 metres and descends to a depth of at least 620 metres. This suggests that it may be amenable to underground bulk-mining. The zone remains open at depth.
Early results from 2001 infill drilling on 60-metre spacings on the Shear zone include: 9 metres grading 16.95 grams palladium per tonne in hole 01; and 81 metres of 3.8 grams palladium in hole 7. The holes confirm the continuity of mineralization to a depth of 490 metres. Hole 7 also cut 19.8 metres of 6 grams palladium and confirmed the presence of the Shear zone down to 705 metres. This was 85 metres deeper than the zone was previously intersected.
At last report, the mine’s reserves were upped to 96.2 million tonnes grading 1.55 grams palladium, 0.17 gram platinum and 0.12 gram gold per tonne, plus 0.06% copper and 0.05% nickel. By comparison, the estimate at the end of 1999 was 79.1 million tonnes grading 1.76 grams palladium (T.N.M. Apr. 9-15).
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