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North American Palladium (NAP) is in the midst of a 100,000-metre program aimed at extending the Roby zone downdip and along strike. Proving up new resources nearby is also a priority, and, accordingly, crews are delineating the Twilight zone to the southeast.
In 1999, NAP completed a similarly aggressive campaign that resulted in an increase in reserves to 74.2 million tonnes grading 1.64 grams palladium per tonne, plus byproduct credits. This is what prompted the expanded pit model, which is to feed a new 15,000-tonne-per-day mill that will be constructed and commissioned by 2002 (T.N.M., Jan. 17/00).
Four new holes cut multiple intervals of mineralized pyroxenite and gabbro breccia on the other side of a diabase dyke previously thought to be a stopper. The new lens rests between 300 and 650 metres below surface.
Hole 77 returned the longest interval: 133 metres (true width) averaging 1.45 grams palladium. The highest grade came from hole 97, which ran 5.13 grams palladium over 3 metres. That interval was part of a wider, 66.2-metre section that averaged 2.64 grams palladium.
Results are pending for a fifth hole.
NAP says the lens remains open along strike and that several more holes must be sunk to define its geometry. Nevertheless, it is expected to boost resources outside of the pit’s projected shell.
Meanwhile, hole 107 has extended by 60 metres the southern limit of the Roby zone. Starting 300 metres below surface, 60 metres graded 3.34 grams palladium, including 6.2 grams over 26 metres. Like the new lens, the interval lies 300-350 metres below surface and consists of a mixture of pyroxenite and gabbro breccia, which is typical for higher grades at Lac des Iles.
Also, deep hole 208 has confirmed the zone’s continuity to a depth exceeding 700 metres, over a strike length of 330 metres. The hole returned 1.2 grams palladium over 119.05 metres (from 951.95 to 1071 metres), including two higher-grading sub-intervals.
Based on 1999 results, measured and indicated resources outside the enlarged pit stand at 23.5 million tonnes grading 1.46 grams palladium, plus byproduct credits. These exclude all holes drilled so far this year.
Meanwhile, higher metal prices and richer ore translated into a notable turnaround in NAP’s quarterly earnings. For the three months ended March 31, net earnings topped $9.1 million (or 63 per share) on revenue of $21.8 million, compared with a net loss of $1.6 million (23 per share) on $8.8 million in the corresponding period of 1999. Revenue in both periods includes shipping and custom smelting charges ($1.5 million in the recent period).
Cash flow from operations climbed to $14 million from $3.3 million. Over the period, the company’s cash on-hand increased by $2.2 million to $2.3 million.
Lac des les cranked out 20,372 oz. palladium, plus 1,270 oz. platinum, 1,285 oz. gold, 277,306 lbs. copper and 200,687 lbs. nickel. This is significantly higher than a year ago, which was expected to occur as miners reached deeper, richer areas of the pit.
Cash costs averaged US$209 per oz. palladium, net of byproduct credits and royalties. This is 23% lower than the corresponding period of 1999 and reflects the higher metal output.
On March 31, North American Palladium had $21 million in working capital. Long-term debt stood at $125.5 million, of which nearly all is owed to Kaiser-Francis Oil, the company’s largest shareholder and guarantor for the expansion project.
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