Lac des les, in addition to being Canada’s only primary producer of palladium, is North America’s largest open-pit producer of the metal. It produced 46,214 oz. palladium in the first half of 2000, or 50% more than a year ago.
Milling capacity is currently being increased to 15,000 from 2,400 tonnes daily. The mill is expected to be operating at the new rate by April of next year; thereafter, annual production will rise to 248,900 oz. as cash costs fall to US$131 per oz., net of byproduct credits.
Reserves are pegged at 73.2 million tonnes grading 1.64 grams palladium per tonne — sufficient for 11 years of production at the expanded rate.
In June, North American Palladium completed a US$90-million term-loan facility with a syndicate of Canadian banks, and this will cover most of the US$126.5 million required. A total of 23.2 million treasury shares, priced at $9.50 each, will be offered to cover the balance and to eliminate pre-existing debt.
A syndicate of brokerage houses led by BMO Nesbitt Burns is underwriting the offer and has the option of buying an additional 1.9 million shares at the same price.
A final prospectus has been filed with security commissions in Canada and the U.S. The offer is scheduled to close no later than mid-November.
North American Palladium has 12.2 million common shares and 10 million preferred shares outstanding. Kaiser-Francis Oil of Tulsa, Okla., is the company’s largest shareholder, holding 2.1 million common shares and all of the preferred ones; it has agreed to buy 13.2 million of the new shares to maintain its interest at 17.4%.
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