North American Palladium Commences Development of an Underground Mine at Lac des Iles
March 29 2004 - 7:56AM
PR Newswire (US)
North American Palladium Commences Development of an Underground
Mine at Lac des Iles Symbols: TSX: PDL AMEX: PAL TORONTO, March 29
/PRNewswire-FirstCall/ -- North American Palladium Ltd. ("NAP") is
pleased to announce that its Board of Directors has approved the
development of an underground mine at the Company's Lac des Iles
operations. The decision to proceed with an integrated open pit and
underground mine project was based on a full feasibility study
prepared by Roscoe Postle Associates Inc. of Toronto, Ontario. NAP
currently operates an open pit mine and mill at Lac des Iles with a
design capacity of 15,000 tonnes per day. In late 2003, the Company
commissioned a full feasibility study in response to scoping
studies and a pre-feasibility study that indicated a higher grade
sub-vertical ore body located directly beneath the open pit mine
was a viable underground mine. The underground feasibility study
defines, as its base case, a nominal 2,000 tonnes per day
mechanized longhole stope mine accessed through a portal in the Lac
des Iles open pit with an initial mine plan containing 3,542,000
tonnes of Proven and Probable Reserves. These underground reserves
contain approximately 6.62 grams of palladium per tonne at a
cut-off grade of 4.5 grams per tonne. In addition, these reserves
contain approximately 0.40 grams of platinum, 0.34 grams of gold,
0.07 percent copper, and 0.08 percent nickel per tonne. The
integrated production plan for the expanded Lac des Iles mine calls
for the blending of higher grade underground ore with that of the
open pit to generate a 7-year mine life at an average annual
production rate of slightly over 300,000 ounces of palladium. The
underground feasibility study's base case generates approximately
C$92 million of cumulative pre-tax cash flow at a palladium price
of US$325 per ounce and projected operating costs of approximately
US$152 per ounce of palladium after by-product metal credits.
Capital costs for the underground development are estimated at C$40
million for direct and indirect costs and working capital. Mining
equipment accounts for an additional C$15 million of capital costs
and the Company plans to finance this equipment through a vendor
lease program. Construction of the underground mineis planned to
commence in May 2004 with first ore production expected in the
third quarter of 2005. The underground operation will operate
together with the open pit operations and when fully operational it
will contribute approximately 750,000 tonnes of mill feed per year.
The Company's Board of Directors also approved a secondary crusher
installation for the Lac des Iles mill designed to maintain the
fourth quarter 2003 throughput rate and reduce processing costs in
the mill circuit. The estimated capital cost of this project is
approximately C$10 million. NAP plans to finance a portion of the
C$50 million total capital cost for the underground mine and
secondary crusher projects with operating cash flow and is
reviewing financing options for the balance. Andre Douchane, NAP's
President and CEO commented, "The integrated open pit and
underground mine project at Lac des Iles, which has all necessary
approvals in place to commence construction, will increase our
production profile at the Lac des Iles mine." NAP is an expanding
palladium producer with mining operations in Northwestern Ontario
and exploration projects and activities mainly in Canada. The
Company produces palladium and significant amounts of platinum,
gold, nickel and copper atits wholly-owned Lac des Iles mine.
Forward-Looking Statements - Certain statements included in this
news release are forward-looking statements which are made pursuant
to the "safe harbor" provisions of the United States Private
Securities LitigationReform Act of 1995. They include estimates and
statements that describe the Company's future plans, objectives and
goals, including words to the effect that the Company or management
expects a stated condition or result to occur. When used herein,
words such as "estimate", "expect", "intend", and other similar
expressions are intended to identify forward-looking statements. In
particular statements relating to estimated mineral reserves, cash
flows, capital costs, ore production, mine life, financingand
construction are forward-looking statements. Such forward-looking
statements involve inherent risks and uncertainties and are subject
to factors, many of which are beyond our control, that may cause
actual results or performance to differ materially from those
currently anticipated in such statements. Important factors that
could cause actual results to differ materially from those
expressed or implied by such forward-looking statements include
among others metal price volatility, economic and political events
affecting metal supply and demand, fluctuations in ore grade, ore
tonne milled, geological, technical, mining or processing problems,
future profitability and production, and availability of financing
on acceptable terms. For a more comprehensive review of risk
factors, please refer to the Company's most recent Annual Report
under "Management's Discussion and Analysis of Financial Results"
and Annual Information Form under "Risk Factors" on file with the
U.S. Securities and Exchange Commission and Canada provincial
securities regulatory authorities. The Company disclaims any
obligation to update or revise any forward-looking statements
whether as a result of new information, events or otherwise.
Readers are cautioned not to put undue reliance on these
forward-looking statements. DATASOURCE: North American Palladium
Ltd. CONTACT: North American Palladium Ltd.: Andre J. Douchane -
President & CEO, Tel: (416) 360-2656; George D. Faught - Vice
President Finance & CFO, Tel: (416) 360-2650; Douglas H. Bache
- Treasurer, Corporate Development and Investor Relations, Tel:
(416) 360-2651, Fax: (416) 360-7709, E-mail: , Website:
http://www.napalladium.com/
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