ONTARIO – The expansion of the Lac Des Iles palladium mine 85 km northwest of Thunder Bay is making “significant progress” according to William J. Biggar, president and CEO of owner North American Palladium (NAP)of Toronto.
The expansion project began early last year to access the underground Offset zone where an estimated 2.5 million oz of palladium is contained in measured and indicated resources. The first phase of the project involves sinking a new shaft with a 7,000-t/d capacity, extending the ramp to a depth of 1,380 metres, plus surface and underground development work. The work is 57% done, says the company, and the mining rate will increase to 3,500-t/d in Q4 2012.
The second phase involves deepening the shaft and boosting the mining rate to 5,500 t/d in 2015. Production will then exceed 250,000 oz of palladium yearly at cash costs forecast to be US$200/oz.
NAP’s capital expenditure budget for 2011 is C$175 million, and that will drop to $75 million in 2012 as phase one is completed. The 2012 budget includes underground infrastructure, the initial construction of a backfill system, completing the shaft sinking, ongoing development to reach the expanded resource, and additional exploration drilling at depth.
NAP recently completed a C$70-million debt financing by selling senior secured notes. The notes, each worth C$1,000, bear an interest rate of 9.25% per year and will mature in 2014. Each note also carries one warrant that will allow the holder to purchase 0.35 oz of palladium at a price of US$620/oz.
Details of the Lac des Iles mine (the world’s only primary palladium mine) are posted at www.NAP.com.