ONTARIO – North American Palladium of Toronto has completed a preliminary economic assessment aimed at extending the life of its Lac des Iles (LDI) palladium mine 85 km northwest of Thunder Bay. The base case, including current operations plus an open pit expansion, could extend the life to 2029. The plan has an after tax net present value of $593 million at a 5% discount rate.
The current operation is an underground mine using longhole stoping. It provides 23 million tonnes of ore grading 2.1 g/t Pd to the mill each year. That production is has an NPV of $457 million at a 5% discount.
The open pit expansion with additional underground footwall material recovered, has a capital cost of $58.6 million. It adds another 39 million tonnes of mineable material to the resource at an average grade of 1.3 g/t Pd. This boosts the NPV by $136 million at a 5% discount rate, representing an after tax internal rate of return of 30%. If the base case is executed as planned, 62 million tonnes of ore grading 1.6 g/t Pd will be mined through 2029.
NAP says there are opportunities to enhance the base case. One idea is a phase 2 shaft deepening project to reach 10.9 million tonnes of 3.3 g/t Pd mineralization below the 1065 level. This plan would require $242.2 million in capital spending to create an NPV of $22 million at a 5% discount and would offer an IRR of 7%. Meanwhile exploration drilling below the 1065 level continues.
Readers might enjoy the LDI photo gallery at NAP.com.