North American Palladium (TSX:PDL, StockForum), a Toronto-based metals producer operating the LDI palladium mine, reported an update on its mineral reserve and resource estimates and life-of-mine for its Lac de Iles mine located in northwestern Ontario.
According to the news release, total reserves and resources of contained Pd rose 24% to 5.2 million ounces due to a 12% increase in total reserves of contained Pd to 1.3 million ounces and total resources increase of 28% to 3.9 million ounces Pd.
Considering the increases in both reserves and resources, the company expects the present life of mine for Lac de Iles will increase one year to 2019 with production surpassing 200,000 payable ounces annually combined with a total mined reserve of 1.1 million payable Pd ounces, up 34% from the 2013 technical report.
Base case NPV at the mine sits at $173 million with a 5% discount using a three-year average pricing of US$700 per ounce and a $0.95 foreign exchange rate.
Company COO, Jim Gallagher, commented, “Mine operations continue to perform well with several large stopes in the production cycle and significant broken ore inventory underground. Tonnage mined is as per plan and grade has been above guidance year to date due partly to some strategic stope sequencing decisions made late last year.”
He went on to explain, “Performance at the concentrator has been above guidance with recoveries in the first two months averaging 84.5%, reflecting positive results from the process improvements implemented in December 2013.”
Phil du Toit, president and CEO, added, “We are pleased with the overall increase in contained palladium ounces in our reserves and resources and the improved economics of our updated life of mine plan for LDI.”
He then concluded, “Our operations are performing well year to date and the fundamentals for the palladium market remain favorable. As we continue through 2014 we will focus on continued operational improvements, lowering unit costs and further diamond drilling to potentially convert our large mineral resource to reserves.”
North American Palladium was in the news recently when the company provided a corporate update at the beginning of the month.
Shares jumped 11.54% on the news to $0.58 per share.
Currently there are 274.0m outstanding shares with a market cap of $158.9 million.