Low metal prices cause North American Palladium to cut jobs, reduce output
TORONTO (miningweekly.com) – Precious metals producer North American Palladium (NAP) has lowered its production forecast and taken steps to reduce its workforce at the Lac des Iles (LDI) mine, in Ontario, as a weak palladium price has taken its toll on the company.
The TSX-listed miner advised on Wednesday that 44 employees, including 18 staff and 26 unionised positions, would be affected. The company would also not fill 17 vacancies, resulting in a net reduction of 61 positions in the total of 422 workers.
"It is imperative that we maintain a positive cash operating margin and continue our focus on [the] sustainable long-term operation of the underground mine and on our exploration programme. These cuts, along with the corporate office reductions that took place in August after the financial restructuring, will help us achieve these goals,” NAP president and CEO Jim Gallagher stated.
Palladium on Wednesday closed at $654.75/oz, having touched a 52-week low of $529.35/oz and a high of $831.15/oz.
NAP would also stop blending its low-grade surface stockpile with its higher-grade underground ore. It would return to a 14-day on, 14-day off operating schedule for the LDI mill, at a planned throughput of 13 400 t/d, when the mill was operating. The surface stockpile, at less than 1 g/t of palladium, was deemed uneconomical at current prices.
As a result of the reduction in low-grade material being processed and the impact of the temporary mill shutdown earlier this year – as a result of water-balance issues – the company revised downward its 2015 guidance to between 160 000 oz and 170 000 oz of palladium, down from the previous forecast of 185 000 oz to 205 000 oz for the year.
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