TORONTO (miningweekly.com) – Toronto-based North American Palladium expects palladium production from its Lac des Iles mine, in Ontario, will increase 75% this year.
However, delays in developing a ramp to access the new zone mean that some pre-production ore previously targeted for this year will now shift to 2012, and production from a new shaft will begin in the third quarter of next year, rather than the second.
NAP produced 95 100 oz of palladium in 2010 and is forecasting output of between 165 000 oz and 175 000 oz this year, the firm said on Thursday.
The company is budgeting C$147-million for the LDI expansion in 2011, and has also approved a C$7-million expansion of the mill at its second mine, the Sleeping Giant gold operation in Quebec, on top of the C$11,2-million budgeted for development work and equipment at the mine.
Sleeping Giant produced 17 550 oz in 2010, but output is expected to ramp up to between 30 000 oz and 35 000 oz of gold, NAP said.
The Sleeping Giant mill will be expanded to 1 250 t/d to process ore from the company's other nearby gold properties.
"Over the next two years, we plan to achieve our ambitious growth strategy to become a mid-tier precious metals producer by significantly increasing our palladium and gold production,” CEO William Biggar said.
During this period, the company will spend more than C$250-million on mine expansions, exploration and development, he said.
NAP expects to mine about 10 000 oz from the new Offset zone this year, and the balance of production will come from the Roby zone and from surface stockpiles.
The firm said the development ramp to access the Offset zone was taking longer than expected, but said an extra development crew has been added, so there should be no more delays.
Production at LDI is expected to increase to between 190 000 and 200 000 oz in 2012, rising to more than 250 000 oz from 2015 onwards, NAP said.
Cash costs this year will be unusually high, because the firm will be processing lower head grades through the mill, and costs are forecast at between $340/oz and $370/oz in 2011.
Once the mining rate hits 5 500 t/d in 2015, costs should be down to less than $150/oz, NAP said.
At Sleeping Giant, cash costs for 2010 are estimated at a whopping $1 550/oz to $1 575/oz, because the company mined much lower grades than expected in stopes used by the previous operator, while waiting to access deeper higher grade zones this year.
Costs this year are forecast at $1 200/oz to $1 300/oz, but should trend downwards over the year, NAP said.
The mine shaft deepening is expected to be completed in the second quarter of 2011, following which development work will begin on the three new mining levels.
Sleeping Giant, a former Iamgold asset that NAP bought in 2009, is expected to produce between 40 000 and 50 000 in 2012.
Palladium, which is used in emissions-reducing autocatalysts, rose dramaticall in 2010, from around $420/oz at the start of the year to just shy of $800/oz by year end. The price has since had further gains, but slid back to $815/oz on Thursday afternoon, amid a broader metals decline.