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Christopher Wallace
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Managing Director - CCC Investment Banking

  • North American Palladium's All-In Sustaining Cash Costs 1 comment
    Jan 7, 2014 3:36 PM | about stocks: PAL

    North American Palladium (NYSEMKT:PAL) just released up-dated Operating Guidance. In that release they announced cash costs for 2014 were expected to come in at $550/oz. This is no improvement over 2013's cash cost number. What PAL's management did not provide is a calculation of their all-in sustaining cash costs. This figure includes overheads, interest and sustaining capex. I compute it as follows:

    NAP All-In Sustaining Cash Costs    
    Cash costs/oz as reported by PAL   550
    SG&A 11,000,000  
    Interest 34,500,000  
    Capex, exploration 34,000,000  
    Total Other cash costs 79,500,000  
    Other cash costs/oz   454.29
    All-in Sustaining Cash Costs   $ 1,004.29

    Not a pretty picture.

    Disclosure: I am short PAL, .

    Stocks: PAL
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  • Fun Trading
    , contributor
    Comments (8822) | Send Message
    Hello Chris,


    This is about what I have estimated... PAL will not give an accurate AISC unless it is forced to.
    I am guessing that you are taking 175k oz for 2014 but using 42.5Koz for Q1, AISC is now even higher with 170koz yearly pace or perhaps $1,033? and should be around $950 end of 2014? Due to a large difference between Q1 Q2 Q3 and Q4 it is perhaps better to estimate AISC per quarter now using the real production?
    Bankruptcy will be the necessary next step.
    I expect the PPS to get one last rebound (0.35?) before going under 0.10. I may trade a bit around 0.20/0.23 to 0.35? I have no short position now.


    Best regards,
    29 Apr 2014, 03:44 AM Reply Like
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