North American Palladium, which has been running their flagship Lac des Iles mine (NYSE:LDI) up in Ontario (56 miles northwest of Thunder Bay, one of just two primary palladium producers on earth) since back in 1993, reported some great news out of the project today, as a major milestone has been reached in their sweeping production expansion and cost per ounce reduction efforts, with the service/auxiliary hoists on the new shaft fully operational and the skipping system tested to target capacity, material is now starting to come up.
The extremely flexible longhole stoping with cemented rock fill methodology employed by PAL at the LDI site has given the company an easy ability to modify discrete panel sizes as per the deposit itself. And now, with this new production shaft in place, stretching down to just over 2.7k feet, PAL should be able to pull as much as 8k tonnes a day up, crushing their previous production bottleneck problem (which was created by the long truck haulage system) decisively. Initial mining from the Offset Zone started late last year using ramp haulage and this new shaft will really get things moving for PAL at LDI. The concrete-lined shaft is just under 20 feet in diameter and is of a conventional vertical design, with a back leg headframe and accompanying hoists, as well as the skip.
PAL is thus on track for their 3k tonnes/day target for the LDI underground Offset Zone this Q4 and they are already hard at work to bring that number up even further going into next year (Feb 19, 2013, Technical Report with PFS on the Offset Zone - PDF). Full commissioning of the shaft systems, including the crusher, loading pocket, and the ore handler, are expected later this month and once complete the production pipeline will be expanded significantly, with PAL transitioning from ramp to primarily shaft haulage thereafter. If everything checks out here towards the end of the month (and by all accounts they will), PAL will have wrapped the first phase of the planned expansion and will have placed a higher production rate at a much lower cost per ounce on the table for shareholders.
President and CEO of PAL, Phil du Toit, clearly excited by the company's successful implementation of the production shaft, thanked staff and contractors alike who've helped navigate the challenges of the expansion, as well as the company's shareholders for capitalizing this milestone. Operating margins are ready for action in 2014 after this upgrade and PAL looks to be headed back into some nice profitability.
There are a number of platinum group element deposits within the 1.85 mile long by just under 1.00 mile wide, elliptical Lac des Iles intrusive package, which sits in the southern end of the (mafic to ultramafic) Archean Lac des Iles Intrusive Complex, a huge series of intrusions some 18.64 miles in diameter. The Roby Zone and the Offset Zone are two of the most distinct deposits in the package and PAL has plenty of palladium potential to chase with the new shaft hoist system.
A summative snapshot by management of their development plan's implementation shows that the company is set up really well for meeting a 2015 production target of some 250k ounces, with lateral, low cost opportunities well enough at hand to legitimize postponing Phase 2 of the shaft expansion for now. This move will allow PAL to grow as planned without having to cough up Phase 2 outlays for quite some time, smoothing over the transition metrics nicely.
Investors can get a closer look at the low cost development prospects management has in mind, as well as an update on the shaft commissioning via an Investor Day webcast that the company held today in Toronto.
For more info, visit North American Palladium Ltd. at NAP.com
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