NAP nearly doubles production
News from The Northern Miner
March 19-25, 2004

With the new primary crusher at its Lac des Iles mine, near Thunder Bay, Ont., fully operational, North American Palladium (PDL-T) enjoyed a profitable fourth quarter.

During the three months ended Dec. 31, 2003, NAP earned $16.1 million (or 31� per share) on revenue of $59.8 million, compared with a net loss of $1.5 million during the corresponding period of 2002. Cash flow from operations (before changes in non-cash working capital) more than doubled to $21.8 million.

For all of 2003, NAP earned $38.4 million (75� per share) on $192.1 million in revenue, compared with a profit of $15.1 million (30� per share) on $176.8 million in revenue in 2002. Cash flow from operations climbed by $12.3 million, to $59.8 million, between the two periods.
The yearly figures incoude an $18.1-million foreign-exchange gain.

During the year, NAP's revenue benefited from its palladium sales contract, which provided a floor price of US$325 per oz. By comparison, the average spot price for palladium during the year was US$200 per oz., off from US$338 during 2002. The company also saw revenue from byproduct metals jump by 64% to $63.4 million, owing to increased production and higher prices for its nickel, platinum, gold and copper.

Fourth-quarter mill throughput at Lac des Iles amounted to a shade more than 1.5 million tonnes of ore averaging 2.6 grams palladium per tonne to produce 94,114 oz. The mill also spat out 7,354 oz. platinum, 7,722 oz. gold, 638 tonnes nickel, and 1,040 tonnes copper as byproduct.
Overall in 2003, some 5.1 million tonnes grading 2.3 grams were processed to yield 288,703 oz. palladium. Byproduct metals amounted to 23,742 oz. platinum, 23,536 oz. gold, 1,846 tonnes nickel, and 3,240 tonnes copper. The year's average palladium recovery rate was 75.5%.

NAP attributes the increase in production to higher head grades and improved mill availability and throughput. The company expects to continue its strong performance in 2004, with the mill projected to process 15,000 tonnes per day.

The increased contribution from byproduct metals also helped NAP slice its cash costs by US$89 per oz., to US$175 per oz. palladium.

At Dec. 31, 2003, the company had $12 million in cash and equivalents, and during the year, it reduced its debt position by $63.7 million.