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NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: NORTH AMERICAN PALLADIUM LTD
TSE SYMBOL: PDL
NOVEMBER 12, 1998
North American Palladium Ltd - Third Quarter Operations
Update
THUNDER BAY,ONTARIO--Keith C. Minty, President and CEO is pleased
to announce continuing improvement in all aspects of the company's
open pit palladium platinum mine at Lac des Iles, Ontario, Canada.
MARKETING
The forward sale palladium and Canadian dollar hedge programs were
completed during the month of July and October respectively. The
Company is currently investigating alternative marketing
strategies to optimize revenues and is now able to sell its
product on the open market at current market prices.
OPERATIONS
During the 3rd quarter the mine produced 217,658 tons of ore and
1,399,919 tons of low-grade waste. Compared to the 3rd quarter of
1997, ore production decreased by 5 percent and low grade waste
production increased by 138 percent. The large increase in
stripping is in preparation for Phase II ore production.
The concentrator processed 230,791 tons during the 3rd quarter
resulting in 22,535 ounces of palladium, contained in concentrate,
being shipped to the smelter. Compared to the same quarter period
in 1997, palladium production increased by 47 percent. This
increase is due to continuing improvements in mine operations, ore
grade control techniques and concentrator efficiencies.
/T/
PRODUCTION STATISTICS
Third Quarter Per - January 1 Per-
centage to Sept. 30 centage
1998 1997 Increase 1998 1997 Increase
Palladium
(troy oz) 22,535 15,346 47 64,458 43,921 47
Platinum
(troy oz) 1,376 1,206 14 4,220 3,169 33
Gold
(troy oz) 1,014 1,029 0 3,829 3,009 27
Copper
(lbs) 219,784 296,308 (35) 924,010 788,092 17
Nickel
(lbs) 151,228 215,764 (43) 685,910 610,009 12
Ore Tons
Milled 230,791 221,978 4 698,238 554,459 26
Ore Tons
Mined 217,658 229,654 (5) 741,163 680,982 9
Low Grade & Waste Tons
Mined 1,399,919 588,082 138 3,185,955 1,447,171 120
/T/
EXPLORATION
The Company is midway into its $1.1 million 1998 exploration
program. Results to date have been very encouraging, resulting in
the commencement of a 5,500 meter diamond drilling program in late
October. This drill phase is targeting the North Roby Zone and
the new palladium discovery at the Baker Zone (formerly 'A' Zone).
Regional exploration at the Wakinoo Lake palladium showing and
prospective areas at Buck Lake includes sampling and geophysics in
preparation for drilling in early 1999.
A 51-hole percussion drilling program was undertaken in the North
Roby Zone during the 3rd quarter. The program results identify
approximately 40,000 tons with an average grade of 0.157 opt Pd to
a depth of 30 meters which is an extension of the mineralized zone
at the north end of the Roby Pit. A second percussion drilling
program is currently underway.
The Baker Zone is located 1 km east of the Roby Pit. This zone,
previously identified as a small outcrop by Anaconda in 1966, now
has been trenched to reveal 100 meters of width and a strike
length of 350 meters. The zone is defined by assays in excess of
0.02 opt Pd from consecutive 1.5 meter channel samples and from
grab samples taken at every 1.5 meters in trenches spaced at 50
meters across the zone. Within the zone, the best assays to date
are consecutive channel samples with a total length of 15 meters
that have an average grade of 0.138 opt Pd, 0.008 opt Au, 0.014
opt Pt, 0.435 percent Cu and 0.388 percent Ni.
Located 35 km southwest of the mine, a PGM occurrence at Wakinoo
Lake was stripped of its overburden and exposed across its strike
for a width of 18 meters. Channel samples defined 3 meters at
0.22 opt platinum plus palladium. The results of IP-EM and
Magnetic surveys are being evaluated for diamond drilling targets.
A surface overburden stripping program and detailed sampling
program was completed in early November at the north end of the
Wakinoo Lake property.
Management is excited about the size potential of the new
palladium discoveries at the North Roby and Baker Zones. However,
not all the work is being centered on these discoveries as a
significant portion of the exploration effort continues toward
development of new targets within 80 kilometers radius of the
mine.
SCOPING STUDY
The Board of Directors has approved the development of a scoping
study to determine the viability of processing a higher daily
tonnage at a lower grade. Preliminary analysis indicates that
this operating scenario may result in greater profitability
thereby enabling the Company to repay the existing debt to
Kaiser-Francis Oil Company. It is assumed for this scoping study
that the additional tonnage will come from the existing Roby Pit
and newly defined mineralized zones. The base case of the scoping
study is to process 10,000 tons per day at a lower grade than what
is being currently processed in the Company's 3,000 tons per day
operation. The scoping study will be performed by specialized
consultants, and the study will be audited by Kilborn Engineering,
Pacific Ltd. The scoping study is scheduled for completion during
the first quarter of 1999.
SUMMARY
The Company reports a notable increase in the metals produced from
its concentrate in 1998. Palladium production during the first
nine months totaled 64,458 troy ounces, an increase of 46.8
percent over the same period in 1997. The Company is now free of
all hedging programs and is looking forward to realizing higher
metal prices.
Management is confident that continuing improvement in metals
production at Lac des Iles and positive exploration results in the
region, combined with a potentially positive expansion scoping
study, will permit the Company to continue its progress toward
long-term profitability.
North American Palladium Ltd., through its wholly owned subsidiary
Lac des Iles Mines Ltd., operates Canada's only primary PGM mine
and is the world's largest open pit PGM producer.
Forward Looking Statements - Some statements contained in this
release are forward-looking and, therefore, involve uncertainties
or risks that could cause actual results to differ materially.
Such forward-looking statements include comments regarding
profitability, operating performance, metal prices and markets,
costs of production, exploration programs, planned scoping study
of the Lac des Iles Mine. Factors that could cause actual results
to differ materially include metal price volatility, economic and
political events affecting metal supply and demand, fluctuations
in ore grade, ore tons milled, geological, technical, mining or
processing problems, future results of exploration programs,
availability of financing and possibility of lack of operating
capital. The Company disclaims any obligation to update forward-
looking statements.
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
North American Palladium Ltd
Keith C. Minty
President and C.E.O.
(807) 624-0960
(807) 624-0961 (FAX)
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