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NEWS RELEASE TRANSMITTED BY CCNMatthews
FOR: NORTH AMERICAN PALLADIUM LTD.
TSE SYMBOL: PDL
AUGUST 28 2000 - 11:54 EDT
North American Palladium Ltd. Announces Second QUARTER 2000
RESULTS
North American Palladium Ltd. announces financial and operating
results for the Second Quarter ended June 30, 2000. The Company
achieved a net income for the three months ended June 30, 2000 of
$11,670,000 or $0.82 per share on revenues of $25,358,000
compared to a net loss of $3,885,000 or $0.42 per share on
revenues of $7,711,000 in the prior year period. The increase in
revenue reflects the benefit of sharply higher palladium prices
combined with an 88% increase in palladium production as a result
of processing much higher grade ore. The net income per share
includes accrued and unpaid dividends on the Series "A" preferred
shares of $1,434,000 for the second quarter of 2000.
For the six months ended June 30, 2000 the Company reported net
income of $20,762,000 or $1.45 per share on revenues of
$48,660,000 compared to a net loss of $5,450,000 or $0.65 per
share on revenues of $17,562,000 for the six months ended June
30, 1999.
Cash provided from operations (prior to changes in non-cash
working capital) was $17,566,000 for the second quarter of 2000
and $31,571,000 for the six months ended June 30, 2000. This
compares with cash provided by operations (prior to changes in
non-cash working capital) of $56,000 for the second quarter 1999
and $4,946,000 for the six months ended June 30, 1999. The
significant improvement in operating cash flow was used to fund
an increase in working capital and for the expansion project and
exploration activities.
On June 27, 2000, the Company closed a US$90 million term loan
facility, which will partially finance the mine expansion capital
cost. The loan will bear interest at floating rates and will be
secured by a first charge on the assets of the Company and will
mature on September 30, 2006. Kaiser-Francis Oil Company has
guaranteed the term loan until completion tests are met.
/T/
Second Quarter Six Months
June 30, June 30,
(thousands of Canadian Dollars, except
per share amounts)
2000 1999 2000 1999
---- ---- ---- ----
Revenue from Metal Sales 25,358 7,711 48,660 17,562
Income (Loss) from Operations 15,740 (1,927) 28,149 (1,624)
Net Income (Loss) 11,670 (3,885) 20,762 (5,450)
Operating Cash Flow* 17,566 56 31,571 4,946
Net Income (Loss) per Share 0.82 (0.42) 1.45 (0.65)
/T/
*Prior to changes in non-cash working capital.
Operating Results
Mine production during the second quarter was 728,297 tonnes of
ore and 724,135 tonnes of waste. A total of 511,309 tonnes of
material was placed in stockpile for milling at a later date.
Total stockpiled tonnage at the end of the quarter was 1,035,965
tonnes. Compared to the second quarter of 1999, ore production
increased by 121% while waste production decreased by 49%. The
increased ore production resulted from the scheduled reduction in
waste stripping requirements. Waste removal will continue to
remain low until completion of the Stage 2 pit in the third
quarter of this year.
The concentrator processed 216,988 tonnes during the quarter
resulting in 25,842 ounces of palladium, a 27% improvement over
the first quarter. The higher palladium production was due to
higher feed grades and recoveries. Improvements in platinum, gold
, nickel and copper production were also achieved for the quarter
compared with the first quarter. Cash costs to produce palladium,
net of other metal credits and royalties, were lowered to US$128
per ounce in the quarter compared to US$209 per ounce in the
first quarter.
/T/
Production Statistics
Second Quarter Six Months
June 30, June 30,
2000 1999 2000 1999
---- ---- ---- ----
Palladium (oz) 25,842 13,761 46,214 30,905
Platinum (oz) 1,520 1,196 2,790 2,281
Gold (oz) 1,391 1,148 2,676 2,114
Copper (lbs) 303,756 350,618 581,062 569,668
Nickel (lbs) 218,018 243,539 418,705 400,557
Ore Tonnes milled 216,988 223,110 436,693 429,674
Ore Tonnes Mined 728,297 329,975 1,059,960 588,207
Waste Tonnes Mined 724,135 1,417,861 1,727,845 2,574,433
/T/
North American Palladium's Lac des Iles Mine is Canada's only
primary producer of platinum group metals and one of the largest
platinum group metals deposits in the world. Palladium
consumption is expected to remain strong in 2000 following a
record demand in 1999, which saw a 20% increase in autocatalyst
use as reported by Johnson Matthey in their Platinum 2000 review.
/T/
NORTH AMERICAN PALLADIUM LTD.
CONSOLIDATED BALANCE SHEETS
[Canadian Funds in Thousands of Dollars]
[Unaudited]
June 30 December 31
2000 1999
---------- ----------
ASSETS
CURRENT ASSETS
Cash $1,158 $157
Accounts receivable 1,367 307
Concentrate inventories awaiting
settlement, net 49,675 30,513
Inventories 3,724 2,784
Prepaid expenses and other assets 269 211
---------- ----------
56,193 33,972
Mining interests, net 56,563 57,013
Expansion project 24,031 -
Mine closure deposit 730 430
Deferred foreign exchange loss 3,084 787
---------- ----------
$140,601 $92,202
========== ==========
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Accounts payable and
accrued liabilities $12,756 $1,464
Advances on palladium settlements 14,388 15,946
Taxes payable 615 549
Current portion of obligations
under capital lease 836 818
---------- ----------
28,595 18,777
Provision for mine closure costs 644 587
Obligations under capital leases 1,344 1,905
Notes and interest payable -
Kaiser-Francis Oil Company 137,311 119,730
---------- ----------
167,894 140,999
---------- ----------
SHAREHOLDERS' DEFICIENCY
Capital stock
Outstanding: 12,498,894 common shares
(1999 - 12,224,504) 31,516 30,774
Outstanding: 10,000,000
Series A preferred shares 50,000 50,000
Deficit (108,809) (129,571)
---------- ----------
Total shareholders' deficiency (27,293) (48,797)
---------- ----------
$140,601 $92,202
========== ==========
NORTH AMERICAN PALLADIUM LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
[Canadian Funds in Thousands of Dollars Except Share and Per
Share Amounts]
[Unaudited]
Quarter Ended Six Months Ended
June 30 June 30
2000 1999 2000 1999
---------- ---------- ---------- ----------
Revenues $25,358 $7,711 $48,660 $17,562
Deduct: smelter
treatment, refining
and freight costs (1,762) (1,192) (3,273) (2,229)
---------- ---------- ---------- ----------
Net revenue from
mining operations 23,596 6,519 45,387 15,333
---------- ---------- ---------- ----------
Operating expenses
Production costs
including overheads 5,763 6,207 12,746 12,770
Amortization 1,976 1,970 3,992 3,778
Administrative expenses 89 239 443 352
Provision for mine
closure costs 28 30 57 57
---------- ---------- ---------- ----------
Total operating
expenses 7,856 8,446 17,238 16,957
---------- ---------- ---------- ----------
Income (loss) from
mining operations 15,740 (1,927) 28,149 (1,624)
---------- ---------- ---------- ----------
Other income (expenses)
Interest income 26 20 57 30
Gain on palladium
forward contracts -- 4 -- 1,419
Gain (loss) on disposal
of capital assets (348) 1 (348) (3)
Interest (45) -- (301) --
Interest on long-term
debt (3,030) (2,300) (5,687) (4,449)
Amortization of
deferred foreign
exchange loss (130) (479) (196) (986)
Foreign exchange
gain (loss) (437) 876 (759) 297
---------- ---------- ---------- ----------
Total other
income (expenses) (3,964) (1,878) (7,234) (3,692)
---------- ---------- ---------- ----------
Income (loss) before
income taxes 11,776 (3,805) 20,915 (5,316)
Income taxes (106) (80) (153) (134)
---------- ---------- ---------- ----------
Net income (loss)
for the period 11,670 (3,885) 20,762 (5,450)
Deficit,
beginning of period (120,479) (125,986) (129,571) (124,421)
---------- ---------- ---------- ---------
Deficit,
end of period $(108,809) $(129,871) $(108,809) $(129,871)
---------- ---------- ---------- ----------
Net income (loss)
per share $0.82 $(0.42) $1.45 $(0.65)
---------- ---------- ---------- ----------
Weighted average
number of shares
outstanding 12,473,320 12,105,040 12,421,564 12,083,516
---------- ---------- ---------- ----------
NORTH AMERICAN PALLADIUM LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
[Canadian Funds in Thousands of Dollars]
[Unaudited]
Quarter Ended Six Months Ended
June 30 June 30
2000 1999 2000 1999
---------- ---------- ---------- ----------
Cash Provided by
(used in)
Operations
Net Income (loss)
for the period $11,670 $(3,885) $20,762 $(5,450)
Operating items
not involving cash
Amortization 1,977 1,971 3,992 3,778
Amortization of
deferred foreign
exchange loss 130 479 196 996
Foreign exchange loss
on interest payable 383 -- 529 --
Loss on disposal of
capital assets 348 (1) 348 3
Provision for mine
closure costs 28 29 57 57
Gain on palladium
forward contracts -- 4 -- 1.419
Unpaid interest expense -
Kaiser-Francis
Oil Company 3,030 1,459 5,687 4,143
---------- ---------- ---------- ----------
17,566 56 31,571 4,946
Changes in non-cash
working capital (11,416) (5,736) (18,592) (13,933)
---------- ---------- ---------- ----------
6,150 (5,680) 12,979 (8,987)
---------- ---------- ---------- ----------
Financing Activities
Mine closure deposit (250) -- (300) --
Advances on palladium
settlements (4,796) 3,881 (1,558) 11,017
Obligations under
capital leases (335) (259) (543) (510)
Notes payable issued 8,875 2,100 8,875 2,100
Issuance of
common shares 208 76 742 144
---------- ---------- ---------- ----------
3,702 5,798 7,216 12,751
---------- ---------- ---------- ----------
Investing Activities
Additions to plant
and equipment -- (388) (15) (845)
Expansion Project (8,651) -- (15,301) --
Mining claims,
exploration and
development costs (2,557) (2,931) (4,053) (3,573)
Proceeds on disposal
of plant and equipment 175 1 175 3
Proceeds on palladium
forward contracts -- 1,903 -- 316
---------- ---------- ---------- ----------
(11,033) (1,415) (19,194) (4,099)
---------- ---------- ---------- ----------
Increase (decrease)
in cash (1,181) (1,297) 1,001 (335)
Cash,
beginning of period 2,339 1,928 157 966
---------- ---------- ---------- ----------
Cash,
end of period $1,158 $631 $1,158 $631
---------- ---------- ---------- ----------
/T/
For further information contact:
Keith C. Minty - President & C.E.O.
Tel: (807) 448-2012 Fax: (807) 448-2001
or
George D. Faught - Vice President Finance & CFO
Tel: (416) 214-1914 Fax: (416) 864-0620
North American Palladium Ltd.
Website:www.napalladium.com
P.O. Box 3386 News Release
Thunder Bay, Ontario P7B 5J9
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, fluctuations in ore grade, ore tons milled,
geological, technical, mining or processing problems, exploration
programs and future results of exploration programs of the Lac
des Iles Mine, future profitability and production. The Company
disclaims any obligation to update forward-looking statements.
/T/
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/T/
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