North American Palladium (NAP) has released a preliminary economic assessment on its Offset Zone, which will extend the life of its Lac des Iles Mine north of Thunder Bay.
Also known as a scoping study, the company said the development of this new zone will transform the northwestern Ontario mine into a long-life, low-cost asset.
In an Aug. 16 release, NAP president and CEO William Biggar said the study shows the Offset Zone is “financially robust” and enables mine production to continue at lower production costs.
Commercial production from the shaft is targeted for the third quarter of 2012 with production in excess of 250,000 ounces per year. It will eight years of mine life.
Biggar said with $150 million in cash and no long-term debt, the company is in good shape to fund pre-production capital spending of $204 million for the Offset Zone.
The study includes detailed mine planning, capital and operating costs estimates, rock mechanics, metallurgical work and overall economic studies.
Commercial production is expected by the third quarter of 2012.
The company's board of directors have given approval for $35 million in capital spending for the rest of 2010 to advance the project.
NAP has been operating in the region for 17 years.
P & E Mining Consultants and Scott Wilson Roscoe Postle Associates prepared the study with input from other consulting firms including Nordmin Engineering Ltd. and Xstrata Processing Support.
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