North American Palladium (NAP) can expect nine-and-a-half more years of life from its Lac des Iles Mine, northwest of Thunder Bay.
The mining company announced the results of its feasibility study, which included a new life of mine (LOM) plan for NAP’s flagship operation since 1993.
Over nine years, an estimated 37.7 million tonnes will be mined and milled from both underground (20.4 million tonnes) and surface (17.3 million) sources with an average grade of 2.21 grams of palladium per tonne.
The new life-of-mine plan goes into effect on July 1. The plan was based on the increase in mineral reserves published May 29.
The Lower Offset Zone will supply most of the underground production with an average daily mining rate of 4,000 tonnes.
Most of the ore will be hoisted to surface with the rest being trucked up the Roby ramp.
Surface mining from the Sheriff pit and the larger Roby pit pushback begins during the first quarter of 2018. Sheriff will stay in production for 16 months. Roby will be in continuous production for nine years.
Over that span, the company expects to spend $303 million, which includes the mine closure costs.
The mine’s mill will be returning to full-time operations in the fall.
Company president-CEO Jim Gallagher called the “turnaround” at Lac des Iles “largely complete” with a more efficient mining method being employed, greater production, robust economics with an all-in sustaining cost of US$527 per ounce, and a positive cash flow of $678 million over the mine’s life.
"Current operations and the LOM plan are both enhanced by palladium prices that are nearing record levels and based on analyst consensus, are forecasted to remain at or increase further from today's level,” added Gallagher.
“The bullish outlook for palladium is based on current and projected supply deficits driven by growing global auto sales, tougher emissions standards and a move away from diesel engines to gasoline engines which use more palladium in their catalytic convertors. Add to this, the excellent exploration potential at LDI and on our greenfields properties and we see a very positive long-term future for the company."