|By Marketwired .||
|January 6, 2014 04:30 PM EST||
TORONTO, ONTARIO -- (Marketwired) -- 01/06/14 -- All figures are in Canadian dollars except where noted.
North American Palladium Ltd. ("NAP" or the "Company") (TSX: PDL)(NYSE MKT: PAL) today released its production guidance along with its capital expenditure and exploration forecasts for its Lac des Iles palladium mine ("LDI") in 2014.
-- Targeting increased payable palladium production of 170,000 to 175,000 ounces; -- Capital investment and exploration budgets significantly reduced to approximately $30 million and $4 million, respectively; -- Underground production forecasted to gradually increase throughout the year from approximately 3,000 tonnes per day in the first half of the year, up to 5,000 tonnes per day by the end of 2014; and -- Planning to commission a preliminary economic assessment ("PEA") study to define future growth potential at LDI by optimizing the Offset Zone resources and several alternative, supplemental development opportunities that could leverage the capacity of existing infrastructure.
"Looking ahead to 2014, our operating focus will be on consolidating the growth investments from our past to establish steady-state operations with the new shaft at LDI," commented Phil du Toit, President and Chief Executive Officer. "Production through the shaft is gradually increasing, enabling us to target over 170,000 ounces of payable palladium production in 2014 at a significantly reduced capital expenditure program of under $30 million. As we increase underground production, we expect that a decrease in operating costs will follow, further positioning LDI for enhanced operating margins."
Mr. du Toit added: "We recognize that our ability to proceed with our plans is contingent on securing additional financing, which we are working hard to complete. The fundamentals of our asset base remain robust, offering good upside to deliver future production growth in a market where the demand exceeds supply. As part of our long-term objective of becoming a low cost mid-tier palladium producer, in 2014 we also plan to determine the most optimal plan for future organic growth so that we can optimize the resources and leverage the historical investments in site infrastructure."
2013 Production & Commissioning Update
The Company is pleased to report that operations are making good progress ramping up underground production through the shaft, while the Company continues to optimize the underground ore handling system to improve shaft production and allow for greater utilization in 2014. Underground production in December increased to approximately 2,800 tonnes per day, peaking at over 3,500 tonnes per day on several days. Production in the month of December totaled approximately 12,000 ounces, one of the highest monthly production rates of 2013, benefitting from improved recoveries at the mill of approximately 83%.
Based on the preliminary results, the Company estimates that 2013 payable palladium production will total approximately 135,000 ounces, consistent with management's revised forecast for the year. More detailed disclosure of 2013 production results will be provided when the Company releases its year-end results in February, 2014.
2014 Operating Guidance
In 2014, operations are expected to benefit from the new shaft, which has positioned LDI for increased underground production from the Offset Zone. The Company is targeting annual payable palladium production in the range of 170,000 to 175,000 ounces. Underground mining is expected to average approximately 3,000 tonnes per day for the first half of the year, and gradually increase up to 5,000 tonnes per day by the end of 2014.
The Company plans to mine up to approximately 1.3 million tonnes from the underground mine at an approximate average diluted grade of 4.2 g/t Pd, with ore predominately sourced from the Offset Zone, as well as some contribution from an additional stope in the northern extension of the Roby Zone. The Company also plans to augment underground production with approximately 1 million tonnes of lower grade surface stockpiles, which average approximately 1.0 g/t Pd. The surface stockpile contribution is forecasted to be higher in the first half of the year, resulting in quarterly variability to the milled head grade and therefore recoveries, with the improved performance (driven by an increased percentage of underground higher-grade material) forecasted for the second half of the year.
During the first quarter the Company plans to complete its mill upgrades, which are expected to yield improved recoveries for the remainder of the year. The combined head grade to the mill is forecasted to average approximately 3.0 g/t Pd for the year, at an improved mill recovery average expected to be higher than 82%.
The transition to shaft hoisting in 2014 is expected to result in cost savings for operations, although these cost savings are expected to be realized during the second half of the year as the new shaft system gets optimized with more efficient skipping and as underground volumes increase and start to dilute the fixed costs. Accordingly, cash costs per ounce are forecasted to be higher in the first half of 2014, and are expected to decrease to approximately US$450 in the fourth quarter. The Company estimates that cash costs per ounce will average around US$550 for the year and that the overall cost per tonne milled will range between C$51 and C$55.
LDI's cash costs per ounce are presented net of by-product revenue. In 2014, the by-product metals are estimated to comprise approximately 26% of LDI's revenue. In comparison to 2013, the Company forecasts decreased prices from the by-product metals, and that revenue from palladium will increase from approximately 66% in 2013, to approximately 74% in 2014. Assumptions used by the Company for 2014 forecasting purposes are: US$750 per ounce palladium; US$1,400 per ounce platinum; US$1,300 per ounce gold; US$6.20 per pound nickel; US$3.20 per pound copper; and an exchange rate of C$1.00 to US$1.00.
Capital Expenditure & Exploration Programs
With Phase I of the mine expansion now completed, the 2014 capital expenditure program for LDI has been substantially reduced to under $30 million. Key expenditures from the program include $11 million for capital development, $5 million to expand the tailings management facility, as well as other expenditures related to underground development, enhancements to the ore handling system, upgrades at the mill, engineering studies and other sustaining capital.
Concurrent with the Company's initiative to reduce spending, investment in exploration has been reduced to approximately $4 million in 2014, all of which will be expensed. The program will be predominately focused on conversion drilling on the Offset Zone to upgrade the resource categories, and on definition drilling on the Offset Zone extensions.
Capital Resources and Liquidity
The Company is currently in discussions about obtaining additional financing to enhance the balance sheet in support of its 2014 budget. The additional proceeds are required to support NAP's working capital needs and enable the Company to continue funding its operating and capital expenditures to establish LDI for sustainable production in 2014. While NAP has been successful at securing financings in the past, there is no certainty that the required financing will be available, or if available, on acceptable terms.
In the event that NAP is unable to secure additional financing, the Company is also reviewing a number of other strategic alternatives. These may include, among other things, a sale of all or part of the Company or its assets, or a recapitalization transaction. There can be no assurance that any alternative transaction will occur, or as to the terms of any possible transaction. Unless otherwise expressly required by law, the Company does not currently intend to disclose further developments with respect to this review process unless and until a transaction is agreed to, or unless it is otherwise determined to be appropriate to do so.
With palladium ending 2013 as one the best performing commodities (averaging US$723 per ounce for the year), most metals forecasters agree that the strong performance will continue into 2014 as global car sales are estimated to rise by 4.8%. Although price forecasts vary by institution, the average consensus price is approximately US$815 for 2014, driven by the resilient industrial demand from the automotive sector and the inability of global mine supply to meet demand.
The supply and demand fundamentals of palladium remain strong, keeping the market in a deficit that is further estimated to grow in 2014 as there should be a decreased contribution from Russian stock sales, strong demand from the Chinese auto market, and increased investment demand. The outlook for palladium is extremely positive and the Company believes that its recent mine expansion has been well timed in the commodity's cycle, where LDI is one of the few PGM producers that is well positioned for production growth at a reduced cost structure.
In 2014, management will focus on the following strategic initiatives:
-- Increasing underground production from approximately 3,000 tonnes per day in the first half of the year, up to 5,000 tonnes per day by the end of 2014; -- Updating its mineral reserve and resource estimate for LDI, targeted for January 2014; -- Updating its NI 43-101 technical report for Phase I reserves, targeted for the first quarter of 2014; and -- Commissioning a new PEA study to assess LDI's future growth potential by evaluating an expansion of the mine at depth, alternative mining methods, and several lateral development opportunities, targeted for completion in the second half of 2014.
About North American Palladium
NAP is an established precious metals producer that has been operating its Lac des Iles mine ("LDI") located in Ontario, Canada since 1993. LDI is one of only two primary producers of palladium in the world, offering investors leverage to the rising price of palladium. The Company's shares trade on the NYSE MKT under the symbol PAL and on the TSX under the symbol PDL.
Cautionary Statement on Forward-Looking Information
Certain information contained in this news release constitutes 'forward-looking statements' within the meaning of the 'safe harbor' provisions of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. The words 'will', 'expect', 'would', 'could', 'estimate' and similar expressions identify forward-looking statements. Forward-looking statements in this news release include, without limitation: the use of proceeds, information pertaining to the Company's strategy, plans or future financial or operating performance, such as the Company's LDI mine expansion, timelines, production plans, projected expenditures, operating cost estimates and other statements that express management's expectations or estimates of future performance. The Company cautions the reader that such forward-looking statements involve known and unknown risk factors that may cause the actual results to be materially different from those expressed or implied by the forward-looking statements. Such risk factors include, but are not limited to: the risk that the Company may not be able to obtain sufficient financing to fund current capital needs including capital expenditures required to continue the LDI mine expansion, the risk that the Company will not be able to meet its financial obligations as they become due, the possibility that metal prices and foreign exchange rates may fluctuate, inherent risks associated with exploration, mining and processing, the possibility that the LDI mine may not perform as planned, and risks related to the availability of skilled labour. For more details on these and other risk factors see the Company's most recent Form 40-F/Annual Information Form on file with the SEC and Canadian provincial securities regulatory authorities.
Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The factors and assumptions contained in this news release, which may prove to be incorrect, include, but are not limited to: that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business, that metal prices and exchange rates between the Canadian and United States dollar will be consistent with the Company's expectations, that there will be no material delays affecting operations or the timing of ongoing development projects, including commissioning the shaft, and that prices for key mining and construction supplies will remain consistent with the Company's expectations. The forward-looking statements are not guarantees of future performance. The Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise, except as expressly required by law. Readers are cautioned not to put undue reliance on these forward-looking statements.
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In this session, James Kirkland, Red Hat's Chief Architect for the ...
May. 29, 2015 02:33 PM EDT Reads: 156
While there are hundreds of public and private cloud hosting providers to choose from, not all clouds are created equal. If you’re seeking to host enterprise-level mission-critical applications, where Cloud Security is a primary concern, WHOA.com is setting new standards for cloud hosting, and has established itself as a major contender in the marketplace. We are constantly seeking ways to innovate and leverage state-of-the-art technologies. In his session at 16th Cloud Expo, Mike Rivera, Seni...
May. 29, 2015 02:30 PM EDT Reads: 900
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series dat...
May. 29, 2015 02:00 PM EDT Reads: 6,429
Cloud Expo, Inc. has announced today that Andi Mann returns to DevOps Summit 2015 as Conference Chair. The 4th International DevOps Summit will take place on June 9-11, 2015, at the Javits Center in New York City. "DevOps is set to be one of the most profound disruptions to hit IT in decades," said Andi Mann. "It is a natural extension of cloud computing, and I have seen both firsthand and in independent research the fantastic results DevOps delivers. So I am excited to help the great team at ...
May. 29, 2015 02:00 PM EDT Reads: 1,709
EMC Corporation on Tuesday announced it has entered into a definitive agreement to acquire privately held Virtustream. When the transaction closes, Virtustream will form EMC’s new managed cloud services business. The acquisition represents a transformational element of EMC’s strategy to help customers move all applications to cloud-based IT environments. With the addition of Virtustream, EMC completes the industry’s most comprehensive hybrid cloud portfolio to support all applications, all workl...
May. 29, 2015 02:00 PM EDT Reads: 904
We’re entering a new era of computing technology that many are calling the Internet of Things (IoT). Machine to machine, machine to infrastructure, machine to environment, the Internet of Everything, the Internet of Intelligent Things, intelligent systems – call it what you want, but it’s happening, and its potential is huge. IoT is comprised of smart machines interacting and communicating with other machines, objects, environments and infrastructures. As a result, huge volumes of data are bein...
May. 29, 2015 02:00 PM EDT Reads: 720
Enterprises are fast realizing the importance of integrating SaaS/Cloud applications, API and on-premises data and processes, to unleash hidden value. This webinar explores how managers can use a Microservice-centric approach to aggressively tackle the unexpected new integration challenges posed by proliferation of cloud, mobile, social and big data projects. Industry analyst and SOA expert Jason Bloomberg will strip away the hype from microservices, and clearly identify their advantages and d...
May. 29, 2015 01:15 PM EDT Reads: 1,543
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo, June 9-11, 2015, at the Javits Center in New York City. Learn what is going on, contribute to the discussions, and ensure that your enter...
May. 29, 2015 01:15 PM EDT Reads: 2,120
SYS-CON Events announced today that MetraTech, now part of Ericsson, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Ericsson is the driving force behind the Networked Society- a world leader in communications infrastructure, software and services. Some 40% of the world’s mobile traffic runs through networks Ericsson has supplied, serving more than 2.5 billion subscribers.
May. 29, 2015 01:00 PM EDT Reads: 1,462
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will w...
May. 29, 2015 01:00 PM EDT Reads: 4,276
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using ...
May. 29, 2015 01:00 PM EDT Reads: 6,929
Thanks to widespread Internet adoption and more than 10 billion connected devices around the world, companies became more excited than ever about the Internet of Things in 2014. Add in the hype around Google Glass and the Nest Thermostat, and nearly every business, including those from traditionally low-tech industries, wanted in. But despite the buzz, some very real business questions emerged – mainly, not if a device can be connected, or even when, but why? Why does connecting to the cloud cre...
May. 29, 2015 12:42 PM EDT Reads: 368
SYS-CON Events announced today that O'Reilly Media has been named “Media Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York City, NY. O'Reilly Media spreads the knowledge of innovators through its books, online services, magazines, and conferences. Since 1978, O'Reilly Media has been a chronicler and catalyst of cutting-edge development, homing in on the technology trends that really matter and spurring their adoption...
May. 29, 2015 12:30 PM EDT Reads: 775
SYS-CON Events announced today that BMC will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. BMC delivers software solutions that help IT transform digital enterprises for the ultimate competitive business advantage. BMC has worked with thousands of leading companies to create and deliver powerful IT management services. From mainframe to cloud to mobile, BMC pairs high-speed digital innovation with robust...
May. 29, 2015 12:15 PM EDT Reads: 928
Imagine a world where targeting, attribution, and analytics are just as intrinsic to the physical world as they currently are to display advertising. Advances in technologies and changes in consumer behavior have opened the door to a whole new category of personalized marketing experience based on direct interactions with products. The products themselves now have a voice. What will they say? Who will control it? And what does it take for brands to win in this new world? In his session at @Thi...
May. 29, 2015 12:13 PM EDT Reads: 382