With the new primary crusher at its Lac des les mine near Thunder Bay, Ont., fully operational for a second consecutive quarter, North American Palladium (PDL-T) swung into the black as its palladium production nearly doubled during the final stanza of 2003.
During the three months ended Dec. 31, NAP piled up earnings of $16.1 million (or 31 per share) on revenue of $59.8 million, compared with a net loss of $1.5 million (3 per share) on $43.9 million during the corresponding period of 2002. Cash flow from operations (before changes in non-cash working capital) more than doubled to $21.8 million.
For all of 2003, NAP’s earnings came to $38.4 million (75 per share) on $192.1 million, compared with year-ago net income of $15.1 million (30 per share) on $176.8 million. Cash flow from operations climbed by about $12.3 million to $59.8 million. The yearly figures include an $18.1 million foreign-exchange gain.
During the year, NAP’s revenue benefited from its palladium sales contract, which provided a floor price of US$325 per oz. By comparison, the average spot price for palladium during the year was US$200 per oz., off from US$338 during 2002. The company also saw revenue from byproduct metals jump by 64% to $63.4 million, owing to increased production and higher prices for its nickel, platinum, gold and copper.
Fourth-quarter mill throughput at Lac des les amounted to a shade more than 1.5 million tonnes of ore averaging 2.6 grams palladium per tonne to produce 94,114 oz. The mill also spat out 7,354 oz. of platinum, 7,722 oz. of gold, 638 tonnes of nickel and 1,040 tonnes of copper as byproduct.
Overall in 2003, some 5.1 million tonnes grading 2.3 grams were processed to yield 288,703 oz. of palladium. Byproduct metals tallied to 23,742 oz. platinum, 23,536 oz. gold, 1,846 tonnes nickel and 3,240 tonnes copper. The year’s average palladium recovery rate rang in at 75.5%.
NAP attributes the increase in production to higher head grades, improved mill availability and throughput. The company expects to continue its strong performance during 2004, with the mill projected to process at a 15,000-tonne-per-day clip.
The increased contribution from byproduct metals also helped NAP slice its cash costs by US$89 per oz. to US$175 per oz. of palladium.
At the end of 2003, the company had $12 million in cash and equivalents; and a reduction in the Company’s debt position by $63,653,000 during the year.