VANCOUVER (miningweekly.com) – Primary palladium producer North American Palladium has narrowed its second-quarter loss to C$9.9-million, or C$0.17 a share, despite low metal prices and underground production challenges at its Lac des Iles (LDI) palladium mine, in north-western Ontario.

Revenue at C$39.9-million, for the three months ended June 30, was up C$12.6-million, or 46%, year-over-year, mainly owing to the mill shutdown impacting results during the second quarter of 2015.

The adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) were C$1.1-million in the period, compared with negative Ebitda of C$4-million in the comparable period a year earlier. The increase in adjusted Ebitda was mainly owing to increased revenue and lower operating costs, the company advised.

During the quarter, the company realised an average palladium selling price of $564/oz, compared with $758/oz realised in the second quarter of 2015.

Underground mining operations produced 3 013 t/d of ore grading 3.8 g/t palladium, 37% lower year-over-year. Surface ore stockpiles contributed 2 315 t/d of ore at a grade of 1 g/t palladium, an increase of 13% over the production rate of 2 050 t/d of ore in the comparable quarter of 2015 at a grade of 1 g/t palladium.

Underground production was lower as the mine transitioned to a sub-level shrinkage method.

“Underground production levels were impacted by seismicity and related ground issues during the quarter, which was expected as the LDI mine works through the transition to a sub-level shrinkage mining method. Conversion is on schedule and should be largely complete by year-end, when underground production levels are expected to return to approximately 4 500 t/d of ore.

“The raise of the east tailings dam is now complete and the new water management facility will be commissioned in September. With tailings storage and water capacity issues resolved and supported by the recent rise in palladium prices, we intend to return to a full mill run, from the current two-week-per-month batch process, in the fourth quarter of this year,” CEO Jim Gallagher stated.

Palladium spot prices had improved nearly 40% in the last six months to $694/oz on Friday.

North American Palladium's TSX-listed stock on Friday fell just over half a per cent to C$5.77 apiece, in step with an intraday spot price contraction of about 1.28%, or $9/oz.