The world’s only pure play palladium producer, North American Palladium (NAP), has reported its highest-ever quarterly revenue of C$128.3-million, thanks to a strong palladium price.
Revenue jumped nearly 50% in the first quarter of 2019, when compared with the C$86.6-million revenue in the first quarter of 2018, the operator of the Lac des Iles mine, in Thunder Bay, Ontario, reported on Thursday.
Palladium revenue averaged at $1 507/oz, compared with $1 001/oz in the same quarter a year earlier.
“Good overall production combined with strong palladium prices have enabled the company to both retire its debt and increase its dividend. While we did experience a few mechanical challenges in the mill, overall Lac des Iles operated exceptionally during the first quarter,” said president and CEO Jim Gallagher.
The mine produced 52 698 oz in the quarter, compared with 57 053 oz a year earlier. All-in sustaining costs increased from $709/oz, net of by-product revenue, to $919/oz and the cash cost increased from $567/oz to $663/oz. The increase resulted from lower ounces produced, increased sustaining capital based on the mine expansion, increased operating expenses, increased royalty expenses due to higher palladium metal prices and lower by-product revenue.
With the elimination of debt, at the end of the first quarter, the company had total liquidity of C$165.5-million, consisting of C$29.1-million of cash and cash equivalents and C$136.4-million or $102.1-million under the credit facility.
Meanwhile, in NAP’s financial results announcement, Gallagher made special mention of the exploration team’s recent successes.
Exploration expenditures for the quarter were C$6.6-million, compared with C$3.8-million in the first quarter of 2018, and included more than 20 000 m of diamond drilling at Sunday Lake, LDI underground and LDI surface operations.
Underground and surface drilling at LDI has yielded positive results and NAP stated that it would release more details in the coming weeks.
At Sunday Lake, a new discovery was made within the “Big Red” target; drill hole SL-19-026 returned a drill intersection of 41.2 m at 5.51 g/t PGMs (platinum, palladium and gold) including a high-grade section of 15.8 m at 9.11 g/t PGMs and 0.88% copper.
“These results are beginning to outline the extent of mineralisation at the base of the Sunday Lake Intrusion, further positioning Sunday Lake as a significant ‘blue sky’ opportunity for the company.”
Based on the large number of resource gain opportunities at LDI, NAP has increased its 2019 diamond drilling budget by C$5.7-million to cover both underground exploration and definition drilling.