North American Palladium Ltd.

North American Palladium Ltd.

January 16, 2007 07:00 ET

North American Palladium Ends 2006 With Robust Fourth Quarter & Annual Production

TORONTO, ONTARIO--(CCNMatthews - Jan. 16, 2007) - North American Palladium Ltd. (TSX:PDL)(AMEX:PAL) -

Highlights for the Fourth Quarter 2006

This news release contains forward-looking statements. Reference should be made to "Forward-looking Statements" at the end of this news release

- Palladium production in the fourth quarter 2006 was 73,242 ounces, among the best quarters in recent years and virtually doubling production in Q4 2005

- Increases in head grade for all commodities were achieved with historically comparable grades recorded for platinum and palladium. The average palladium mill feed grade for the quarter was 2.52 g/t compared with 1.47 g/t in Q4 2005 and 2.17 g/t in Q4 2004

- By-product metal production for the quarter increased to 6,512 oz of platinum (+73% from Q4 2005), 5,108 oz of gold (+75%), 864,442 lbs of nickel (+63%) and 1,421,451 lbs of copper (27%)

- In total 1,179,644 tonnes of ore was processed during the quarter for an average of 12,822 tonnes per day at a palladium recovery rate of 76.9% compared with 11,962 tonnes per day in Q4 2005 at a palladium recovery rate of 70.7%

- Underground production has been a key factor producing on average 2,156 tonnes per day and averaging a palladium head grade of 6.42 g/t

- Spot palladium prices in the fourth quarter were in line with the preceding quarter of 2006 averaging US $323 per oz versus US $242 per oz in Q4 2005

Results of Operations

The Company's Lac des Iles operation ended 2006 on a strong note. In the fourth quarter of 2006, the mine produced 73,242 ounces of palladium, almost doubling Q4 2005's production of 36,833 ounces and surpassing that of the comparable quarter in 2004 of 62,526 ounces. For the year ended 2006, palladium production increased 34% to 237,338 ounces from 177,167 ounces in 2005 at an average head grade for the year of 2.18 g/t Pd compared with 1.66 g/t Pd in 2005.

The Company's by-product metal production for the fourth quarter saw substantial increases; platinum: 6,512 oz vs. 3,761 oz in 2005; gold: 5,108 oz vs. 2,915 oz in 2005; nickel: 864,442 lbs vs. 531,669 lbs in 2005; and copper: 1,421,451 lbs vs. 1,117,885 lbs in 2005.

Consistent improvement in each successive quarter of 2006 was achieved as higher recoveries and blended mill feed grades benefited from the optimal performance of the underground mine.

The underground mine continues to deliver optimal performance achieving consistency of grade and throughput. During the quarter the underground averaged 2,156 tonnes per day at a palladium head grade of 6.42 g/t. As a result, the average blended palladium mill feed grade improved to 2.52 g/t compared to 1.47 g/t palladium in the fourth quarter of last year and 2.17 g/t in the fourth quarter of 2004. Underground mining has continued on the first level in both the primary and secondary stopes while development is well advanced on the second mining level.

Mill availability reached 90% during the quarter, about 10% above last year's comparable period, reflecting the determined efforts throughout the year to resolve the prior year's challenges, combined with the implementation of a proactive maintenance program.

A total of 1,179,644 tonnes of ore was processed during the fourth quarter for an average of 12,822 tonnes per day at a palladium recovery rate of 76.9%, compared to 1,100,540 tonnes or 11,962 tonnes per day at a recovery of 70.7% in the same period last year.

2006 2005
Palladium Q4 YTD Q4 YTD
Ore Milled (tpd) 1,179,644 4,570,926 1,100,540 4,780,599
Head Grade (%) 2.52 2.18 1.47 1.66
Recovery (%) 76.9% 74.0% 70.7% 69.6%
Mill Availability 89.5 86.5 80.8 86.5
Production (oz) 73,242 237,338 36,833 177,167

By-Product Metals
Platinum (oz) 6,512 22,308 3,761 18,833
Gold (oz) 5,108 17,237 2,915 14,308
Copper (lbs) 1,421,451 5,155,588 1,117,885 5,514,670
Nickel (lbs) 864,442 2,721,042 531,669 2,353,227

Jim Excell, President & CEO commented on the year's performance: "The significant turnaround in 2006 is the result of the hard work and dedication of the mine staff and their contributions are gratefully recognized. The underground mine performance continues to be outstanding and our growth projects are progressing as planned. Combined with the improvement in production, 2007 is shaping up to be an exciting year for North American Palladium".

Spot palladium prices in the fourth quarter maintained similar averages as the preceding third quarter of 2006 at US $323 per oz compared with US $242 per oz in the fourth quarter of 2005. North American Palladium continues to pursue a non-hedging policy for its primary metal palladium.

North American Palladium's Lac des Iles Mine is Canada's only primary producer of platinum group metals and is among the largest open pit, bulk mineable palladium mining operations in the world. The Mine also generates substantial revenue from platinum and by-product metals including nickel, gold and copper. NAP is focused on expanding its production profile through joint ventures in Canada and the Arctic Platinum Project in Finland. Palladium's catalytic qualities are expected to play an increasing role in the automotive industry in response to growing concern for global environmental solutions, in fuel cell technology for alternative energy sources and a burgeoning jewellery market, while continuing to have widespread application in the dental, electronics and chemical sectors.

Forward-Looking Statements - Certain statements included in this news release are forward-looking statements within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation including the Securities Act (Ontario), relating to the objectives, plans, strategies and results of operation of the Company including words to the effect that the Company or management expects a stated condition or result to occur. When used herein, words such as "expect", "continues", "pursue", "will" and other similar expressions as they related to the Company or its management, are intended to identify forward-looking statements. In particular, statements relating to estimated future metal prices and future ore and metal production are forward-looking statements. In making the forward-looking statements in this news release, the Company has applied several material assumptions, including but not limited to, the assumption that (1) market fundamentals will result in increased palladium demand and prices and sustained by-product metal demand and prices, (2) the integrated operation of the underground mine and the open pit mine remain viable operationally and economically, (3) financing is available on reasonable terms, (4) expectations for blended mill feed grade and mill performance will proceed as expected, (5) new mine plan scenarios will be viable operationally and economically, and (6) plans for improved mill production, for sustainable recoveries from the Lac des Iles mine, for further exploration at the Lac des Iles mine and surrounding region, and for exploration in Finland will proceed as expected.
Any forward looking statements in this news release involve inherent risks and uncertainties and are subject to factors, many of which are beyond our control, which may cause actual results or performance to differ materially from those currently anticipated in such statements. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include among others (1) metal price volatility, (2) economic and political events affecting metal supply and demand, (3) fluctuations in ore grade or ore tonnes milled, (4) geological, technical, mining or processing problems, (5) future metal production, and (6) changes in life-of-mine plan. For a more comprehensive review of risk factors, please refer to the "Risks and Uncertainties" section of the Company's most recent interim Management Discussion and Analysis and most recent Annual Report under "Management's Discussion and Analysis of Financial Results" and Annual Information Form under "Risk Factors" on file with the U.S. Securities and Exchange Commission and Canada provincial securities regulatory authorities. The Company disclaims any obligation to update or revise any forward-looking statements whether as a result of new information, events or otherwise. Readers are cautioned not to put undue reliance on these forward-looking statements.

Contact Information

  • North American Palladium Ltd.
    Jim Excell
    President & CEO
    (416) 360-7971 ext. 223
    North American Palladium Ltd.
    Ian MacNeily
    Vice President, Finance & CFO
    (416) 360-7971 ext. 222
    North American Palladium Ltd.
    Donna Yoshimatsu
    Director, Investor Relations
    (416) 360-7971 ext. 226