North American Palladium Files Prefeasibility Study on LDI's Initial Offset Zone Reserves
1.1 Million Contained Palladium Ounces Converted into Reserves
(firmenpresse) - TORONTO, ONTARIO -- (Marketwire) -- 02/19/13 -- All figures are in Canadian dollars except where noted.
North American Palladium Ltd. ("NAP" or the "Company") (TSX: PDL)(NYSE MKT: PAL) is pleased to announce that it has filed on SEDAR a National Instrument 43-101 ("NI 43-101") technical report for the LDI property, which includes an initial mineral reserve estimate and Prefeasibility Study for Phase I of the Offset Zone (the "Prefeasibility Study").
Summary:
Offset Zone Reserves & Resources
The Offset Zone mineral reserve and resource estimate was prepared by independent Qualified Persons of Tetra Tech, Inc. ("Tetra Tech"). Based on the current and future operating plans at the mine, and updated metal price assumptions that are consistent with current consensus price forecasts, the Company has reduced its palladium cutoff grade from 3.5 grams per tonne ("g/t") to 2.5 g/t to calculate the reserves and resources.
Proven and probable reserves are estimated to be 7.7 million tonnes at a grade of 4.30 g/t of palladium, representing 1.1 million ounces of contained palladium. For the purpose of the Prefeasibility Study, the new reserves are based on the Phase I portion of the measured and indicated resources of the Offset Zone above the 990-metre mine level, which qualified due to density of drilling (see Figure #1 below).
The following table provides the Offset Zone mineral reserve estimate using a 2.5 g/t Pd cutoff:
This lower 2.5 g/t Pd cutoff grade also resulted in the following increases from the 3.5 g/t cutoff for previously stated resources (see the Company's August 8, 2012 news release):
Pages 14-31 through 14-37 of the Prefeasibility Study include tables and graphs using various cutoff grades to demonstrate the robust nature of the resources. The Company plans to provide its next annual reserve and resource update in the third quarter of 2013 using the 2.5 g/t cutoff grade for all underground resource models.
For comparative purposes, the following Offset Zone mineral resource estimate (which formed the basis for the conversion of the reserves) also uses a 2.5 g/t cutoff:
The following table provides the remaining known resources for the Offset Zone after removal of the reserves associated with the technical report as at March 31, 2012, using a 2.5 g/t cutoff:
The 7.7 million tonnes of Offset Zone reserves grading above 2.5 g/t palladium represent only approximately one third of the 22.1 million tonnes of the overall measured and indicated resources grading above 2.5 g/t. Using the same 2.5 g/t cutoff, there are approximately 14 million additional tonnes of identified Offset Zone inferred resources, therefore the Prefeasibility Study takes a conservative view of the Offset Zone relative to the total resource wireframe. The Company has a clear resource replacement strategy and remains confident that it can continue to expand its reserves and resources through exploration. See Figure #1 below for a visual of the Offset Zone reserves contemplated in the Prefeasibility Study, relative to the other known resources.
To view "Figure #1: Offset Zone deposit (looking east)," please visit the following link:
The remaining resources require further definition before they can be converted into reserves. Development plans and stoping schedules have been applied to total mineral reserves in anticipation of upgrading the remaining known resources. Accordingly, the Company intends to study the extension of development and shaft sinking adjacent to the lower portion of the Offset Zone and conduct further definition and extension drilling of the Offset Zone.
Economic Analysis
The economic analysis in the Prefeasibility Study uses a conservative palladium price assumption however management estimates that at current prices, the economics show additional upside.
Capital Expenditures to Extract Offset Zone Reserves
The Prefeasibility Study also highlights a $79-million investment in 2013 to complete Phase I of the LDI mine expansion (as detailed in the Prefeasibility Study), which will transition operations to shaft production in the third quarter of 2013, allowing the Company to increase underground mining at a reduced cash cost per ounce. This investment is based only on the new Offset Zone reserves, and includes sinking the shaft to the 825-metre level, and advancing underground development in the Offset Zone (including extending the ramp at depth, completing the new mine levels and setting up mining stopes), as well as mine-expansion related sustaining capex.
Exploration Upside Potential
The Company believes there remains significant upside potential from continued exploration at the LDI property, where a number of surface and underground targets have been identified for follow up exploration. The Offset Zone remains open to the west, south and at depth, and management is confident that further drilling has a high probability of finding more resources close to the new underground infrastructure.
The Company's recent exploration program returned excellent drilling results (see January 31, 2013 news release) that showed potential to extend the Offset Zone and identified new potential sources of near-surface, pit-grade ore, highlighting the potential for future resource expansion at LDI. Work has already commenced to assess the production potential of the Sheriff Zone and the 2013 exploration efforts will be focused on defining extensions to both the Offset and Roby zone resources, as well as identifying additional pit-grade material at surface.
Other important information to note when reading the technical report:
Technical Information and Qualified Persons
This news release was prepared under the supervision of Kevin Small, P.Eng., Director of Technical Services, and David Peck, Ph.D., P.Geo., Head of Exploration for the Company, who are Qualified Persons as defined by National Instrument 43-101, with input from Greg Struble, Vice President and Chief Operating Officer.
Additional information can be found in NAP's Form 40-F/Annual Information Form on file with the US Securities and Exchange Commission and Canadian provincial securities regulatory authorities, available at and , respectively. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
About North American Palladium
NAP is an established precious metals producer that has been operating its flagship Lac des Iles mine (LDI) located in Ontario, Canada since 1993. LDI is one of only two primary producers of palladium in the world, and is currently undergoing a major expansion to increase production and reduce cash costs per ounce. NAP also operates the Vezza gold mine located in the Abitibi region of Quebec. The Company's shares trade on the NYSE MKT under the symbol PAL and on the TSX under the symbol PDL.
Cautionary Note to US Investors Concerning Estimates of Measured, Indicated and Inferred Resources
This press release uses the terms "Measured", "Indicated" and "Inferred" Resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable.
Cautionary Statement on Forward Looking Information
Certain information included 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. The words 'expect', 'believe', 'will', 'intend', 'estimate', 'forecast', and similar expressions identify forward-looking statements. Such statements include, without limitation, any information as to our future exploration, financial or operating performance, including: the Company's forward looking production guidance, projected capital expenditures, operating cost estimates, project timelines, mining and milling rates, the methods by which ore will be extracted, projected grades, mill recoveries, and other statements that express management's expectations or estimates of future performance. 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 metal prices will be consistent with the Company's expectations, that the exchange rate between the Canadian dollar and the United States dollar will be consistent with the Company's expectations, that there will be no significant disruptions affecting development projects including the LDI mine expansion or operations, that prices for key mining and construction supplies, including labour and transportation costs, will remain consistent with the Company's expectations, and that the Company's current estimates of mineral reserves and resources are accurate. The forward-looking statements are not guarantees of future performance.
The Company cautions the reader that such forward-looking statements involve known and unknown risks that may cause the actual results to be materially different from those expressed or implied by the forward-looking statements. Such risks include, but are not limited to: the possibility that metal prices, foreign exchange rates or operating costs may differ from management's expectations, uncertainty of mineral reserves and resources, inherent risks associated with mining and processing, the risk that the Lac des Iles may not perform as planned and that the Offset Zone and other properties may not be successfully developed, and uncertainty of the ability of the Company to obtain financing. For more details on the factors, assumptions and risks see the Company's most recent Form 40-F/Annual Information Form on file with the U.S. Securities and Exchange Commission and Canadian 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, except as expressly required by law. Readers are cautioned not to put undue reliance on these forward-looking statements.
Contacts:
North American Palladium Ltd.
Camilla Bartosiewicz
Director, Investor Relations and Corporate Communications
416-360-7374
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Datum: 19.02.2013 - 13:35 Uhr
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News-ID 230723
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