Recent trading in NA Palladium made me wonder how NAM and PDL compare.

 

 

 

PDL HISTORY

 

 

 

• 1986 – Madelaine Mines acquired 50% LDIM from Sheridan Palladium

• 1993 – Madelaine becomes PDL & acquires 100% of LDIM

 

• Dec 1993 - Lac des Isles Mine (LDIM) started open pit production at Roby Mine.

• ore was crushed & milled on site then toll processed by Inco (25%) and Falconbridge (75%)

• Palladium was sold to a large auto manufacturer

• PDL reported a loss of $5.2M in 1999

• 2000 - Agra Simons Feasibility Study recommends $207M expansion program

• 2001 – new mill & concentrator started operation

• 2004 RPA Study recommended U/G mining

• 2006 - LDIM started U/G production at Roby Mine below the pit via ramp access

• Oct 2008 - Roby mine placed on care & mtce due to low metal prices

• Exploration drilling continued during & following the shutdown

• RPA did several technical Reports during shutdown to determine viability of LDIM

• During shutdown mill was redesigned to include SAG mill, jaw crusher & new flotation circuit

• Mar 2010 - LDIM resumed U/G production

• Nov. 2010 - RPA study reported PDL was now selling its concentrate to Xstrata in Sudbury.

• 2013 - a shaft to 825M was completed to access the offset zone

• 2014 – Tetra Teck report - Life of Mine Plan

• 2014 – concentrator started operating full time ( was 2 weeks /mo.)

• 2015 – Hatch PEA for Mine Expansion was prepared

• Apr 2015 – PDL delisted on NY stock exchange

• May-June 2015 – operations suspended – water issues

• July 2015 – recapitalization & officer resignations

• Sept 2015 – worforce reduction & further recapitalization (Brookfield)

• Q3 2017 - PDL reported Net Income of $11M for Q3

 

PDL 43-101 Technical Reports

 

 

 

Agra Simons Ltd - May 2000 - Feasibility Study

 

Pincock,Allen& Holt - May 2001 - Technical Report

 

Scott Wilson RPA - July 2003 - Prefeasibility Report

 

Scott Wilson RPA - Feb 2004 - U/G Feasibility Report

 

Scott Wilson RPA - Feb 2007 - U/G Resource Estimate - Offset Zone

 

Scott Wilson RPA - Oct 2007 - Resource & Reserve Estimate

 

Mincon International - May 2008 - PEA of Offset Zone

 

Scott Wilson RPA - Jan 2009 - Update Offset Zone Resource Estimate

 

Scott Wilson RPA - Mar 2009 - Resource update

 

Scott Wilson RPA - Nov 2010 – Update Resource Estimate

 

Tetra Tech - Mar 2014 - Prefeasibility for Life of Mine

 

Hatch Engineering – April 2015 - PEA for Mine Expansion

 

Nordmin Engineering – June 2017 – Feasibility Study

 

 

 

 

 

 

 

PDL Metalurgical Studies

 

 

 

SGS – 2008 - Grinding Size Study

 

XPS – 2010 – metalurgical study – new grind size established

 

PDL (In House) – 2012- Flash Flotation Feasibility Study - not recommended

 

 

 

2017 PDL Mineral Reserves – Proven & Probable

 

 

 

Total 38.5M T 2.25g/t PD 2,787,000 OZ PD

 

Underground 21.2M T 3.09g/t PD

 

Surface 12.1M T 1.32g/t PD

 

 

 

2017 PDL Mineral Resources – Measured & Indicated

 

 

 

Total 28.8M T 1.9g/t PD 1,723,000 OZ PD

 

Measured 13.8M T 1.9g/t PD

 

Indicated 15.0M T 1.9g/t PD

 

 

 

2017 PDL Mineral Resources – Inferred

 

 

 

Total 4.4M T 2.6g/t PD

 

 

 

2017 PDL Total Resources and Reserves

 

 

 

Total 71.7M T 4,510,000 OZ PD

 

 

 

 

 

PDL COMPARISON TO NAM

 

 

 

2012 NAM Mineral Resources (Tetra Tech Report)

 

 

 

Measured 91.3M T 0.58g/t PD 1,867,899 OZ PD

 

Indicated 35.9M T 0.36g/t PD 455,881 OZ PD

 

Total 127.2 M T 2,323,781 OZ PD

 

 

 

NOTE: NAM Palladium conversion of grams to ounces = 0.035274g/oz)

 

 

 

 

 

GRADES

 

 

 

• notice that the PDL underground grades are significantly higher than the surface/open pit grades

• I suspect the same would be true if NAM were to do some deep drilling

• the 2006 43-101 GeoSim study reported palladium grades of 1.33g/t PD

• the 2012 Tetra Tech study reported much lower palladium grades

• this is because the tetra tech study targeted a large-tonnage low-grade open pit model

• 2017 drilling in the footwall revealed much higher grades at very shallow depths

• the inclusion of 2017 drilling in the 2018 RE should greatly increase the palladium ounces

 

 

 

RESERVES & RESOURCES (R&R)

 

 

 

• PDL total R&R is 71.7M T verses 127.2M T for NAM

• the PDL RE was produced in 2017 verses 2012 for the NAM outdated RE

• This equates to 4.5M OZ PD for PDL verses 2.3M OZ PD for NAM

• this is because the resource estimate for NAM assumes high tonnage open pit mineral extraction at lower grades palladium

• assuming a 20% increase in 2018 we get...

• 153M T

• open pit grade = 0.7g/t PD ( 2017 grades were over 1 g/t PD)

• 3.8M OZ PD

• NOTE: This does not include other payable metals, AU, PT, CU,NI,Rh)

 

 

 

 

 

OBSERVATIONS

 

 

 

• this comparisson underlines the economic value of the River Valley deposit

 

• PDL has a long history and a lot of money spent on Technical reports

• This comparison shows the importance of the new Technical Report and Metallurgical study

• NAM resources are based on 2012 data and grossly out of date

• NAM will have the cost advantage of an open pit mine

• NAM will not have the expense of a mill if supported by Vale or Glencore

 

 

 

 

 

 

 

CONCLUSIONS

 

 

 

 

 

• the RV deposit will utilize less expensive open pit methods of mining

• RV is 100km from Vale verses 1000km for PDL

• 2017 drilling demonstrated comparable grades in the footwall at RV

• only 3 km of the 16km strike length has been included in the resource estimate

• the NAM resource size and grades are comparable to PDL with much more potential for growth

• the next step for NAM may be a JV with a bigger company

• PDL has returned to profitability and could afford to invest in 20% of NAM

• possible JV partners include Vale, Glencore, PDL, Anglo American