North American Palladium* (PDL : TSX : $4.90), Net Change: 0.35, % Change: 7.69%, Volume: 1,462,121
I said, you wanna be restartin' somethin'? You got to be restartin' somethin'. It's too high to get over (yeah, yeah). North
American Palladium was in the spotlight on Wednesday after announcing that it has restarted production ahead of schedule at its
flagship Lac des Iles (LDI) mine in Ontario. This restart comes almost a month a head of expectations. The company is
currently mining at 2,000 tpd from its Roby Underground Zone and expects to increase throughput to the targeted rate of 2,600
tpd by May 1. Given this early start, the company is now projecting output of 140,000 ounces of palladium a year. Importantly,
early production allows the company to capitalize on the robust price. As noted by the company’s President and CEO, William
J. Biggar, "The restart is well timed to capitalize on the recent increase in the price of palladium, which now exceeds US$520
per ounce." Strength in the price of the commodity stems from investment demand (from ETFs) and the recovery in the global
automotive sector which is the major consumer of the metal. Also, concerns over PGM supply are contributing to strength in the
sector as power shortage issues continues to arise in South Africa, which produces around 35% of the world’s palladium and
about 85% of the world’s platinum. Going forward, one Bay Street analyst notes now that Lac des Iles is in production, he
expects the following events to provide near-term catalysts to further de-risk the stock: 1) A resource update for the Offset Zone
and Cowboy Zone in Q2/10, which could increase the company’s palladium resource; 2) An economic assessment for the Offset
Zone, in Q3/10 which should outline costs for an expansion program; and 3) Ongoing – drill results from 2010 exploration
programs at LDI and Sleeping Giant, which could lead to larger resources and extended mine lives. North American Palladium
is Canada’s only primary palladium producer. It owns the Lac des Iles palladium mine in Thunder Bay as well as the Sleeping
Giant gold mine located in the Abitibi region of Quebec.