|
TORONTO,
ONTARIO--(Marketwire - May 7, 2009) - North American palladium Ltd. (TSX:PDL)(NYSE
Amex:PAL) today announced financial results for the first quarter ended
March 31, 2009.
"I am pleased with the progress made on advancing our strategic
initiatives in the first quarter," said Bill Biggar, President and
CEO. "The previously announced acquisition of Cadiscor Resources
Inc., expected to close in late May following approval by Cadiscor's
shareholders, is an important step towards our vision of creating a
mid-tier precious metals company operating multiple mines in
mining-friendly jurisdictions. Cadiscor's Sleeping Giant gold mine is
expected to resume operations in the fourth quarter, at a production
rate of 50,000 ounces per year. At our Lac des Iles mine, our $7
million exploration program is well underway. Our operations team is
also working on a prefeasibility study to verify our belief that the
Roby underground mine and the Offset Zone will allow for another 12
years of underground mining. In addition, mine site personnel are
refining a restart plan for the Lac des Iles mine with the objective of
streamlining processes and lowering operating costs. From an
operational perspective, we expect to be able to resume mining within
three months of making a "go" decision."
FINANCIAL HIGHLIGHTS
- On March 31, 2009 the Company announced the planned acquisition of
Cadiscor Resources Inc. in an all share transaction. Coincident with
the signing of the agreement, the Company advanced $7.5 million to
Cadiscor to assist with the restart of the Sleeping Giant gold mine in
Quebec, expected to be producing in the fourth quarter of 2009.
- For the quarter ended March 31, 2009 there was no palladium production
as compared to 61,091 ounces in the first quarter last year due to the
Lac des Iles mine being on a care and maintenance basis during the
quarter.
- Revenue
after pricing adjustments for the quarter ended March 31, 2009 was $5.0
million compared to $70.8 million in the first quarter last year. The
first quarter 2009 revenue is entirely attributable to positive
commodity and foreign exchange pricing adjustments, as compared to
$19.7 million of positive pricing adjustments in the first quarter of
2008.
- During the three months ended March 31, 2009, the first full quarter
that the Lac des Iles mine was on care and maintenance, the Company
incurred care and maintenance costs of $3.2 million, general and
administration costs of $2.0 million and exploration expenditures of
$2.4 million, primarily on the Offset Zone project at Lac des Iles.
- Net income for the quarter ended March 31, 2009 was $0.3 million or
$0.00 per share compared to net income of $12.6 million or $0.16 per
share in the first quarter last year.
- palladium sales settled during the quarter ended March 31, 2009 were
realized at an average price of US$197 per ounce compared to US$434 per
ounce in the first quarter last year, a decrease of 55%.
- Concentrate awaiting settlement as at March 31, 2009 was $20.1
million and included 45,146 ounces of palladium provisionally valued at
the spot price of US$215 per ounce or contractually agreed upon prices.
The Company's performance is highly correlated to prevailing palladium
and by-product metal prices as it continues to sell all its metal
production into the spot markets.
- Net working capital as at March 31, 2009 was $79.4 million (including
cash and cash equivalents of $47.5 million) compared to $86.1 million
as at December 31, 2008.
Outlook
As of May 6, 2009 the spot price of palladium and platinum, the
Company's two main metals, was US$226 per ounce and US$1,136 per ounce
respectively, representing an increase of 23% and 27% respectively,
compared to December 31, 2008. palladium and platinum prices have not
yet reached a level at which the Company's management would consider
the restart of production at the Lac des Iles mine.
Approximately 50% of palladium and platinum demand is for the
manufacture of automotive catalytic converters. While there are some
signs of a global economic recovery, the outlook for the automotive
industry over the near term remains challenging. On the other hand, the
medium to longer term outlook for the pricing of palladium and platinum
appears to be quite positive based on credible third party forecasts
predicting renewed growth in global automotive sales, particularly in
the BRIC (Brazil, Russia, India and China) countries.
As at March 31, 2009 the Company had net working capital of $79.4
million, including cash and cash equivalents of $47.5 million. In
addition to the cash on hand, management expects to realize additional
cash flow over the next few months as payment is received for metal
sales made prior to the mine closure.
While in care and maintenance mode, the Company has retained senior
mine management and its exploration team. Management estimates that
mine site personnel costs, care and maintenance expenditures at the
mine, and corporate overhead costs will continue to be in the range of
$5 million to $6 million per quarter. This estimate does not include
discretionary investment in exploration activities.
Going forward, management intends to focus on strategic initiatives,
including:
1. Continuing the work required to complete a prefeasibility study on the
Offset Zone to a depth of up to 1,200 metres below surface. This
project has the potential to extend the life of the Lac des Iles mine
significantly. Mineralization is currently known to exist to a depth of
at least 1,670 metres. The results of the prefeasibility study are
expected to be available in the third quarter of 2009.
2. Carrying out drilling and exploration operations on the largely
unexplored Lac des Iles property to discover new resources.
3. Leveraging the Company's strong balance sheet to pursue potential
acquisitions and joint venture opportunities that may emerge in these
difficult and volatile markets.
In the current environment, management expects that there will be many
attractive strategic opportunities to consider. The Company will pursue
acquisition and joint venture opportunities aggressively but with
discipline to ensure that only those transactions that can deliver
enhanced shareholder value over the long-term are pursued.
While the Lac des Iles mine is on care and maintenance, management is
re-evaluating the current mine plan and mill configuration with a view
to reducing operating costs and ensuring that the Company is well
positioned to profit when metal prices recover and operations resume.
Conference Call and Webcast
The Company will host its first quarter earnings conference call at
2:00 p.m. ET on Friday, May 8, 2009. The toll-free conference call
dial-in number in North America is 1-888-789-0150 and the local and
overseas dial-in number is 416-695-6622.
The conference call will be simultaneously webcast and archived at www.napalladium.com
and at www.investorcalendar.com/IC/CEPage.asp?ID=144492.
A replay of the conference call will be available until May 29, 2009
toll-free at 1-800-408-3053, locally and overseas at 416-695-5800,
access code #5585268.
Further information about the first quarter results are available in
the Company's financial statements and MD&A, which will be filed on
its website, with Canadian provincial securities authorities (www.sedar.com) and
with the U.S. Securities and Exchange Commission (www.sec.gov).
About North American palladium
North American palladium is a precious metals company that owns one of
North America's largest palladium mines, historically producing
approximately 4% of global palladium supply. The Company's palladium
production at its Lac des Iles mine is strengthened by a significant
contribution from platinum, gold, nickel and copper by-product metals.
The Lac des Iles mine was placed on temporary care and maintenance in
October 2008 due to low metal prices. Prior to the temporary shutdown,
the mine had annual production of 270,000 ounces of palladium, 20,000
ounces of platinum and 20,000 ounces of gold. The mine, which can be
quickly restarted upon a strengthening of metal prices, hosts in situ
measured and indicated mineral resources of 3.7 million ounces of
palladium, 300,000 ounces of platinum and 250,000 ounces of gold,
giving investors significant leverage to an increase in commodity
prices. The Company benefits from operating in a politically stable
jurisdiction with developed infrastructure and a history of innovation
and excellence in mining. Please visit www.napalladium.com
for more information.
Cautionary Statement on Forward-Looking Information
Certain information included in this press release, including any
information as to our future financial or operating performance and
other statements that express management's expectations or estimates of
future performance, constitute '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' and similar
expressions identify forward-looking statements. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by management, are
inherently subject to significant business, economic and competitive
uncertainties, risks and contingencies. The Company cautions the reader
that such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual financial
results, performance or achievements of North American palladium to be
materially different from the Company's estimated future results,
performance or achievements expressed or implied by those
forward-looking statements and that the forward-looking statements are
not guarantees of future performance. These statements are also based
on certain factors and assumptions. For more details on these
estimates, risks, assumptions and factors, 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. In addition, there can be no assurance that the
Company's acquisition of Cadiscor will be completed or, if completed,
that it will be successful, and there can be no assurance that the Sleeping
Giant mine will be successfully restarted or that Cadiscor's other
properties can be successfully developed. 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.
Consolidated Balance Sheets (expressed in thousands of Canadian dollars) --------------------------------------------------------------------------- March 31 December 31 2009 2008 --------------------------------------------------------------------------- (unaudited) (audited) ASSETS Current Assets Cash and cash equivalents $47,485 $43,068 Concentrate awaiting settlement 20,083 43,051 Taxes recoverable 385 638 Inventories 19,089 16,590 Other assets 2,666 3,193 --------------------------------------------------------------------------- 89,708 106,540 Debentures receivable 7,500 - Mining interests 31,462 31,640 Mine restoration deposit 8,728 8,724 --------------------------------------------------------------------------- $137,398 $146,904 --------------------------------------------------------------------------- --------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable and accrued liabilities $5,824 $13,996 Current portion of obligations under capital leases 1,772 1,992 Senior credit facility 2,751 4,430 --------------------------------------------------------------------------- 10,347 20,418 Mine restoration obligation 8,549 8,455 Obligations under capital leases 831 1,130 --------------------------------------------------------------------------- 19,727 30,003 Shareholders' Equity Common share capital and purchase warrants 485,597 485,386 Stock options 2,517 2,305 Contributed surplus 12,336 12,336 Deficit (382,779) (383,126) --------------------------------------------------------------------------- Total shareholders' equity 117,671 116,901 --------------------------------------------------------------------------- $137,398 $146,904 --------------------------------------------------------------------------- --------------------------------------------------------------------------- Certain prior period amounts have been reclassified to conform to the presentation adopted in 2009. These financial statements should be read in conjunction with the notes and management's discussion and analysis, available online at www.sedar.com and www.sec.gov and on the Company's website at www.napalladium.com. Consolidated Statements of Operations, Comprehensive Income and Deficit (expressed in thousands of Canadian dollars, except share and per share amounts) (unaudited) --------------------------------------------------------------------------- Three months ended March 31 2009 2008 --------------------------------------------------------------------------- Revenue - before pricing adjustments $ - $51,052 Pricing adjustments: Commodities 4,018 15,178 Foreign exchange 1,012 4,558 --------------------------------------------------------------------------- Revenue - after pricing adjustments 5,030 70,788 --------------------------------------------------------------------------- Operating expenses Care and maintenance costs 3,216 - Production costs - 30,600 Inventory pricing adjustment (2,688) (144) Smelter treatment, refining and freight costs 66 5,410 Amortization 50 9,162 Loss on disposal of equipment - 695 Asset retirement costs 94 151 --------------------------------------------------------------------------- Total operating expenses 738 45,874 --------------------------------------------------------------------------- Income from mining operations 4,292 24,914 --------------------------------------------------------------------------- Other expenses General and administration 2,047 357 Exploration 2,408 7,054 Interest and other financing costs (income) (140) 1,629 Foreign exchange loss (gain) (370) 914 --------------------------------------------------------------------------- Total other expenses 3,945 9,954 --------------------------------------------------------------------------- Income before taxes 347 14,960 Income and mining tax expense - 2,365 --------------------------------------------------------------------------- Net income and comprehensive income for the period 347 12,595 Deficit, beginning of period (383,126) (222,447) --------------------------------------------------------------------------- Deficit, end of period $(382,779) $(209,852) --------------------------------------------------------------------------- Net income per share Basic $0.00 $0.16 --------------------------------------------------------------------------- Diluted $0.00 $0.15 --------------------------------------------------------------------------- Weighted average number of shares outstanding Basic 86,750,500 79,755,805 --------------------------------------------------------------------------- Weighted average number of shares outstanding Diluted 86,750,500 82,161,057 --------------------------------------------------------------------------- --------------------------------------------------------------------------- Certain prior period amounts have been reclassified to conform to the presentation adopted in 2009. These financial statements should be read in conjunction with the notes and management's discussion and analysis, available online at www.sedar.com and www.sec.gov and on the Company's website at www.napalladium.com. Consolidated Statements of Cash Flows (expressed in thousands of Canadian dollars) (unaudited) Three months ended March 31 2009 2008 --------------------------------------------------------------------------- Cash provided by (used in) Operations Net income for the period $347 $12,595 Operating items not involving cash Accretion expense relating to convertible notes payable - 1,831 Amortization 50 10,089 Amortization of deferred financing costs 9 104 Interest on convertible notes settled in shares - 256 Accrued interest on mine restoration deposit (4) (73) Unrealized foreign exchange gain (1,146) (3,180) Unrealized commodity price adjustment (6,059) (16,933) Asset retirement costs 94 151 Future income tax recovery - 2,365 Stock based compensation and employee benefits 423 253 Loss on disposal of equipment - 695 --------------------------------------------------------------------------- (6,286) 8,153 Changes in non-cash working capital 20,750 1,947 --------------------------------------------------------------------------- 14,464 10,100 --------------------------------------------------------------------------- Financing Activities Issuance of common shares and warrants, net of issue costs - 10,504 Repayment of senior credit facility (1,759) (1,518) Repayment of obligations under capital leases (578) (422) Mine restoration deposit - (266) --------------------------------------------------------------------------- (2,337) 8,298 --------------------------------------------------------------------------- Investing Activities Advances to Cadiscor Resources Inc. (7,500) - Additions to mining interests 210 (11,029) --------------------------------------------------------------------------- (7,710) (11,029) --------------------------------------------------------------------------- Increase in cash and cash equivalents 4,417 7,369 Cash and cash equivalents, beginning of period 43,068 74,606 --------------------------------------------------------------------------- Cash and cash equivalents, end of period $47,485 $81,975 --------------------------------------------------------------------------- Cash and cash equivalents consisting of: Cash $6,653 $11,768 Short-term investments 40,832 70,207 --------------------------------------------------------------------------- $47,485 $81,975 --------------------------------------------------------------------------- --------------------------------------------------------------------------- Certain prior period amounts have been reclassified to conform to the presentation adopted in 2009. These financial statements should be read in conjunction with the notes and management's discussion and analysis, available online at www.sedar.com and www.sec.gov and on the Company's website at www.napalladium.com. Consolidated Statements of Shareholders' Equity (expressed in thousands of Canadian dollars, except share amounts) (unaudited) Number of Capital Shares Stock shares stock issuable options ---------------------------------------------------------------------------- Balance, December 31, 2008 85,158,975 $469,214 $2,080 $2,305 Common shares issued/issuable: For principal repayments on convertible notes payable 1,486,900 2,062 (2,062) - For interest payments on convertible notes payable 14,738 18 (18) - Stock-based compensation expense 106,443 211 - 212 Net income and comprehensive income for the three months ended March 31, 2009 - - - - ---------------------------------------------------------------------------- Balance, March 31, 2009 86,767,056 $471,505 $ - $2,517 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Equity component of convertible Total notes Contributed shareholders' Warrants payable surplus Deficit equity ---------------------------------------------------------------------------- Balance, December 31, 2008 $14,092 $ - $12,336 $(383,126) $116,901 Common shares issued/issuable: For principal repayments on convertible notes payable - - - - - For interest payments on convertible notes payable - - - - - Stock-based compensation expense - - - - 423 Net income and comprehensive income for the three months ended March 31, 2009 - - - 347 347 ---------------------------------------------------------------------------- Balance, March 31, 2009 $14,092 $ - $12,336 $(382,779) $117,671 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Number of Capital Shares Stock shares stock issuable options ---------------------------------------------------------------------------- Balance, December 31, 2007 75,770,570 $430,793 $ - $1,673 Common shares issued/issuable: For principal repayments on convertible notes payable 6,111,869 28,270 2,062 - For interest payments on convertible notes payable 165,185 714 18 - Tax effect of flow-through shares - (1,452) - - Pursuant to unit offering, net of issue costs 2,800,000 9,575 - - Warrants issued: Pursuant to unit offering, net of issue costs - - - - Warrants exercised 100 1 - - Stock-based compensation expense 311,251 1,313 - 632 Net loss and comprehensive loss for the year ended December 31, 2008 - - - - ---------------------------------------------------------------------------- Balance, December 31, 2008 85,158,975 $469,214 $2,080 $2,305 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Equity component of convertible Total notes Contributed shareholders' Warrants payable surplus Deficit equity ---------------------------------------------------------------------------- Balance, December 31, 2007 $13,193 $6,044 $6,292 $(222,447) $235,548 Common shares issued/issuable: For principal repayments on convertible notes payable - (6,044) 6,044 - 30,332 For interest payments on convertible notes payable - - - - 732 Tax effect of flow-through shares - - - - (1,452) Pursuant to unit offering, net of issue costs - - - - 9,575 Warrants issued: Pursuant to unit offering, net of issue costs 899 - - - 899 Warrants exercised - - - - 1 Stock-based compensation expense - - - - 1,945 Net loss and comprehensive loss for the year ended December 31, 2008 - - - (160,679) (160,679) ---------------------------------------------------------------------------- Balance, December 31, 2008 $14,092 $ - $12,336 $(383,126) $116,901 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Certain prior period amounts have been reclassified to conform to the presentation adopted in 2009. These financial statements should be read in conjunction with the notes and management's discussion and analysis, available online at www.sedar.com and www.sec.gov and on the Company's website at www.napalladium.com.
|