North American Palladium (PDL
& PAL)
Interview with: Andre Douchane, President and CEO
Business News, Financial News, Stocks, Money & Investment Ideas, CEO Interview
and Information on their Lac des Iles open pit mine,
located 85 kilometers northwest of Thunder Bay in northern Ontario, which produces
palladium, platinum, gold, copper and nickel as by-products. |
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North
American Palladium is a major supplier to the automobile industry, where their product is
used in catalytic converters
Basic Materials
Metal Mining
(TSX: PDL)
(AMEX: PAL)
North American Palladium
Andre Douchane
President and
Chief Executive Officer
Interview conducted by:
Lynn Fosse
Senior Editor
CEOCFOinterviews.com
October 2003
North American Palladium (TSX: PDL) (AMEX: PAL) is Canada's only primary producer of
palladium. Palladium is one of the platinum group metals (PGMs), a group of rare precious
metals, distinguished by their superior conductivity and ductility, resistance to
oxidation and corrosion, their strength and durability, strong catalytic properties and
high melting points. The Company's Lac des Iles open pit mine, located 85 kilometers
northwest of Thunder Bay in northern Ontario, also produces platinum, gold, copper and
nickel as by-products. “When we recover palladium, we also
recover another suite of metals.” Continues Mr. Andre
Douchane, President and CEO of North American Palladium, “We
recover a little platinum, gold, nickel, copper and cobalt, which are also sold on the
market. I think palladium is a good long-term business as well as platinum and
nickel.” Pointing to the expanding use of palladium in the automobile
industry, Mr. Douchane tells us, “We
currently have a long-term contract with a major automobile manufacturer that includes a
price protection. This year our average price will be around $440.00 per ounce. Next year
it may fall off to a low of $325.00 if the spot price does not come back up. Our long-term
contract goes through the middle of 2005. Palladium and platinum belong to a group of
metals have some unique properties, such as the ability to hold hydrogen and the ability
to convert exhaust gases to a less harmful gas. I doubt use of palladium in catalytic
converters will go down because they are beginning to use those things in Asia. As we move
forward with catalytic converters in places like China, Viet Nam, Thailand and those
areas, you are going to see actual usage go up. This is long term and there are other uses
coming along such as energy storage and fuel cells.” When asked what is
involved in the mining of palladium and getting it to its final destination, Mr. Douchane responded, “Palladium is
mined from a surface (open pit) mine, which is located in northwestern Ontario. We move a
massive amount of rock and put a massive amount of rock through a milling operation where
it is ground. Right now we are averaging a little over 14,000 tons a day and we are trying
to get up to 15,000 tons a day. The rock is ground in big grinding mills to a consistency
of face powder. It is then run through a concentrating process where it is collected using
air bubbles then filtered and dried into what is called a “concentrate.” That is
then sent off to one of two smelters where it is then smelted and refined into various
metals.”
Palladium is used in a variety of industries. The largest and fastest growing application
is in the production of automobile catalytic converters, which help to reduce emissions
that are harmful to the environment. In 2001, the automobile industry accounted for nearly
72% of palladium demand, followed by electronics (10%), and dentistry (10%). The
electronics industry uses palladium in the production of components for personal
computers, cellular telephones, fax machines and other electronically controlled devices.
Palladium is also used in dental alloys, in jewelry and in the chemical industry.
North American Palladium's Lac des Iles mine began commercial production in December 1993.
Following an extensive exploration program completed in 1999, and a detailed feasibility
study completed in May 2000, the company embarked on a mine expansion program at Lac des
Iles which expanded mill throughput from 2,400 tons per day to 15,000 tons per day, and
increased annual palladium production to 250,000 ounces over a 17-year mine life. The mine
property consists of four mining leases covering 1,465 hectares. In addition, the company
holds 13,709 hectares of mining claims within 80 kilometers of the mine, which cover host
rocks favorable for platinum group metals.
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