North American Palladium will inject C$5.7 million into its Lac des Iles asset in order to expand drilling in the area.
North American Palladium (NAP) (TSX:PDL,OTC Pink:PALDF) has increased the drilling budget for its Ontario-based Lac des Iles (LDI) mine property by C$5.7 million, with a specific focus on expanding the newly discovered C zone.
The company reported on Wednesday (May 29) that the cash will be used to complete about 25,000 meters of underground exploration drilling and 75,000 meters of resource definition drilling in 2019.
“The additional funding will allow us to accelerate drilling on most of our underground exploration targets, including Camp Lake, Offset Zone satellites and the recently-discovered C Zone,” said Jim Gallagher, president and CEO of the company.
Next month, the miner will position a drill in a new exploration drift where the deepest level of the asset is located. NAP will start drilling at the Camp Lake target with a secondary underground exploration drill in play that will continue testing for major extensions to known B zone targets.
“The discovery of the C zone is testimony to the effectiveness of our modeling of the critical structures that control the distribution of the known palladium resources at LDI,” said Dr. Dave Peck, vice president of exploration at NAP.
“With our recently expanded target bank and a larger drilling budget, we are increasingly optimistic about the prospects for significant additions to our palladium mineral inventory at LDI.”
The C zone has become an area of focus for the precious metals miner thanks to encouraging drill results, the size of the target area and its location relative to existing infrastructure. NAP revealed that the C zone’s close proximity to the Offset zone mining areas suggests that, if new resources are found, development should be low cost.
Mine life was extended by one year, to 2027, with average underground production increasing from 6,000 tonnes per day to more than 12,000 tonnes per day. Underground and surface reserves were pegged at 40.9 million tonnes at an average palladium grade of 2.31 grams per tonne, yielding 2.32 million ounces of payable palladium production.
“LDI continues to be one of the lowest cost underground mines in Canada. This new approach will take full advantage of (its) large, lower-grade near-surface resources and allow for the mining of more resources at an improved grade than contemplated in the prior 2017 feasibility study,” Gallagher said at the time.
As of 2:32 p.m. EDT on Thursday (May 30), North American Palladium was trading at C$11.16.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.