North American Palladium Needs Money, Says CIBC

MetalMiner reported that CIBC believes North American Palladium Ltd.’s (TSX:PDL,NYSEMKT:PAL) future doesn’t look particularly bright, largely due to the fact that a slow ramp up at the company’s Lac des Iles mines has left it in need of more cash.

As quoted in the market news:

‘Having burnt another $24 million in the quarter, PDL had $18 million cash left with all debt facilities fully drawn,’  CIBC says. ‘Given $37 million of capex in the fourth quarter, the company has weeks of liquidity left and management is now actively looking at its options to bridge the funding gap until the mine starts generating positive cash in 2014.’ CIBC suggests North American Palladium needs $10 to $15 million immediately, and more. ‘In the absence of any guidance for 2014 and beyond, the mid to longer-term financing needs remain unclear but based on our estimates with costs dropping to $400 an ounce (from $580 an ounce in the third quarter), PDL needs at least $50 million, but it could be $150 million if the palladium price stays at $730 an ounce,’ CIBC says.

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