North American Palladium Posts Impressive Q3 Results

North American Palladium Ltd. (TSX:PDL, OTC PINK:PALDF) announced its third quarter 2018 financial and operational results for the three and nine months ended September 30, 2018.

Highlights are as follows:

• Adjusted EBITDA for the third quarter of 2018 was US$38.0 million compared to US$22.0 million for the same period in 2017. Adjusted EBITDA for the nine months ended September 30, 2018 was US$103.6 million compared to US$49.3 million for the same period in 2017.
• Net income for the quarter was US$22.9 million compared to a net income of US$12.2 million for the same period in 2017. Net income for the nine months ended September 30, 2018 was US$41.7 million compared to a net income of US$21.8 million for the same period in 2017.
• Underground production was 565,277 tonnes (6,144 tonnes per day) at an average grade of 3.2 grams per tonne this quarter compared to 500,560 tonnes (5,441 tonnes per day) at an average palladium grade of 3.8 grams per tonne in the third quarter 2017.
• The company produced 56,852 ounces of payable palladium at an All-Inclusive Sustaining Cost (AISC) of US$733 per ounce compared to 53,118 ounces of palladium at an AISC of US$688 in the third quarter of 2017.
• In October, the company published a new feasibility study prepared in accordance with NI 43-101 that expanded underground operations and added resources and mine life at the Lac des Iles Mine (LDI).

Jim Gallagher, president and CEO, commented:

We are pleased to report another strong quarter at LDI, with palladium production increasing by 7 percent over the same period last year based on higher underground and surface ore production. These excellent production results combined with strong palladium prices resulted in an increase in revenue of 48 percent and adjusted EBITDA of over US$100-million year to date. On September 17^th, the company announced the results of a new feasibility study for LDI, which outlined a new plan to extend the mine life, generate increased cash flow by optimizing resources formerly included in the Roby open pit pushback plan and by added reserves that were previously left unmined the open pit design. This new approach will take full advantage of LDI’s 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.

The company is in a strong position to capitalize on the robust palladium market while continuing to add resources through mine site and greenfields exploration. Guided by the results of ongoing geophysical surveys, we are increasing investment in surface exploration is supported by the encouraging drilling results reported earlier this year from the Creek Zone and Baker area targets. Adding near-surface resources capable of displacing lower-grade feed from our surface stockpile remains a strategic priority. Palladium prices continue to show strong resilience during this period of financial market volatility, supported by trade and sanction concerns. As we have mentioned before, the primary deficit in the palladium market that has existed for the last few years is predicted to continue well into the future.