Lac Des Iles says bye

North American Palladium is putting its Lac Des Iles Mine on care and maintenance, the latest in a series of Canadian mine closures. LDI was nearing a critical point in it's mine life, either it continued to expand or it simply closed down. There was no middle ground that it could achieve. The current pit is nearing the end of phase 4 and phase 5, which would of extended the mine life another 2 years would of greatly increased production cost. The pit has a very low head grade and unless they are producing a enormous amount of tonnes, they simply cannot produce a profit. It would come as no surprise then that phase 5 was canceled and the pit would stop production after phase 4 was completed and all the high grade was taken.

The underground is a different story though, much higher grade and much higher cash cost. The current Roby zone had at best one year of life left to it, after that it would be off to the Offset zone where mining could continue for another decade. Although the offset zone grades were better, it was deeper and a conveyor system, shaft or more trucks were needed to extract the ore. The preliminary economic assessment done by consultants established that at 2 year average Pd prices the offset zone would return 29% profits....(2 year average prices is $325, a far cry from the $180 we're looking at now) Unfortunately, it then comes as no surprise that the offset zone and phase 5 of the pit were canceled. But I must say I am surprised that they will hold off on extracting the ore from the Roby zone underground, the development has been established all that remains is the blasting of the stopes and extraction of the ore.

Oh well, I wish all workers from Blue Notes to Lockerby and LDI, the best of luck job huntin'.

Edit: I take my last word on LDI's planning back, they made the right choice and it makes sense to leave the ore in place, might as well go after it when you can make money instead of spending all your money moving it and not getting a return. I was a little shaken up on the day I wrote this, some good friends of mine lost their jobs.