This news release contains forward-looking statements. Reference should
be made to the cautionary statement on forward-looking information at
the end of this news release.
Highlights of 2007
- Revenue for the year increased by $36.7 million to $195.9 million, up 23% versus 2006.
- Operating cash flow for the year (before changes in non-cash
working capital(1) improved by $36.9 million to $46.8 million compared
to operating cash flow of $9.9 million in 2006.
- The net loss for the year ended December 31, 2007 was $28.7
million or $0.51 per share compared to a net loss of $34.1 million or
$0.65 per share in 2006. The net loss for the year includes a net
negative impact of $19.0 million (2006 - net negative impact $3.7
million) due to foreign exchange gains and losses.
- Palladium production increased by 21% to 286,334 ounces for
the year ending December 31, 2007 versus production of 237,338 ounces
the previous year.
- Palladium represented 47% of the year's total revenues while platinum and nickel contributed 16% and 22% respectively.
- Total by-product revenues for the year increased by 25% to $104.1 million versus $83.6 million in 2006.
- Cash cost per ounce of palladium produced(1), net of
by-product metal revenues and royalties, was US$164 in 2007 compared to
US$201 last year.
- North American Palladium completed an equity offering that
resulted in total gross proceeds to the Company of approximately US$86
million, which will be used to advance its three platinum group metals
(PGM) and nickel-copper projects.
(1) Non-GAAP measure. Reference should be made to footnote 1 at the end of this Press Release.
North American Palladium Ltd. announced today financial results for the fourth quarter and year ended December 31, 2007.
Revenue, after pricing adjustments, in the fourth quarter of
2007 was $46.5 million, lower than the fourth quarter of 2006 by $4.3
million due mainly to the negative foreign exchange impact from the
continued strengthening of the Canadian dollar versus the US dollar.
For the year ended December 31, 2007, revenue after pricing adjustments
was $195.9 million, an increase of $36.7 million or 23%, compared to
revenue of $159.2 million last year.
Palladium production for the quarter ended December 31, 2007 of
71,595 ounces was down slightly (2%) compared to 73,242 ounces the
previous year and reflects increased scheduled maintenance downtime in
the fourth quarter of 2007. Palladium production for the year ended
December 31, 2007 increased to 286,334 ounces, up 21% compared to the
previous year.
Palladium sales in the fourth quarter of 2007 were recorded at
an average price of US$364 per ounce versus an average price of US$322
in the same period in 2006. For the year ended December 31, 2007
palladium sales were recorded at an average price of US$356 per ounce,
up 12%, compared to US$319 in 2006.
For the quarter ended December 31, 2007, cash cost per ounce(1)
of palladium, net of by-product metal revenues, was US$223 per ounce
versus US$108 in the same period last year and reflects primarily the
negative impact of the strengthening Canadian dollar on by-product
metal revenue. For the year ended December 31, 2007 the cash cost per
ounce(1) of palladium produced declined to US$164 per ounce compared
with US$201 per ounce in 2006, reflecting the increase in production
together with continued strength in by-product metal prices, partially
offset by the strengthening Canadian dollar.
The Company recognized a loss from mining operations of $8.2
million in the fourth quarter of 2007 compared to income of $0.5
million in the same period last year. The loss is due to lower revenue
of $4.3 million, which includes a negative foreign exchange impact of
$7.2 million, and increased operating costs due primarily to increased
production costs ($1.0 million), smelting, refining and freight costs
($1.5 million) and amortization charges ($0.9 million). The loss from
mining operations for the year ended December 31, 2007 was $19.4
million, an increase of $1.3 million (7%), compared to the loss of
$18.1 million last year.
The net loss for the quarter ended December 31, 2007 was $11.1
million or $0.19 per share compared to a loss of $7.4 million or $0.14
per share in the same period last year. For the year ended December 31,
2007, the Company decreased its net loss to $28.7 million ($0.51 per
share) from the 2006 loss of $34.1 million ($0.65 per share) despite a
negative foreign exchange impact of $19.0 million (2006 negative impact
of $3.7 million) due to strengthening of the Canadian dollar versus the
US dollar.
Operating cash flow for the year (before changes in non-cash
working capital(1) improved by $36.9 million to $46.8 million compared
to operating cash flow of $9.9 million in 2006.
(1) Non-GAAP measure. Reference should be made to footnote 1 at the end of this Press Release.
Mr. Jim Excell, President and Chief Executive Officer said, "The
consistent and improved production results are gratifying and supports
our drive toward strengthening the Company's financial position. Having
raised US$86 million in a recent financing, we are well-positioned to
aggressively advance the Shebandowan West and the Offset High Grade
Zone projects in Ontario, as well as the Arctic Platinum Project in
Finland, towards production decisions." Mr. Excell added, "Since
December 31, 2007 we have seen a significant increase in PGM prices,
highlighting increased demand and growing supply concerns in South
Africa. If the prevailing metal prices are sustained, it can have a
very positive impact on the Company's 2008 financial performance."
Outlook
Palladium production is expected to increase by approximately 5%
for the year ended December 31, 2008 with an estimated total production
of approximately 300,000 ounces. The proportion of by-product metals
produced is, in aggregate, expected to increase in tandem with
palladium production.
A key strategy moving forward will be to continue the pursuit
of opportunities to acquire good quality PGM-Ni-Cu projects. The
Company's ambitious exploration program will continue in 2008, with an
important component being the completion of a feasibility study for the
Arctic Platinum Project in Finland. In addition, a preliminary economic
assessment of the Offset High Grade Zone at Lac des Iles is nearing
completion and the Company anticipates releasing the results during the
second quarter of 2008. A preliminary economic assessment of the
Shebandowan West Project is also anticipated in the second quarter of
2008 which evaluates a ramp-accessed underground mine scenario.
Discussions are currently underway with Vale-Inco about the next steps
for the Shebandowan joint venture.
Further information about the 2007 year-end results are
available in the Company's financial statements and MD&A, which
will be filed on its website, with Canadian provincial securities
authorities (www.sedar.com) and with the U.S. Securities and Exchange
Commission (www.sec.gov).
Conference Call and Webcast
The Company will host its fourth quarter and year-end 2007
Conference Call and Webcast at 3:00 pm ET on Thursday March 20, 2008.
The toll-free conference call dial-in number is 1-866- 226-1799 and the
local and overseas dial-in number is 416-641-6125. The conference call
will be simultaneously webcast and archived at www.napalladium.com in
the Investor Centre under Conference Calls. The webcast will also be
available at www.vcall.com/IC/CEPage.asp?ID=126220. A replay of the
conference call will be available until April 3, 2008: toll-free at
1-800-408-3053; locally and overseas at 416-695-5800, access code
#3253315.
