The life of the mine is based on the Status of the proven reserves. But then - as can be seen from the numbers below, PAL has huge numbers in probable reserves. Probable reserves can only be taken as proven if the production starts from were the probables have been taken. We know, that PAL still has 2 to 3 shift for going lower in the mine over time, which could extend the life of maturity for another 5 to 6 years.
But then Investors are not only investing in a Company that exists perpetual. You can invest in a Company in expection that they return Money to the shareholders - like a sinking fund or they make over time an acquisition.
Be it as it may: Here some very interesting figures to study.
TABLE 1: Mineral reserve and mineral resource estimates for the Lac des Iles mine property effective December 31 st , 2013.
NEAR SURFACE RESERVES Category/Source Pd Cut-Off Tonnes Pd Pt Au Ni Cu Pd Contained Proven (g/t) (000's) (g/t) (g/t) (g/t) (%) (%) (000's
oz) Low-Grade Stockpile (RGO) 0.95 4,876 0.97 0.12 0.08 0.06 0.03 152 Roby Zone Open Pit 1.09 716 1.31 0.16 0.13 0.07 0.06 30 Total Proven - 5,592 1.01 0.13 0.09 0.06 0.03 182 Probable Roby Zone Open Pit 1.09 293 1.39 0.18 0.15 0.08 0.07 13 Total Reserve - 5,885 1.03 0.13 0.09 0.06 0.04 195
NEAR-SURFACE RESOURCES Category/Source Pd Cut-Off Tonnes Pd Pt Au Ni Cu Pd Contained Measured (g/t) (000's) (g/t) (g/t) (g/t) (%) (%) (000's oz) Low-Grade Stockpile (RGO) 0.95 7,679 0.97 0.12 0.08 0.06 0.03 239 Roby Zone Pit Expansion 1.00 10,476 1.60 0.21 0.12 0.07 0.05 539 Sheriff Zone 1.50 1,725 2.06 0.21 0.11 0.06 0.07 114 North VT Rim 1.00 437 2.03 0.12 0.03 0.03 0.01 28 Total Measured - 20,317 1.41 0.17 0.10 0.07 0.04 921 Indicated Roby Zone Pit Expansion 1.00 5,393 1.53 0.21 0.11 0.07 0.05 265 Sheriff Zone 1.50 35 1.74 0.20 0.14 0.07 0.09 2 North VT Rim 1.00 14 1.75 0.12 0.03 0.03 0.01 1 Total Indicated 5,442 1.53 0.21 0.11 0.07 0.05 268 Total Measured + Indicated - 25,759 1.44 0.18 0.10 0.07 0.04 1,189
UNDERGROUND RESERVES - HANGINGWALL ZONES Category/Source Pd Cut-Off Tonnes Pd Pt Au Ni Cu Pd Contained Proven (g/t) (000's) (g/t) (g/t) (g/t) (%) (%) (000's oz) Offset Hangingwall Zone 2.60 4,499 4.06 0.28 0.28 0.11 0.08 587 Roby Hangingwall Zone 2.40 847 3.51 0.23 0.20 0.05 0.04 96 Total Proven - 5,346 3.97 0.27 0.27 0.10 0.07 683 Probable Offset Hangingwall Zone 2.60 3,564 3.82 0.27 0.27 0.10 0.09 438 Roby Hangingwall Zone 2.40 251 3.17 0.22 0.18 0.05 0.04 26 Total Probable 3,815 3.78 0.27 0.26 0.10 0.09 463 Total Reserve - 9,161 3.89 0.27 0.27 0.10 0.08 1,146
UNDERGROUND RESOURCES - HANGINGWALL ZONES Category/Source Pd Cut-Off Tonnes Pd Pt Au Ni Cu Pd Contained Measured (g/t) (000's) (g/t) (g/t) (g/t) (%) (%) (000's oz) Offset Hangingwall Zone 2.50 2,418 4.34 0.31 0.28 0.11 0.08 337 Indicated Offset Hangingwall Zone 2.50 3,234 4.19 0.30 0.29 0.12 0.10 436 Total Measured + Indicated 2.50 5,652 4.25 0.30 0.29 0.12 0.09 773 Inferred Offset Hangingwall Zone 2.50 5,942 3.75 0.23 0.23 0.10 0.09
UNDERGROUND RESOURCES - FOOTWALL ZONES Category/Source Pd Cut-Off Tonnes Pd Pt Au Ni Cu Pd Contained Measured (g/t) (000's) (g/t) (g/t) (g/t) (%) (%) (000's oz) Offset Footwall Zone 1.50 11,011 2.24 0.23 0.16 0.08 0.06 793 Roby Footwall Zone 1.50 4,159 2.43 0.21 0.18 0.06 0.05 325 Total Measured 1.50 15,170 2.29 0.22 0.17 0.07 0.06 1,118 Indicated Offset Footwall Zone 1.50 8,810 2.12 0.22 0.16 0.08 0.07 600 Roby Footwall Zone 1.50 2,341 2.34 0.20 0.17 0.06 0.05 176 Total Indicated 1.50 11,151 2.17 0.22 0.16 0.08 0.07 777 Total Measured + Indicated 1.50 26,321 2.24 0.22 0.16 0.08 0.07 1,895 Inferred Offset Footwall Zone 1.50 9,530 2.16 0.15 0.12 0.06 0.05 Roby Footwall Zone 1.50 248 2.43 0.18 0.08 0.03 0.02 Total Inferred 1.50 9,778 2.17 0.15 0.12 0.06 0.06
COMBINED RESERVES AND RESOURCES - ALL SOURCES Category/Source Tonnes Pd Pt Au Ni Cu Pd Contained Sub-Category (000's) (g/t) (g/t) (g/t) (%) (%) (000's oz) Total Proven + Probable 15,046 2.77 0.21 0.20 0.08 0.06 1,341 Total Measured + Indicated 57,732 2.08 0.21 0.15 0.08 0.06 3,857 Total Inferred 15,720 2.77 0.18 0.16 0.07 0.07
Notes 1. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. 2. Palladium ounces are stated as contained ounces. Disclosure of contained ounces is permitted under Canadian regulations; however, the SEC generally permits resources to be reported only as in place tonnage and grade. 3. Resources listed in Table 1 are exclusive of reserves. Resources and reserves reflect depletion from mining activities to December 31st, 2013. 4. Tonnages are rounded to nearest '000 tonnes. Pd, Pt and Au grades are rounded to nearest .01 g/t. Ni and Cu grades are rounded to nearest .01%. Rounded numbers used to calculate contained Pd (oz) and average resource and reserve tonnage and grades. 5. All reserve and resource estimates were prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects (NI 43-101) and the Canadian Institute of Mining, Metallurgy and Petroleum classification system. US investors should refer to the Annual Information Form for an overview on how Canadian Standards differ significantly from US requirements. 6. The mineral resource for the Offset hangingwall and footwall zones was estimated as of December 31, 2013 by Denis Decharte P.Eng, an employee of North American Palladium Ltd. (NAP) and a qualified person (QP) under NI 43-101. The mineral resource calculation uses a minimum 2.5 g/t palladium resource block cut-off for the hangingwall zone and a minimum 1.5 g/t palladium resource block cut-off for the footwall zone. The mineral resource estimate is based on the combination of geological modeling, geostatistics and conventional block modelling (5m by 5m by 5m blocks). 1m composite intervals were used with a grade capping at 30 g/t for palladium and 3 g/t for gold. Grade capping was determined not to be necessary for others metals. The Offset Zone resource models used the ordinary kriging (OK) grade interpolation method within a 3DI block model with mineralized zones defined by wireframe solids. The mineral resource is exclusive of mineral reserve and mined-out material as of December 31, 2013. 7. The mineral resource for the Roby footwall zone was estimated as of December 31, 2013 by Denis Decharte P.Eng, an employee of North American Palladium Ltd. (NAP) and a qualified person (QP) under NI 43-101. The mineral resource calculation uses a minimum 1.5 g/t palladium resource block cut-off. The mineral resource estimate is based on the combination of geological modeling, geostatistics and conventional block modelling (5m by 5m by 5m blocks). Grade capping was determined not to be necessary, however influence of composite intervals with palladium grade higher than 50 g/t were limited in space. The Roby zone resource models used the ordinary kriging (OK) grade interpolation method within a 3DI block model with mineralized zones defined by wireframe solids. The mineral resource is exclusive of mineral reserve and mined-out material as of December 31, 2013. 8. Mineral resource estimates for the near-surface portion of the western part of the North VT Rim zone (west and East-deep zones) at the LDI mine property was prepared by Chris Roney , P.Geo., a Qualified Person and a private consultant to the Company. This resource estimate was based on a 1.0 g/t Pd cut-off grade. The North VT Rim zone mineral resources were estimated from drilling completed to April 15, 2013. The mineral resource uses a minimum 1.0 g/t Pd resource block cut-off. The mineral resource estimate is based on the combination of geological modeling, geostatistics and conventional block modeling (5m x 5m x 5m blocks). The North VT Rim resource models used the inverse distance squared (ID 2) grade interpolation method. 9. Mineral resource estimates for the low-grade stockpile (RGO) was prepared by David N. Penna , P.Geo., an employee of Lac des Iles Mines Ltd. and a qualified person within the meaning of NI 43-101. 10. As with mineral resources, the estimate of mineral reserves may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. The mineral reserves were estimated from geological block models provided by Denis Decharte P.Eng. and from RGO stockpile resource information provided by Dave Penna , P. Eng., employees of North American Palladium (NAP) and qualified persons (QP) under NI 43-101. The geological block models reflect updates that are based upon diamond drilling completed after March 31, 2012 and before December 31 st , 2013. 11. Mineral resources for the Sheriff Zone are based on estimates originally provided in the Company's September 5, 2013 press release. 12. The mineral reserves were estimated by William Richard McBride , P.Eng. of Tetra Tech and Wenchang Ni , P.Eng. of Tetra Tech; with input by Dave Penna , P. Eng., an employee of North American Palladium (NAP) and qualified persons (QP) under NI 43-101 on allocation of indirect mining costs and John Cooney , P. Eng., an employee of North American Palladium (NAP) and qualified persons (QP) under NI 43-101 on the use of the Lac Des Isle Mine 2014 budget for unit cost determinations; and with additional input by Cam McKinnon , P.Eng. of Tetra Tech on recoveries; and Philip Bridson , P.Eng. of Tetra Tech on metal prices and exchange rate, independent QPs within the meaning of NI 43-101. 13. Reserves were estimated to the 1065 Mine Level (4,435 metre elevation), a maximum depth of 1,072.5 metres. 14. The following metal price assumptions were used for reserves estimation: US$700/oz palladium, US$1,453/oz platinum, US$1,320/oz gold, US$6.47/lb nickel, and US$3.26/lb copper. A CDN$/US$ exchange rate of CDN$1.00 = US$0.95 was also applied. 15. An average production rate of 5,272 t/d was used to determine the reserves. The following recoveries were used in the assumptions to determine the reserves: 86.3% palladium, 80.3% platinum, 80.4% gold, 38.8% nickel, and 88.7% copper. The effective date of NAP's LDI Mine resource models for the Offset Zone and for the Roby Zone, as prepared by NAP's Denis Decharte P.Eng., is December 31, 2013 and as a result of "mining depletion" the user of this reserve information should ensure that this is based upon the most recent resource estimate for the property. 16. It should also be noted that the mineral reserve estimate for the Offset Zone as provided in 2013 as part of the technical report labeled "Technical Report Lac des Iles Mine, Ontario, Incorporating Prefeasibility Study Offset Zone Phase I, effective January 31, 2013" reflected a different mining method with a different set of economic circumstances that thereby lead to that January 2013 reserve estimate in that prior report to be non-applicable to the unconsolidated fill mining method demonstrated as being viable by this prefeasibility study work. It should be further noted that "mining depletion" during 2013 is not accounted for in the reserves, as in place underground mining developments were removed from the resource model prepared by NAP's Denis Decharte P.Eng., and thereby from the reserve numbers; and a 0% mining recovery was applied to known mined-out stopes. The projected top down, long-hole with unconsolidated fill mining method, its potential production profile and the plans referred to in this prefeasibility study are preliminary in nature and additional technical studies will need to be completed in order to prove out their viability. There is no certainty that this mining method will be realized or that the production capabilities as represented will be realized. A mine production decision that is made without a feasibility study carries additional potential risks which include but are not limited to the lack of details pertaining to geotechnical and ventilation field study inputs for mine design, ore handling upgrades and their impact on mining schedules, metallurgical flow sheets and process plant designs that in themselves may require additional economic analysis and internal studies to ensure satisfactory operational conditions and decisions regarding future targeted production. Numbers may not add due to rounding.
Table 2. Comparison Between 2012 and 2014 Near-Surface and Underground Reserve and Resource Estimates for the Lac des Iles Mine Property.
why would anyone dump PAL under 1.50/shr with five years left, non dilutive financing, palladium price increasing, and ounces mined increasing each quarter going forward?
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