North American Palladium (NAP) is currently working on a number of initiatives to improve output at its flagship Lac des Iles mine.

At present, the facility produces about 130,000 oz of palladium per year, but this could reach 250,000 oz when commercial production at the high-grade Offset zone starts in Q3 2012.

The company is connecting the Offset area to its Roby zone with a 1,500m ramp and has already awarded contracts for the raiseboring of a new production shaft to access the new site.

Estimates place production costs from the Offset zone at $132 per oz, which would represent "an attractive margin at even half the current palladium price", according to Mining Weekly.

Despite the progress being made at the Ontario-based project, NAP is experiencing difficulties at its Sleeping Giant gold mine in Quebec, in the shape of low output and high costs.

However, shaft deepening at the site should be completed in the first half of 2011 and the company is hoping to push its production up to historic levels of about 55,000 oz per year.

When the higher-grade zones are accessed, NAP believes it will be able to improve on its most recent figures for the third quarter, which saw 3,879 oz of gold produced at a huge cash cost of $1,600 per oz.

NAP recently recruited Greg Struble from Stillwater Mining Company to be its new Chief Operating Officer.

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North American Palladium: Palladium gains supported by fundamentals, still room to go (11/11/10)

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