North American Palladium (NAP) has announced it is set to miss its 2005 palladium production estimate.

Revealing its second quarter operating performance, the company stated that, taking into account first and second quarters production shortfall, it is likely to miss its production estimate by as much as 15 per cent.

The firm explained that recovery at its Lac des Iles operations during the second quarter was negatively affected by "fluctuating mill throughput and recovery problems associated with the low grade ore that is currently being mined".

NAP also stated that its recovery was hampered by severe weather conditions, resulting in a number of "significant losses of power".

The firm has seen a continuing decline in its palladium production in the past year, falling from 75,970 ounces during the second quarter of 2004, to 48,230 during the same period this year.

News of the downturn in production will come as little surprise, as NAP announced in May that it had suffered a dramatic drop in pgm production.