Palladium output at North American Palladium's (NAP) Roby deposit will remain at about 140,000 oz per year for the foreseeable future, Mining Weekly reports.

The zone, which is located at the company's flagship Lac des Iles facility, has been crucial since underground mining was suspended in November 2008 amid falling prices.

Although production of underground ore is likely to recommence in the second quarter, NAP intends to continue mining the Roby deposit for about two years, until it is depleted.

CEO William Biggar confirmed that palladium output will remain relatively flat during this period until work begins on the firm's high-grade Offset zone in 2012.

However, he noted that once the new project - which is set to feature a raise-bore shaft to surface - gets underway, operating costs will decline rapidly and production could hit 250,000 oz per year.

"Now that we've had some exploration success and we know we've got a big enough resource and a long enough life, we are going to put a shaft in," Mr Biggar told the news provider.

"And that's going to make us a very low-cost producer of palladium."

Furthermore, Mr Biggar predicted that the gradual recovery in palladium prices witnessed last year could continue in 2010, with the metal trading at between $450 per oz and $500 per oz.

"I think into next year, when global vehicle production should be back above where it was in 2008, I think there is a case for it to move up to $600 per oz," he added.

The Lac des Iles mine lies approximately 85km north-west of the Thunder Bay, which is located in Ontario, Canada.

Source:

NA Palladium mulls organic, acquisitive growth (15/01/10)

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