North American Palladium has published its second quarter results, revealing an increase in production in comparison with the corresponding period last year.

Between April and June, Canada's only primary producer of platinum group metals processed 1,445,445 tonnes of ore, producing 75,970 ounces of palladium.

This is up from the same quarter in 2003 when 1,154,965 tonnes of ore was processed to produce 59,069 ounces of palladium.

North American Palladium achieved a net income over the period of $2,834,000 or $0.06 per share on revenues, compared to a net income of $10,361,000 or $0.20 per share on revenue for the corresponding period in 2003.

These results are partly explained by a foreign exchange loss of $264,000 in the current quarter compared to a foreign exchange gain of $6,210,000 in the second quarter of 2003. This primarily relates to the company's US dollar denominated long-term debt.

Production costs also increased over the quarter year-on-year, up from $24,009,000 during the second quarter 2003 to $27,489,000 during the second quarter of 2004.

The higher production costs in the quarter primarily relate to major repairs to mine loading and haul equipment, increased volumes of secondary crushed mill feed and transportation fuel surcharges.

Looking to the future, North American Palladium said that production at its Lac des Iles mine continues to be ahead of budget due to favourable palladium ore grades and mill throughput.

Andre J Douchane, president and chief executive, commented: "We are pleased with our performance thus far in 2004 and our continued progress in strengthening our financial position.

"Continued focus on enhancing our operations and financial position remain our top priority as we move forward with our growth strategy."