In these hectic economic times, hedging one’s bets is always a wise idea. What may or may not happen to the world economy now or down the road should be a concern. Although price swings are a concern, metals are a solid way to hedge. Some investors prefer owning the actual metal while other’s find owning the mining company a better way to go. Each has its pluses and minuses, but at least a small part of a portfolio should include one of these options in any particular concentration.
North American Palladium Inc., a diversified precious metals exploration and development company, works to develop palladium, platinum and gold deposits primarily in Canada. The company has recently discovered additional possible reserves at its Lac des IIes mine and completed the purchase of a gold mining operation in Quebec.
From all appearances, the company has a very well seasoned exploration team working at its primary mining location – Thunder Bay. At the company’s Lac des IIes location, the team has seemingly found an extension of the original palladium find. Named the Cowboy Zone, the new discovery was made during infill drilling and has the possibility of extending the original LDI sites production life-expectancy in a significant way. Although additional drilling will be needed to define the new find, upwards of 30 drill holes indicate the extension is open on all sides, 250 meters along strike and 350 meters down dip. How the surface conditions present themselves have yet to be determined. As the company begins to restart this operation, after lower prices dictated a temporary shutdown in 2008, it expects the historical 250,000 oz. of palladium, 20,000 of platinum and 20,000 oz. of gold production per/year to resume.
The company has also been making solid strides with regard to its gold mining activities. It is paying close attention to overall cost structures, but has recently completed the acquisition of Cadiscor Resources, a Quebec based gold mining concern with 10 year production levels of 1 million ounces. A restart of the operation is scheduled for the fourth quarter. Expected production is 50,000 oz. per year. Metals are at a unique point in the economic cycle. Currencies are suspect and overall deficits are rising as stimulus plans are put in place. The US Federal Reserve continues to discount inflation, although hedges its statements when quarried about future years. North American Palladium is well positioned and appears to have plenty of property to tap for some time to come. Most will say that an investor should have some metal in their portfolio with this one possibly being an option.
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