Production begins at Lac des Iles expansion.

The official opening of North American Palladium's Lac des Iles mine expansion project on Aug. 29 is being billed as Canada's largest mine opening in the last five years.

"This is definitely a significant event from a national perspective," says Nicholas Nikolakakis, the company's treasurer.

By the end of the year, the $220-million project is expected to triple the mine's annual production to 250,000 ounces, representing five per cent of the global annual palladium supply.

One of the missing links delaying the mill's target production rate is a new pebble crusher which is expected to arrive on site at the end of September and be fully functioning by October.

North American Palladium Ltd. commissioned the Lac des Iles mine expansion in June 2001. The project is expected to increase mill throughput to 15,000 tonnes per day before the end of the year. The revamped operation replaces the old mill, which operated at 2,400 tonnes per day.

At full production, starting in 2002, annual output will average approximately 250,000 ounces of palladium; 23,000 ounces of platinum, 18,000 ounces of gold, 6.0 million pounds of copper and 2.0 million pounds of nickel for a minimum of 17 years, according to the current mine plan.

Since the expansion, the mine site's workforce has jumped from 130 to 275 employees. Nikolakakis does not anticipate anymore hiring in the near future.

Ripples from the increased activity at the Lac des Iles mine, on Highway 527, are expected to be felt in Thunder Bay, 85 kilometres south of the site, especially in the city's service industry.

"This mine will result in a significant in crease in production, and we will be Canada's only primary producer, of palladium," Nikolakakis says. Palladium, in smaller quantities, is also produced at Inco Ltd. and Falconbridge Ltd. In Sudbury.

North American Palladium decided to expand the mine after conducting a feasibility study last year. One of the compelling forces behind the decision was the dramatic increase of the palladium resource at the mine site.

"The success of the company has been driven by the exploration growth," Nikolakakis says. "The resources have grown by approximately 470 per cent since 1998, from 1.3 million ounces to 7.4 million ounces. We're actively exploring in the area and hope that success continues."

The expansion is going to result in an increase of palladium production to 250,000 ounces from 95,000 ounces in 2000.

Palladium is used in a variety of industries, but its largest and fastest growing application is in the production of automobile catalytic converters.