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North American Palladium: Where is company going?

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  1. Where is company going?
  2. Position in market
  3. Financial analyses
  4. Investments and liquidity
  5. Corporate governance
  6. Management philosophy
  7. Management strategy
  8. Conclusion

Precious metals such as palladium have been in great demand for the past five years, and thus there have been strong pushes for production increases. This year, palladium production by North American Palladium is expected to be 290,000 ounces, which includes production from their underground mine.

This year the company is allocating $15 million towards its mining operations. A considerable portion of these funds will be applied towards a research operation they are conducting in Finland, to scope out the possibility of an opening of a mining project. Another portion of this funding will go towards its current mining operations in a mine called Lac des Iles, and towards the mining of nickel and copper in this mine, as the demand of these metals has been increasing.

[...] It is essential that employees do not put themselves in situations where their personal interests interfere with their obgliations to NAP. Employees and management are not allowed to trade the company's stock on insider information. The diagram below is a visual representation of the NAP's whistleblower process. It is evident that the company takes these matters very seriously, as they have drawn out a very detailed schematic of this process. There is a commonality between the process in performing whistleblowing when an employee is involved and when a member of management is involved. [...]

[...] This business is almost directly related to the prices of the metals that are excavated in its operations. Though it is highly leveraged to commodity prices, currently they are not utilizing any hedging instruments on its metal products. Investments and Liquidity NAP used million in the third quarter of 2006 towards development of the underground mine, and the building and maintenance of the tailings management facilities. This is about a million decrease from the third quarter of 2005. On the 29th of March of 2006, NAP closed Series I private placement convertible notes that provided them $35 million. [...]

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