CIBC Gives Bleak North American Palladium Outlook, US Palladium Bar Falls

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Canadian bank CIBC has painted a pretty “grim picture for the future of North American Palladium Ltd. as they see the need for more capital after a slower-than-expected ramp-up at its Lac des Iles mine,” reports Kitco.

“’Having burnt another $24 million in the quarter, PDL had $18 million cash left with all debt facilities fully drawn,’  CIBC says. ‘Given $37 million of capex in the fourth quarter, the company has weeks of liquidity left and management is now actively looking at its options to bridge the funding gap until the mine starts generating positive cash in 2014.’ CIBC suggests North American Palladium needs $10 to $15 million immediately, and more. ‘In the absence of any guidance for 2014 and beyond, the mid to longer-term financing needs remain unclear but based on our estimates with costs dropping to $400 an ounce (from $580 an ounce in the third quarter), PDL needs at least $50 million, but it could be $150 million if the palladium price stays at $730 an ounce,’ CIBC says.”

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The week’s biggest mover on the weekly Global Precious Metals MMI® was the price of US palladium bar, which saw a 3.4 percent decline. This comes on the heels of a 2.6 percent increase the week before. Following a 2.4 percent increase in the week prior, the price of Japanese palladium bar fell 1.0 percent last week. The price of Chinese palladium bar fell 0.6 percent after rising 1.2 percent the week before.

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Closing out the fifth week of rising prices, the price of Japanese platinum bar gained 1.5 percent. The price of Chinese platinum bar rose 0.7 percent after falling 0.7 percent during the previous week. The price of US platinum bar declined 0.4 percent over the past week.

Following a 3.4 percent increase in the week prior, the price of Indian gold bullion fell 3.0 percent last week. The price of Chinese gold bullion rose 0.3 percent after falling 2.1 percent during the previous week. The price of Japanese gold bullion rose 0.2 percent after falling 1.1 percent during the previous week. US gold bullion remained unchanged for the week.

US silver weakened by 3.4 percent to land. Japanese silver saw a 2.3 percent decline over the past week. The price of Chinese silver dropped 1.5 percent this week, closing out the third consecutive week of falling prices. The price of Indian silver rose 1.1 percent after falling 3.5 percent during the previous week.

The Global Precious Metals MMI® collects and weights 14 global precious metal price points to provide a unique view into precious metal price trends. For more information on the Global Precious Metals MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.