North American Palladium Ltd. reported consolidated earnings and production results for the fourth quarter and year ended December 31, 2017. For the quarter, the company reported revenue of CAD 87.1 million against CAD 46.0 million a year ago. Income from mining operations was CAD 27.5 million against loss of CAD 6.4 million a year ago. Net income was CAD 15.2 million or CAD 0.26 per share against loss of CAD 12.9 million or CAD 0.22 per share a year ago. EBITDA was CAD 32.4 million against loss of CAD 3.9 million a year ago. Capital investment, excluding non-cash leases was CAD 19.4 million against CAD 7.1 million a year ago. Cash provided by operations was CAD 42.0 million compared to cash used in operations of CAD 10.0 million for the same period of 2016. Adjusted EBITDA increased to CAD 36.9 million, compared to a loss of CAD 0.7 million for the same period in 2016.

For the year, the company reported revenue of CAD 272.4 million against CAD 166.9 million a year ago. Income from mining operations was CAD 52.3 million against loss of CAD 20.4 million a year ago. Net income was CAD 30.3 million or CAD 0.52 per share against loss of CAD 37.5 million or CAD 0.65 per share a year ago. EBITDA was CAD 86.3 million against CAD 0.1 million a year ago. Capital investment, excluding non-cash leases was CAD 60.5 million against CAD 47.5 million a year ago. The increase in revenue was primarily due to increased payable palladium sold combined with higher palladium prices. Cash provided by operations was CAD 94.3 million compared to cash used in operations of CAD 9.4 million in 2016. Adjusted EBITDA was CAD 86.2 million compared to CAD 4.7 million in 2016. Cash employed during 2017 included CAD 60.5 million for capital investments and a reduction in total debt of CAD 23.2.

For the quarter, the company produced 58,000 payable palladium ounces compared to 37,979 payable palladium ounces produced for the same period in 2016. Underground production for the quarter increased to 578,249 tonnes (6,285 tonnes per day) at an average grade of 3.5 grams per tonne compared to 405,736 tonnes (4,410 tonnes per day) at an average grade of 3.5 grams per tonne for the same period in 2016. Total ore mined was 982,096 tonnes against 612,149 tonnes a year ago.

For the year, the company produced 201,592 payable palladium ounces, representing a 35% increase over the 149,563 payable palladium ounces produced in 2016. Underground production increased to 1,897,114 tonnes (5,198 tonnes per day) at an average grade of 3.9 grams per tonne compared to 1,367,458 tonnes (3,736 tonnes per day) at an average grade of 3.8 grams per tonne in 2016. Total ore mined was 2,859,174 tonnes against 2,098,204 tonnes a year ago.

For the year 2018, the company expects production of 230,000-240,000 ounces of payable palladium at a decreasing average AISC of USD 640 to USD 660 per ounce, assuming a USD/CAD exchange rate of 1.24. These costs include CAD 37.7 million in sustaining capital costs for mine development, infrastructure and equipment, of which the majority will be expended in the first half of the year. An additional CAD 27.1 in project capital will be invested towards tailings dam construction and other long-term infrastructure projects, bringing the total capital spend to CAD 64.8 million. The company expects that cash flows from operations in 2018 will be sufficient to fund all capital expenditures and to reduce debt, further strengthening the company's balance sheet.