North American Palladium (NAP) says it has enjoyed record production during 2004, with its mill comfortably outstripping the performance in the previous year.

The final 2004 metal production quantities are being calculated to include assay adjustments with the smelters, but the firm says that its fourth quarter results have delivered encouraging figures and completed a strong year.

The firm's Lac des Iles Mine, which is one of Canada's few primary platinum group metal locations, processed 1,202,942 tonnes of ore at an average of 13,075 tonnes per day during the fourth quarter, with a palladium head grade of 2.17 grams per tonne during 2004.

The mill's total output hit 62,526 ounces of palladium at a recovery rate of 74.6 per cent, down on the third quarter production of 79,174 ounces of palladium, despite some adverse conditions.

NAP said that its milling operations were affected in the quarter by the integration of the new secondary crusher, and also maintenance on conveyor belts and chutes.

However, with the grinding improvement project now complete and operations back on track, chief executive and president Andre J. Douchane expressed confidence for 2005.

"Palladium production for each of the next three quarters of this year will be similar to that of 2004's fourth quarter," he explained.

"We are entering a period where the head grade will drop to slightly below 2 grams per tonne, but mill tonnage will be increased to compensate for this decline.

"By the fourth quarter of 2005, palladium production is expected to gradually increase as the underground operations move online."

Mr Douchane said that NAP was now exploring other locations at the Lac des Iles mine site, as part of its plans to foster further growth.

Meanwhile, by-product metal production for 2004 also marked a new record, with 25,128 ounces of platinum, 25,679 ounces of gold, 4,320,970 pounds of nickel and 7,836,183 pounds of copper produced.