North American Palladium (NAP) has detailed its annual results, with palladium production increasing by seven per cent to 308,931 ounces for the year ending December 31st 2004.

However, the firm saw profits dip, including a net loss of $92 million, as a non-cash impairment charge of $108 million took effect.

The impairment resulted from "changes in key assumptions which were affected by a continuation of low palladium prices".

Difficulties at the firm included problems with the primary crusher back in 2002, which had repercussions for the latest results, and losses were also incurred through foreign exchange rates.

Production costs were steady, hovering around the $103 million mark for the second year running, but profits were bolstered by the palladium production increase and a 13 per cent increase in revenue from by-product metals.

Looking forward, the firm said it had high hopes for expansion of the Lac des Iles area and also potential pgm prospects at the Shebandowan Lake Project.

When NAP's underground mine achieves full production in 2006, it anticipates combined palladium production of 350,000 ounces per year, as well as increased by-product metal production.

NAP is also confident that an increase in palladium production will prove profitable in light of shifting platinum prices, which it expects will add impetus to palladium's use as a an alternative to the precious metal in markets as diverse as jewellery and the automotive emission reduction market.