North American Palladium (NAP) has announced that it has successfully negotiated a credit facility in order to raise funds to expand its Lac des Iles underground mine.

The firm says it has secured a new $20 million and $10 million senior credit facility with a leading equipment finance company.

Initially the money will be used to help repay the company's existing bank loan totalling around $19 million, with further equipment purchases then scheduled.

North American Palladium says the new facility will enable it to utilize free cash flow to finance the Lac des Iles underground mine and secondary crusher projects.

Meanwhile, the firm also revealed that it has extended the term of its $20 million subordinated loan from its affiliate, Kaiser Francis Oil Company, to June 30, 2006.

NAP says that it has now completed the first phase of construction of the underground mine access portal and decline ramp at the Lac des Iles mine.

Site preparation and foundation work for a new secondary crusher has also begun, with NAP hopeful that the crusher will be operational in the fourth quarter.

The crusher is expected to reduce its milling costs by about $2.00 per tonne.