North American Palladium says that it has seen a marked slump in pgm production, as revenues stumbled to $26 million.

For the first quarter of 2005 palladium production fell 42 per cent in comparison with the previous year, with problems in output compounded by lower palladium prices.

A total of 45,022 ounces of palladium were produced in the first three months of the year.

Figures also showed that the level of by-product metals generated by the firm were down, falling by 27 per cent to $14 million.

NAP said that metal production during the first quarter of 2005 was hampered by lower ore grades and average daily mill throughput, as ball mill bearing failures and unscheduled downtime took effect.

There was some more encouraging news at the company's Lac des Iles site, with $4.5 million budgeted to be spent on the mine in a bid to ramp m up production.

Management said it expected the price of palladium to pick up, pointing to demand for pgms from the automotive industry,

Citing the recent release by Englehard Corporation, which detailed plans for mass pgm catalyst production in conjunction with European manufacturers, NAP identified "palladium's bright future".