February 13, 2006

Tailings dam leak quickly blocked, averting harmful impact

TORONTO, ONT-A leak in the tailings dam at North American Palladium's Lac des Iles mine, north of Thunder Bay, Ontario is not expected to affect the surrounding environment, the company said last week. The leak occurred February 4 in the tailings dam near the primary crusher; this is a contained area of the site. A response team focused on building a trench and dumping material into the area where the leak was suspected to have occurred. Pumps were also mobilized in order to reduce water damage from the extensive flooding that occurred as a result of the leak. The team succeeded in blocking the leak with a mixture of solidified tailings and hay, and built a dam to prevent any more water from flowing into the area. Approximately half the open pit's mine fleet was re-deployed to help respond to the incident, while regular operations in the open pit and underground continued. Because of the extensive flooding due to the leak, the milling operations, including the primary crusher and the electrical substations were temporarily shut down in order to protect the equipment. By mid-week, testing of the systems was beginning and the response team expected to clear the remaining water before the end of the week. In an update on the situation, company president and CEO Jim Excell confirmed that the leak was in a contained area of the mine and posed no environmental threat.

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