Brookfield set to exit palladium stake

MINING Prices for precious metal have soared

Brookfield Asset Management Inc. is laying the groundwork for the possible sale of one of the world’s only dedicated palladium companies even as prices for the metal used in car pollution control devices soar.

Canada’s largest alternative asset manager is the majority owner of North American Palladium Ltd., whose main asset is a mine near Thunder Bay, Ont., with reserves of 21 million tonnes. Brookfield’s i nvolvement began in 2013 when the company almost collapsed amid a poorly conceived expansion.

What began as a US$ 130million l oan became a 92- per- cent equity stake after the firm’s situation deteriorated further and it failed to find a buyer. Since then, North American Palladium has redesigned the asset and managed to post its first quarterly profit in six years as prices of the precious metal rallied.

Asked if Brookfield intends to hold the asset to reap rewards over the long term, Brookfield managing partner Peter Gordon, who is chairman of the board at Northern American Palladium, suggested the firm would look to exit once its strategy is achieved.

The objectives Brookfield set out for North American Palladium two years ago — namely getting production up to the mill’s capacity and having a long- term plan for the mine site — will largely be completed this year, he said.

Palladium — used to help clean exhaust gases in gasoline engines — is the bestperforming major metal this year, with a 38- per- cent jump.

North American Palladium shares have gained just 10 per cent this year and are largely unchanged since Brookfield took over. Its market value is $343 million (US$280 million).