Management's Discussion and Analysis
The following is management's discussion and analysis ("MD&A") of the financial condition and results of operations to
enable a reader to assess material changes in financial condition and results of operations for the three months and six months
ended June 30, 2008, compared to those of the respective periods in the prior year. This MD&A has been prepared as of
August 6, 2008 and is intended to supplement the unaudited consolidated financial statements and notes thereto for the six
months ended June 30, 2008 (collectively, the "Financial Statements"). In conjunction with your review of this MD&A, you are
encouraged to review the Financial Statements, the most recent audited financial statements and MD&A included in the 2007
Annual Report, and the most recent Form 40-F/Annual Information Form on file with the US Securities and Exchange and
Canadian provincial securities regulatory authorities. All amounts are in Canadian dollars unless otherwise noted.
Second Quarter 2008 Highlights
Revenue for the quarter ended June 30, 2008 of $52.2 million increased by $7.7 million (17%) compared to the same period
Income from mining operations for the quarter ended June 30, 2008, before an insurance recovery of $13.8 million, was
$4.1 million compared to a loss of $6.1 million in the same period last year.
Net income for the quarter ended June 30, 2008 was $10.4 million or $0.13 per share compared to a net loss of $9.1 million
or $0.17 per share in the second quarter last year.
Palladium production for the three months ended June 30, 2008 was 65,791 ounces, roughly on par with 66,651 ounces
produced in the same period last year.
Cash cost per ounce of palladium produced 1 , net of by-product metal revenues and royalties, was US$219 for the
second quarter of 2008 compared to US$242 for the same period last year.
Palladium sales for the second quarter of 2008 were recorded at US$467 per ounce compared t