Lastly, please be reminded that all currency amounts discussed on today are in Canadian dollars, unless otherwise stated. All references to production ounces refer to payable production and all tons are in metric tons.
And now I’d like to turn the call over to Bill.
Thanks, Camilla and good morning, everyone. During a very active development period in the second quarter and despite the weather-related challenges that we encountered, LDI delivered solid production results.
By way of background, in Q2, the Thunder Bay Region experienced unprecedented rainfall, resulting in flooding across the city of Thunder Bay to declare a state of emergency for two days. The impact of LDI was less significant, although there was an interruption in our underground mining activities at the peak of the event.
In the second quarter, we produced approximately 40,000 ounces of palladium at a cash cost of US$429 per ounce. Our realized palladium selling price in the quarter was US$622 per ounce, which gives a palladium operating margin of CAD193 per ounce for a total margin of about CAD8 million.
With a strong first half of the year, marked by almost 82,000 ounces of palladium produced, we’re confident that we will meet our 2012 production guidance of 150,000 to 160,000 ounces of palladium with cash cost in the range of US$375 to US$400 per ounce.
Our Q2 financial performance was, for the most part, within our expectations. Although compared to the same quarter last year, we were negatively affected by a lower realized palladium selling price, no gold sales, as well as the one-time costs of about CAD700,000 that were incurred relating to the flood mitigation efforts.
During the quarter we completed a CAD35 million flow-through financing and, subsequent to quarter-end, completed a CAD43 million convertible debenture financing. These financings have strengthened our balance sheet to facilitate the funding of our LDI mine expansion. Given the recent volatility of financial markets around the world and commodity prices, we believe that this was a prudent measure.