North American Palladium Provides Update on Reserves and Resources at Lac des Iles

TORONTO, ONTARIO--(Marketwired - Feb. 25, 2015) - North American Palladium Ltd. ("NAP" or the "Company") (TSX:PDL)(NYSE MKT:PAL) is pleased to provide an update on its mineral reserve and resource estimates for its Lac des Iles mine property (the "Property") in northwestern Ontario.

Highlights:

• Total reserves of 20.4 million tonnes at a grade of 2.1 grams per tonne ("g/t") and total resources of 71.5 million tonnes at a grade of 2.0 g/t, representing a combined 5.9 million ounces of contained palladium.
• Significant increase in underground measured and indicated resource of 3.9 million tonnes at a grade of 2.67 g/t palladium (413,000 ounces of contained palladium). An increase of 16%.
• Increase in near surface reserve of 6.3 million tonnes at a grade of 1.0 g/t palladium (197,000 ounces of contained palladium). An increase of 101%.
• Increase in near surface resource of 9.8 million tonnes at a grade of 1.28 g/t palladium (274,000 ounces of contained palladium). An increase of 23%.

"The positive change in our global mineral reserve and resource estimate for Lac des Iles reflects both our recent exploration successes and the current, favourable longer-term outlook on palladium prices, which enhances our ability to pursue expansion opportunities at our mining operations," said Phil du Toit, President and Chief Executive Officer.

Update to Mineral Reserves and Mineral Resources for the Lac des Iles Mine Property

The Company has completed an update to its LDI mineral reserves and resources. The effective dates for the new reserve estimate and resource estimate, shown in Table 1, are January 1, 2015 and February 2, 2015, respectively. The new estimates exclude material mined up until December 31, 2014. The resource estimates provided in Table 1 were prepared by NAP Qualified Persons in accordance with National Instrument 43-101 ("NI 43-101"). The reserve estimates provided in Table 1 are derived from the Company's NI 43-101 technical report entitled "Technical Report for Lac des Iles Mine, Ontario Incorporating Prefeasibility Study for Life of Mine Plan" dated March 21, 2014 (the "2014 Technical Report"), and have been updated to include depletion and conversion of RGO stockpile resources to reserves.

Mineral Resources

The updated mineral resource estimate presented in Table 1 represents a significant change to the previously published (see 2014 Technical Report) mineral resource estimate for the Property. The known mineralized zones on the Property are shown in Figure 1. The main differences between the current resource estimate (Table 1) and the previously published resource estimate are highlighted in Table 2. In summary, the major differences between these two mineral resource estimates include:

• Increase to Offset Zone resources, including expanded Lower Offset Zone indicated resources;
• Increase to Roby Zone pit expansion resource based on a revised pit expansion concept that incorporates current palladium prices and foreign exchange rates, as well as improved long-term consensus palladium price forecasts that support lowering the Pd cut-off grade to 0.6 g/t;
• Initial resource estimates for both the recently delineated Powerline and Upper Offset southeast extension zones; and
• Revision to the Sheriff Zone resource estimate based on the application of a lower Pd cut-off grade of 1.0 g/t, and the removal of the portion of the Powerline Zone resource that overlaps with the Sheriff Zone resource.

The net change to the LDI resource inventory in terms of contained palladium is an increase of 686,000 ounces, bringing the total measured and indicated resource at Lac des Iles to 71.5 million tonnes having an average grade of 1.98 g/t Pd and containing 4.54 million ounces of palladium. The components of this revised resource estimate are:

• Near surface measured and indicated resources of 35.6 million tonnes having a Pd grade of 1.28 g/t (1.46 million ounces of contained Pd);
• Underground Offset hangingwall zone measured and indicated resources of 7.6 million tonnes having a Pd grade of 4.36 g/t (1.07 million ounces of contained Pd); and
• Underground Offset and Roby footwall zones measured and indicated resources of 28.3 million tonnes having a Pd grade of 2.21 g/t (2.01 million ounces of contained Pd).

Mineral Reserves

The updated mineral reserve estimate presented in Table 1 is divided into the following categories: near surface (low grade stockpile and Roby Zone open pit) and underground (Offset hangingwall and Roby hangingwall). The only differences between the current reserve estimate and the previously published reserve estimate (see 2014 Technical Report) are:

• Depletion from mining activities in 2014 of Offset Zone reserves, RGO stockpile reserves and Roby hangingwall zone underground reserves; and
• Conversion of all RGO stockpile resources to reserves based on successful processing of this material in 2014.

Underground proven and probable reserves are restricted to the Roby and Offset hangingwall zones and total 8.2 million tonnes having an average diluted Pd grade of 3.82 g/t (1.0 million ounces of contained Pd) after adjusting for depletion from mining activities in 2014.

Near surface proven and probable reserves total 12.2 million tonnes with an average grade of 1.0 g/t Pd (390,000 ounces of contained Pd) after allowing for mining depletion in 2014 and the conversion of the RGO stockpile resources to reserves.

Technical Information and Qualified Persons

The content of this news release has been reviewed and approved by Dave Peck, P.Geo., the Company's Vice-President, Exploration, an employee of NAP and a Qualified Person as defined in National Instrument 43-101.

Additional information can be found in NAP's Form 40-F/Annual Information Form on file with the US Securities and Exchange Commission and Canadian provincial securities regulatory authorities, available at www.sec.gov and www.sedar.com, respectively. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

About North American Palladium

NAP is an established precious metals producer that has been operating its Lac des Iles mine ("LDI") located in Ontario, Canada since 1993. LDI is one of only two primary producers of palladium in the world, offering investors exposure to palladium. The Company's shares trade on the NYSE MKT under the symbol PAL and on the TSX under the symbol PDL.

Cautionary Note to US Investors Concerning Estimates of Measured, Indicated and Inferred Resources

This press release uses the terms "Measured", "Indicated" and "Inferred" Resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable.

Cautionary Statement on Forward Looking Information

Certain information contained in this news release constitutes 'forward-looking statements' within the meaning of the 'safe harbor' provisions of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. The words 'will', 'expect', 'would', 'could', 'estimate' and similar expressions identify forward-looking statements. Forward-looking statements in this news release include, without limitation: any information as to future exploration results, statements with respect to the exploration potential of LDI, projected grades, information pertaining to the Company's strategy, plans or future financial or operating performance and other statements that express management's expectations or estimates of future performance. Forward-looking statements involve known and unknown risk factors that may cause the actual results to be materially different from those expressed or implied by the forward-looking statements. Such risks include, but are not limited to: the possibility that exploration targets may not meet management's expectations, uncertainty of mineral reserves and resources, metal price and foreign exchange rate volatility, the possibility that the LDI mine may not perform as planned, that the Company may not be able to obtain sufficient financing to meet its financial obligations as they become due. For more details on these and other risk factors see the Company's most recent Form 40-F/Annual Information Form on file with the SEC and Canadian provincial securities regulatory authorities.

Forward-looking statements are also based upon a number of factors and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The factors and assumptions contained in this news release include, but are not limited to: that current estimates of mineral reserves and resources are accurate, that the Company's interpretations of the ore body are accurate, that the Company will be able to realize its assets and discharge its liabilities in the normal course of business, that metal prices and exchange rates between the Canadian and United States dollar will be consistent with the Company's expectations, that there will be no material delays affecting operations, and that prices for key mining and construction supplies will remain consistent with the Company's expectations. The forward-looking statements are not guarantees of future performance. The Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise, except as expressly required by law. Readers are cautioned not to put undue reliance on these forward-looking statements.

Figure 1. Oblique longitudinal projection, looking west, of the Offset Zone deposit as outlined by selected current palladium grade shells, and relative to the position of the shaft and ramp system. The Lower Offset Zone below the 1065 meter level is open to the north and at depth and is completely untested south of the Camp Lake fault. The current limit of the hangingwall zone is approximated by the 2.25 g/t grade shell whereas the limit of the footwall zone resources is approximated by the 1.0 g/t Pd grade shell. Click here for access to figure 1.

TABLE 1: The effective dates for the reserve estimate and resource estimate are January 1, 2015 and February 2, 2015, respectively.

Notes for Table 1

Table 2. Comparison Between 2014 and 2015 Reserve and Resource Estimates for the Lac des Iles Mine Property.