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INVESTOR PRESENTATION
May 2014
1
Forward Looking
STATEMENTS Certain information included in this presentation 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. The words ‘expect’, ‘believe’, ‘will’, ‘intend’, ‘estimate’, ‘forecast’, and similar expressions identify forward-looking statements. Such statements include, without limitation, any information as to our future exploration, financial or operating performance, including: the Company's forward looking production guidance, projected capital expenditures, operating cost estimates, project timelines, mining and milling rates, the methods by which ore will be extracted, projected grades, mill recoveries, and other statements that express management's expectations or estimates of future performance. Forward-looking statements are necessarily 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 presentation, which may prove to be incorrect, include, but are not limited to: metal prices assumptions, Canadian and U.S. dollar exchange rate assumptions, that there will be no significant disruptions affecting operations, that prices for key mining and construction supplies, including labour and transportation costs, will remain consistent with the Company's expectations, that the Company's current estimates of mineral reserves and resources are accurate, and that there are no material delays in the timing of ongoing development projects. The forward-looking statements are not guarantees of future performance. The Company cautions the reader that such forward-looking statements involve known and unknown risks 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 metal prices, foreign exchange rates or operating costs may differ from management's expectations, uncertainty of mineral reserves and resources, inherent risks associated with mining and processing, the risk that the Lac des Iles mine may not perform as planned and that the Offset Zone and other properties may not be successfully developed, and uncertainty of the ability of the Company to obtain financing. For more details on the factors, assumptions and risks see the Company's most recent Form 40-F/Annual Information Form on file with the U.S. Securities and Exchange Commission and Canadian provincial securities regulatory authorities. 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.
All dollar amounts are in Canadian currency unless otherwise stated, all references to production refer to payable
production, and all reference to tonnes refer to metric tonnes.
U.S. investors are encouraged to refer to the “Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated and Inferred Resources” in the appendix.
2
Growing
• Strong demand from automotive sector
• Growth in demand driven by vehicle sales & environmental legislation in developing markets:
o Light vehicle production forecasted to increase by 4% annually
o Strong growth in light vehicle production driven by China (forecast ~31 M vehicles per year by 2018)
o More stringent emission control standards mandate the use of catalytic converters
DEMAND
Automotive (catalytic converters)
67%
Electronics
12%
5%
Dental
1%
Other
5%
Jewellery
5%
Chemical 4%
Investment
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
2011 2012 2013 2014 2015 2016 2017 2018
Global Light Vehicle Production Forecast:
(000’s)
Source: IHS Automotive, February 2012 1. Other includes: Japan, Korea, Middle East and Africa 2. BRIC Economies include: Greater China, South America and South Asia
3
Constrained
Small Market:
• Only ~6.5 M oz in annual mine production
(unlikely to increase meaningfully)
Highly Concentrated:
• 80% of mine supply derived from risky jurisdictions:
Russia & South Africa (mined as a by-product
metal)
Challenged Global Supply:
• Decreased production from Russia’s Norilsk Nickel
due to declining grades
• Anticipated closures of some South African mines,
where output is affected by political issues, labour
unrest & technical challenges
• Decreased sales from Russian stockpiles, a
historical overhang (believed to be depleted)
• Recycling insufficient to offset demand
The palladium market is forecasted to remain in a
deficit position for the foreseeable future
SUPPLY
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2008 2009 2010 2011 2012e 2013p 2014p 2015p
Other United States Canada South Africa Russia
NORTH AMERICA
RUSSIA
SOUTH AFRICA
36%
14% 44%
Sources: Johnson Matthey & CPM Group (excludes secondary supply)
4
NAP’s Investment
• Clear Growth Strategy to Increase Production & Lower Cash Costs NAP’s mine offers production growth with a decreasing cash cost profile and expanding
operating margins
Attractive PGM Investment Jurisdiction NAP operates in a stable political landscape, with low geopolitical risk and moderate cost
inflation compared to peers in South Africa and Russia
Significant Development & Exploration Upside
Excess mill and production shaft capacity, existing infrastructure & permits, gives NAP the potential
to convert exploration success into production and cash flow on an accelerated timeline
Updated LOM plan including Reserves and Resource Current mine life extended to 2019 (proven and probable reserves only) and total R&R of 5.2M
combined ounces an increase 24% above Jan. 2013 technical report
Strong Senior Management Team with Track Report of Operational Success Operational improvements at LDI implemented in 2013, continuing in 2014 with goal of achieving
expanded productions and lower cost targets
PROPOSITION
5
• Located north of Thunder Bay, Ontario, Canada
• One of only two primary palladium producers in the world
• Deposit is unique in the world:
- Strong palladium enrichment over significant widths vs.
more typical PGE reef-type deposits
- Offset Zone remains open at depth, to the west and
south
• Established infrastructure with excess capacity:
- 15,000 tpd mill & new 8,000 tpd shaft
• Increasing production & decreasing operating costs:
- Mining rate of ~3,000 tpd in H1/14, up to 5,000 tpd by YE
- Cash costs expected to decline to US$450 per ounce in
Q4
LDI Mine & Mill Complex
A WORLD CLASS ASSET
15,000 tpd mill capacity
8,000 tpd shaft capacity
6
• Development upside to leverage existing mine & mill
infrastructure:
- Opportunity at depth & laterally
- Significant exploration upside identified on the LDI property
• 43-101 proven and probable reserves
- 15,046k tonnes @ 2.8 g/t Pd, 1,341k Pd ounces (2019 mine
life)
• Measure and Indicates Resources (exclusive of P&P)
- 57,732k tonnes @ 2.1 g/t Pd, 3,857k Pd ounces (not in LOM)
• Inferred Resources
- 15,720k tonnes @ 2.8 g/t Pd, (not in LOM)
Reserves and Resources
A WORLD CLASS ASSET
15,000 tpd mill capacity
8,000 tpd shaft capacity
7
HANGINGWALL AND FOOTWALL ZONES
• A new resource and reserve
classification has been adopted
• Roby and Offset zones are now
subdivided into separate hangingwall
and footwall zones
• Previously the footwall and
hangingwall resources were
combined
• Adding 26 million tonnes of M&IND
resources grading ~2.2 g/t from the
two underground footwall zones
Cross Section, Looking North
8
2014 RESERVE AND RESOURCE ESTIMATES
Source
Tonnes (000’s)
Pd (g/t)
Pd (k oz contained)
Proven & Probable (2019 mine life):
Near Surface 5,885 1.03 195
Underground Hanging Wall 9,161 3.89 1,146
Total 15,046 2.77 1,341
Measured & Indicated (not in LOM):
Near Surface 25,759 1.44 1,189
Underground Hanging Wall 5,651 4.25 773
Underground Footwall 26,322 2.24 1,895
Total 57,732 2.08 3,857
Inferred – Underground (not in LOM) 15,720 2.77
9
LDI Mine Expansion
• Phase I of mine expansion
completed in Q4, 2013:
– Transitioning from ramp
haulage to shaft hoisting
(increasing shaft production)
– Targeting mining rate of ~3,000
tpd in H1/14, up to 5,000 tpd by
YE
– Current focus on material flow
improvements
• Operations expected to benefit
from increased mining rates &
decreased operating costs through
utilization of shaft
• Targeting to achieve steady-state
production in 2014
• Internal analysis to define future
growth potential (targeted for
H2/14)
PLAN FOR GROWTH
Shaft
pillar
New stopes added to LOM plan
on the 1065 level
1000 m
Level
Resource Zone Colour
2014 Hangingwall 2014 Footwall
500 m
Level
10
2014
• Using proven and probable reserves only, life of mine to 2019
• Underground mine increases to 5,000 tpd and total payable Pd increases to
approx. 200,000 oz per year up from 140,000 in the 2013 report
• 1.1 million Payable ounces of Pd produced, an increase of 140,000 ounces
from 2013, despite mining depletion
• 2.6M tonnes annual mill throughput including low grade stockpile material.
• Assumes a large open stope blast hole mining method with waste for fill,
successfully done at LDI for several years.
• Total LOM site capital of $143M
LIFE OF MINE HIGHLIGHTS
11
2014
• 2014 technical report is an all encompassing review of all geological
information and mineral inventory at the LDI site and included:
• New geological block models rigorously tested for potential economic
extraction to support inclusion as resources, completed by LDI resource
geologists with review by external consultants
• A mine plan, at a PFS level, completed by external consultants with
review and input from LDI to convert resources to reserves
• The main changes in the mining plan are:
• The Offset zone reserve extended to 1065 L from 990 L previously
• Remnant material in the Roby zone including higher grade sill pillars
and large lower grade bulk stopes included
• Inclusion of a portion of the low grade surface stockpile
• A final salvage mining of the pit
LIFE OF MINE OVERVIEW
12
LIFE OF MINE ECONOMIC SUMMARY
Lac Des Iles LOM Economics March 17/14 Prices(1) (US$770 Pd)
Study Prices(2) (US$700 Pd)
Gross Revenue $1,400 M $1,220 M
Operating Margin $476 M $336 M
Post Tax Cash Flow $362 M $195 M
NPV @ 5% $324 M $173 M
Cash Cost US$/oz $421 $441
(1) Pt US$1,464/oz, Au US$1,367/oz, Cu US$2.97/lb, Ni US$7.20/lb, C$0.90
(2) Pt US$1,453/oz, Au US$1,330/oz, Cu US$3.26/lb, Ni US$6.47/lb, C$0.95
• Mine economics are most affected by:
• Proven and probable reserves only included
• Foreign exchange rate
• Palladium price
13
Payable palladium produced 170,000 - 175,000 oz
Cash cost per ounce1 ~US$550/oz (expected to decline to
~$450/oz in Q4)
Tonnes of ore mined ~2.3 M
From Surface Stockpile ~1 M @ 1.0 g/t
From Underground ~1.3 M @ 4.2 g/t
Average milled head grade 3.0 g/t Pd
Palladium mill recovery ~82%
Total cost per tonne milled C$51 – C$55
Mining Rate ~3,000 tpd in 1H/14 & gradually
increase to ~5,000 tpd in 2H/14
Capital expenditure forecast ~$30 M
Exploration budget ~$10 M
LDI Operations
2014 GUIDANCE
1. Non-IFRS measure. Please refer to Non-IFRS Measures in the MD&A.
14
CAPITAL REQUIREMENTS FOR 2014
• Budget of approximately $30M
• Underground level and ramp development
• Normal surface and underground fleet replacement
• Preliminary engineering for site optimization
• Mill enhancements and tailings work
15
LDI OPTIMIZATION OPPORTUNITIES
• Longer mill runs with additional RGO (low grade
stockpile)
• Mining of Tailings
– Requires engineering and technical solutions and capital
investment. Studies to be completed.
• Future Mining of the low grade footwall resource
– May be economic at higher production rates and metal prices
– Lower cost/more efficient mining method
• Deepen the shaft to exploit resources at depth
– Requires additional drilling and resource conversion
– Potential for higher mining volumes at lower unit costs
16
EXPANDED 2014 EXPLORATION BUDGET
• Expanded $10M budget for 2014
• 43,000 m of conversion and extension
drilling in Offset Zone using both UG
and surface drills
• 300 metres of drifting provides platform
for resource compliant drilling
• Confirm indicated resources in lower
Offset and extend limit of Offset zone
high-grade mineralization to depth of
~1400m
16
Lower OZ Core
Zone Conversion
Lower OZ
Deep Extension
Upper OZ
North End
Conversion
Upper OZ
Southeast
Extension
655 expl’n drift
extension
Long Section
Looking West
17
Q1 2014
Palladium Production:
• 42,641 oz Pd. at a cash cost of US$492/oz
• Realized Pd. selling price of US$739/oz = operating margin of US$247/oz or US$10.5 M
Financial Performance:
• Revenue: $48.7 M
• Adjusted EBITDA: $9.8 M
Operating Highlights:
• Underground production during the quarter averaged 3,065 tonnes per day, ahead of
guidance for 2014
• Underground ore mined at an average grade of 5.0 g/t palladium
• Low grade surface stockpile averaged 1.0 g/t palladium
• Mill recoveries at a record rate of 84.5% during the quarter
Financial Position:
• $21.9 M cash and cash equivalents as of March 31, 2014
• Subsequent to quarter end completed a $35M financing
SUMMARY OF RESULTS
18
LDI
Q1 OPERATING HIGHLIGHTS
Q1 2014 Guidance
Payable Pd. produced 42,641 oz. 170-175k oz.
Cash cost per ounce1 US$492 US$550
Tonnes of ore mined
Average underground grade
530,139
5.0 g/t Pd
2,300,000
4.2 g/t Pd
Tonnes of ore milled
Average milled head grade
516,511
3.3 g/t Pd
2,300,000
3.0 g/t Pd
Pd. mill recovery 84.5% 82.0%
Total cost per tonne milled C$62 C$51-55
7
1. Non-IFRS measure. Please refer to Non-IFRS Measures in the MD&A.
19
LDI Operations
Q1 2014 PRODUCTION
1. Non-IFRS measure. Please refer to Non-IFRS Measures in the MD&A.
Q1, 2013 Q2, 2013 Q3, 2013 Q4, 2013 Q1, 2014
Payable palladium produced 38,654 oz 35,428 oz 30,097 oz 30,979 oz 42,641 oz
Cash cost per ounce1 US$490 US$564 US$581 US$621 US$492
Tonnes of ore mined 540,694 433,580 542,917 576,478 530,139
From underground 245,656
@ 4.1 g/t 131,606
@ 4.4 g/t 208,097
@ 4.5 g/t 231,346
@ 4.67 g/t 275,845
@ 5.0 g/t
From surface 295,038
@ 2.4 g/t 301,974
@ 2.1 g/t 334,820
@ 1.2 g/t 345,132
@ 0.98 g/t 254,294
@ 1.0 g/t
Tonnes of ore milled 503,585 483,266 517,157 544,074 516,511
Avg. milled head grade 3.3 g/t Pd 3.1 g/t pd 2.5 g/t Pd 2.4 g/t Pd 3.3 g/t Pd
Palladium mill recovery 80.1% 80.7% 80.7% 81.5% 84.5%
Total cost per tonne milled C$57 C$53 C$42 C$55 C$62
20
Financial
POSITION
Liquidity as at March 31, 2014:
• $21.9M cash and cash equivalents
• US$36.4M of US$60.0M credit facility utilized
• Closed $35M of 7.5% convertible unsecured subordinated
debentures and associated warrants in April 2014
• Pro-forma cash position of $54.7M
21
Investment
• Clear Growth Strategy to Increase Production &
Lower Cash Costs
• Attractive PGM Investment Jurisdiction
• Significant Development & Exploration Upside
• Updated LOM plan including Reserves and
Resource
• Strong Senior Management Team with Track
Report of Operational Success
PROPOSITION
22
Appendices &
FURTHER INFORMATION
23
Future Growth Potential
UPSIDE
Mill Complex
Nameplate capacity: 15,000 tpd mill
Shaft Infrastructure
Nameplate capacity: 8,000 tpd mill
Robust Ore Body
Offset Zone remains open at depth,
to the west and south
Opportunity to optimize the ore body & utilize existing infrastructure
Growth could potentially come from:
• Deeper Offset Zone (via shaft extension & new ore handling system)
• Lateral development (lateral targets near existing infrastructure)
• New bulk mining method (potential to significantly increase mining volumes)
• Surface exploration upside
1 g/t Pd Resource
Shell and Block Model
Legend:
Red – Measured
Green – Indicated
Blue - Inferred
24
LDI Property
EXPLORATION UPSIDE
• LDI complex remains largely underexplored
• New lateral targets
are under review (near existing infrastructure)
• Regional land package covers the
most prospective mafic complexes in the area
25
Firm As of: 2014 2015 2016 2017
BMO Capital Markets 01-13-14 $750 $750 $800 $800
Scotia 01-09-14 $725 $725 $700 $650
CPM Group 01-08-14 $769 $830 $875 $908
Mitsui Precious Metals 01-08-14 $745 $780
CIBC World Markets 01-07-14 $800 $1,000 - -
Cormark 01-07-14 $750 $750 $750 $750
Macquarie 01-07-14 $785 $838 - -
Credit Suisse 01-06-14 $760 $840 $850 $850
Prestige Economics LLC 12-31-13 $745 $800 - -
Intesa Sanpaolo SpA 12-18-13 $800 $850 $875 -
TD Bank 12-02-13 $819 $831 - -
Societe Generale SA 11-26-13 $790 $850 $900 $950
ABN AMRO Bank NV 11-21-13 $650 $725 - -
Citigroup 11-18-13 $800 $925 $925 -
LBBW 11-07-13 $775 - - -
Standard Chartered Bank 11-04-13 $850 $800 $650 -
UBS 10-15-13 $825 $850 $825 $825
Raymond James 10-08-13 $750 $850 - -
Bank of America Merrill Lynch 09-27-13 $800 $850 $777 -
Deutsche Bank 09-25-13 $750 $850 $950 -
RBC Capital Markets 08-11-13 $850 $850 - -
Capital Economics 08-16-13 $850 - - -
CIMB Group Holdings 08-09-13 $850 $1,000 $708 $708
Barclays 07-12-13 $795 $900 - -
China International Capital 04-15-13 $800 - - -
Annual Average (US$/oz.) $786 $844 $824 $827
Pa
llad
ium
Pric
e F
ore
ca
sts
(US$
pe
r o
un
ce
)
26
Market
STATISTICS
Information as at March 31, 2014, Thomson One. Shareholder ID based only on public filings.
SECURITY SYMBOLS NYSE MKT: PAL TSX: PDL, PDL.DB, PDL.DB.A
MARKET CAPITALIZATION US$88 Million
RECENT SHARE PRICE US$0.32
SHARES OUTSTANDING 273,992,149 M (issued & outstanding) (fully diluted)
52-WEEK HIGH/LOW US$1.95 / US$0.31
3-MONTH TRADING VOLUME NYSE MKT: 6.9 M / TSX: 1.5 M
ANALYST COVERAGE
1. CIBC, Leon Esterhuizen
2. Raymond James, Alex Terentiew
3. Mackie, Barry Allan
4. Macquarie, Daniel Greenspan
5. Euro Pacific, Heiko Ihle
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
27
Senior
EXECUTIVES
Phil du Toit – President & CEO Mr. du Toit is an accomplished mining executive with a proven track record for executing on his management mandates throughout his career.
He brings significant project management expertise to the CEO role, developed during his 37 years of global experience in the mining industry
which included senior roles for some of the world's leading mining companies, and the successful development of multiple large capital
projects. Recently, Mr. du Toit served as Executive Vice President and Head of Mining Projects and Exploration for ArcelorMittal, the world's
leading integrated steel and mining company, where he was responsible for mining strategy, exploration, project and business development.
His experience also includes serving as interim CEO of Baffinland Iron Mines Corp., as well as having held various senior management positions
for Vale, Diavik Diamond Mines (a subsidiary of Rio Tinto plc), Voest Alpine Inc., and Gencor Ltd. He holds a Bachelor of Science degree in Civil
Engineering from the University of Pretoria in South Africa.
Dave Langille – Chief Financial Officer Mr. Langille is a seasoned finance executive with over 26 years of international public company experience. He brings a wealth of international
financial expertise to NAP, notably a solid track record of optimizing operations to improve operating margins, along with merger and
acquisition experience, and raising capital through a broad range of capital market products. Most recently, Mr. Langille served as the CFO
and Vice President, Finance of Breakwater Resources Ltd. Prior to this, he served in senior financial positions for various public companies,
including Lindsey Morden Group Inc., Capital Environmental Resource Inc., Cott Corporation, and TVX Gold Inc. Mr. Langille received an
Honours Bachelor of Business Administration from Wilfrid Laurier University in Waterloo, Ontario, Canada in 1985, and has been a member of the
Institute of Chartered Accounts of Ontario and the Society of Management Accountants of Ontario since 1987.
David Peck – Head of Exploration Dr. Peck is a Professional Geoscientist with nearly 30 years of exploration and research experience specializing in magmatic Ni-Cu-PGE ore
deposits. Dr. Peck holds global recognition as an expert in PGE exploration after serving as a senior technical and strategic consultant to
several public and private companies and having worked on exploration and mining projects in more than a dozen countries. He was directly
involved in several significant magmatic Ni-Cu-PGE discoveries in Canada and overseas. Prior to joining NAP, Dr. Peck served as President and
Senior Technical and Strategic Consultant at Revelation Geoscience Ltd., and prior to this, he served as Global Nickel Commodity Leader at
Anglo American plc, a Senior Geologist for Falconbridge Ltd., a Senior Mineral Deposits Geologist with the Manitoba Geological Survey, held
various academic roles in Canadian universities, and was the technical lead on a multi-year mineral potential study funded by the Ontario
Geological Survey. He has authored numerous public publications addressing his area of specialization.
Jim Gallagher – Chief Operating Officer Mr. Gallagher is a seasoned mining executive with over 30 years of experience in a series of roles spanning operations, projects, engineering, technology and consulting. For the last seven years, Mr. Gallagher served as Global Director of Mining at Hatch Ltd., with a mandate to build
the firm’s global underground capability, where he led the firm’s global mining group involved in transitioning projects to normal operations.
Prior to Hatch, the foundational part of his experience came from his 24-year career at Falconbridge in a variety of operations and project
management roles, most of which were based in Northern Ontario. Mr. Gallagher also has a track record for identifying improvement
opportunities and building out technical capabilities. Mr. Gallagher holds a Bachelor of Mining Engineering degree from Laurentian University in
Canada.
28
Cautionary Note to U.S. Investors Concerning
• Mineral reserves and mineral resources have been calculated in accordance with National Instrument
43-101 as required by Canadian securities regulatory authorities. For United States reporting purposes,
Industry Guide 7, (under the Securities and Exchange Act of 1934), as interpreted by Staff of the Securities
Exchange Commission (SEC), applies different standards in order to classify mineralization as a reserve. In
addition, while the terms “measured”, “indicated” and “inferred” mineral resources are required pursuant
to National Instrument 43-101, the U.S. Securities and Exchange Commission does not recognize such
terms. Canadian standards differ significantly from the requirements of the SEC, and mineral resource
information contained herein is not comparable to similar information regarding mineral reserves
disclosed in accordance with the requirements of the U.S. Securities and Exchange Commission. U.S.
investors should understand that “inferred” mineral resources have a great amount of uncertainty as to
their existence and great uncertainty as to their economic and legal feasibility. In addition, U.S. investors
are cautioned not to assume that any part or all of NAP's mineral resources constitute or will be
converted into reserves. For a more detailed description of the key assumptions, parameters and
methods used in calculating NAP’s mineral reserves and mineral resources, see NAP’s most recent Annual
Information Form/Form 40-F on file with Canadian provincial securities regulatory authorities and the SEC.
• Please refer to North American Palladium’s most current Annual Information Form and applicable
technical reports available on www.sedar.com, www.sec.gov and www.nap.com for further information.
MINERAL RESERVES AND MINERAL RESOURCE
29
2014 RESERVE AND RESOURCE ESTIMATES
Summary of the 2014 Resource and Reserve Estimate for the Lac des Iles Mine Property
Source Zone Category Tonnes (000’s) Pd (g/t) Pd (k oz contained)
Near Surface All 2P Reserves 5,885 1.03 195
Near Surface All Resources 25,759 1.44 1,189
Underground Hangingwall 2P Reserves 9,161 3.89 1,146
Underground Hangingwall Resources 5,651 4.25 773
Underground Footwall 2P Reserves nil - -
Underground Footwall Resources 26,322 2.24 1,895
Underground Roby & Offset Inferred 15,720 2.77
TOTALS All Sources Reserves & Resources 72,778 2.22 5,198
30
LDI Reserves & Resources
Notes
1. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may
be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
2. Palladium ounces are stated as contained ounces. Disclosure of contained ounces is permitted under Canadian regulations; however,
the US Securities and Exchange Commission (SEC) generally permits resources to be reported only as in place tonnage and grade.
3. Resources listed in Table 1.1 are exclusive of reserves. Resources and reserves reflect depletion from mining activities to December 31,
2013.
4. Tonnages are rounded to nearest '000 tonnes. Palladium, platinum and gold grades are rounded to nearest 0.01 g/t. Nickel and
copper grades are rounded to nearest 0.01%. Rounded numbers used to calculate contained palladium (oz) and average resource
and reserve tonnage and grades.
5. All reserve and resource estimates were prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral
Projects (NI 43-101) and the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) classification system. US investors should refer
to the Annual Information Form for an overview on how Canadian Standards differ significantly from US requirements.
6. The mineral resource for the Offset hangingwall and footwall zones was estimated as of December 31, 2013 by Denis Decharte P.Eng,
an employee of North American Palladium Ltd. (NAP) and a qualified person (QP) under NI 43-101. The mineral resource calculation
uses a minimum 2.5 g/t palladium resource block cut-off for the hangingwall zone and a minimum 1.5 g/t palladium resource block cut-
off for the footwall zone. The mineral resource estimate is based on the combination of geological modeling, geostatistics, and
conventional block modelling (5 m by 5 m by 5 m blocks). 1 m composite intervals were used with a grade capping at 30 g/t for
palladium and 3 g/t for gold. Grade capping was determined not to be necessary for others metals. The Offset Zone resource models
used the ordinary kriging (OK) grade interpolation method within a 3DI block model with mineralized zones defined by wireframe solids.
The mineral resource is exclusive of mineral reserve and mined-out material as of December 31, 2013.
7. The mineral resource for the Roby footwall zone was estimated as of December 31, 2013 by Denis Decharte P.Eng, an employee of NAP
and a QP under NI 43-101. The mineral resource calculation uses a minimum 1.5 g/t palladium resource block cut-off. The mineral
resource estimate is based on the combination of geological modeling, geostatistics, and conventional block modelling (5 m by 5 m by
5 m blocks). Grade capping was determined not to be necessary, however influence of composite intervals with palladium grade
higher than 50 g/t were limited in space. The Roby Zone resource models used the OK grade interpolation method within a 3DI block
model with mineralized zones defined by wireframe solids. The mineral resource is exclusive of mineral reserve and mined-out material
as of December 31, 2013.
NOTES
31
LDI Reserves & Resources
8. Mineral resource estimates for the near-surface portion of the western part of the North VT Rim Zone (west and east deep zones) at the
Lac des Iles Mine Property was prepared by Chris Roney, P.Geo., a QP and a private consultant to the Company. This resource estimate
was based on a 1.0 g/t palladium cut-off grade. The North VT Rim Zone mineral resources were estimated from drilling completed to
April 15, 2013. The mineral resource uses a minimum 1.0 g/t palladium resource block cut-off. The mineral resource estimate is based on
the combination of geological modeling, geostatistics, and conventional block modeling (5 m by 5 m by 5 m blocks). The North VT Rim
resource models used the inverse distance squared (ID2) grade interpolation method. North American Palladium Ltd. 1-4 1496780200-
REP-R0002-01 Technical Report for Lac des Iles Mine, Ontario Incorporating Prefeasibility Study for Life of Mine Plan.
9. Mineral resource estimates for the low-grade stockpile (RGO) was prepared by David N. Penna, P.Geo., an employee of Lac des Iles
Mines Ltd. and a QP within the meaning of NI 43-101.
10. As with mineral resources, the estimate of mineral reserves may be materially affected by environmental, permitting, legal, t itle,
taxation, socio-political, marketing, or other relevant issues. The mineral reserves were estimated from geological block models
provided by Denis Decharte P.Eng. and from RGO stockpile resource information provided by Dave Penna, P. Geo., employees of NAP
and QPs under NI 43-101. The geological block models reflect updates that are based upon diamond drilling completed after March
31, 2012 and before December 31, 2013.
11. Mineral resources for the Sheriff Zone are based on estimates originally provided in the Company’s September 5, 2013 press re lease.
12. The mineral reserves were estimated by William Richard McBride, P.Eng. of Tetra Tech and Wenchang Ni, P.Eng. of Tetra Tech; with input
by Dave Penna, P. Geo., an employee of NAP and QPs under NI 43-101 on allocation of indirect mining costs and John Cooney, P. Eng.,
an employee of NAP and QP under NI 43-101 on the use of the Lac Des Isle Mine 2014 budget for unit cost determinations; and with
additional input by Cam McKinnon, P.Eng. of Tetra Tech on recoveries; and Philip Bridson, P.Eng. of Tetra Tech on metal prices and
exchange rate, independent QPs within the meaning of NI 43-101.
13. Reserves were estimated to the 1065 Mine Level (4,435 m elevation), a maximum depth of 1,072.5 m.
14. The following metal price assumptions were used for reserves estimation: US$700/oz palladium, US$1,453/oz platinum, US$1,320/oz gold,
US$6.47/lb nickel, and US$3.26/lb copper. A Cdn$/US$ exchange rate of Cdn$1.00 = US$0.95 was also applied.
NOTES
32
LDI Reserves & Resources
15. An average production rate of 5,272 t/d was used to determine the reserves. The following recoveries were used in the assumptions to
determine the reserves: 86.3% palladium, 80.3% platinum, 80.4% gold, 38.8% nickel, and 88.7% copper. The effective date of NAP’s Lac
des Iles Mine resource models for the Offset Zone and for the Roby Zone, as prepared by NAP’s Denis Decharte P.Eng., is December 31,
2013 and as a result of “mining depletion” the user of this reserve information should ensure that this is based upon the most recent
resource estimate for the Property.
16. It should also be noted that the mineral reserve estimate for the Offset Zone as provided in 2013 as part of the technical report labeled
“Technical Report Lac des Iles Mine, Ontario, Incorporating Prefeasibility Study Offset Zone Phase I, effective January 31, 2013” reflected
a different mining method with a different set of economic circumstances that thereby lead to that January 2013 reserve estimate in
that prior report to be non-applicable to the unconsolidated fill mining method demonstrated as being viable by this prefeasibility study
work. It should be further noted that “mining depletion” during 2013 is not accounted for in the reserves, as in place underground mining
developments were removed from the resource model prepared by NAP’s Denis Decharte P.Eng., and thereby from the reserve
numbers; and a 0% mining recovery was applied to known mined-out stopes. The projected top down, long-hole with unconsolidated fill
mining method, its potential production profile and the plans referred to in this prefeasibility study are preliminary in nature and
additional technical studies will need to be completed in order to prove out their viability. There is no certainty that this mining method
will be realized or that the production capabilities as represented will be realized. A mine production decision that is made without a
feasibility study carries additional potential risks which include but are not limited to the lack of details pertaining to geotechnical and
ventilation field study inputs for mine design, ore handling upgrades and their impact on mining schedules, metallurgical flow sheets
and process plant designs that in themselves may require additional economic analysis and internal studies to ensure satisfactory
operational conditions and decisions regarding future targeted production. Numbers may not add due to rounding.
NOTES
33
Shareholder
INFORMATION
North American Palladium’s vision is to become a low cost, mid-tier precious metals company operating in
mining friendly jurisdictions. 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, and is currently completing a major expansion to increase production and reduce cash costs per
ounce.
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