Reserves & Resources

Notes on Mineral Reserve and Mineral Resource Tables:

The classification system used herein conforms with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101) and the Canadian Institute of Mining, Metallurgy and Petroleum classification system. U.S. investors should refer to the Company’s Annual Information Form for an overview on how Canadian standards differ significantly from U.S. requirements. Pd, Pt and Au ounces are stated as contained ounces. Disclosure of contained ounces is permitted under Canadian regulations; however, the SEC generally permits resources to be reported only as in place tonnage and grade.

Lac des Iles

1.    Prepared in accordance with NI 43-101 Standards of Disclosure for Mineral Projects and the CIM classification system.

2.    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, socio-political, marketing, or other relevant issues.  Mineral resources are exclusive of the mineral reserves.

3.    The mineral resource for the Offset Zone was estimated as of June 30, 2012 by Todd McCracken, P.Geo, of Tetra Tech, an independent QP under NI 43-101. The effective date of the resource is March 31, 2012. The mineral resource calculation uses a minimum 2.5 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). Assay grade capping was determined not to be necessary. The Offset Zone resource models used the ordinary kriging (OK) grade interpolation method within a 3Dl block model with mineralized zones defined by wireframed solids. The quality assurance (QA)/quality control (QC) protocols and corresponding sample preparation and shipment procedures for the Offset Zone have been reviewed by Tetra Tech. The following metal price assumptions were used: US$675/oz palladium, US$1,675/oz platinum, US$1,750/oz gold, US$8.00/lb nickel, and US$3.50/lb copper. A US$/CDN$ exchange rate of US$1.00 = CDN$1.00 was also applied.

4.    Mineral reserves for the Offset Zone were estimated by Todd McCracken, P. Geo.; William Richard McBride, P.Eng.; Todd Kanhai, P.Eng.; and Philip Bridson, P.Eng. of Tetra Tech, independent QPs within the meaning of NI 43-101. The mineral reserves were estimated from drilling completed to March 31, 2012. Reserves were estimated to the 990 Mine Level (4,490 m elevation), a maximum depth of 1,017.5 m. The following metal price assumptions were used for reserves estimation: US$675/oz palladium, US$1,675/oz platinum, US$1,750/oz gold, US$8.00/lb nickel, and US$3.50/lb copper. A US$/CDN$ exchange rate of US$1.00 = CDN$1.00 was also applied. An average production rate of 3,500 t/d was used to determine the reserves. The following recoveries were used in the assumptions to determine the reserves: 80.45% palladium, 71.30% platinum, 83.97% gold, 43.13% nickel, and 88.55% copper.

5.    The mineral resource estimate for the Roby Zone open pit and stockpiles were estimated as of June 30, 2010 by Scott Wilson RPA and updated by David N. Penna, P.Geo., an employee of Lac des Iles Mining Ltd. (LDIM) and a qualified person (QP) under NI 43-101 to reflect: (i) additions to mineral reserves in the Roby Zone as a result of a lower cut-off palladium grade; (ii) depletion from production up to March 31, 2012, and (iii) mineral reserves from the crown pillar (supported by an internal engineering report). The following cut-off grades were used: (i) 1.8 g/t palladium equivalent (PdEq) for the Roby open pit, within an optimized pit shell run below the current pit survey; (ii) 1.9 g/t PdEq for the mine stockpiles; and (iii) 5.8 g/t PdEq for the underground Roby Zone. These cut-off grades were determined under the assumption that production would take place at a rate of 14,000 t/d. Metal price assumptions of US$350/oz palladium, US$1,400/oz platinum, US$850/oz gold, US$6.50/lb nickel, and US$2.00/lb copper were used in the estimation of cut-off grade. A US$/CDN$ exchange rate of 1.11 was also applied. Numbers may not add due to rounding. 

Shebandowan West

Mineral Resources for the Shebandowan West project were estimated as of August 9, 2007 by F.H. Brown, CPG, Pr. Sci. Nat., a Qualified Person under NI 43 101, using a cut-off grade of US$60.00 NSR and 18-month trailing average metal prices of US$300/oz Pd, US$750/oz Pt, US$400/oz Au, US$7/lb Ni and US$1.50/lb Cu. The estimate assumes a net inventory to North American Palladium of 50% for the Shebandowan West project. The Company’s interest is currently 50%, which could be reduced to 40% upon the exercise by Vale of a back in right.