North American Palladium Ltd.

On March 24, 2006, the Company entered into an agreement with Gold Fields Limited to further explore and develop a mining operation at the Arctic Platinum Project (“APP”) located in Finland. The APP includes several advanced stage PGM Projects. The Company has been granted an option to earn up to a 50% interest and, in certain circumstances, a 60% interest in APP, in which event a joint venture will be formed and the Company will become the project operator. In order to exercise the option, the Company must spend US$12,500, complete a feasibility study and make a production decision as well as issue to Gold Fields, approximately 7.3 million shares or approximately 9.2 million shares, subject to adjustment, to earn a 50% or 60% interest respectively on or before August 31, 2008. As at June 30, 2008, the Company has incurred $20,692 (US$18,844) in expenditures on the APP and these costs have been charged to exploration expense. The Company has determined that it will not deliver a positive feasibility study for the Arctic Platinum Project prior to the August 31, 2008 deadline and it has commenced discussions with Gold Fields Ltd. to review strategic options for the project.

In March 2006 the Company entered into a formal Option and Joint Venture Agreement with Gold Fields Limited to further explore and develop the Arctic Platinum Project (“APP”) located in northern Finland. The APP includes several advanced stage platinum group metal projects (Suhanko, Narkaus and Penikat) located approximately 60 km south of the town of Rovaniemi. The capital of Lapland and regional mining centre, Rovaniemi offers abundant infrastructure such as housing, transportation, supplies and the availability of electricity. The port of Kemi on the Gulf of Bothnia is located 120 km south-west of Rovaniemi.

A good strategic fit for NAP in view of the similarities in operating conditions and deposit class with the Lac des Iles Mine in northwestern Ontario, the APP contains a number of undeveloped PGM deposits in addition to nickel-copper deposits. Platinum group

elements along with nickel-copper mineralization were first discovered in the area by Outokumpu Oy in 1964 during a regional Cu-Ni exploration program and the area was further explored by Gold Fields between 2001 and 2004. In 2005, Gold Fields prepared a feasibility study on the Suhanko Project comprising the advanced stage Konttijarvi and Ahmavaara open pit projects. The APP also encompasses the nearby Narkaus (SK) and Penikat (SJ) Projects, both of which are known to host platinum group and base metal mineralization associated with large, layered mafic complexes.

In February 2006, NAP initiated a US$6 million exploration program to drill test selected targets within the Narkaus and Penikat Projects as well as to conduct preliminary mineralogical and metallurgical test work. The Narkaus (SK) Project is being evaluated for

its accretive potential and positive impact on the main project at Suhanko located some 20 kms to the south.

A total of 49 diamond drill holes for a total length of 8,716 metres focused on three target areas: 1) Kouhunki, 2) Nutturalampi and 3) Siika-Kama, collectively forming the Narkaus (SK Reef) Project. While the mineralized zones within the Narkaus intrusive are considerably narrower in width than those found at Suhanko, they are higher in grade. Building on the extensive work conducted by Gold Fields over a four year, US$70 million program, NAP

is applying its expertise in re-evaluating the potential of the Suhanko Project in light of updated input parameters including higher commodity prices and new drilling data.

NAP has contracted Aker Kvaerner ASA to complete the APP re-scoping study and P&E Mining Consultants Inc. to conduct the open-pit designs and optimization. Metallurgical test work is being conducted by SGS Lakefield Research to examine different processing

options in an attempt to improve metal recoveries and reduce operating costs. In accordance with the terms of the Agreement, NAP has budgeted $7.5 million for the re-scoping study and exploration program work towards a $5.0 million feasibility study to be completed on or before August 30, 2008.

The results of the scoping study are expected to be released in a Technical Report prepared in compliance with Canadian National Instrument 43-101.

NAP has an option to acquire a 50% interest (up to 60% in certain circumstances) in the project. Upon a production decision, up to 9.2 million NAP common shares would be payable to Gold Fields.

The Narkaus Property is comprised of three target areas: Kuohunki, Nutturalampi and Siika Kämä and is located 20 km to the northeast of the Suhanko Property, the subject of a feasibility study by Gold Fields in 2005. Since the commencement of its drill campaign in February 2006, NAP’s strategy has been to focus on the near surface potential of known mineralization at the Narkaus Property in order to enhance the economics of the larger Suhanko Property and consider alternate development scenarios. While the mineralized zones at the Narkaus Property are smaller in size than the Suhanko Property, the drilling results support the belief that they are higher in grade. The Narkaus Property covers approximately a 20 km strike length of highly favourable host rock considered to be underexplored.

These final results released on June 1, 2007 constitute the completion of the phase one drill campaign that commenced on October 30, 2006 and include the results from a small geotechnical drilling program. This final set of results comprise 11 diamond drill holes totaling 2,203 metres in length that tested targets at the Siika Kämä and Kuohunki deposits to depths of just over 300 metres from surface. Highlights of these latest drill holes are presented below.

Note: The column labeled "3E" represents the summation of 3 Elements as follows: 3E = Pd (g/t) + Pt (g/t) + Au (g/t)

The mineralization at both Siika Kämä and Kuohunki, as outlined by widely spaced drilling to date, occurs as a traditional “reef style” and “contact style”. The reef style mineralization is interpreted to occur as a gently north dipping stratiform layer while the contact style mineralization is interpreted to occur as pods of disseminated mineralization located stratigraphically below the reef style mineralization. The Siika Kämä deposit appears to occur as a fault displaced block that has been transported approximately seven kilometers to the southeast of the main Narkaus trend. The Kuohunki deposit is interpreted to occur as forming part of the Narkaus trend. The host rock for the reef style mineralization is viewed as being metamorphosed pyroxenite, gabbronorite and peridotite, while the host rock for the contact style mineralization is viewed as being metamorphosed gabbronorite and pyroxenite.

North American Palladium has contracted with Aker Kvaerner ASA to complete a rescoping study for the Suhanko project and with P&E Mining Consultants Inc. to conduct openpit designs and optimization. Metallurgical test work is being conducted by SGS Lakefield Research to examine different processing options, to improve metal recoveries and reduce operating costs.

The results of this work will be compiled in a Technical Report compliant with National Instrument 43-101.