North American Palladium entered into an Option Joint Venture Agreement with Rare Earth Metals Corp. (REM) to earn up to 65% in REM's interest in the five properties located in the historic Ni-Cu Lynn Lake Mining Camp. The terms of the Option require North American Palladium to complete an aggregate of $1.4 Million in work expenditures and make payments of $550,000 over a 4 year period to earn 50%. A further 15% may be earned following completion of a feasibility study.

The optioned claim blocks cover five separate mafic-ultramafic bodies which have noted similarities to the two intrusives (Main and El Intrusives) which were hosts for all of the past Ni-Cu production from the Lynn Lake Camp. The properties are all within 3 kilometres of road access to the infrastructure provided by the mining community of Lynn Lake, Manitoba. The property is approximately 300 kilometres from the city of Thompson, Manitoba, the location of the fully integrated nickel mining, milling and smelting complex operated by INCO.

A detailed airborne survey was recently completed over the properties with ground follow-up scheduled to commence later this summer. The survey, being undertaken by Terraquest Ltd, is designed to provide high resolution Mag and VLF-EM data of the properties. The survey will be conduced on tight 60 metre line spacing in two separate directions roughly N-S and E-W. The geophysical data will be used to identify prospective structures and host geology for Nickel-Copper mineralization, within the Gabbro bodies.

Historically, Lynn Lake is the third largest nickel producing region in Canada. Sherritt Gordon Mines Ltd. mined the Lynn Lake nickel-copper deposits from 1953-1976. The Main and El gabbroic plugs produced 20,151,146 tonnes of ore at an average grade of 1.023% Ni and 0.535% Cu from three mines over the 24 year period.