Production in fiscal 2007 from the Lac des Iles Mine increased for the second year in a row as increased grade, recoveries and mill availability improved the year's performance.

Palladium production in 2007 was 286,334 ounces at an average head grade of 2.39 g/t compared with 237,338 ounces in 2006 at a head grade of 2.18 g/t.  As well, byproduct metal production of platinum, goldm nickel and copper all increased proportionately.

The Lac des Iles mining operation was significantly enhanced by the achievement of commercial production from the underground mine on April 1, 2006.  The $46 million underground development program initiated just two years prior was successfully completed on budget and schedule.

Since start-up, the underground mine has more than met our expectations, producing 770,000 tonnes of mill feed in 2007 or 2,106 tpd at an average palladium grade of 5.79 g/t. In the fourth quarter of 2007, production from the underground reached an average of 2,198 tonnes per day at a palladium head grade of 5.98 g/t.

The open-pit continues to provide the builk of the Lac des Iles throughput with total ore production of 4.4 million tonnes at an average grade of 1.79 g/t palladium. The combined open-pit and underground mill throughput in 2007 of 5.0 million tonnes at an average palladium head grade of 2.39 g/t, compared with 4.6 million tonnes at an average palladium head grade of 2.18 g/t last year.

Early in the year the Company undertook a number of initiatives to improve mill performance.  Process optimization, recovery improvements and enhancements to the long-term preventative maintenance program, combined to improve performance by minimizing unscheduled downtime.  In the last quarter of 2007, mill availability reached 87% and palladium recovery rose to 75%.

In 2008 the Company expects to continue on this improved track with estimated production of 300,000 ounces of palladium, an increase of 5% over the 2007 production level of 286,334 ounces.

Mill Production Stats

Statement of Mineral Reserves & Resources (as of December 31, 2007)

LAC DES ILES - OPEN PIT

LAC DES ILES - UNDERGROUND

Notes:

1. The mineral reserve and resource estimates for the LDI property other than the OHGZ were prepared by David Penna, P. Geo (a "qualified person" under NI 43-101), using a cutt-off grade of 1.1 g/t Pd for the open pit and 4.5 g/t Pd for the underground, assuming long-term prices of US$325/oz Pd, US$1,000/oz Pt, US$550/oz Au, US$11/lb Ni and US$2.50/lb Cu. Mr. Penna is an employee of the Company, where he holds the position of Chief Geologist at the Lac des Iles mine. The mineral resource estimates for OHGZ were prepared by Richard E. Routledge, M.Sc., P.Geo. of Scott Wilson RPA. (a "qualified person" under NI 43-101), using a 3.6 g/t Pd equivalent cut-off grade. The open pit reserves are reported as grade diluted blocks but are stated on an in-situ basis.
2. Due to rounding differences, total contained ounces of measured and indicated resources of Pd and Pt may not be equal to the sum of these two mineral resource categories.
3. Pd and Pt 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 situ tonnage and grade.

Statement of Mineral Reserves (as of December 31, 2007)

LAC DES ILES - OPEN PIT

Notes:

1. Due to rounding differences, total contained ounces of measured and indicated resources of Pd and Pt may not be equal to the sum of these two mineral resource categories.
2. Although "Measured Resources", "Indicated Resources", and "Inferred Resources" are categories of mineralization that are recognized and required to be disclosed by Canadian regulators, the SEC does not recognize them. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
3. Pd and Pt 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 situ tonnage and grade.

LAC DES ILES - UNDERGROUND

Notes:

1. The mineral reserve and resource estimates for the LDI property other than the OHGZ were prepared by David Penna, P. Geo (a "qualified person" under NI 43-101), using a cutt-off grade of 1.1 g/t Pd for the open pit and 4.5 g/t Pd for the underground, assuming long-term prices of US$325/oz Pd, US$1,000/oz Pt, US$550/oz Au, US$11/lb Ni and US$2.50/lb Cu. Mr. Penna is an employee of the Company, where he holds the position of Chief Geologist at the Lac des Iles mine. The mineral resource estimates for OHGZ were prepared by Richard E. Routledge, M.Sc., P.Geo. of Scott Wilson RPA. (a "qualified person" under NI 43-101), using a 3.6 g/t Pd equivalent cut-off grade. The open pit reserves are reported as grade diluted blocks but are stated on an in-situ basis.