Reserves & Resources

The Company has completed an update to its LDI mineral reserves and resources (Table 1). The effective dates for the new reserve estimate and resource estimate (Table 1) are January 1, 2015 and February 2, 2015, respectively. The new estimates exclude material mined up until December 31, 2014. The resource estimates provided in Table 1 were prepared by NAP Qualified Persons in accordance with National Instrument 43-101 ("NI 43-101"). The reserve estimates provided in Table 1 are derived from the Company's NI 43-101 technical report entitled "Technical Report for Lac des Iles Mine, Ontario Incorporating Prefeasibility Study for Life of Mine Plan " dated March 21, 2014 (the "2014 Technical Report"), and have been updated to include depletion from mining to the end of 2014 and conversion of RGO stockpile resources to reserves.

TABLE 1: Mineral reserve and mineral resource estimates for the Lac des Iles mine property effective January 1, 2015 and February 2, 2015, respectively.

Reserves & Resources

Notes

1. 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 classification system. US investors should refer to the Annual Information Form for an overview on how Canadian Standards differ significantly from US requirements.
2. Resources listed in Table 1 are exclusive of reserves. Resources and reserves reflect depletion from mining activities to December 31, 2014.
3. The estimation of mineral reserves and mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. 
4. 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 North American Palladium (NAP) and qualified persons (QPs) under NI 43-101.
5. Palladium 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.
6. Tonnages are rounded to nearest '000 tonnes. Pd, Pt and Au grades are rounded to nearest .01 g/t. Ni and Cu grades are rounded to nearest .01%. Rounded numbers were used to calculate contained Pd (oz) and average resource and reserve tonnages.
7. The mineral reserves are based on the estimates, metal price assumptions, and exchange rates provided in the March 21, 2014 NI 43-101 Technical Report entitled "Technical Report for Lac des Iles Mine, Ontario Incorporating Prefeasibility Study for Life of Mine Plan" (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). The reserves have been updated to account for mining depletion that occurred in 2014 as well as conversion of RGO stockpile resources to reserves. Mining depletion estimates were prepared by David N. Penna, P.Geo. and QP.
8. Reserves are estimated to the 1065 Mine Level (4,435 metre elevation), a maximum depth of 1,072.5 metres.  The effective date of the Lac des Iles Mine resource models that were used in the estimation of the current reserves for the Offset and Roby zones is December 31, 2013, as prepared by Denis Decharte P.Eng. and QP. 
9. The mineral resource for the Offset hangingwall and footwall zones was estimated as of December 31, 2014 by Denis Decharte P.Eng. and QP. 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 (5m by 5m by 5m blocks). 1m 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 3D 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, 2014.
10. The mineral resource for the Upper Offset southeast extension zone was estimated as of December 31, 2014 by Denis Decharte P.Eng. and QP. The mineral resource calculation was constrained by a 2.0 g/t Pd grade shell and with no Pd cutoff grade applied. The mineral resource estimate is based on the combination of geological modeling, geostatistics and conventional block modelling (5m by 5m by 5m blocks). 1m composite intervals were used. Grade capping was determined not to be necessary. The Upper Offset southeast extension zone resource model used the inverse distance squared (ID 2) grade interpolation method within a 3DI block model. The mineral resource is exclusive of mineral reserve and mined-out material as of December 31, 2014.
11. The mineral resource for the Roby footwall zone was estimated as of December 31, 2013 by Denis Decharte P.Eng. and QP. 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 (5m by 5m by 5m 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 ordinary kriging (OK) grade interpolation method within a 3D 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, 2014.
12. The mineral resource for the Powerline Zone was estimated as of February 2, 2015 by Chris Roney, P.Geo. and QP, a private consultant to the Company. This resource estimate was based on a 1.0 g/t Pd cut-off grade. The Powerline Zone mineral resources were estimated from drilling completed to December 31, 2014. The mineral resource uses a minimum 1.0 g/t Pd resource block cut-off. The mineral resource estimate is based on the combination of geological modeling, geostatistics and conventional block modeling (10m x 10m x 10m blocks). The Powerline Zone resource models used the Ordinary Kriging grade interpolation method.
13. The mineral resource for the Sheriff Zone is based on estimates originally provided in the Company’s September 5, 2013 press release, adjusted to a cut-off grade of 1.0 g/t Pd and to account for the overlap with the preliminary resource estimates for the Powerline Zone by Chris Roney, P.Geo. and QP.
14. The mineral resource for the North VT Rim zone was estimated as at December 31st, 2013 by Chris Roney, P.Geo. and QP. 
15. Mineral resource estimates for the low-grade stockpile (RGO) shown in the Company's March 21, 2014 statement of mineral reserves and mineral resources were converted to proven mineral reserves, under the direction of David N. Penna, P.Geo. and QP.