North American Palladium Reports Prelim. Q1 Production

North American Palladium Ltd. ("NAP" or the "Company")

announced today its preliminary palladium production results for the quarter ending March 31, 2013, as well as an update on the second tranche of its previously announced public offering (the "Offering") of 7.5% convertible unsecured subordinated debentures. Preliminary First Quarter Production Results Operations continue to make good progress ramping up production through the shaft. In the first quarter of 2014, underground production averaged approximately 3,065 tonnes per day, ahead of the Company's operating guidance for the first half of the year. Based on preliminary results, the Company estimates that payable palladium production for the quarter ended March 31, 2014 totaled approximately 42,500 ounces. Production also benefited from higher underground grades which averaged approximately 4.96 grams per tonne palladium. The Company continues to benefit from ongoing mill improvements, with first quarter recoveries averaging around 85%. Information About the Offering The Company has amended the terms of the offering of 7.5% convertible unsecured subordinated debentures (the "Series 2 Debentures") due the fifth anniversary of the issue date and associated warrants (the "Series 2 Warrants"). The amendments include, among other things: -- a decrease in the maximum size of the Offering from $43 million to $35 million; -- a reduction in the number of Series 2 Warrants from 33.33% to 25% of the number of common shares of the Company ("Common Shares") that the Series 2 Debentures are convertible into (excluding Common Shares issuable as interest or under the make-whole provisions); -- an increase to the exercise price of the Series 2 Warrants from 120% to 125% of the conversion price of the Series 2 Debentures (the "Warrant Exercise Price"); -- a reduction in the term of the Series 2 Warrants from three years to two years; and -- the removal of full ratchet/anti-dilution provisions in the Series 2 Debentures and Series 2 Warrants. The net proceeds from the Offering are expected to be used for expenditures at the Company's Lac des Iles mine, exploration, mining equipment and for other general corporate purposes. The Company intends to apply to list the Common Shares issuable pursuant to the terms of the Series 2 debentures and warrants on the TSX and the NYSE MKT. The completion of the Offering is subject to the approval of the TSX, NYSE MKT, all other necessary regulatory approvals and the settlement of definitive documentation, among other conditions. Edgecrest Capital Corporation has been retained as lead agent and book-runner.