TORONTO, ONTARIO–(Marketwired – June 20, 2017) – North American Palladium Ltd. (“NAP” or the “Company”) (TSX:PDL) (OTC PINK:PALDF) is pleased to announce the signing of a Definitive Option Agreement (the “Option Agreement”) with Impala Platinum Holdings Limited (“Implats”) and Transition Metals Corp (“Transition”) that provides the Company with the exclusive right to acquire a 75% ownership position in the Sunday Lake Project located near Thunder Bay, Ontario. The Sunday Lake Project is host to a recently discovered platinum group element (“PGE”) – copper – nickel sulfide deposit. The Company is also providing details on its regional exploration strategy.

Highlights:

• Option Agreement signed with Implats and Transition, through its wholly-owned subsidiary, HTX Minerals, providing the Company with an option to acquire a 75% ownership stake in the Sunday Lake PGE-Cu-Ni sulfide project, by making cumulative total cash payments of $3.5 million and completing a minimum of $4.5 million in qualified expenditures over a five year staged earn-in period.
• The Sunday Lake Project is located within trucking distance of the Company’s Lac des Iles mine and hosts a recently discovered magmatic sulfide deposit having typical, combined Pt + Pd grades in the 2 to 5 g/t range over true thicknesses of several metres up to a maximum of ~40 metres.
• The Company has commenced the implementation of a new exploration strategy, as part of its overall business plan, which features up to $10 million of annual exploration spending over the next three years on targets at the Company’s Lac des Iles mine, Sunday Lake and its current Greenfields properties.

“We are very pleased to announce the signing of a Definitive Option Agreement with Impala Platinum and Transition Metals in connection with the Sunday Lake property. The Sunday Lake property rounds out our portfolio of early-stage to advanced exploration opportunities within our strategic exploration area of interest extending over a radius of 50 km from our Lac des Iles mill,” said Mr. Jim Gallagher, the Company’s President and CEO.

“Late last year, our board of directors approved a comprehensive exploration strategy that will potentially deliver timely resource additions on our Lac des Iles Mine property and our substantial Greenfields property portfolio. Following the recently announced increases in our mineral reserves and life of mine production plan at Lac des Iles, NAP is now well positioned to execute on this strategy,” continued Mr. Gallagher.

“We look forward to building on the encouraging, recent exploration results on the Sunday Lake Project. Our immediate priority is to advance the project to the resource delineation stage. In addition, after a multi-year effort, we now hold mineral rights over all of the known Lac des Iles suite of intrusions and are well-positioned to translate our new insights into the ore-forming processes at Lac des Iles into future discoveries of PGE-rich magmatic sulfide deposits on a condensed timeframe,” said Dr. David C. Peck, the Company’s Vice President, Exploration.

Sunday Lake Agreement

On June 20, 2017, the Company, signed a Definitive Option Agreement (the “Option Agreement”) with Impala Platinum Holdings Limited (“Implats”) and Transition Metals Corp (“Transition”) through its wholly-owned subsidiary of HTX Minerals Corp, with respect to the Sunday Lake PGE-Cu-Ni exploration project (Figure 1). The Sunday Lake property comprises approximately 2,600 hectares of mineral claims and patents and is located 25 km due north of the city of Thunder Bay and approximately 95 km by road from the Company’s Lac des Iles mill. Exploration drilling completed in the period 2013-2015 under a joint venture agreement between Implats and Transition completed 20 diamond drill holes totaling 12,017 metres on the Sunday Lake property. This drilling delineated a semi-continuous zone of PGE-rich magmatic sulfide mineralization covering an area of ~800 metres long and 300 metres wide and reaching ~40 metres in vertical thickness (Figure 2). Drilling highlights are provided in Table 1. Additional details on the exploration results from the Sunday Lake property are available www.transitionmetalscorp.com. The Sunday Lake PGE-Cu-Ni deposit remains open to surface and along strike. This summer, the Company will conduct geophysical and geochemical surveys in advance of its initial approximately 7,000 metre surface drilling program later in the year. Initial exploration will focus on:

• Determining the lateral and vertical limits of the deposit;
• Testing for local areas of thicker and/or higher-grade mineralization, including more massive accumulations of magmatic sulfide mineralization and more PGE-rich disseminated sulfides; and
• Testing for a mineralized feeder along-strike from and beneath the currently-delineated mineralization.

Table 1. Selected Highlights from Recent Exploration Drilling on the Sunday Lake Property

Source: Transition Metals news releases on the Sunday Lake property for the period 2013-2015 (www.transitionmetalscorp.com)

¹All interval lengths have been interpreted by Transition Metals as approximating the true thickness

The Option Agreement provides the Company with the exclusive right to acquire a 75% ownership in the Sunday Lake property by making cumulative total cash payments of $3.5 million and completing a minimum of $4.5 million in qualified expenditures over a five year staged earn-in period. Should Lac des Iles Mine Property complete all requirements under the Option Agreement, it will hold an undivided 75% interest in the property and Transition will retain its existing 25% interest. Thereafter, the Company and Transition will enter into an Exploration Joint Venture with Transition having no financial commitments to the Joint Venture until a Feasibility Study is completed, whereupon Transition can elect to participate in future programs at its pro-rata ownership level or have its interest diluted.

To view Figure 1 accompanying this press release, please visit the following link: http://media3.marketwire.com/docs/a1097668.pdf

To view Figure 2 accompanying this press release, please visit the following link: http://media3.marketwire.com/docs/b1097668.pdf

Exploration Strategy

This year the Company commenced the implementation of a new exploration strategy, which is designed to increase the Company’s inventory of PGE-rich magmatic sulfide deposits within a strategic exploration area of interest extending 50 km from the Lac des Iles mill. The Company’s revamped long-term exploration strategy is summarized as follows:

• Mineral Reserves replacement on the Lac des Iles Mine Property through extension and conversion drilling adjacent to the principal Mineral Reserves and mining areas;
• Mineral Resource additions (both underground and at surface) on other parts of the Lac des Iles Mine Property through exploration drilling, supported by geophysical and geochemical surveys; and
• Delineation of new Mineral Resources on other Lac des Iles suite intrusions and on the Sunday Lake property.

The Company intends to invest up to $10M annually in exploration over the next three years on targets at the Lac des Iles minesite, Sunday Lake Project and its current Greenfields properties.

Lac des Iles Minesite

Current priorities for exploration on the Lac des Iles Mine Property include:

• Underground extensions to the known orebodies and a recently added high-priority target south of the Offset Zone and the Camp Lake fault (Figure 3); and

Two surface targets, including the central-east part of the Property and far southern end of the Property (South Lac des Iles intrusion), which is modelled to contain the extension of the main feeder structure to the Offset and Roby zone deposits (Figure 4).

To view Figure 3 accompanying this press release, please visit the following link: http://media3.marketwire.com/docs/c1097668.pdf

To view Figure 4 accompanying this press release, please visit the following link: http://media3.marketwire.com/docs/d1097668.pdf

Greenfields Properties

The Company is also increasing its investment in Greenfields exploration. The current Greenfields properties cover an area of 43,088 hectares and capture all known Lac des Iles suite intrusions (Figure 5). All of these properties are situated within 50 km of the mine site and many of them are known to host near-surface, Pd-rich magmatic sulfide mineralization having similar characteristics to the Roby and Offset zone deposits in the Mine Block intrusion at Lac des Iles. Historical exploration data for the Greenfields properties have been integrated with more recent geophysical and geochemical survey information to guide the selection and ranking of anomalous features having geological characteristics similar to the PGE deposits at Lac des Iles. The current Greenfields exploration program will focus on the search for thick, vertically-oriented PGE-rich sulfide mineralization within major, regional structures that may have acted as feeders to the Lac des Iles suite intrusions.

Concurrently, the Company is preparing to resume exploration drilling on several existing targets including, but not limited to:

• The Tib Lake property, where the Company intends to test for the presence of a mineralized feeder structure in an area hosting Pd-rich disseminated sulfide mineralization known as the Kuhner showing; and
• The Shelby Lake property, where recent exploration work identified Lac des Iles-style, Pd-rich magmatic sulfide mineralization at several different locations.

The Company will provide regular updates on its Lac des Iles and Greenfields property exploration programs as significant new results become available.

To view Figure 5 accompanying this press release, please visit the following link: http://media3.marketwire.com/docs/e1097668.pdf

Note: All dollar amounts discussed in this news release refer to Canadian dollars unless otherwise stated

Technical Information and Qualified Persons

Dr. David C. Peck, P.Geo., the Company’s Vice President, Exploration and a Qualified Person under National Instrument 43-101, has reviewed and approved all technical items disclosed in this news release.

About North American Palladium Ltd.

North American Palladium Ltd. (TSX:PDL) (OTC PINK:PALDF) is a Canadian company with over 20 years of production at Lac des Iles mine, located northwest of Thunder Bay, Ontario. North American Palladium is the only pure play palladium producer in the world. With over 500 employees, Lac des Iles mine features a unique world class ore body and modern infrastructure, including both an underground mine and an open pit mine.

Cautionary Statement on Forward-Looking Information

Certain information contained in this news release constitutes ‘forward-looking statements’ within the meaning of the ‘safe harbor’ provisions of Canadian securities laws and the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. The words ‘target’, ‘plan’, ‘should’, ‘could’, ‘estimate’, ‘guidance’, and similar expressions identify forward-looking statements. Forward-looking statements in this news release include, without limitation: information pertaining to the Company’s strategy, plans or future financial or operating performance, such as statements with respect to, long term fundamentals for the business, operating performance expectations, project timelines, tailings management plan, mining method change, production forecasts, operating and capital cost estimates, expected mining and milling rates, cash balances, projected grades, mill recoveries, metal price and foreign exchange rates and other statements that express management ‘s expectations or estimates of future performance. Forward-looking statements involve known and unknown risk factors that may cause the actual results to be materially different from those expressed or implied by the forward -looking statements. Such risks include, but are not limited to: the possibility that metal prices and foreign exchange rates may fluctuate, the risk that the Lac des Iles mine may not perform as planned, that the Company may not be able to meet production forecasts, the possibility that the Company ma y not be able to generate sufficient cash to service its indebtedness and may be forced to take other actions, inherent risks associated with development, exploration, mining and processing including environmental risks and risks to tailings capacity, employment disruptions, including in connection with collective agreements between the Company an d unions, the risks associated with obtaining necessary licenses and permits and uncertainty regarding the ability to consummate the Recapitalization. For more details on these and other risk factors see the Company’s most recent Annual Information Form / Form 40-F on file with Canadian provincial securities regulatory authorities and the SEC.

Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The factors and assumptions contained in this news release, which may prove to be incorrect, include, but are not limited to: that the Company will be able to continue normal business operations at its Lac des Iles mine, that metal prices and exchange rates between the Canadian and United States dollar will be consistent with the Company’s expectations, that there will be no significant disruptions affecting operations, and that prices for key mining and construction supplies, including labour, will remain consistent with the Company’s expectations. The forward-looking statements are not guarantees of future performance. The Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise, except as expressly required by law. Readers are cautioned not to put undue reliance on these forward-looking statements.