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North American Palladium Announces C$43 Million Offering of Convertible Debentures

July, 10, 2012

TORONTO, ONTARIO--(Marketwire - July 10, 2012) -


North American Palladium Ltd. ("NAP" or the "Company") (TSX:PDL)(NYSE MKT:PAL)(NYSE Amex:PAL) today entered into an agreement with a syndicate of underwriters co-led by Scotia Capital Inc. and Raymond James Ltd. under which they have agreed to act as underwriters to purchase, on a bought deal basis, 43,000 convertible unsecured subordinated debentures (the "Debentures") of NAP at a price of C$1,000 per Debenture, for total gross proceeds of C$43 million (the "Offering").

The Underwriters have been granted an option (the "Option") to purchase up to an additional 15% of the Offering, exercisable in whole or in part at any time up to 30 days following the closing of the Offering, which is scheduled to occur on or about July 31, 2012 (the "Closing Date").

The Debentures will mature on September 30, 2017 (the "Maturity Date"), unless earlier redeemed, and will bear interest, accruing, calculated and payable semi-annually in arrears on March 31 and September 30 of each year, at a rate of 6.15% per year. The Debentures will be convertible at the holder's option into common shares ("Common Shares") of the Company at any time prior to the close of business on the earlier of the Maturity Date and the business day immediately preceding the date fixed for redemption of the Debentures at a conversion price of C$2.90 per Common Share (the "Conversion Price").

The proceeds from the Offering will be used for the Company's mine expansion expenditures at its Lac des Iles palladium mine and for general corporate purposes.

The Debentures will rank subordinate in right of payment of principal and interest to all present and future senior secured obligations of the Company and will rank pari-passu to all present and future unsecured indebtedness. The Debentures will be offered (i) in Canada by way of short form prospectus in all provinces of Canada, (ii) in the United States and to, or for the account or benefit of, U.S. persons, to "qualified institutional buyers" as defined in Rule 144A under the U.S. Securities Act of 1933, as amended, and (iii) in such other jurisdictions as may be agreed upon by the Company and the Underwriters.

The Offering is subject to a number of conditions, including, without limitation, receipt of all regulatory approvals. The Offering is subject to the approval of the TSX and the NYSE MKT, LLC.

The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in the United States.

About North American Palladium

NAP is an established precious metals producer that has been operating its flagship Lac des Iles mine (LDI) located in Ontario, Canada since 1993. LDI is one of only two primary producers of palladium in the world, and is currently undergoing a major expansion to increase production and reduce cash costs per ounce. NAP also operates the Vezza gold mine located in the Abitibi region of Quebec. The Company's shares trade on the NYSE MKT under the symbol PAL and on the TSX under the symbol PDL.

Forward-Looking Information

Certain information in this news release relating to North American Palladium Ltd. is forward looking and related to anticipated events and strategies. When used in this context, words such as "will", "anticipate", "believe", "plan", "intend", "target" and "expect" or similar words suggest future outcomes. By their nature, such statements are subject to significant risks and uncertainties, which include, but are not limited to, regulatory and government decisions, economic conditions, and availability and cost of financing.

Readers are cautioned not to place undue reliance on forward-looking statements as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements. Except as required by law, North American Palladium Ltd. disclaims any intention and assumes no obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.

Neither the TSX nor the NYSE MKT, LLC accepts responsibility for the adequacy or accuracy of this release.

Contact: Camilla Bartosiewicz
Company Name: North American Palladium Ltd.
Contact Title: Director, Investor Relations and Corporate Communications
Phone: 416-360-7374
Other1: camilla@nap.com

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