Mr. Jim Gallagher reports

NORTH AMERICAN PALLADIUM REPORTS $167.8M IN ADJUSTED EBITDA FOR 2018, ANNOUNCES QUARTERLY DIVIDEND

North American Palladium Ltd. has released its financial and operational results for the three months and year ended Dec. 31, 2018, and declared a quarterly dividend to common shareholders.

Fourth Quarter and Year Ending Highlights

• For the year ended 2018, adjusted EBITDA1 increased to $167.8 million, compared to $86.2 million in 2017. Adjusted EBITDA1 increased to $64.2 million for the fourth quarter in 2018, compared to $36.9 million for the same period in 2017.
• Revenue for the year increased to $396.8 million compared to $272.4 million in 2017. Revenue for the quarter increased to $122.5 million compared to $87.1 million for the same period in 2017.
• Net income for the year ended 2018 was $119.2 million compared to $36.1 million in 2017. Net income for the quarter was $77.5 million compared to $14.3 million for the same period in 2017.
• In 2018, the Company produced a total of 237,461 ounces of payable palladium, an increase from the 201,592 ounces produced in 2017. Q4 2018 palladium production reached 65,904 payable ounces as compared to 58,000 ounces in Q4 2017.
• All-in sustaining cost ("AISC1") per payable palladium ounce produced for the year decreased to US$690, compared to US$694 in 2017. AISC1 per payable palladium ounce for the fourth quarter in 2018 decreased to US$670, compared to US$734 for the same period in 2017.
• Net debt was reduced by $37.7 million, down to $36.8 million as of December 31, 2018, from $74.5 million as of December 31, 2017.

"2018 was a record year for North American Palladium and its Lac des Iles Mine," reports Mr. Jim Gallagher, President and CEO. "Highest-ever underground mine production combined with rising palladium prices have resulted in the best-ever financial results in the Company's history. With Q4 production of over 6,720 tonnes per day at a cost of $35 per tonne mined, we are one of the largest, lowest-cost underground mines in Canada. In addition, we have started to expand the upper mine to take us to 12,000 tonnes per day over the next two years and further lower our unit costs. We are particularly proud that, with all this activity, the mine has continued to improve its safety performance and had zero lost-time accidents in 2018."

Operating Highlights                  Three Months Ended  December 31Year Ended  December 31
                                      2018            2017            2018        2017      
Ore mined (tonnes)   2                                                                      
Underground                           618,211         578,249         2,285,821   1,897,114 
Sheriff open pit                      244,835         -               696,333     -         
Surface inventory                     303,509         403,847         1,360,181   962,060   
Total                                 1,166,555       982,096         4,342,335   2,859,174 
Mined ore grade (Pd g/t)                                                                    
Underground                           3.3             3.5             3.2         3.9       
Sheriff Open Pit                      2.1             -               1.6         -         
Surface                               0.8             0.9             0.9         0.9       
Milling                                                                                     
Tonnes milled (dry metric tonnes)     1,110,754       1,037,185       4,237,734   2,780,119 
Palladium recoveries (%)              80.2            80.4            80.1        80.6      
Palladium concentrate grade (g/t)     226             271             234         286       
Tonnes of concentrate produced        9,632           7,206           33,258      22,980    
Production cost per tonne milled     $45          $   42          $   45          57        
Payable palladium (oz)                65,904          58,000          237,461     201,592   
Other results 1                                                                             
Underground cost per tonne ore mined $35          $   37          $   37        $ 43        
AISC per ounce of Pd produced (US$)1 $670         $   734         $   690       $ 694       
Cash cost per ounce of Pd sold (US$)1$513         $   463         $   531       $  509      

Financial Highlights                                   Three Months Ended  December 31Year Ended  December 31
(expressed in millions of Canadian dollars)                2018             2017         2018          2017  

Revenue                                                $   122.5        $   87.1      $  396.8      $  272.4 
Smelting, refining and freight costs                       4.9              3.7          17.4          12.2  
Royalty expense                                            5.4              4.2          17.0          12.8  
Net revenue                                                112.2            79.2         362.4         247.4 
Operating Expenses                                                                                           
Production costs                                                                                             
Mining                                                     30.4             26.8         116.0         99.8  
Milling                                                    11.6             9.6          46.0          34.5  
General and administration                                 7.6              6.7          27.5          24.2  
Inventory and other costs                                  (3.4 )           (2.9)        (2.4 )        (5.3) 
Total production costs                                     46.2             40.2         187.1         153.2 
Depreciation and amortization                              15.9             12.0         52.8          35.5  
Inventory price adjustment                                 -                -            -             (0.2) 
(Gain) loss on disposal of equipment                       (0.3 )           0.4          (0.3 )        0.8   
Total mining operating expenses                            61.8             52.6         239.6         189.3 
Income from mining operations                          $   50.4         $   26.6      $  122.8      $  58.1  
Net income                                             $   77.5         $   14.3      $  119.2      $  36.1  
Net income per share                                   $   1.33         $   0.25      $  2.05       $  0.62  
Adjusted EBITDA 1                                      $   64.2         $   36.9      $  167.8      $  86.2  
Capital investment, including non-cash financing leases$   11.9         $   12.7      $  66.3       $  62.5  

Net income for the quarter was $77.5 million compared to $14.3 million for the same period in 2017. Net income for the year ended 2018 was $119.2 million compared to $36.1 million in 2017. Net income for 2018 included a one-time adjustment of $43.5 million relating to the recognition of deferred tax assets derived from the LDI's previously unrecognized income tax losses.

Revenue increased to $122.5 million in Q4 2018 compared to $87.1 million in Q4 2017. Revenue for the year ended December 31, 2018 was $396.8 million compared to $272.4 million for 2017. The year-over-year increase in revenue is due to additional palladium sales combined with increased palladium prices. Palladium prices averaged at US$1,028/oz in 2018, compared with US$869/oz in 2017.

For the year ended 2018, adjusted EBITDA1 increased to $167.8 million, compared to $86.2 million in 2017. Adjusted EBITDA1 increased to $64.2 million for the fourth quarter in 2018, compared to $36.9 million for the same period in 2017.

In 2018, the Company produced a total of 237,461 ounces of payable palladium, meeting the upper half of its 2018 guidance of between 230,000 to 240,000 ounces; an increase from the 201,592 ounces in 2017. Q4 2018 palladium production reached 65,904 payable ounces, as compared to 58,000 ounces in Q4 2017.

Total production costs for the year ended 2018, before inventory and other cost adjustments, were $189.5 million ($45 per tonne milled) compared to $158.5 million ($57 per tonne milled) in 2017. Total production costs for the fourth quarter, before inventory and other cost adjustments, were $49.6 million ($45 per tonne milled) compared to $43.1 million ($42 per tonne milled) in the fourth quarter of 2017.

Cash provided by operations for 2018, prior to changes in non-cash working capital, was $152.7 compared to $81.2 million in 2017. Cash provided by operations for the fourth quarter, prior to changes in non-cash working capital, was $58.4 million compared to $33.5 million for the same period in 2017.

For the year ended 2018, AISC1 per ounce of palladium produced was US$690, a slight decrease from US$694 for the year ended 2017.The AISC1 per ounce of palladium produced was US$670 for Q4 2018, compared to US$734 for the same period in 2017.

Capital expenditures in 2018 totalled $66.3 million compared to $62.5 million in 2017. The Company invested $11.9 million in capital during the fourth quarter, compared to $12.7 million for the same period in 2017. Major expenditures during the quarter included the tailings management facility, underground development and mobile equipment.

Financial Liquidity

As at December 31, 2018, the Company had cash and cash equivalents of $12.3 million compared to $11.1 million for the same period in 2017. In the quarter, the Company reduced its total debt to $49.1 million compared to $85.6 million as at December 31, 2017. As at December 31, 2018, the Company had availability of US$80.1 million under the Company's credit facility.

On December 17, 2018, the Company entered into a new US$125.0 million, five-year revolving term credit facility, replacing its existing credit facilities. A portion of the proceeds of the initial drawdown under the credit facility was used to repay outstanding amounts under the senior secured term loan of US$35.0 million with an affiliate of Brookfield Business Partners LP and the outstanding revolving credit facility with a Canadian chartered bank.

On December 24, 2018, the Company closed a non-brokered private placement of 714,257 common shares in relation to a flow-through equity offering. Gross proceeds to the Company were approximately $10.0 million. All proceeds from the sale of the flow-through shares will be used to incur eligible Canadian Exploration Expenses under the Company's greenfield exploration program.

Exploration

The Company is currently focussed on a number of promising exploration targets immediately adjacent to the Lac des Iles Mine (LDI). In the fourth quarter of 2018, a total of 7,731 metres of drilling was completed in two underground drill holes and 18 surface holes.

2018 saw an increase in surface drilling at LDI due to the generation of new targets and the completion of a major geophysical survey program. The Company also completed 29 underground exploration drill holes, the majority of which were designed to extend or convert resources in the southern part of the Offset Zone. A total of 37 surface exploration drill holes were completed in 2018 between Legris Lake, Sunday Lake and LDI.

A comprehensive update on 2018 exploration results at LDI was provided in a press release on February 11, 2019 that can be found here. Separate news releases discussing the Company's Sunday Lake and Legris Lake drilling programs are also available at www.nap.com .

Palladium Market

Palladium was one of the best-performing metals in 2018, with its price surging to almost US$1,300 per ounce at year-end. The palladium market has been in a fundamental deficit for several years, persisting throughout 2018. The key drivers of higher palladium demand are increasingly strident emissions standards around the globe and the introduction of Real Driving Emission (RDE) standards in the European Union and China. RDE standards require outdoor driving tests taken under various conditions in addition to the existing lab-based tests. Higher palladium loadings are now required in catalytic converters to meet these elevated standards. Tests show that platinum does not perform as well as palladium, limiting the likelihood of significant substitution. Other factors driving palladium demand are increased US sales of larger vehicles, the substitution of diesel engines with gasoline engines in Europe and flat global mine supply.

Outlook

In 2019, the Company expects production of between 220,000 to 235,000 ounces of payable palladium. The average head grade will drop slightly in 2019 as the mill feed will return to a blend of underground ore and lower-grade stockpile ore on surface. Mining from the Sheriff Pit was completed in Q4 2018.

AISC1 for 2019 is forecasted to average between US$785 to US$815 per payable palladium ounce. Sustaining capital investment is estimated at $44.0 million, while project capital is forecasted at $40.0 million.

Dividend

Giving consideration to the Company's cash flow and capital allocation alternatives, including the previously announced underground expansion project and the Company's confidence in continued, strong financial performance, the Company's Board of Directors announced a quarterly dividend of $0.03 per share to common shareholders of record on March 1, 2019.

Shareholder Information

The complete consolidated financial statements of the Company for the year ending December 31, 2018 and the related management's discussion and analysis can be found on NAP's website at www.nap.com , and on SEDAR at www.sedar.com .

The Company invites you to join its webcast and conference call on Friday, February 15, 2019 at 8:00 a.m. E.T.

Conference Call:

• Date: Friday, February 15, 2019
• Time: 8:00 a.m. ET
• Dial-In: North America: 1-800-319-4610 | International: 1-604-638-5340
• Recording: Available within 24 hours following the call at www.nap.com.
• Webcast: http://services.choruscall.ca/links/nap20190215.html
• Replay: International Toll: 1-604-674-8052 | North America Toll Free: 1-855-669-9658
• Replay Passcode: 2885 (available until March 15, 2019)

Notes:

1 Non-IFRS measure. Such non-IFRS measures do not have a standardized meaning under the financial reporting framework used to prepare the Company's financial statements and may not be comparable to similar financial measures presented by other issuers. For information regarding how the non-IFRS measure provides useful information and the additional purposes for which management uses the non-IFRS measure, please refer to Non-IFRS Measures in the Company's management's discussion and analysis.

2 The determination of mined tonnes requires reliance upon various estimates, including estimated load factors assigned to trucks and the shaft skips, density factors assigned to the size of ore being mined, the impact of seasonal conditions, and the variability of the moisture content at the time of extraction.

All figures are in Canadian dollars except where noted.

The analyses reported in this news release were performed by ALS Global in Vancouver, British Columbia. The Company's rigorous internal quality control and quality assurance protocols are described in detail in the current Technical Report for its Lac des Iles mine (September 2018 {A –} available on SEDAR).

Qualified Person

The technical content of this news release was reviewed and approved by the Company's Vice-President, Exploration, Dr. Dave Peck. Dr. Peck is a Qualified Person under the meaning of National Instrument 43-101 and a registered Professional Geoscientist with the Association of Professional Geoscientists of Ontario, the Association of Professional Engineers and Geoscientists of British Columbia, and the Association of Professional Engineers and Geoscientists of Manitoba.

About North American Palladium Ltd.

North American Palladium (TSX: PDL) (OTC PINK: PALDF) is a Canadian company with 25 years of production at the Lac des Iles Mine in a low-risk jurisdiction northwest of Thunder Bay, Ontario. North American Palladium is the world's only pure play palladium producer. With over 600 employees, the Lac des Iles Mine features a unique, world-class ore body and modern infrastructure, including both an underground mine and surface operations.

We seek Safe Harbor.