Mr. Wayne Tisdale reports

CANADIAN PALLADIUM ANNOUNCES DEBT SETTLEMENT

Canadian Palladium Resources Inc. has entered into a debt settlement agreement with certain arm's-length and non-arm's-length consultants and creditors whereby the company will settle up to $1,513,814 of its outstanding debt through the issuance of 30,276,280 common shares in the capital of the corporation at a deemed price of five cents per common share.

The company also announces that it has issued 500,000 common shares to Pavey Ark Minerals Inc. pursuant to the option agreement to acquire a 100-per-cent interest in the East Bull palladium property.

The common shares issued in the above transactions are subject to a statutory hold period expiring four months and one day after the issuance where applicable.

The shares-for-debt transaction constitutes a related-party transaction within the meaning of Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) as Wayne Tisdale, Kelsey Chin, James Newall and Michelle Gahagan, insiders of the company, will receive 12,654,093 common shares of the company in connection with the debt settlement. The company is relying on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, as the fair market value of the shares for debt transaction with the insider does not exceed 25 per cent of the market capitalization of the company, as determined in accordance with MI 61-101. The company did not file a material change report in respect of the related-party transaction at least 21 days before the closing of the debt settlement, which the company deems reasonable in the circumstances, as the company wishes to improve its financial position by reducing its existing liabilities.

We seek Safe Harbor.