North American Palladium (PAL) Narrows Loss in 2014; Guides 2015

North American Palladium (NYSE: PAL) reported FY14 revenue of $220.1 million and loss of $0.20 per share, from revenue of $153.2 million and loss of $0.26 per share posted in FY13.

The company also announced operating and financial guidance for 2015 for its Lac des Iles ("LDI") mine located in northwestern Ontario. In this news release, grams per tonne; tonnes; tonnes per day; ounces; and palladium are represented by "g/t"; "t"; "tpd"; "oz"; and, "Pd" respectively. All palladium ounces refer to payable palladium.

Payable palladium production for 2015 is expected to increase by approximately 12% to between 185,000 and 205,000 ounces, from 174,194 in 2014.

2015 Guidance

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                                      2015 Guidance             2014 Actuals

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Total payable

 palladium

 production (oz)                 185,000 to 205,000                  174,194

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US$ cash cost per

 Pd oz sold                        US$ $440 to $466                  US$ 513

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Production cost

 (per t milled)                          $49 to $53                      $49

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Underground mining Approximately 1.6 million tonnes     1.225 million tonnes

                      Approximate Pd grade of 4 g/t         Pd grade 4.4 g/t

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Surface materials    Approximately 1 million tonnes     1.411 million tonnes

 processing              Approximate Pd grade 1 g/t         Pd grade 1.1 g/t

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Milling                 Average Pd head grade 3 g/t    Pd head grade 2.7 g/t

                         Pd recovery rates 83 - 85%  Pd recovery rates 82.4%

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Capital

 expenditures                     Under $37 million            $23.8 million

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Exploration expense                Under $9 million             $8.3 million

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"With the successful ramp up of operations in 2014 complete, we are now well positioned to consider optimization and life of mine expansion opportunities at LDI in 2015," said Phil du Toit, President and Chief Executive Officer. "Key priorities for 2015 will be on further improving the reliability and consistency of production, cost performance and evaluating the potential of the large mineral resource at LDI to support an extended mine life."

For 2015, the mill will be run on a full time basis at roughly 60% of capacity to allow time to implement a long-term tailings management solution. The Company is in the process of finalizing a design that addresses tailings requirements for the foreseeable future at a relatively low capital cost. The Company expects to begin implementation of the solution in the first half of 2015.

Capital expenditures in 2015 are expected to be less than $37 million and will include approximately:

--  $11 million for underground development;

--  $13 million on the tailings management facility;

--  $5 million on mobile and production equipment; and

--  $8 million for all other expenditures.

Assuming the current metal prices prevail and production metrics and costs are met, the 2015 capital expenditures and exploration programs are expected to be self-funded by cash flow from LDI operations.

Exploration Expenses

Exclusive of the exploration drift noted above, exploration expenditures in 2015 are expected to be less than $9 million. For 2015, exploration expenditures will primarily focus on drilling to convert inferred resources to indicated resources in the lower Offset Zone in support of a study to consider potential future shaft deepening. Exploration activities will also include modest programs for infill and extension drilling on the upper Offset Southeast extension target and top priority surface targets.

Mine Expansion

The Company continues to study various opportunities to increase the production rate and extend the mine life at the LDI site. As demonstrated in the last quarter of 2014, running the mill at full capacity has a positive impact on total palladium production and unit costs in the current strong palladium price environment. This improves the potential for mining more of the large resource at LDI. Deepening the shaft and expansion of the open pit are two of the potential opportunities being studied.

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