North American Palladium Announces First Quarter 2008 Financial Results; Net Income $12.6 Million

Market Wire, May, 2008

North American Palladium Ltd. (TSX: PDL)(TSX: PDL.WT)(AMEX: PAL)(AMEX: PAL.WS) -

This news release contains forward-looking statements. Reference should be made to the cautionary statement on forward-looking information at the end of this news release.

Highlights

- Income from mining operations for the quarter ended March 31, 2008 of $24.9 million increased by $7.1 million or 40% compared to the same period last year.

- Net income for the quarter ended March 31, 2008 was $12.6 million or $0.16 per share compared to net income of $5.5 million or $0.10 per share in the first quarter last year.

- Revenue for the quarter ended March 31, 2008 of $70.8 million increased by $2.3 million or 3% compared to the same period last year.

- Palladium sales for the quarter were recorded at an average price of US$445 per ounce compared to US$352 per ounce in the same period last year.

- Palladium accounted for 51% of the quarter's total revenue. By-product revenue from platinum and nickel continued to be important contributors at 19% and 15% of the quarter's total revenue respectively.

- Cash cost per ounce of palladium produced(1), net of by-product metal revenues and royalties, was US$16 for the first quarter of 2008 compared to US$15 for the same period last year.

North American Palladium Ltd. announced today financial results for the first quarter 2008.

The first quarter of 2008 generated income from mining operations of $24.9 million an improvement of $7.1 million or 40% compared to the first quarter of 2007. The improvement is due to increased revenue of $2.3 million, which includes positive mark-to-market commodity and foreign exchange pricing adjustments compared to the first quarter of 2007 of $6.0 million and $5.6 million respectively, and lower operating expenses of $4.7 million.

Net income for the first quarter of 2008 was $12.6 million or $0.16 per share compared to a net income of $5.5 million or $0.10 per share for the corresponding period in 2007.

Revenue of $70.8 million, after pricing adjustments, for the first quarter of 2008 increased by $2.3 million or 3% reflecting higher commodity prices and a weakening of the Canadian dollar versus the US dollar, offset partially by reduced sales volumes.

(1) Non-GAAP measure. Reference should be made to footnote 1 at the end of this press release.

Palladium sales in the first quarter of 2008 were recorded at an average price of US$445 per ounce versus an average price of US$352 in the same period in 2007, an increase of 26%. As previously reported, palladium production for the first quarter of 2008 of 61,091 ounces was down 22% compared to the first quarter of 2007. The decrease in production primarily reflects the mine plan which anticipated processing lower grade ore from the open pit during the first quarter. Operations have now moved into a higher grade area of the open pit, where they will remain for the balance of the year.

For the quarter ended March 31, 2008, cash cost per ounce(1) of palladium, net of by-product metal revenues, of US$16 per ounce was slightly higher than the US$15 per ounce in the same period last year. While lower production volumes in the first quarter of 2008 increased cash costs per ounce, the increase was largely offset by higher by-product commodity prices.

Operating cash flow for the first quarter of 2008 (before changes in non-cash working capital)(1) improved by $2.1 million to $25.1 million compared to the first quarter 2007.

Outlook

In light of current favourable PGM market conditions, the Company is assessing the economic viability of a southern extension of the open pit at Lac des Iles mine which could prolong the open pit mine life by an additional two to three years. A positive preliminary economic assessment of the Offset High Grade Zone at Lac des Iles was released last week and the Company has immediately moved to the feasibility stage for this project. Production could commence in 2010 with an underground mine life of approximately eight years. Further expansion of the mineralized resource is possible with additional drilling that will be done in 2008 and 2009. Completion of a preliminary economic assessment of the Shebandowan West Project is anticipated in the second quarter of 2008 evaluating a ramp-accessed underground mine scenario. The feasibility study for the Arctic Platinum Project, located in Finland is progressing well and is on track for completion by the end of August 2008.

Further information about the 2008 first quarter results are available in the Company's financial statements and MD&A, which will be filed on its website, with Canadian provincial securities authorities ( www.sedar.com ) and with the U.S. Securities and Exchange Commission ( www.sec.gov ).

Conference Call and Webcast

The Company will host its first quarter 2008 financial results Conference Call and Webcast at 8:30 a.m. ET on Wednesday May 14, 2008. The toll-free conference call dial-in number is 1-888-789-0150 and the local and overseas dial-in number is 416-695-6622. The conference call will be simultaneously webcast and archived at www.napalladium.com in the Investor Centre under Conference Calls. The webcast will also be available at www.vcall.com/IC/CEPage.asp?ID equals 129032. A replay of the conference call will be available until May 28, 2008: toll-free at 1-800-408-3053; locally and overseas at 416-695-5800, access code #3260053.