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

This press release refers to cash cost per ounce and operating cash flow which are not recognized measures under Canadian GAAP. Such non-GAAP financial measures do not have any standardized meaning prescribed by Canadian GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. Management uses these measures internally. The use of these measures enables management to better assess performance trends. Management understands that a number of investors and others who follow the Company's performance assess performance in this way. Management believes that these measures better reflect the Company's performance and are a better indication of its expected performance in future periods. This data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Canadian GAAP. The following tables reconcile these non-GAAP measures to the most directly comparable Canadian GAAP measure:


(a) Reconciliation of Cash Cost per Ounce to Financial Statements

(thousands of dollars except per ounce amounts)

---------------------------------------------------------------------------
                                               Three months ended March 31
---------------------------------------------------------------------------
                                                   2008               2007
---------------------------------------------------------------------------
Production costs including overhead             $30,456            $33,252
---------------------------------------------------------------------------
Smelter treatment, refining and freight costs     5,410              5,262
---------------------------------------------------------------------------
                                                 35,866             38,514
---------------------------------------------------------------------------
Less by-product metal revenue                   (34,997)           (37,333)
---------------------------------------------------------------------------
                                                    869              1,181
---------------------------------------------------------------------------
Divided by ounces of palladium                   54,201             70,634
---------------------------------------------------------------------------
Cash cost per ounce (C$)                             16                 17
---------------------------------------------------------------------------
C$ exchange rate                                  1.027              1.153
---------------------------------------------------------------------------
Cash cost per ounce (US$)                           $16                $15
---------------------------------------------------------------------------


(b) Reconciliation of Cash Flow from Operations, Prior to Changes
    in Non-Cash Working Capital  (Operating Cash Flow) to Financial
    Statements(i)

---------------------------------------------------------------------------
                                               Three months ended March 31
---------------------------------------------------------------------------
                                                   2008               2007
---------------------------------------------------------------------------
Operating cash flow                             $25,106            $23,037
---------------------------------------------------------------------------
Changes in non-cash working capital             (15,006)           (20,904)
---------------------------------------------------------------------------
Cash provided by operating activities           $10,100             $2,133
---------------------------------------------------------------------------

(i) Certain prior period amounts have been reclassified to conform to the
    classification adopted in the current period.