NOT FOR RELEASE OVER U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE U.S.

North American Palladium Ltd. ("NAP" or the "Company") (TSX:PDL)(NYSE Amex:PAL)
today announced that on October 4, 2011 it sold C$70 million of senior secured
notes (the "Notes") by way of a private placement, with Sprott Resource Lending
Corp., who was the lead investor in the Notes. 


The Notes were issued in C$1,000 denominations and bear interest at a rate of
9.25% per year, payable semi annually. The Notes will mature on October 4, 2014,
with the Company having an option to extend for an additional one year. 


The Company also issued one warrant with each Note. Each warrant entitles the
holder to purchase 0.35 ounces of palladium at a purchase price of US$620 per
ounce (the "Strike Price"), anytime up to October 4, 2014. If exercised, NAP
will pay the warrant holder an amount equal to the average of the U.S dollar
palladium afternoon fixing price per ounce on the London Platinum and Palladium
Market for the ten trading days prior to the exercise date less the Strike
Price, multiplied by 0.35. The Company has the option, subject to certain
conditions, to pay the amount owing in common shares priced at a 7% discount to
the volume weighted average price on the Toronto Stock Exchange for the five
trading days prior to the date of exercise.


The Company intends to use the proceeds of the private placement to fund the
continued expansion of its Lac des Iles ("LDI") palladium mine in Northern
Ontario and for general working capital purposes. The Notes are guaranteed by
the Company's subsidiaries and secured by a first charge on the assets of NAP
and the subsidiaries, excluding accounts receivable, inventory and certain other
assets, which are pledged in support of the Company's US$60 million operating
line of credit with Scotiabank. 


"We are delighted to complete this financing with the Sprott group, whose
expertise and success in the mining sector is widely known. Like NAP, they are
bullish on the outlook for palladium and recognize the significant cash flow
potential from our LDI mine," said William J. Biggar, President and Chief
Executive Officer of NAP. "The proceeds of this financing, combined with our
cash, operating line of credit, and cash flow from operations, will give us the
financial resources to accomplish our current mine expansion objectives."


"This debt financing presents a rare financing opportunity in the palladium
sector, with the backing of a world-class asset in a low-risk jurisdiction,"
commented Peter Grosskopf, President and Chief Executive Officer of Sprott
Resource Lending Corp.


This press release shall not constitute an offer to sell or a solicitation of an
offer to purchase the Notes, warrants, or any other securities in the United
States or any other jurisdiction. The Notes, warrants and common shares issuable
upon exercise of the warrants, have not and will not be registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act"), or the
securities laws of any other jurisdiction and may only be offered and sold in
the United States and to, or for the account benefit of, U.S. persons pursuant
to an exemption from the registration requirements of the U.S. Securities Act.
In addition, the Notes, warrants and common shares issuable upon exercise of the
warrants, may only be offered and sold in Canada pursuant to an exemption from
the prospectus requirements of Canadian securities laws.


About North American Palladium

NAP is a Canadian precious metals company focused on growing its production of
palladium and gold in mining-friendly jurisdictions. The Company's flagship
mine, Lac des Iles, is one of the world's two primary palladium producers. NAP
also owns the Sleeping Giant gold mine and the Vezza Project, each located in
the Abitibi region of Quebec. The Company has extensive landholdings adjacent to
both its Lac des Iles and Sleeping Giant mines, and a number of exploration
projects. NAP trades on the NYSE Amex under the symbol PAL and on the TSX under
the symbol PDL.


About Sprott Resource Lending Corp.

Sprott Resource Lending specializes in bridge and mezzanine lending to precious
and base metal mining, exploration and development companies and energy
companies on a global basis. Headquartered in Toronto, the Company seeks to
generate income from lending activities as well as the upside potential of bonus
arrangements with borrowers generally tied to the underlying property or shares
of the borrower.


Sprott Resource Lending (www.sprottlending.com) was founded by Quest Capital
Corp. and Sprott Lending Consulting Limited Partnership. Sprott Lending
Consulting LP is a wholly owned subsidiary of Sprott Inc., the parent of Sprott
Asset Management LP (www.sprott.com), a leading Canadian independent money
manager.


Cautionary Statement on Forward Looking Information

Certain information included in this press release, including any information as
to our future exploration, financial or operating performance and other
statements that express management's expectations or estimates of future
performance, constitute 'forward-looking statements' within the meaning of the
'safe harbor' provisions of the United States Private Securities Litigation
Reform Act of 1995 and Canadian securities laws. The words 'expect', 'believe',
'will', 'intend', 'estimate' and similar expressions identify forward-looking
statements. The Company cautions the reader that such forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause
the actual financial results, performance or achievements of the Company to be
materially different from the Company's estimated future results, performance or
achievements expressed or implied by those forward-looking statements, and that
the forward-looking statements are not guarantees of future performance.
Forward-looking statements are necessarily based upon a number of estimates,
assumptions and factors that, while considered reasonable by management, are
inherently subject to significant business, economic and competitive
uncertainties, risks and contingencies, including the possibility that the Lac
des Iles and Sleeping Giant mines may not perform as planned, that the Offset
Zone, Vezza project and other properties may not be successfully developed, that
metal prices, foreign exchange assumptions and operating costs may differ from
management's expectations and the possibility that the financing may not satisfy
mine expansion objectives. For more details on these estimates, risks,
assumptions and factors, see the Company's most recent Form 40-F/Annual
Information Form on file with the U.S. Securities and Exchange Commission and
Canadian provincial securities regulatory authorities. The Company disclaims any
obligation to update or revise any forward-looking statements, whether as a
result of new information, events or otherwise, except as expressly required by
law. Readers are cautioned not to put undue reliance on these forward-looking
statements.
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