North American Palladium Announces C$22 Million Financing of Flow-Through Shares

TORONTO, ONTARIO--(Marketwire - Jan. 27, 2011) -

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

North American Palladium Ltd. ("NAP" or the "Company") (TSX:PDL) (NYSE Amex:PAL) entered into an agreement with a syndicate of underwriters led by RBC Capital Markets, Scotia Capital Inc. and including Cormark Securities Inc. under which they have agreed to act as agents to sell 2,667,000 flow-through shares (the "Flow-Through Shares") of NAP on a guaranteed basis at a price of C$8.25 per Flow-Through Shares (the "Offering").

The Company intends to use the proceeds from the Offering for exploration activities that will constitute Canadian exploration expenditures and "flow-through mining expenditures" as defined in the Income Tax Act (Canada). The Offering is expected to close on or before February 18, 2011.The Offering is subject to the approval of the TSX and the NYSE Amex.

The Flow-Through Shares will be offered in all provinces of Canada by way of a prospectus supplement to a base shelf prospectus of North American Palladium Ltd. The Flow-Through Shares will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be offered or sold in the United States or to "U.S. persons" as defined in Regulation S under the U.S. Securities Act. This press release does not constitute an offer to sell the Flow-Through Shares in the United States or to U.S. persons.

Forward-Looking Information

Certain information in this news release relating to North American Palladium Ltd. is forward looking and related to anticipated events and strategies. When used in this context, words such as "will", "anticipate", "believe", "plan", "intend", "target" and "expect" or similar words suggest future outcomes. By their nature, such statements are subject to significant risks and uncertainties, which include, but are not limited to, regulatory and government decisions, economic conditions, and availability and cost of financing.

Readers are cautioned not to place undue reliance on forward-looking statements as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements. Except as required by law, North American Palladium Ltd. disclaims any intention and assumes no obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.

About North American Palladium Ltd.

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 and operates the Sleeping Giant gold mine located in the prolific 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.