North American Palladium Intersects High Grades Underground at LDI Mine and Reef-Style Mineralization on Surface Near Open Pit

TORONTO, ONTARIO--(Marketwire - Jan. 30, 2012) - North American Palladium Ltd. ("NAP" or the "Company") (TSX:PDL)(NYSE Amex:PAL) today provided an update on the remaining drill results from its 2011 exploration program at the Company's Lac des Iles ("LDI") palladium mine in Northern Ontario. These results (see Appendix) are the third and final tranche of drill results from the 2011 program.

Highlights:

• Infill drill results in the Offset Zone returned excellent grades, with good width and continuity, including 78 metres at 7.39 grams per tonne Palladium ("g/t Pd") and 33 metres at 8.71 g/t Pd;
• Good indication of a southern extension to the Offset Zone in an area previously reported as the Southern Norite Zone, including 39 metres at 4.02 g/t Pd and 15 metres at 5.13 g/t Pd;
• Mineralization discovered 300 metres to the west of the Offset, Cowboy and Outlaw zones, including 10 metres of 3.05 g/t Pd, giving support to the interpretation that some mineralized zones manifest as a series of parallel stacked lenses;
• Confirmed north and south lateral extensions of upper Roby Zone, including 18 metres at 12.82 g/t Pd; and
• Bonanza grade surface mineralization encountered from trenches along the North VT Rim 500 metres northeast of the LDI open pit, including approximately 1 metre samples at 64.4 g/t Pd and 45.8 g/t Pd.

"The success of our 85,000-metre drill campaign in 2011 underpins the significant exploration potential of the LDI property, and supports our view that we have only scratched the surface in our exploration endeavours," stated William J. Biggar, President and Chief Executive Officer. In addition to confirming excellent grades in the Offset Zone over significant intercepts, the 2011 exploration program continues to expand the size of the Offset Zone and parallel mineralized zones; provides new targets for Roby Zone mining adjacent to existing underground infrastructure; and gives a new surface target with exceptional grades."

Mr. Biggar added: "As we pursue our organic growth strategy through the LDI mine expansion, exploration will continue to be a key focus for the Company for many years to come. As an established PGM producer with excess mill capacity on a permitted property, we are well positioned to convert exploration success into production and cash flow on an accelerated timeline."

The objectives of NAP's 2011 exploration program were to expand the Offset Zone, improve knowledge of the Offset Zone mineralization through infill drilling, and identify potential surface targets (see Figures 1, 2 and 3 for an overview of drill locations). In 2011, 261 holes totaling 84,686 metres were drilled on the LDI property. Underground drilling accounted for 41,343 metres (205 holes), of which approximately 13,290 metres (66 holes) were to support mine operations. Drilling from surface accounted for the remaining 43,343 metres (56 holes). Previous exploration updates on the 2011 program were issued by news release on June 28, 2011 and September 14, 2011.

The visual images and complete drill results are included in an Appendix to this news release posted on the Company's website. It is estimated that true widths represent on average 70% of the reported lengths for surface drilling and on average 80% of the reported lengths for underground drilling.

Offset Zone Delivers Excellent Grades and Continues to Expand

Infill drilling on the Offset Zone continued throughout 2011 to define the upper and middle portions of the ore body on a 15-metre drill pattern in preparation for production (see Figures 4 and 5). The holes were drilled on a fan pattern from the Offset Zone ramp and the vast majority intersected the Offset Zone, returning good widths and grades, the majority which are higher than the current resource estimate. Although the Cowboy Zone was not specifically targeted, it was frequently intersected during the drill campaign.

The 800-series holes of the infill drilling targeted the middle portion of the Offset Zone, which continued to intersect high grade intervals. Some of the best results from the 800-series holes include:

Hole	From	To	Length of Intersection	Grade (g/t Pd)	Location
11-829	100 m	178 m	78 m	7.39	Offset & Cowboy
11-801	104 m	137 m	33 m	8.71	Offset
11-817	91 m	124 m	33 m	8.60	Offset
11-804	103 m	114 m	11 m	18.06	Offset
11-831	116 m	125 m	9 m	20.07	Offset

The 700-series of holes targeted the southern portion of the Offset Zone, at the outer portion of the current resource model (see Figures 6 and 7). Results continue to show high grades and good continuity as well as high grade footwall mineralization that may be associated with the Cowboy or Outlaw zones. Significant mineralization was encountered in the Cowboy Zone, including 11 metres at 7.22 g/t Pd (Hole 11-710) and 24 metres at 5.5 g/t Pd (Hole 11-717).

Notable drill results from the 700-series holes include:

Hole	From	To	Length of Intersection	Grade (g/t Pd)	Location
11-748	125 m	151 m	26 m	5.17	Offset
11-719	209 m	237 m	28 m	4.75	Offset
11-717	22 m	46 m	24 m	5.5	Cowboy
11-718	203 m	221 m	18 m	5.63	Offset
11-722	108 m	121 m	13 m	5.01	Offset
11-710	24 m	35 m	11 m	7.22	Cowboy
11-825	40 m	47 m	7 m	4.28	Cowboy
11-829	60 m	66 m	6 m	7.44	Cowboy
11-711	28 m	33 m	5 m	9.84	Cowboy
11-749	147 m	151 m	4 m	16.04	Offset

Moreover, there is good indication of a southern extension to the Offset Zone in an area previously reported as the Southern Norite Zone (see the Appendix for the drill results for Southern Norite Zone and Figures 10 and 11 for the location of the drill holes).

Notable results from these drill holes include:

Hole	From	To	Length of Intersection	Grade (g/t Pd)	Location
11-027	206 m	245 m	39 m	4.02	Norite
11-023	944 m	959 m	15 m	5.13	Norite

The Company is investigating whether the Southern Norite Zone is an extension of the Offset Zone towards the south.

The 900-series of holes targeted an area to the west of the Offset Zone from an underground platform. These results discovered more footwall mineralization to the west of the mineralized Outlaw Zone (see Figures 8 and 9). This is the Company's first attempt to drill beyond the Cowboy and Outlaw zones, which were discovered to the west of the Offset Zone in 2009. Additional work will be required to understand how the 300 metres of previously unknown mineralized gabbros relates to the three currently identified zones. The results do, however, give support to the interpretation that mineralization adjacent to the Offset Zone consists of a series of parallel stacked lenses.

Roby Zone Expands Laterally

The Roby Zone drill campaign was designed to confirm north and south extensions of the mineralization in the upper part of the mine. Definition drilling in 2011 followed palladium mineralization previously encountered and results continue to confirm northern and southern extensions (Figures 12 and 13).

Some notable drill results include:

Hole	From	To	Length of Intersection	Grade (g/t Pd)	Location
11-214	215 m	233 m	18 m	9.27	Roby North
11-217	238 m	256 m	18 m	12.82	Roby North
11-234	55 m	71 m	16 m	9.03	Roby South

The Company is developing a mine plan for both upper Roby Zone extensions. Development has already commenced towards the new North Block, which will allow further drilling to expand the resource northward. In the southern extension, development is still at the planning stage.

Bonanza Grade Mineralization Encountered at North VT Rim

The Company discovered bonanza grade Platinum Group Elements (PGEs) at surface in trenches along the North VT Rim approximately 500 metres northeast of the LDI open pit, including 0.98 metre at 64.4 g/t Pd and 0.8 metre at 45.8 g/t Pd (see Figures 14 and 15). Corresponding platinum values for these intervals are 5.2 g/t Pt and 2.46 g/t Pt, which are broadly in line with palladium to platinum rations in the nearby Roby and Offset zones.

The North VT Rim target was known to have anomalous palladium values that follow the contact with the East Gabbro and Varied-Textured Gabbro (VT-Gab) to the east but such high grades had not previously been encountered. The geological controls on the high grade palladium mineralization along the North VT Rim target are still being investigated. Available technical data indicate that the mineralization is generally stratabound and stratiform in nature and features very low sulfide content that is generally not visible in hand specimens. The mineralization along this contact may be similar to other PGE 'reef-style' occurrences found in the Bushveld and Stillwater complex.

The most noteworthy grades from trenching on the North VT Rim include:

Trench ID	Length of Intersection	Pd. Grade (g/t)	Pt. Grade (g/t)	Au. Grade (g/t)
TR11-04-011	0.98 m	64.4	5.17	1.19
TR11-04-103	0.80 m	45.8	2.48	1.59
TR11-04-102	1 m	37.3	2.44	0.33
TR11-04-027	1 m	23	0.98	0.58
TR11-04-026	0.9 m	22.3	0.99	0.33

While very encouraging, additional work is required on the North VT Rim to understand the nature of the mineralization. The Company intends to follow up on these results during 2012 with a drill campaign targeted below the highest grade trench mineralization with larger diameter HQ drill core.

2012 LDI Exploration

NAP will continue to invest in exploration to expand the reserves and resources at LDI and to identify new targets. In total, NAP plans to drill approximately 70,000 metres in 2012, of which 64,000 metres will be at LDI, and 6,000 metres at NAP's other nearby properties. Approximately 55,000 of the 64,000 metres to be drilled at LDI is in connection with the LDI mine expansion.

The primary focus of the exploration program will be underground exploration at LDI targeting the Offset Zone, to conduct infill drilling as well as to test extensions of the Offset Zone mineralization towards surface, at depth, and to the south. In addition, drilling will be conducted at North LDI, the North VT Rim and at Legris Lake.

Technical Information and Qualified Persons

The assay analyses performed during NAP's drill programs (with the exception of Roby Zone - see below) are subject to a formal quality assurance and quality control (QA/QC) program. Diamond drill core from exploration drilling is logged and sampled on site and at the Company's exploration office in Thunder Bay with sample transport by the Company and Courtesy Courier to Activation Laboratories Ltd. (Thunder Bay and Ancaster), an independent accredited laboratory, for assay analysis. Check assay analyses are carried out by SGS Minerals Services (Toronto), a laboratory that is also independent of the Company.

Diamond drill core from drilling in the Roby mine, including the Roby Zone extensions are logged and sampled on site and assayed at the Company's lab at the mine. The assay analyses are subject to a formal quality assurance and quality control (QA/QC) program. Monthly check assay analyses are carried out by SGS Minerals Services (Toronto), a laboratory that is also independent of the Company.

The Company's exploration team designed and executed the drilling program under the supervision of David Penna, P. Geo., an employee of NAP and a Qualified Person as defined by National Instrument 43-101, who has reviewed and approved the content of this news release.

An Appendix of tables and figures for this news release is available on the Company's website at www.nap.com.

About North American Palladium

NAP is an established precious metals producer that has been operating its flagship Lac des Iles mine (LDI) located in Ontario, Canada since 1993. LDI is one of only two primary producers of palladium in the world, and is currently undergoing a major expansion to increase production and reduce cash costs per ounce. NAP also operates the Vezza gold mine located in the Abitibi region of Quebec. The Company's shares trade on the NYSE Amex under the symbol PAL and on the TSX under the symbol PDL.

Cautionary Statement on Forward Looking Information

Certain information included in this news release constitutes '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', 'forecast', and similar expressions identify forward-looking statements. Such statements include, without limitation, any information as to our future exploration results, financial or operating performance, including: statements with respect to the exploration potential of the LDI property, the methods by which ore will be extracted, projected grades and other statements that express management's expectations or estimates of future performance. Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The factors and assumptions contained in this news release, which may prove to be incorrect, include, but are not limited to: that the Company's interpretations of the ore body are accurate, that prices for key exploration and development supplies, including labour, will remain consistent with the Company's expectations, that the Company's current estimates of mineral reserves and resources are accurate, and that there are no material delays in the timing of ongoing development projects. The forward-looking statements are not guarantees of future performance. The Company cautions the reader that such forward-looking statements involve known and unknown risks that may cause the actual results to be materially different from those expressed or implied by the forward-looking statements. Such risks include, but are not limited to: the possibility that new exploration targets may not meet management's expectations, uncertainty of mineral reserves and resources, inherent risks associated with exploration and development, the risk that the Offset Zone and other zones may not be successfully developed, and uncertainty of the ability of the Company to obtain financing. For more details on the factors, assumptions and risks 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.

To view the Appendix, please click the following link: http://media3.marketwire.com/docs/PDLAppendix.pdf.