NORTH AMERICAN PALLADIUM THE WORLDS ONLY PURE PLAY PALLADIUM PRODUCER - PowerPoint PPT Presentation

NORTH AMERICAN PALLADIUM THE WORLD’S ONLY PURE PLAY PALLADIUM PRODUCER TSX:PDL | OTC:PALDF May ay 3, 2019 FIRST QUARTER 2019

MANAGEMENT AGENDA PARTICIPANTS Jim Gal allagher lagher President and Chief Executive Officer 1. Q1 Highlights 2. Operation Update Tim Hil ill 3. Financial Update Vice President, Finance & Chief Financial Officer 4. Exploration 5. Market Activity Davi avid Pec eck 6. Dividend Vice President, Exploration 7. Q&A QUARTERLY RESULTS Friday, May 3, 2019 2

Dis isclai claimer mers and d Forward-Looking Looking Informati ormation on All dollar amounts shown are in Canadian dollars unless otherwise stated. QUARTERLY RESULTS 3 Friday, May 3, 2019

Q1 1 HI HIGH GHLI LIGH GHTS Health lth & Safety ty • LTI-free quarter and 1.5 TRIF (2018 Industry Average is 3.8) Prod oduct uction ion Average daily underground production – 6,755 tonnes • at a cost of $38/tonne mined 52,698 ounces of payable palladium produced • • Mine expansion on track Mill recovery – 82.4% • • Mill throughput below expectations Sustain ained ed Profit itab ability ility • Revenue – $128.3 million Net income – $29.5 million • • Cash provided from Operations - $75.8 million Free cash flow 1 - $46.9 million • • Debt – $0 • Quarterly dividend increased to $0.10 QUARTERLY RESULTS Explo plorat ation ion • Very positive developments 4 Friday, May 3, 2019 1. Non-IFRS measure.

MINE NE EXP XPANSION NSION New dry facility • Underground ramping up to 12,000 tpd by 2021 • 2019 – A year of development: • Total metres of development in Q1 2019; 28% Camp expansion increa ease over Q1 2018 • Ramped up to 30.5m/day in March – 75% higher igher than 2018 annual average • Moved 8,570 tpd underground (ore + waste) in March Water treatment – 23% higher igher than 2018 annual average plant upgrade • Scope of expansion project extends significantly beyond just mine activity QUARTERLY RESULTS Ventilation system upgrade 5 Friday, May 3, 2019

Q1 1 PRODU ODUCTIO CTION N HI HIGH GHLIGHT LIGHTS SHERIF ERIFF F PIT PAYAB ABLE LE RGO GO UNDER ERGR GROUN OUND D PALLAD LADIUM IUM PRODUCTION ODUCTION Average tonnes per day Average tonnes per day & average grade & average grade Ounces produced Average tonnes per day & average grade 6,755 3,922 1,422 6,327 2,683 3.2 g/t 0.9 g/t 2.4 g/t 3.3 g/t 0.8 g/t 22 QUARTERLY RESULTS 1.3 g/t Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 2019 Guidance: 220,000- 235,000 6 Friday, May 3, 2019

MILL LL PERFORMANC RFORMANCE E • Average throughput 8,984 tpd vs 12,000 tpd target • Challen enge ges: s: • Two conveyer belt failures • Major work on primary and secondary crushers • Fines from SLS underground • Mitigat ation: n: • Organizational changes • Renewed focus on preventative maintenance • Design changes to crushing and conveying • Opportun unity ty: • High ratio of fines presents an opportunity for a potential increase in QUARTERLY RESULTS total throughput above 12,000 tpd 7 Friday, May 3, 2019

Q1 Fi Q1 Fina nancial Highl ncial Highlight ights

STRONG ONG BA BALA LANCE CE SH SHEET Liqu quidi dity ty (C$ mill llion) ion) Net t Debt bt +$1 $144.8 .8 (C$ mill llion ion – Total al debt less Cash) h) $165.5 -$1 $100 00.4 .4 Curre rrent t Ratio tio Debt bt/Equ /Equity ty Ratio tio (Curr rrent nt Assets ts / Curre rent nt Liabili abiliti ties) (Total Liabilities / Shareholders’ Equity) $20.7 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 QUARTERLY RESULTS Cash Credit Q1 2018 Q1 2019 9 Friday, May 3, 2019

SI SIGNI GNIFICANT FICANT CASH SH GE GENERA ERATION TION Palladi Pa adium um Reve venue e Pa Palladi adium um Sold d Revenue venue Cash sh Flow from m pe per r Ounce ce Sold ld 1 (payab able le ounces es) (C$ millio ion) n) Ope perati ations ons (US$ per ounce ce sold) (C$ millio ion) n) +51% 1% +48 48% +$6 $62.3 .3 +1% 1% QUARTERLY RESULTS Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 10 Friday, May 3, 2019 1. Non-IFRS measure, please refer to Non-IFRS Measures in the MD&A.

COS OST STRUCTU UCTURE RE Production Costs Under ergr ground Costs AISC SC 1 1 (C$ per tonne ne mille led) d) (US$ S$ per ounce nce produc duced) d) (C$ per tonne mined ) +30 30% +34 34% -3% 3% AISC Variance $210 - Less by-product revenue - Increased royalty – 5% of NSR - Increased production costs; milling issues and expansion - Less ounces produced - Increased sustaining capital; u/g dev., TMF & site expansion - Weaker CAD QUARTERLY RESULTS Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 11 Friday, May 3, 2019 1. Non-IFRS measure, please refer to Non-IFRS Measures in the MD&A.

FINANC NCIAL IAL RESU SULTS Adjusted Net Income Capital l Exploration EBITDA (C$ mill llion) ion) Investment Expenditures (C$ mill llion) ion) (C$ mill llion) ion) (C$ mill llion) ion) +$3 $33.2 .2 +$2 $24.9 .9 +20 20% +74% 4% QUARTERLY RESULTS Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 12 Friday, May 3, 2019 1. Non-IFRS measure, please refer to Non-IFRS Measures in the MD&A.

Ex Explo ploration ation

EXP XPLORA LORATION TION RESU SULTS Expanding resource potential at Lac des Iles and new discoveries at Sunday Lake Lac des Iles • Three new underground zones delineated • Enhanced potential to expand resources • New exploration drift in progress • Surface drilling ongoing, new results coming Sunday Lake • #1 opportunity in our blue sky portfolio • Potential for a large deposit has improved Q1 2019 Investor Call Exploration Regional Program • Geophysical screening program continues 14 Friday, May 3, 2019

LAC DES ES ILES ES UNDERGR ERGROUND UND EX EXPLORA RATION TION New Zones Added, Drilling Program Expanded C Zone Targe get: Exp xpansi sion on • Initial results suggest the C Zone in the Offset Block splits into two divergent trends: 1) a persistent north-south trend that parallels the Offset Zone Deposit and 2) a south-west trend that has significant strike length potential and is open in most directions. Assays pending. Q1 2019 Investor Call Exploration 15 Friday, May 3, 2019

LAC DES ES ILES ES UNDERGR ERGROUND UND EX EXPLORA RATION TION Offset Satellites B series ies and and the Myster ery Zone • Three discrete satellite zones of palladium mineralization referred to as the B1 to B3 zones, were identified within a few tens of metres of previous or planned mining areas in the Offset block. • The upper parts of the B2 and B3 zones are already in the mining plan. Whereas their lower extensions as well as the other B zones required additional drilling. • The Mystery Zone is an isolated area of Pd mineralization located on the eastern side of mining area in Offset Block. Q1 2019 Investor Call Exploration Recent drilling and geological modelling suggest that the • Mystery Zone is likely a much larger area of mineralization than previously believed and could connect to the surface of the Twilight Zone in the southeast extension of the Roby pit. 16 Friday, May 3, 2019

LAC DES S ILES S SU SURFACE CE EXPLORA LORATION TION Near Surface Resource Potential New Geophy hysical sical Targe gets ts • Final targets emerging from 2018/19 geophysical programs Exp xpanded ed Dril ill Program am Plan to drill over 30 km this year based • on recent success Three ee Pd Pd Zones (so (so far) • Distinct mineralized trends found at Creek Zone, below and south of historical Baker Zone and along the Q1 2019 Investor Call Exploration North Rim of the complex 17 Friday, May 3, 2019

SU SUNDAY Y LA LAKE KE PGM Zone expanded, best ever drill results reported 2019 Drilli lling ng Progr ogram am Completed 7,300 metres in 6 holes in ~3 months and expanded the PGM zone to • cover nearly the full strike length and width of the intrusion Highligh lights ts • Big Re Red Target returned best results to date on the property with first two holes in the western target area: SL-19-026: 41.2 metres with 3.22 g/t Pt, 2.08 g/t Pd and 0.21  g/t Au (5.51 g/t 3E) with 0.57% Cu and 0.19% Ni. Includes 15.8 metre of 9.11 g/t 3E with 0.88% Cu and a 8.30 metre sub- interval of 13 g/t 3E, 1.23% Cu. Big  SL-19-029: 275m step out from hole 26 intersected 32.0 metres with 3.35 g/t 3E, including 8.17 metres of 5.44 g/t 3E and 0.51% Cu. Red Q1 2019 Investor Call Exploration • Encouraging results from the central part of intrusion SL-19-025: 14.80 metres with 2.33 g/t 3E and 0.29% Cu including 2.30 metres with 4.11  g/t 3E and 0.48% Cu and 1.60 metres with 5.18 g/t 3E and 0.70% Cu.  SL-19-030: 20.61 metres with 1.87 g/t 3E, including a higher-grade sub-interval of 5.50 metres with 3.67 g/t 3E and 0.83% Cu. 18 Friday, May 3, 2019

SUNDAY SU Y LA LAKE KE Future plans Many ny targe gets ts remain ain to to be be tested • New drilling results warrant additional testing of geophysical anomalies • Additional geophysics also warranted • Extension drilling recommended around recent, higher-grade intersections • After completing this work, a decision will be taken on whether or not to proceed to an initial resource delineation program Q1 2019 Investor Call Exploration 19 Friday, May 3, 2019