NAP Closes Over-Allotment Option for Unit Offering and Private Placement of Flow-Through Shares

TORONTO, ONTARIO, Oct 08 (MARKET WIRE) --
North American Palladium Ltd. ("NAP" or the "Company") (TSX: PDL)(TSX:
PDL.WT)(TSX: PDL.WT.A)(NYSE Amex: PAL)(NYSE Amex: PAL.WS) has completed
the exercise of the full over-allotment option granted in connection with
its previously announced cross-border bought deal public offering,
consisting of an additional 2,400,000 units at a price of C$3.15 per
unit, for total gross proceeds of C$7,560,000. Each unit consists of one
common share and one-half of one common share purchase warrant of the
Company. Each whole warrant entitles the holder to purchase an additional
common share at a price of C$4.25 per share, subject to adjustment, at
any time on or prior to September 30, 2011, subject to early termination
in certain circumstances. Thomas Weisel Partners Canada Inc. and Cormark
Securities Inc. co-led the underwriting syndicate, which included Dundee
Securities Corporation, Haywood Securities Inc. and Octagon Capital
Corporation.

The Company has also closed its previously announced bought deal private
placement of 4,000,000 flow-through shares at a price of C$3.75 per share
for total gross proceeds of C$15,000,000. The shares were sold by the
underwriting syndicate to accredited investors in Canada on a private
placement basis pursuant to applicable Canadian securities laws. The
flow-through shares are subject to a four-month hold period ending on
February 9, 2010.

Total gross proceeds from the unit and flow through share offerings are
approximately C$73 million.

North American Palladium: Re-engineering the Future

North American Palladium is a precious metals company that owns the Lac
des Iles mine, which produced platinum group metals for 15 years until
October 2008 when it was placed on temporary care and maintenance due to
low metal prices. Prior to the temporary shutdown, the mine had annual
production of 270,000 ounces of palladium, 20,000 ounces of platinum and
20,000 ounces of gold. The Company also owns and operates the Sleeping
Giant gold mine located in the Abitibi region of Quebec, which produced
over 1 million ounces of gold from 1988-2008 at an average grade of 11.44
g/t. North American Palladium expects commercial gold production to
resume in the fourth quarter of 2009 at an annual rate of 50,000 ounces.
North American Palladium benefits from operating in a politically stable
jurisdiction with developed infrastructure and a history of innovation
and excellence in mining.

Cautionary Statement on Forward Looking Information

Certain information included in this press release, including any
information as to the individual use of proceeds of the offering,
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. Forward-looking statements are necessarily
based upon a number of estimates and assumptions that, while considered
reasonable by management, are inherently subject to significant business,
economic and competitive uncertainties, risks and contingencies. 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 North
American Palladium 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. These statements are
also based on certain factors and assumptions. 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. In addition, there can be no assurance that the Company's
Lac des Iles or Sleeping Giant mines will be successfully restarted or
that other properties can be successfully developed. 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.

Contacts:
North American Palladium Ltd.
Jeffrey A. Swinoga
Vice President, Finance & Chief Financial Officer
416-360-7971 Ext. 222
jswinoga@nap.com

North American Palladium Ltd.
Annemarie Brissenden
Director, Investor Relations
416-360-7971 Ext. 226
abrissenden@nap.com

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