North American Palladium Commences Development of an Underground Mine at Lac des Iles

North American Palladium Commences Development of an Underground Mine at Lac des
Iles
Symbols: TSX: PDL AMEX: PAL 


TORONTO, March 29  /PRNewswire-FirstCall/ -- North American Palladium Ltd.
("NAP") is pleased to announce that its Board of Directors has approved the
development of an underground mine at the Company's Lac des Iles operations. The
decision to proceed with an integrated open pit and underground mine project was
based on a full feasibility study prepared by Roscoe Postle Associates Inc. of
Toronto, Ontario.

NAP currently operates an open pit mine and mill at Lac des Iles with a design
capacity of 15,000 tonnes per day. In late 2003, the Company commissioned a full
feasibility study in response to scoping studies and a pre-feasibility study
that indicated a higher grade sub-vertical ore body located directly beneath the
open pit mine was a viable underground mine. The underground feasibility study
defines, as its base case, a nominal 2,000 tonnes per day mechanized longhole
stope mine accessed through a portal in the Lac des Iles open pit with an
initial mine plan containing 3,542,000 tonnes of Proven and Probable Reserves.
These underground reserves contain approximately 6.62 grams of palladium per
tonne at a cut-off grade of 4.5 grams per tonne. In addition, these reserves
contain approximately 0.40 grams of platinum, 0.34 grams of gold, 0.07 percent
copper, and 0.08 percent nickel per tonne. The integrated production plan for
the expanded Lac des Iles mine calls for the blending of higher grade
underground ore with that of the open pit to generate a 7-year mine life at an
average annual production rate of slightly over 300,000 ounces of palladium.

The underground feasibility study's base case generates approximately C$92
million of cumulative pre-tax cash flow at a palladium price of US$325 per ounce
and projected operating costs of approximately US$152 per ounce of palladium
after by-product metal credits. Capital costs for the underground development
are estimated at C$40 million for direct and indirect costs and working capital.
Mining equipment accounts for an additional C$15 million of capital costs and
the Company plans to finance this equipment through a vendor lease program.

Construction of the underground mineis planned to commence in May 2004 with
first ore production expected in the third quarter of 2005. The underground
operation will operate together with the open pit operations and when fully
operational it will contribute approximately 750,000 tonnes of mill feed per
year.

The Company's Board of Directors also approved a secondary crusher installation
for the Lac des Iles mill designed to maintain the fourth quarter 2003
throughput rate and reduce processing costs in the mill circuit. The estimated
capital cost of this project is approximately C$10 million. NAP plans to finance
a portion of the C$50 million total capital cost for the underground mine and
secondary crusher projects with operating cash flow and is reviewing financing
options for the balance.

Andre Douchane, NAP's President and CEO commented, "The integrated open pit and
underground mine project at Lac des Iles, which has all necessary approvals in
place to commence construction, will increase our production profile at the Lac
des Iles mine."

NAP is an expanding palladium producer with mining operations in Northwestern
Ontario and exploration projects and activities mainly in Canada. The Company
produces palladium and significant amounts of platinum, gold, nickel and copper
atits wholly-owned Lac des Iles mine.

Forward-Looking Statements - Certain statements included in this news release
are forward-looking statements which are made pursuant to the "safe harbor"
provisions of the United States Private Securities LitigationReform Act of
1995. They include estimates and statements that describe the Company's future
plans, objectives and goals, including words to the effect that the Company or
management expects a stated condition or result to occur. When used herein,
words such as "estimate", "expect", "intend", and other similar expressions are
intended to identify forward-looking statements. In particular statements
relating to estimated mineral reserves, cash flows, capital costs, ore
production, mine life, financingand construction are forward-looking
statements. Such forward-looking statements involve inherent risks and
uncertainties and are subject to factors, many of which are beyond our control,
that may cause actual results or performance to differ materially from those
currently anticipated in such statements. Important factors that could cause
actual results to differ materially from those expressed or implied by such
forward-looking statements include among others metal price volatility, economic
and political events affecting metal supply and demand, fluctuations in ore
grade, ore tonne milled, geological, technical, mining or processing problems,
future profitability and production, and availability of financing on acceptable
terms. For a more comprehensive review of risk factors, please refer to the
Company's most recent Annual Report under "Management's Discussion and Analysis
of Financial Results" and Annual Information Form under "Risk Factors" on file
with the U.S. Securities and Exchange Commission and Canada 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. Readers are cautioned not to put undue
reliance on these forward-looking statements. 

DATASOURCE: North American Palladium Ltd.



CONTACT: North American Palladium Ltd.: Andre J. Douchane - President &

CEO, Tel: [phone]; George D. Faught - Vice President Finance & CFO,

Tel: [phone]; Douglas H. Bache - Treasurer, Corporate Development and

Investor Relations, Tel: [phone], Fax: [phone], E-mail:

, Website: http://www.napalladium.com/

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