Investor PRESENTATION• PRESENTATION January 2013
Forward LookingSTATEMENTSCertain information included in this presentation constitutes ‘forward-looking statements’ within the meaning of the ‘safeharbor’ provisions of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities laws. Thewords ‘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, financial or operatingperformance, including: the Companys forward looking production guidance, projected capital expenditures, operatingcost estimates, project timelines, mining and milling rates, the methods by which ore will be extracted, projected grades,mill recoveries, and other statements that express managements expectations or estimates of future performance.Forward-looking statements are necessarily based upon a number of factors and assumptions that, while consideredreasonable by management, are inherently subject to significant business, economic and competitive uncertainties andcontingencies. The factors and assumptions contained in this press release, which may prove to be incorrect, include, butare not limited to: metal prices assumptions, Canadian and U.S. dollar exchange rate assumptions, that there will be nosignificant disruptions affecting operations, that prices for key mining and construction supplies, including labour andtransportation costs, will remain consistent with the Companys expectations, that the Companys current estimates ofmineral reserves and resources are accurate, and that there are no material delays in the timing of ongoing developmentprojects. The forward-looking statements are not guarantees of future performance. The Company cautions the readerthat such forward-looking statements involve known and unknown risks that may cause the actual results to be materiallydifferent from those expressed or implied by the forward-looking statements. Such risks include, but are not limited to: thepossibility that metal prices, foreign exchange rates or operating costs may differ from managements expectations,uncertainty of mineral reserves and resources, inherent risks associated with mining and processing, the risk that the Lac desIles and Vezza mines may not perform as planned and that the Offset Zone and other properties may not be successfullydeveloped, and uncertainty of the ability of the Company to obtain financing. For more details on the factors, assumptionsand risks see the Companys most recent Form 40-F/Annual Information Form on file with the U.S. Securities and ExchangeCommission and Canadian provincial securities regulatory authorities. The Company disclaims any obligation to update orrevise any forward-looking statements, whether as a result of new information, events or otherwise, except as expresslyrequired by law. Readers are cautioned not to put undue reliance on these forward-looking statements.All dollar amounts are in Canadian currency unless otherwise stated, all references to production refer to payableproduction, and all reference to tonnes refer to metric tonnes.U.S. investors are encouraged to refer to the “Cautionary Note to U.S. Investors Concerning Estimates of Measured,Indicated and Inferred Resources” in the appendix. 1
Investment CaseFOR NAP COMMODITY GROWTH BALANCE SHEET MANAGEMENT•Palladium is a top •LDI mine expansion •Prudent financial •Experienced senior pick amongst offers production management management & metal price growth with a supports balance operating team forecasters decreasing cash sheet to support reduces risk cost profile & development•Positive supply & expanding margins programs •LDI has been demand producing fundamentals •Significant •$61.1 M in working palladium for 20 driven by development & capital as at Sept. years constrained mine exploration upside 30, 2012, including supply & rising complimented by $23.5 M in cash •Over 600 global vehicle excess mill employees and production capacity, existing contractors driving infrastructure & growth•Canada is an permits attractive PGM investment jurisdiction compared to South African peers 2
Market StatisticsCOMPELLING ENTRY POINT SECURITY SYMBOLS NYSE MKT: PAL $3.50 TSX: PDL $3.00 TSX: PDL.DB $2.50 MARKET CAPITALIZATION US$285 M $2.00 $1.50 SHARE PRICE US$1.64 $1.00 SHARES OUTSTANDING 174 M $0.50 52-WEEK HIGH/LOW US$3.21/$1.15 $0.00 3-MONTH AVERAGE NYSE MKT: 1.9 M TRADING VOLUME TSX: 0.4 MCIBC, Haywood, RBC, TOP INSTITUTIONAL SHAREHOLDERSLeon Esterhuizen Ben Asuncion Sam CrittendenCormark, Macquarie, Scotia, 1. RBC Global Asset Management (6.3%)Edward Otto Daniel Greenspan Leily Omoumi 2. T. Rowe Price Associates (6.0%)Credit Suisse, Merrill Lynch, Stifel Nicolaus, 3. Franklin Advisers (3.3%)Nathan Littlewood Michael Parkin George Topping 4. Mackenzie Financial (3.0%)Euro Pacific, Octagon, 5. AGF Investments (1.2%)Heiko Ihle Annie Zhang 6. AllianceBernstein (1.0%)GMP, Raymond James,Andrew Mikitchook Alex TerentiewInformation as at January 11, 2013, Thomson One. 3
FinancialPOSITION • C$61.1 M in working capital as at Sept. 30 • C$23.5 M in cash as at Sept. 30 • C$43 M convertible debenture financing closed Jul. 31 (6.15% interest, C$2.90 conversion price) • US$60 M operating line (US$28.2 M available) • C$15 M capital leases • C$72 M term debt (9.25% interest) 4
Palladium MarketFUNDAMENTALS• Palladium prices forecasted to return to historical highs – up to $1,000/oz – Palladium price forecasts projected to remain strong: most analysts forecast palladium will reach US$700 – US$1,000 in 2013 – Supply deficit expected to persist in the future• Strong demand fundamentals – demand has historically exceeded mine supply – Majority of demand derived from automobile sector with light vehicle production expected to increase at a 4% CAGR from 2012 and 2016 (autocatalyst demand for palladium to reach a record high in 2012) – Recent significant increase in palladium investment demand reflects positive supply/demand fundamentals and automotive industry outlook• Constrained mine supply – unable to match growth in demand – Majority of mine production comes from challenging jurisdictions (Russia and South Africa – less attractive regions for committing capital due to ongoing geopolitical risk – Russian stockpiles, a historical overhang on the market, are now believed to be at or near depletion 6
Palladium Market MINE SUPPLY RUSSIA NORTH AMERICA 41% 14% ONLY 6.3 M oz. ANNUAL PRODUCTION WORLDWIDE ~80% OF GLOBAL MINE SUPPLY COMING FROM HIGH-RISK JURISDICTIONS SOUTH AFRICA 38%Notes:1. Source: Johnson Matthey, November 2012 (forecasts for 2012 supply)2. Other producing countries (~7%) include Zimbabwe, Australia, Botswana, China, Serbia and Montenegro. 73. Excludes secondary recycling supply of 2.2 M oz. and ~250,000 oz. From Russian stock sales.
Palladium MarketMINE SUPPLY Constrained Mine Supply From Major Producers (000’s ounces) 6,000 South Africa Russia 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2008 2009 2010 2011 2012p 2013p 2014p 2015p Source: CPM Group, June 2012• 2012 global palladium supply is expected to fall to the lowest level since 2003 (down11% YoY)• South African production particularly challenged by deeper mines, power/water limitations, higher operating costs, geopolitical risks, shortages of skilled labour and strengthening of currencies• Considering the recent supply disruption in South Africa and a contraction of underlying output in Russia, the future production forecasts are expected to be significantly challenged Notes: 1. Russian supply is entirely from Norilsk Nickel, which produces palladium as a by-product from nickel production. 2. South African supply includes the major platinum producers who produce palladium as a by-product from platinum 8 production.
Palladium MarketDEMAND 2012 Gross Demand: 9.7 M oz. • Demand diversified by Dental Other geography & end market Investment 5% Chemical 1% Jewellery 4% • Strongest demand growth in 5%Automotive 5% regions outside of North 67% Electronics America, Europe and Japan – 12% BRIC economies • 2012 forecasted to be record year for autocatalyst demand (driven by China, North America & Japan) Pd. Demand: 2011A 2012E Autocatalyst 6,030,000 6,480,000 Industrial 2,480,000 2,410,000 Jewellery 505,000 450,000 Investment (565,000) 385,000 Gross demand 8,450,000 9,725,000 Source: Johnson Matthey, November 2012 9
Palladium MarketDEMAND FROM AUTO SECTOR Global Light Vehicle Production Forecast (000’s) 110,000 102M 104M 95M 99M 100,000 91M Other1 90,000 85M 77M 81M 80,000 Europe 70,000 60,000 North 50,000 America 40,000 30,000 BRIC Economies2 20,000 10,000 0 2011 2012 2013 2014 2015 2016 2017 2018 Source: IHS Automotive, February 2012 1. Other includes: Japan, Korea, Middle East and Africa 2. BRIC Economies include: Greater China, South America and South Asia • Global vehicle production biggest source of palladium demand • Light vehicle production is forecasted to increase to over 100 M units by 2017 • Strong growth to +100 M units by 2017 driven by BRIC economies 10
Palladium MarketFABRICATION DEMAND Adoption of Stricter Emission Control Standards 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Europe Euro IV Euro V Euro VI Beijing Euro III Euro IV Euro V China Nationwide Euro II Euro III Euro IV Euro V Select Cities Euro III Euro IV India Nationwide Euro II Euro III Russia Euro I Euro II Euro III Euro IV Euro V USA Tier 2 and LEV II Brazil Prconve 3 Prconve 4 Prconve 5 Prconve 6 Source: CPM Group, June 2012 • Emerging economies have adopted emission control standards that mandate the use of catalytic converters • Advancing to a higher level of emission controls results in higher PGM loadings in the catalytic converter • Tightening emission control regulations for heavy-duty trucks 11
Use of Palladium inCATALYTIC CONVERTERSVast majority of 2020 cars still projected to be gas and dieselGasoline Engines Hybrids & Other New Forms• Use +90% palladium (of total required • Neutral impact on PGM use PGM content) • Gasoline hybrids tend to use as much palladium as normal gasoline enginesDiesel Engines • Currently account for only 1% of global• Historically used platinum due to cars sales1 technical requirements • Forecasted to be 14% of overall market• Currently use 30% palladium, with scope by 20202 to increase to 50% due to advent of low sulphur diesel fuel Electric • No requirement for catalytic converters • Challenged by lack of infrastructure to recharge, high costs, long charging periods and short driving range • Forecasted to account for only 2% of global car sales by 20202 1. CPM Group, June 2010 2. Stefan Bratzel, director of the Centre of Automotive Management in Germany; as reported in Mitsui Global Precious Metals “Pole Position” Report, June 2010 12
Palladium MarketINVESTMENT DEMAND Exchange Traded Funds Physical Palladium Holdings M oz. Pd. M oz. Pd. 2.5 2.5 Mitsubishi SPAL 2.0 SPDM 2.0 WITE GLTR 1.5 Julius Baer 1.5 PALL MSL ASX 1.0 Palladium ZKB 1.0 PHPD LSE 0.5 0.5 0.0 0.0 2007 2008 2009 2010 2011 2012 • Large increase in palladium investment demand • Investment demand driven by supply/demand fundamentals for palladium -- constrained mine supply and growth in global vehicle productionSource: CPM Group, as at May 28, 2012 13
Palladium MarketPRICE PERFORMANCE Historic Price Performance (US$/oz) Average 2013 Price Forecast (US$/oz)$900 PALLADIUM 2013 BMO $725$800 Canaccord Genuity $775$700 CIBC $700$600 Cormark $750$500 Credit Suisse $700$400 Deutsche Bank $750$300$200 Dundee $700$100 J.P.Morgan $700 $0 Macquarie $1,019 Mitsui Global Precious Metals $745 Morgan Stanley $708 National Bank Financial $750 Raymond James $856Historic High: US$1,090 (2001) RBC $7502012 Average Price: US$640 Scotiabank $725Recent Price: US$683 (Jan. 9, 2012) Societe Generale $800 TD Securities $600 Average $750Sources: Thomson One, Bloomberg and available equity research. 14
LDI Mine & Mill ComplexA WORLD CLASS ASSET• Located north of Thunder Bay, Ontario, Canada• One of only two primary palladium producers in the world• Deposit is unique in the world: high palladium concentration, broadly disseminated mineralization vs. narrow vein• Established palladium producer since 1993• Currently undergoing a major expansion to increase production and reduce cash costs per ounce• 15,000 tpd mill has excess capacity available for production growth (currently operating at 35% capacity)• Significant exploration upside identified on the LDI property• Notable safety award received for lowest reportable injury rates in 2011 16 15
LDI Mine OPERATING METRICS Q1 2012 Q2 2012 Q3 2012 Q4 2012 2012 Actual* 2012 GuidancePayable Pd. Production1 41,760 oz. 40,017 oz. 37,908 oz. 44,394 oz. 163,980 oz. 150,000 - 160,000 oz.Cash Cost (US$/oz)1 $380 $429 $423 TBD TBD $375 - $400Total Tonnes Of Ore Milled 519,944 528,068 504,022 511,226 2,063,260 1.8 M – 2.0 M(Underground & Surface)Average Pd. Head Grade 3.5 g/t 3.4 g/t 3.3 g/t 3.6 g/t 3.4 g/t 3.7 g/tPd. Mill Recovery 77% 77% 77% 82% 78% 78%*The preliminary production numbers are approximate figures and may differ from the final results included in the year-end 2012 financial results. Achieved 2012 production guidance1. Cash cost per ounce is a non-IFRS measure. For reconciliation of historical total cash costs per ounce to production costs, please refer to the Company’s financial statements. Cash costs per ounce are presented net of byproduct credits and can be materially affected by changes in byproduct metal prices, as well as the Canadian/US dollar exchange rate. The 2012 cash cost guidance assumes: US$1,600 per ounce gold, US$1,600 per ounce platinum, US$8.50 per pound nickel, US$3.50 per pound copper 17 and an exchange rate of C$1.00 to US$1.00.
LDI Mine Expansion PLAN FOR GROWTH• Approx. $262 M spent to date (2010 – Q3, 2012) Surface• Key development includes: OPEN PIT o Sinking a shaft to transition underground operations from mining via ramp to mining via ROBY shaft ZONE SHAFT o Setting up underground infrastructure to mine North (7,000 tpd name- plate capacity) the Offset Zone using a high volume bulk mining method (long-hole stoping with primary and secondary stoping blocks) - this includes expanding the ramp, building new mine levels, and setting up mining stopes 825 Metres o Constructing surface infrastructure to service the OFFSET expanded underground operations (i.e. ZONE Headframe, hoist house, etc.) Offset Zone• Through the utilization of the shaft & bulk mining remains open to method, operations are expected to benefit from the west, south & at depth increased mining rates & decreased operating costs 1,345 Metres• Currently sinking shaft to 825 metres from surface• Targeting production via shaft in Q3, 2013 The underground design schematic of LDI, showing the deposit and underground ramp infrastructure, looking east. 18
LDI Mine ExpansionRECENT UPDATESurface construction: Underground development:• Major construction components are • Shaft sinking is progressing well, in line now completed with the Company’s scheduled rates of advancement.• The headframe, main substation, hoist house, service hoist & auxiliary hoist are • Currently at a an approximate all fully operational and 100% depth of 475 m below surface (60% completed completed of the total 825 m planned for Phase I)• The installation of the production hoist has commenced & commissioning • Installation of the 740-m level loading scheduled for Q1, 2013 pocket is scheduled for Q1, 2013• The remaining work on surface • Ramp & stope development progressing includes the installation of the main on schedule skip dump & surface ore bins2013 development work to focus on: Advancing underground development (including mine level development & setting up mining stopes) Completing sinking the shaft to the 795-metre level 19
PotentialGROWTH TARGETS 3D View of Pit, Sheriff & Offset Zone Sheriff Zone: • Currently under review for resource potential with trenching and additional shallow drilling • Outcrops to surface and continuing to infill drill towards the pit Sheriff Zone • To be considered for mining via open pit & under ground South Offset Extension: • Encouraging hits south of the shaft show potential for South Offset growth • Continuing to infill drill to the south of the shaft between 825 3D View of Pit, Sheriff & Offset Zone and 740 levels North VT Rim • Potential to de-risk main Offset Zone and provide lateral growth North VT Rim: Sheriff Zone • Potentially accessible from the north end of the Roby Pit • Extremely speculative but could develop a higher grade narrow zone that outcrops • Beginning to infill drill below surface high grade channel samples to test structure, dip and continuity 20
LDI Property EXPLORATION UPSIDE Near-mine land package 62,000-acre regional land package South Norite Zone Mineralization Trend• LDI represents a rare palladium-rich asset with excellent infrastructure• LDI complex has only been drilled in a 1km x 1km area & remains largely underexplored• Multiple targets identified for follow up exploration (surface & underground)• Regional land package covers the most prospective mafic complexes in the area (all PGM properties are less than 30 km from LDI mill) 21
Plan:PRODUCE MORE, FOR LESS Transition to shaft mining Leverage existing infrastructure Realize exploration upside 22
CompellingINVESTMENT OPPORTUNITY LEVERAGE TO RISING PALLADIUM PRICES CLEAR STRATEGY TO INCREASE PRODUCTION & LOWER CASH COSTS ATTRACTIVE PGM INVESTMENT JURSIDICTION UPSIDE IN EXPLORATION & DEVELOPMENT 23
ShareholderINFORMATIONNorth American Palladium’s vision is to become a low cost, mid-tier precious metals company operating inmining friendly jurisdictions. NAP is an established precious metals producer that has been operating its flagshipLac des Iles mine (LDI) located in Ontario, Canada since 1993. LDI is one of only two primary producers ofpalladium in the world, and is currently undergoing a major expansion to increase production and reduce cashcosts per ounce. NAP also operates the Vezza gold mine located in the Abitibi region of Quebec. NAP’sexperienced management and technical teams have a significant commitment to exploration and arededicated to building shareholder value. Corporate Office: Royal Bank Plaza, South Tower 200 Bay St., Suite 2350 Toronto, ON M5J 2J2 Security Symbols: NYSE MKT– PAL TSX – PDL, PDL.DB Website: www.nap.com Investor Relations: Camilla Bartosiewicz Director, Investor Relations & Corporate Communications email@example.com 416-360-7374 24
SeniorMANAGEMENT Andre Douchane – Chairman and Interim CEO Mr. Douchane is a seasoned mining executive with over 40 years of experience in the mining industry with a solid track record of successfully bringing development projects into production. He was appointed to the Company’s Board of Directors in April 2003, and served as the President and CEO until January 2006. Mr. Douchane is currently the Chief Executive Officer of THEMAC Resources Group Ltd., a Vancouver- based resource company focused on exploring and developing natural resource properties. Previously, he held senior positions with several precious and base metal international mining companies including President and CEO of Starfield Resources Inc., President and COO of Chief Consolidated Mining Co., and Vice President, Operations of Franco and Euro-Nevada (Newmont Mining Corporation). He holds a Bachelor’s degree in Mining Engineering from the New Mexico Institute of Mining and Technology and is a graduate of the Executive Business Program at the Kellogg School of Business in Toronto. Greg Struble – VP and COO Mr. Struble is a mine engineer with over 30 years of experience in underground mining. Prior to joining NAP, he served as Executive Vice President and Chief Operating Officer of Stillwater Mining Company, where he was responsible for two underground palladium mines as well as smelter and refinery operations. Prior to this, he worked as underground project manager for Barrick Gold’s Cortez Hills Joint Venture. Mr. Struble has also worked internationally at a number of large gold mines, including General Manager of the El Penon Mine in Chile and the Jerritt Canyon Mines in Nevada. Previously, he worked for the Homestake Mining Company and held various positions including Mine Superintendent at their Homestake Mine in South Dakota. David C. Peck – Head of Exploration Dr. Peck is a Professional Geoscientist with nearly 30 years of exploration and research experience specializing in magmatic Ni-Cu-PGE ore deposits. Dr. Peck holds global recognition as an expert in PGE exploration after serving as a senior technical and strategic consultant to several public and private companies and having worked on exploration and mining projects in more than a dozen countries. He was directly involved in several significant magmatic Ni-Cu-PGE discoveries in Canada and overseas. Prior to joining NAP, Dr. Peck served as President and Senior Technical and Strategic Consultant at Revelation Geoscience Ltd., and prior to this, he served as Global Nickel Commodity Leader at Anglo American plc, a Senior Geologist for Falconbridge Ltd., a Senior Mineral Deposits Geologist with the Manitoba Geological Survey, held various academic roles in Canadian universities, and was the technical lead on a multi-year mineral potential study funded by the Ontario Geological Survey. He has authored numerous public presentations and government and academic publications addressing his area of specialization. 26
Cautionary Note to U.S. Investors ConcerningMINERAL RESERVES AND MINERAL RESOURCE• Mineral reserves and mineral resources have been calculated in accordance with National Instrument 43-101 as required by Canadian securities regulatory authorities. For United States reporting purposes, Industry Guide 7, (under the Securities and Exchange Act of 1934), as interpreted by Staff of the Securities Exchange Commission (SEC), applies different standards in order to classify mineralization as a reserve. In addition, while the terms “measured”, “indicated” and “inferred” mineral resources are required pursuant to National Instrument 43-101, the U.S. Securities and Exchange Commission does not recognize such terms. Canadian standards differ significantly from the requirements of the SEC, and mineral resource information contained herein is not comparable to similar information regarding mineral reserves disclosed in accordance with the requirements of the U.S. Securities and Exchange Commission. U.S. investors should understand that “inferred” mineral resources have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. In addition, U.S. investors are cautioned not to assume that any part or all of NAPs mineral resources constitute or will be converted into reserves. For a more detailed description of the key assumptions, parameters and methods used in calculating NAP’s mineral reserves and mineral resources, see NAP’s most recent Annual Information Form/Form 40-F on file with Canadian provincial securities regulatory authorities and the SEC.• Please refer to North American Palladium’s most current Annual Information Form and applicable technical reports available on www.sedar.com, www.sec.gov and www.nap.com for further information. 27
LDI Reserves & Resources NOTES1. Prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101) and the Canadian Institute of Mining, Metallurgy and Petroleum classification system. U.S. investors should refer to the Annual Information Form for an overview on how Canadian standards differ significantly from U.S. requirements.2. Palladium ounces are stated as contained ounces. Disclosure of contained ounces is permitted under Canadian regulations; however, the SEC generally permits resources to be reported only as in place tonnage and grade.3. Mineral Resources for the Offset Zone were estimated from drilling completed to March 31, 2012 by Todd McCracken, P.Geo., of Tetra Tech, an independent Qualified Person within the meaning of NI 43-101. The mineral resource calculation uses a minimum 3.5 g/t Pd resource block cut-off. The mineral resource estimate is based on the combination of geological modeling, geostatistics and conventional block modeling (5 m x 5 m x 5 m blocks). Assay grade capping was determined not to be necessary. The Offset Zone resource models used the ordinary kriging (OK) grade interpolation method within a three-dimensional block model with mineralized zones defined by wireframed solids. The QA/QC protocols and corresponding sample preparation and shipment procedures for the Offset Zone have been reviewed by Tetra Tech. Resources were estimated to the 4070 Mine Level (-930 m elevation), a maximum depth of 1,430 m. The following metal price assumptions were used: US$475/oz palladium, US$1,500/oz platinum, US$1,200/oz gold, US$9.00/lb nickel, and US$3.25/lb copper. A US$/Cdn$ exchange rate of US$0.95 = CDN$1.00 was also applied.4. The mineral reserve and resource estimate for the Roby Zone, open pit and stockpiles were estimated as of June 30, 2010 by Scott Wilson RPA and updated by David Penna, P.Geo., an employee of the Company and a Qualified Person under 43-101 to reflect: (i) additions to mineral reserves in the Roby Zone as a result of a lower cut-off palladium grade; (ii) depletion from production up to March 31, 2012, and (iii) mineral reserves from the crown pillar (supported by an internal engineering report). The following cut-off grades were used: (i) 1.8 g/t PdEq for the Roby open pit, within an optimized pit shell run below the current pit survey; (ii) 1.9 g/t PdEq for the mine stockpiles; and (iii) 5.8 g/t PdEq for the underground Roby Zone. These cut-off grades were determined under the assumption that production would take place at a rate of 14,000 tpd. Metal price assumptions of US$350/oz palladium, US$1,400/oz platinum, US$850/oz gold, US$6.50/lb nickel, and US$2.00/lb copper were used in the estimation of cut-off grade. A US$/Cdn$ exchange rate of 1.11 was also applied.5. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred resources as an Indicated or Measured mineral resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured mineral resource category.6. Numbers may not add due to rounding. 29
$0 $200 $400 $600 $800 $1,000 $1,200 Impala Mine (IMP) Bokoni (ATL) Everest South (AQP) Marikana (AQP/AMS) Smokey Hills (PLA) Modikwa (ARM/AMS) Crocodile River (ELR) Marikana (LMI) Thembelani Mine (AMS)Source: CIBC World Markets, based on H1 CY12 Kroondal (AQP/AMS) Khuseleka Mine (AMS) Zondereinde (NHM) Khomanani Mine (AMS) Pandora (LMI/AMS) Rustenburg Section (AMS) LDI is a Low Cost Producer Unki (AMS) Union Section (AMS) Tumela Mine (AMS) Amandelbult Section (AMS) • NAP is one of the lowest cash cost producers Siphumelele Mine (AMS) Bathopele Mine (AMS) Dishaba Mine (AMS) Marula (IMP) BRPM (RBP) Mogalakwena (AMS) Nye Mine (SWC) PALLADIUM CASH COST CURVE Mototolo (XTA/AMS) Boulder (SWC) Mimosa (IMP/AQP) Platinum Mile (AQP) W/L Tailings (AMS) CTRP (AQP/SLP) Two Rivers (ARM/IMP) LDI Mine (PDL) Cash Costs per PdEq Oz Sylvania Dumps (SLP) Average Pd Price Received Zimplats (IMP)30
Palladium MarketMARKET DYNAMICS• The palladium market is expected to remain in a position of undersupply over the 2012 to 2016 period – will allow prices to remain robust World Palladium Supply and Demand Forecast 2009 2010 2011 2012E 2013E 2014E 2015E (In koz, unless otherwise noted) Supply Mine Production 6,320 6,613 6,966 6,825 6,925 7,125 7,225 Scrap 1,184 1,454 1,620 1,770 1,980 2,130 2,250 Total Palladium Supply 7,504 8,067 8,586 8,595 8,905 9,255 9,475 Change (YoY %) (3.2%) 7.5% 6.4% 0.1% 3.6% 3.9% 2.4% Total Palladium Consumption 7,591 8,642 8,740 8,920 9,475 9,790 10,000 Change (YoY %) (9.5%) 13.9% 1.1% 2.1% 6.2% 3.3% 2.1% Implied Market Balance (87) (575) (154) (325) (570) (535) (525) Stock Releases 1,100 800 800 150 150 -- -- ETF Investment 507 1,038 (514) -- -- -- -- Implied Residual Balance 507 (813) 1,160 (175) (420) (535) (525) Source: Thomson Reuters GFMS, LPPM, RBS (Commodity Companion - Truly Precious, May 4th 2012) 31
PalladiumPRICE FORECASTS PALLADIUM 2012 2013 2014 2015 2016 LT BMO $643 $725 $750 $700 $650 $650 Canaccord Genuity $656 $775 $850 $900 CIBC $610 $700 $900 $1,000 $800 $700 Cormark $650 $750 $750 Credit Suisse $640 $700 $800 $850 $900 Deutsche Bank $679 $750 $800 $900 $1,000 $1,000 Dundee $678 $700 $775 $750 $700 $600 J.P.Morgan $635 $700 $881 $1,000 Macquarie $746 $1,019 $950 $800 Morgan Stanley $638 $708 $780 $850 $1,092 $1,106 National Bank Financial $672 $750 $750 $750 $750 $550 Paradigm $700 $560 $560 $560 $560 $560 Raymond James $648 $856 $1,000 $950 $850 $800 RBC $650 $750 $850 $850 $750 $750 Scotiabank $644 $725 $750 $750 $700 $650 Societe Generale $710 $800 TD Securities $653 $600 $550 Average $660 $740 $815 $810 $785 $765Source: Scotiabank – based on available equity research 32
Gold DivisionOVERVIEW• NAP is currently exploring divestiture opportunities of its non- core portfolio of gold assets• Portfolio consists of significantly de-risked gold assets in Quebec with total mineral resource inventory of 1.5 MM oz Au: • Vezza Mine – High-grade, underground, fully permitted gold mine with near-term cash generation potential (ready for commercial production) • Sleeping Giant Mine & Mill Complex – Fully permitted, 900 tpd regional mill with potential to be expanded to 1,750 tpd • Dormex, Flordin & Discovery Projects – Advanced and early stage exploration properties with blue sky potential, within trucking distance to regional mill 33
Gold DivisionOVERVIEWDivestiture strategy driven by:• Gold assets are non-core to NAP• Equity investor preference for pure play PGM exposure (gold diversification strategy perceived to dilute the palladium brand)• Newly identified exploration & development upside in palladium assets that will give the Company growth in palladium (therefore not relying on growth through diversification)• Lack of “mass scale” in gold production growth due to Sleeping Giant mine closure in early 2012• Significant development milestones reached at Vezza have well positioned the asset for sale (warrants more attractive valuation now that operations have commenced) 34
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