NORTH AMERICAN PALLADIUM THE WORLD S ONLY PURE PLAY PALLADIUM PRODUCER TSX:PDL OTC:PALDF
MANAGEMENT PARTICIPANTS AGENDA Jim Gallagher President and Chief Executive Officer Tim Hill Vice President, Finance & Chief Financial Officer David Peck Vice President, Exploration 1. 2018 Highlights 2. Production Update 3. Financial Update 4. Expansion and Exploration 5. Palladium Market 6. 2019 Outlook 7. Q&A 2
Disclaimers and Forward-Looking Information All dollar amounts shown are in Canadian dollars unless otherwise stated. 3
2018 HIGHLIGHTS Health & Safety Lost Time Injury (LTI) Frequency 0 As of February 14, 496 days without an LTI Medical Treat Injury Frequency 2.2 Sustained Profitability Adjusted EBITDA 1 $167.8 million Revenue $396.8 million Net Income $119.2 million Production 237,461 ounces of payable palladium produced, up 18% over 2017 Average daily underground production 6,263 tonnes per day (at a cost of $37/tonne mined) $6,720 tpd at $35/tonne mined in Q4 2018 AISC 1 US$690 per ounce for the year Record Palladium Prices US$1,270 / C$1,732 as of December 31, 2018 1. Non-IFRS measure, please refer to Non-IFRS Measures in the MD&A. 4
UNDERGROUND PRODUCTION PAYABLE PALLADIUM UNDERGROUND MINING COST TOTAL SITE COST Average tonnes per day Ounces produced $C per tonne mined $C per tonne milled 2016 2017 2018 2016 2017 2018 2016 2017 2018 2016 2017 2018 5
Financial Highlights
REVENUE (C$ million) For the three months and year ended December 31, 2018 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 2016 2017 2018 PRODUCTION COST 1 (C$ per tonne milled) For the three months and year ended December 31, 2018 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 2016 2017 2018 1. Non-IFRS measure, please refer to Non-IFRS Measures in the MD&A. 7
ADJUSTED EBITDA (C$ million) For the three months and year ended December 31, 2018 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 2016 2017 2018 NET INCOME (Loss) & COMPREHENSIVE INCOME (Loss) (C$ million) For the three months and year ended December 31, 2018 2 2 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 2016 2017 2018 1. Non-IFRS measure, please refer to Non-IFRS Measures in the MD&A. 2. Includes one-time adjustment relating to the recognition of deferred tax assets. 8
PALLADIUM REVENUE PER OUNCE SOLD 1 (US$) For the year ended December 31, 2018 AISC 1 PER PALLADIUM OUNCE PRODUCED (US$) For the year ended December 31, 2018 2016 2017 2018 2016 2017 2018 1. Non-IFRS measure, please refer to Non-IFRS Measures in the MD&A. 9
CAPITAL INVESTMENT (C$ million) For the year ended December 31, 2018 EXPLORATION INVESTMENT (C$ million) For the year ended December 31, 2018 2016 2017 2018 2019 F 2016 2017 2018 2019 F 10
TOTAL DEBT (C$ million) For the year ended December 31, 2018 LIQUIDITY 3 (C$ million) For the year ended December 31, 2018 2016 2017 2018 2016 2017 2018 3. Cash and cash equivalents plus credit available through the Company s credit facilities. 11
QUARTERLY DIVIDEND $0.03 per share Common shareholders of record on March 1, 2019 Payable March 15, 2019 12
Mine Expansion
UNDERGROUND PRODUCTION (tonnes mined per day) 2018 A 2019 2020 2021 2022 2023 2024 2025 2026 2027 PALLADIUM PRODUCTION (payable ounces) 2018 A 2020 2021 2022 2023 2024 2025 2026 2027 14
ROBY PIT EXPANSION DEVELOPMENT Sheriff South New Fresh Air Raise Roby NE Extension Roby South Roby Southwest Floor Roby Central Isometric View Looking Southeast Roby Sub-level Cave Development All Other Near-Surface Development Historical Development and Stopes 15
Exploration
EXPLORATION: MULTIPLE HIGH-QUALITY, UNDERGROUND TARGETS Offset Block Seven high-potential targets: B1, B2 and B3 Zones C Zone (in the footwall to Offset Zone) Sheriff South extension Mystery Zone Offset Northeast Domain Camp Lake Block New exploration drift will be used for drilling into the large Camp Lake target area 17
EXPLORATION: SEVERAL SURFACE TARGETS CLOSE TO SITE Creek Zone Top-ranked target based on 2018 drilling results and new geophysical data New Geophysical Targets Several new targets defined from fall 2018 surveys; additional targets expected from data not yet received or modeled Baker Zone Planning to follow up on encouraging drilling results from 2018 and 2013 18
REGIONAL EXPLORATION: Discovering new feed for the Lac des Iles Mill Sunday Lake New geophysical targets generated in Q4 Focus is on discovering high grade massive sulfide mineralization Phase 2 drilling commenced in January Greenfields Properties Re-ranked exploration target areas in Q4 Just started work on the same suite of geophysical surveys that were done at LDI Focus is on discovering another Roby- Offset Zone type of deposit, near surface 19
Palladium Market
PALLADIUM PRICES CONTINUE TO RISE January 2009 February 2019 Currently around US$1,400 21
PALLADIUM DEMAND ON THE RISE Growth of hybrid vehicle market worldwide Lower diesel sales, replaced with gasoline engines in Europe Growth of SUV market share; increase in engine size Sustained global automobile sales Heightened emissions standards worldwide (e.g. Real Driving Emissions (RDE) testing) 22
HEIGHTENED EMISSIONS STANDARDS: Real Driving Emissions (RDE) test being added to existing lab-based emissions test in Europe and China in 2019 Worldwide Harmonized Light Vehicle Test Procedure Real Driving Emissions Image source: https://www.continental-automotive.com 23
PALLADIUM SUPPLY IN DEFICIT, DUE TO: 1. INELASTIC SUPPLY 2. JURISDICTIONAL RISK Primary Production Source: Metals Focus Report 2018 High-Risk Jurisdiction Low-Risk Jurisdiction Source: S&P Global Market Intelligence, Metals Focus 2018 24
PALLADIUM SUPPLY IN DEFICIT, DUE TO: 3. ON-GROUND INVENTORY DEPLETION 25 (Source: Norilsk Nickel Presentation (November 2017) and consensus estimates.)
OUTLOOK Strong palladium price Solid operation performance Mine expansion Dedicated team 2019 GUIDANCE The Company expects production of 220,000-235,000 ounces of payable palladium at an AISC of US $ 785 - US $ 815 per ounce. 26
Questions? Click Call Me link on the left side of the screen Jim Gallagher President & CEO 416-360-7492 jgallagher@nap.com Investor Relations 416-360-7590 ext. 7226 ir@nap.com 27