North American Palladium Ltd. (TSX:PDL)(NYSE MKT:PAL) announced today that it has amended its US$130 million senior secured term loan with Brookfield Capital Partners Ltd. resulting in an additional advance of US$21.4 million of cash to support working capital needs and continue funding operating and capital expenditures at its Lac des Iles palladium mine. The cash received consists of an additional US$15 million added to the existing facility and a refund of US$6.4 million of cash interest previously paid to Brookfield.

Pursuant to the amendment, the interest rate will be recalculated as if NAP had elected to accrue interest on the loan from the date of the original closing (June 7, 2013), resulting in a 4% increase of the interest rate from 15% to 19% until the Company reverts to cash interest payments. After the Company reverts to cash interest payments, the interest rate returns to 15% per annum on the principal amount outstanding, which includes capitalized interest. Prepayment of any principal (including capitalized interest) would be subject to a prepayment fee and voluntary prepayment conditions.

As a result of the retroactive application of the 19% interest rate to June 7, 2013, an aggregate US$169.7 million principal is outstanding under the loan consisting of: US$148.9 million of loan and capitalized commitment fees; US$12.7 million of accrued and capitalized interest; and US$8.1 million of a capitalized amendment fee. The loan amendment also includes modifications to existing covenants and the Company estimates that it will record a non-cash loss of approximately C$14.5 million in the fourth quarter of 2013 related to the accounting treatment of the amendment.

The additional proceeds are expected to support NAP’s working capital needs and enable the Company to continue funding its operating and capital expenditures. The Company recognizes that there are further funding needs required to achieve sustainable operations that are expected to be breakeven or cash flow positive during 2014. Accordingly, the Company is currently actively engaged in discussions about securing additional financing. While NAP has been successful at securing financings in the past, there is no certainty that the required financing will be available, or if available, on acceptable terms.

The Company is currently in the process of finalizing its budget and capital requirements for 2014, which will include increased production at lower operating costs and a significantly reduced capital expenditure program of under C$30 million. Formal operating guidance is expected to be issued in December of 2013.

About North American Palladium

NAP is an established precious metals producer that has been operating its Lac des Iles mine located in Ontario, Canada since 1993. LDI is one of only two primary producers of palladium in the world, and is currently undergoing a major expansion to increase production and reduce cash costs per ounce.