Lac des Iles Mine Property

EXPLORATION AND UNIQUENESS ARE CENTRAL

The platinum group element (PGE) deposits at Lac des Iles (LDI) are truly one-of-a-kind, due to their structurally-controlled sub-vertical orientation, unusually large thickness and atypical, selective enrichment in palladium relative to platinum. Sustained investment in near-mine exploration continues to deliver timely resource additions from continually-improving geological models.

THE SCIENCE BEHIND THE SITES

  • North American Palladium (NAP) believes at least two major feeder structures have provided the critical pathways for palladium-rich magma to form the South LDI Complex, which hosts all past and present mineral resources on the property.
  • Sulfides and palladium were concentrated within and directly adjacent to these structures.
  • The LDI carrier magmas had strong geochemical similarities to the noritic magmas that produced the Merensky and UG2 Reefs and the Platreef deposit in South Africa’s Bushveld platinum mining district.
  • LDI’s two principal ore zones are the semi-continuous Roby and Offset Zones. In the central parts of both, palladium grades commonly average 4 g/t over true widths of 10–30 metres with maximum mining widths in the new sublevel shrinkage (SLS) mining method area, reaching 100 metres. The highest-grade parts of these zones exceed 10 grams per tonne of palladium over true widths of several metres. The Roby-Offset ore body remains open to the south and at depth.
  • Satellite zones to the main deposit include the recently-discovered Mystery Zone and the past-producing Twilight Zone.

ADDING VALUE AT LOW COST VIA UNDERGROUND EXPLORATION

The vertical orientation and significant average thicknesses of the palladium resources at LDI allow for low-cost underground bulk mining methods, including the efficient sublevel shrinkage (SLS) method currently being employed to mine the thickest and highest-grade part of the Offset Zone.

These low mining costs enable LDI economically to extract a significant amount of lower-grade “halo” mineralization that is present in the footwall of both the Roby and Offset Zones.

The core of both zones is much higher-grade and includes multi-meter thicknesses with average palladium grades in excess of 5 g/t and locally exceeding 10 g/t. Current underground exploration programs focus on adding resources directly adjacent to the underground reserves.

Specific targets are shown below. For more detail, see the Company’s May 29, 2019 news release.

Mine Grid Plan Section

Plan-view image of the 1065-metre level in the Offset Block showing the current underground exploration targets adjacent to the sublevel shrinkage (SLS) reserves and planned mine development (green lines). Source – North American Palladium, May 29, 2019.

Mine Gird Section Looking NE

Longitudinal projection of the Offset Zone deposit, looking west, and showing the current priority underground exploration targets on the property, including: (1) Offset South; (2) Camp Lake; (3) B2 Zone extension (3) Mystery Zone; (5) Deep footwall to Offset Zone.

SURFACE EXPLORATION TARGETS

Numerous near-surface exploration opportunities exist at the LDI Mine property. The greatest potential lies in the East Mine Block. All current surface exploration targets are located within two kilometers of the Lac des Iles Mill; they include the Creek Zone and Baker Zone targets as well as a number of new geophysical targets (see map below).

Encouraging drilling results were reported in 2018 and prompted:

  1. A re-assessment of the potential for near-surface palladium mineralization in the East Mine Block; and
  2. Subsequent airborne and ground geophysical surveys to study induced polarization, magnetotellurics, drone-based magnetics and gravity, which were completed in late 2018 and early 2019.

With an advanced understanding of the controls on palladium mineralization at LDI, NAP hopes to invest in systematic surface exploration to identify critical mineral resources that could improve and extend the life of the mine in the future.

Surface Exploration Targets

Plan view image of the Lac des Iles Mine property showing the current, top-priority surface exploration target zones and geophysical anomalies in the eastern region.

EXPLORATION MODEL

The revised LDI deposit model is described in detail in the October 2018 Technical Report. NAP’s current exploration model involves applying advanced geophysical methods and integrating detailed 3D data to detect the primary structures that controlled the flow of mineralized magma into its current position in the crust.

In their simplest form, the LDI palladium deposits can be explained as the product of a vertical “plumbing system” in which Bushveld-like noritic magmas flowed upward along pre-existing regional feeder faults. Flow sorting of dense sulfide particles appears to explain the current distribution of platinum group metals, gold and base metal sulfides within the deposits.