PAL

Form 6-K

SECURITIES AND EXCHANGE COMMISSION

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of

The Securities Exchange Act of 1934

NORTH AMERICAN PALLADIUM LTD.

(Name of Registrant)

200 Bay Street

Royal Bank Plaza, South Tower

Suite 2350

Toronto, Ontario

Canada M5J 2J2

(Address of Principal Executive Offices)

Indicate by checkmark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  o                                          Form 40-F  x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Indicate by checkmark whether the registrant, by furnishing the information contained in this Form is also thereby furnishing the information to the SEC pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes  o  Assigned  File No.                                No  x

If “Yes” is marked, indicate the file number assigned to the Registrant in connection with Rule 12g3-2(b).

This report on Form 6-K is specifically incorporated by reference into North American Palladium’s registration statement on Form S-8 (File No. 333-13766) and registration statement on Form F-10 (File No. 333-200762).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

2

EXHIBIT INDEX

3

Exhibit 1

North American Palladium Ltd.

TABLE OF CONTENTS

Second Quarter Report 2015

Management’s Discussion and Analysis

INTRODUCTION

Unless the context suggests otherwise, references to “NAP” or the “Company” or similar terms refer to North American Palladium Ltd. and its subsidiaries. “LDI” refers to Lac des Iles Mines Ltd.

The following is management’s discussion and analysis of the financial condition and results of operations (“MD&A”) to enable readers of the Company’s condensed interim consolidated financial statements and related notes to assess material changes in financial condition and results of operations for the three and six months ended June 30, 2015, compared to those of the respective periods in the prior year.  This MD&A has been prepared as of July 28, 2015 and is intended to supplement and complement the condensed interim consolidated financial statements and notes thereto for the three and six months ended June 30, 2015 (collectively, the “Financial Statements”), which have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting as issued by the IASB.  Readers are encouraged to review the Financial Statements in conjunction with their review of this MD&A and the most recent Form 40-F/Annual Information Form on file with the U.S. Securities and Exchange Commission (“SEC”) and Canadian provincial securities regulatory authorities, available at www.sec.gov and www.sedar.com, respectively.

Mr. James Gallagher, the Company’s Chief Operating Officer and a Qualified Person under National Instrument 43-101, has reviewed and approved all technical items disclosed in this MD&A.

All dollar amounts are in millions of Canadian dollars unless otherwise noted and all references to production ounces refer to payable production.

FORWARD-LOOKING INFORMATION

Certain information contained in this MD&A constitutes ‘forward-looking statements’ within the meaning of the ‘safe harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. The words ‘expect’, ‘potential’, ‘believe’, ‘anticipate’, ‘contemplate’, ‘target’, ‘may’, ‘will’, ‘could’, ‘would’, ‘intend’, ‘estimate’ and similar expressions identify forward-looking statements. Forward-looking statements included in this MD&A include, without limitation: information as to our strategy, plans or future financial or operating performance such as statements with respect to project timelines, production plans, projected cash flows or expenditures, operating cost estimates, mining methods, expected mining and milling rates, metal price and foreign exchange rates and other statements that express management’s expectations or estimates of future performance.  The Company cautions the reader that such forward-looking statements involve known and unknown risk factors that may cause the actual results to be materially different from those expressed or implied by the forward-looking statements. Such risk factors include, but are not limited to: the risk that the LDI mine may not perform as planned, the possibility that commodity prices and foreign exchange rates may fluctuate, the possibility that the Company may not be able to generate sufficient cash to service its indebtedness and may be forced to take other actions, uncertainty regarding the ability to consummate the Recapitalization, the risk the Company may not be able to continue as a going concern, the possibility the Company will require substantial additional financing, events of default on its indebtedness, hedging could expose it to losses, competition, the possibility title to its mineral properties will be challenged, dependency on third parties for smelting and refining, inherent risks associated with development, exploration, mining and processing including risks related to tailings capacity and ground conditions, the risks associated with obtaining necessary licenses and permits, environmental hazards, uncertainty of mineral reserves and resources, changes in legislation, regulations or political and economic developments in Canada and abroad, employment disruptions including in connection with collective agreements between the Company and unions and litigation. For more details on these and other risk factors see the Company’s most recent Form 40-F/Annual Information Form on file with the SEC and Canadian provincial securities

1

regulatory authorities. Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The factors and assumptions contained in this MD&A, which may prove to be incorrect, include, but are not limited to: that the Company will be able to consummate the Recapitalization that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business, that metal prices and exchange rates between the Canadian and United States dollar will be consistent with the Company’s expectations, that there will be no material delays affecting operations or the timing of ongoing projects, that prices for key mining and construction supplies, including labour costs, will remain consistent with the Company’s expectations, and that the Company’s current estimates of mineral reserves and resources are accurate. The forward-looking statements are not guarantees of future performance. The Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise, except as expressly required by law. Readers are cautioned not to put undue reliance on these forward-looking statements.

CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING MINERAL RESERVES AND RESOURCES

Mineral reserve and mineral resource information contained herein has been calculated in accordance with National Instrument 43-101 — Standards of Disclosure for Mineral Projects, as required by Canadian provincial securities regulatory authorities. Canadian standards differ significantly from the requirements of the SEC, and mineral reserve and mineral resource information contained herein is not comparable to similar information disclosed in accordance with the requirements of the SEC. While the terms “measured”, “indicated” and “inferred” mineral resources are required pursuant to National Instrument 43-101, the SEC does not recognize such terms.  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 NAP’s 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.

OUR BUSINESS

NAP is an established precious metals producer that has been operating its LDI mine located in Ontario, Canada since 1993.  LDI is one of only two primary producers of palladium in the world, offering investors exposure to the price of palladium.

The Company recently expanded the underground LDI mine and has transitioned from ramp access to shaft access while utilizing long hole open stope mining. In the second quarter of 2015, the Company entered into a new three year collective agreement with its hourly employees that runs from June 1, 2015 to May 31, 2018.

The Company has significant exploration potential near the LDI mine, where a number of growth targets have been identified, and is engaged in an exploration program aimed at increasing its palladium reserves and resources.  As an established palladium-platinum group metal (“PGM”) producer on a permitted property, NAP has the potential to convert exploration success into production and cash flow on an accelerated timeline.

NAP trades on the TSX under the symbol PDL and on the OTC Market under the symbol PALDF.

2

RECAPITALIZATION TRANSACTION

Although the Company produced approximately 45,600 payable ounces of palladium in the first quarter of 2015, covenant relief was required as a result of lower production volumes in March 2015 combined with higher operating expenses in 2015, a decline in palladium prices and weakening of the Canadian dollar, which impacted the minimum shareholders’ equity and leverage ratio covenants.

On April 15, 2015, the Company announced that, following discussions with Brookfield Capital Partners Ltd. (“Brookfield”), one of its senior secured lenders, the Company entered into an agreement with Brookfield aimed at significantly reducing the Company’s debt and enhancing the Company’s liquidity (the “Recapitalization”).

The Company had retained a financial advisor in January 2015 to conduct a strategic review process.  In connection with the Recapitalization, the Company was permitted to continue its strategic review process in order to solicit interest in a sale of the Company and find a superior proposal.  On June 19, 2015, the Company announced that it had been unable to obtain a superior proposal to the Recapitalization and was therefore proceeding with the Recapitalization.

On June 18, 2015, Brookfield made available a US$25 bridge loan to fund any short term liquidity requirements related to the recent mill shutdown (see water balance issue and mill shutdown section of this MD&A). The bridge loan was available in two tranches, matures on September 15, 2015 and bears interest at 16%. On June 19, 2015, the Company drew down the first US$15 tranche of the bridge loan and on July 14, 2015 drew down on the second US$10 tranche.

The terms of the Recapitalization are as follows: (i) conversion of all amounts owing to Brookfield into equity, except in respect of the bridge loan, resulting in Brookfield owning common shares representing 92% of the common shares outstanding on a fully-diluted basis after giving effect to the Recapitalization, but prior to the rights offering; (ii) conversion of the 2012 and 2014 convertible debentures into equity, resulting in holders of convertible debentures owning common shares representing in aggregate 6% of the common shares outstanding on a fully diluted basis after giving effect to the Recapitalization, but prior to the rights offering; (iii) existing holders of common shares will own 2% of the post-Recapitalization common shares outstanding on a fully-diluted basis, but prior to the rights offering; (iv) termination of all outstanding warrants and options; (v) vesting of all outstanding restricted share units and their conversion into common shares; and, (vi) after completion of the Recapitalization, the Company will: (a) consolidate every 400 existing common shares into 1 new common share and (b) undertake a $50 rights offering to raise equity, pursuant to which all shareholders at that time will be able to participate. The $50 rights offering will be backstopped by Brookfield and another party.

The Recapitalization is subject to receipt of customary approvals, including convertible debenture holder and shareholder approval, as well as customary closing conditions. The Company’s obligations to employees, trade creditors, equipment leases and suppliers will not be affected by the Recapitalization. On July 30, 2015, meetings of shareholders and debentureholders will be held to vote on the Recapitalization.

If the Recapitalization is not approved, the Company has agreed to pursue proceedings under creditor protection legislation.  A holder of convertible debentures holding approximately 54% of the Company’s convertible debentures has executed an agreement to support the Recapitalization. The Recapitalization will be effected by way of a court approved plan of arrangement.  On June 30, 2015, the Company received the interim order with respect to the plan of arrangement.

Additional information regarding the Recapitalization transaction is included in the Company’s management proxy circular dated June 30, 2015 that is filed with the provincial securities regulatory authorities and the SEC and can be obtained at www.sedar.com or www.sec.gov.

3

WATER BALANCE ISSUE AND MILL SHUTDOWN

On May 11, 2015, the Company announced that water management continued to be a challenge and the Company was addressing water seepage issues at its reclamation water ponds that were being contained and pumped back into the tailings management facility. Since April 2015, the Company has been working closely with regulators to keep them informed of, and obtain their approval for, the actions being taken by the Company and various mitigation strategies to manage the water balance issues.

Prior to May 27th, the Company’s view was that the shutdown was temporary in nature and it was anticipated that restarting the mill within a reasonable timeframe would occur; however, on May 28, 2015, the Company announced that recent problems had developed with leakages at some of the existing containment structures which were then under repair. These issues were exacerbated by the late and rapid onset of spring, accompanied by heavy rains, causing excess water to enter containment areas resulting in an upsetting of the water balance.  The Company also experienced a leak in a decommissioned tailings pond that was used to store reclaimed water that was contained on site and monitored closely.  Progress towards the repair of the containment structures was being made but the timing for the resumption of milling operations could not be determined.

On June 3, 2015, after consultation with the relevant government ministries, the Company announced that, due to persistent high water levels in containment ponds, a controlled release of water into the environment commenced in order to restore the water balance and to ensure that dam integrity would not be compromised.  A portion of the water being discharged was being processed through an on-site water clarification plant.  Two additional water treatment plants were brought to site to provide additional treatment capacity and remain in operation. Monitoring stations have been set up downstream from the water release point to measure water quality. Unlike certain mining operations, tailings contained in LDI’s tailings management facilities are relatively benign as they are not acid generating. No tailings were released and the released water contained higher than permitted levels of suspended solids, aluminum and iron.

On June 19, 2015, the Company announced that it had made significant progress towards restoring the water balance at the LDI mine site. With water levels lower, at or approaching targeted levels within the tailings facility, and following consultations with the relevant provincial government ministries and under the advice of independent third party professionals, it was determined that the Company could stop the controlled release of water into the environment. Since June 18, 2015, only treated water has been discharged. Extensive downstream monitoring and testing to date in the LDI reclaim ponds and of the treated and untreated water released in downstream discharge areas has confirmed the water to be non-toxic and there have been no observed detrimental effects on aquatic life.

On June 26, 2015, milling operations resumed.  Prior to the restart of milling operations, the Company received a dam safety report from an independent third-party engineering consulting firm that reconfirmed the integrity of the containment structures at LDI’s tailings management facility. The Company also successfully restored water balance levels at LDI to within permitted operating levels. Following consultations with relevant provincial ministries, the Company was in compliance with all criteria required for the restart of milling operations.

The Company’s action plan to reduce and mitigate the potential downstream impact of the release includes: extensive monitoring and sampling of the receiving watershed; engaging experts to monitor the receiving water bodies and to advise on dam integrity and overall mitigation plans; check dams to slow the flow of water; and, silt fencing in place on the in and out flows of each receiving body of water.

As at July 28, 2015, monitoring indicates that the water quality in the downstream water bodies has essentially returned to background levels that existed before the discharge occurred. Suspended solids, aluminum and iron which were previously identified as being above permitted discharge limits are now at or below those limits. While the potential longer term impact of the discharge on the environment, if any, has yet to be determined, recent test results suggest that the impact will be negligible and the Company is working with experts in the field to prepare and implement a

4

monitoring and remediation plan in consultation with First Nations groups and the Ministry of the Environment and Climate Change.

HIGHLIGHTS

1 Non-International Financial Reporting Standard (“IFRS”) measure. Please refer to Non-IFRS Measures on pages 22-23.

In the second quarter of 2015:

·                  The suspension of milling operations had a materially adverse impact on the financial and operating results for the Company. See the water balance issues and mill shutdown section of this MD&A for more information.

·                  625,093 tonnes were mined from the underground Offset and Roby zones and processed from the low grade surface stockpile at an average grade of 3.3 grams per tonne palladium.

·                  The mill processed 336,142 tonnes of ore at an average palladium head grade of 2.8 grams per tonne and a recovery of 82.8%.

·                  Payable palladium production was 22,904 ounces while payable palladium sales were 23,974 ounces.

·                  Cash interest of $7.9 was paid.

·                  Revenue decreased by $23.2 compared to 2014 primarily due to the impact of the mill shutdown.

·                  Production costs decreased $1.0 to $29.3 compared to 2014 primarily due to milling 36% fewer tonnes and favourable inventory and other cost movements partially offset by the impact of the mill shutdown, mining 66% more underground tonnes and higher contractor and consulting costs.

·                  Adjusted EBITDA decreased $14.5 to negative $4.0.

5

·                  A net loss of $96.8 occurred which included recognition of a $66.8 change in carrying value of long-term debt due to recognition of prepayment fees related to the Recapitalization transaction, mine restoration costs of $3.7 and $4.6 of non-cash depreciation and amortization partially offset by a $4.0 foreign exchange gain.

LDI OPERATING & FINANCIAL RESULTS

The LDI mine consists of an underground mine accessed via shaft with a capacity of approximately 8,000 tonnes per day, an open pit (currently inactive), a substantial low grade surface stockpile and a mill with a processing capacity of approximately 15,000 tonnes per day.  The primary underground deposits on the property are the Offset and Roby zones.  During 2015, the mill ran on a full time basis at approximately 60% of capacity other than during the May 8, 2015 until June 26, 2015 period that the mill was shutdown.  In the first six months of 2014, the mill was run on a batch basis.  The mill shutdown in the second quarter of 2015 makes comparisons between 2015 and 2014 difficult.

Operating Results

The key operating results are set out in the following table.

1 Non-IFRS measure. Please refer to Non-IFRS Measures on pages 22-23.

6

Mining

Underground mining continued during the mill shutdown in the second quarter of 2015 and consisted of 438,555 tonnes (4,819 tonnes per day) at an average grade of 4.3 g/t palladium compared to 263,904 tonnes (2,900 tonnes per day) at an average palladium grade of 4.9 g/t in the same period in the prior year.  In the second quarter of 2015, 186,538 tonnes of the low grade surface stockpile and tailings at an average grade of 1.0 g/t palladium was processed compared to 243,041 tonnes at an average grade of 1.0 g/t in the prior year. On a combined basis, 23% more tonnes of ore were mined and processed in the second quarter of 2015 at an 8% lower palladium grade compared to the same period in 2014.

In the first six months of 2015, underground ore mined at LDI consisted of 833,607 tonnes (4,606 tonnes per day) at an average grade of 4.2 g/t palladium compared to 539,749 tonnes (2,982 tonnes per day) at an average palladium grade of 4.9 g/t in the prior year.  In the first six months of 2015, LDI processed 577,786 tonnes of the low grade surface stockpile and tailings at an average grade of 1.0 g/t (2014 - 497,335 tonnes at an average grade of 1.0 g/t).

Milling

During 2015, the mill ran on a full time basis at approximately 60% of capacity other than during the May 8, 2015 until June 26, 2015 period that the mill was shutdown.  In the first six months of 2014, the mill was run on a batch basis.  The mill shutdown in the second quarter of 2015 makes comparisons between 2015 and 2014 difficult.

During the three months ended June 30, 2015, the LDI mill processed 336,142 tonnes of ore at an average palladium head grade of 2.8 g/t palladium and a recovery of 82.8% to produce 22,904 ounces of payable palladium (compared to the results in the same period in 2014 — 521,478 tonnes milled, average palladium head grade of 3.1 g/t, recovery of 83.6%, producing 39,223 ounces of payable palladium). The decrease in the second quarter of 2015 is due primarily to the mill shutdown.

The LDI mill processed 1,087,562 tonnes of ore at an average palladium head grade of 2.6 g/t and a recovery of 82.9% to produce 68,530 ounces of payable palladium during the six months ended June 30, 2015 (2014 — 1,037,989 tonnes milled, average palladium head grade of 3.2 g/t, recovery of 84.1%, producing 81,863 ounces of payable palladium).

Production Costs per Tonne Milled

Production costs per tonne milled in the three and six month periods ended June 30, 2015 were $76 and $62 respectively compared to $58 and $58 per tonne in the comparable 2014 periods.  The increases were primarily due to the impact of the mill shutdown in the second quarter of 2015 resulting in fewer tonnes milled and the production cost increases noted below.

Payable Production

Payable production was lower for all payable metals in the first quarter and first half of 2015 compared to the same periods in 2014.  Payable metal changes were primarily due to the mill shutdown in the second quarter of 2015.

Cash Cost per Ounce of Palladium Sold

Cash cost per ounce of palladium sold is a non-IFRS measure and the calculation is provided in the Non-IFRS Measures section of this MD&A.

The cash cost per ounce of palladium sold increased to US$7501 for the three months ended June 30, 2015 compared to US$5101 in the same period in 2014. The cash cost per ounce of palladium sold increased to US$6451 for the six months ended June 30, 2015 compared to US$4981 in the same period in 2014. Please refer to the water balance issue and mill shutdown, LDI revenue, production costs, smelting, refining and freight costs and royalty expense sections of this MD&A for additional details.

1 Non-IFRS measure. Please refer to Non-IFRS Measures on pages 22-23.

7

Financial Results

Income from mining operations for the LDI operations is summarized in the following table.

The Company has included income from mining operations as an additional IFRS measure to provide the user with additional information on the actual results of the LDI operations.

Gross Revenue

Gross revenue is affected by production and sales volumes, commodity prices, currency exchange rates, mill run timing and shipment schedules.  Metal sales for LDI are recognized in revenue at provisional prices when delivered to a smelter for treatment or a designated shipping point.  Final pricing is determined in accordance with LDI’s smelter agreements.  In most cases, final pricing is determined two months after delivery to the smelter for gold, nickel and copper and four months after delivery for palladium and platinum.  Final pricing adjustments can result in additional revenues in a rising commodity price environment and reductions to revenue in a declining commodity price environment.  Similarly, a weakening in the Canadian dollar relative to the U.S. dollar would have a positive impact on revenues and a strengthening in the Canadian dollar would have a negative impact on revenues.  The Company periodically enters into financial contracts for past production delivered to the smelters to mitigate the smelter agreements’ provisional pricing exposure to rising or declining palladium prices and an appreciating Canadian dollar.  These financial contracts represent 18,300 ounces of palladium as at June 30, 2015 (December 31, 2014 — 12,800 palladium ounces) and matured in July 2015 at an average forward price of US$790 per ounce of palladium (December 31, 2014 — US$812 per ounce of palladium).  For substantially all of the palladium delivered to the customers under the smelter agreements, the quantities and timing of settlement specified in the financial contracts match final pricing settlement periods.  The palladium financial contracts are being recognized on a mark-to-market basis as an adjustment to revenue.  The fair value of these contracts at June 30, 2015 was an asset of $2.6 included in accounts receivable compared to $0.2 at December 31, 2014.

8

Revenue for the three months ended June 30, 2015

(1)   Quantities and prices are per ounce for palladium, platinum and gold and per pound for nickel and copper.

Revenue for the three months ended June 30, 2014

(1)   Quantities and prices are per ounce for palladium, platinum and gold and per pound for nickel and copper.

Revenue for the six months ended June 30, 2015

(1)   Quantities and prices are per ounce for palladium, platinum and gold and per pound for nickel and copper.

Revenue for the six months ended June 30, 2014

(1)   Quantities and prices are per ounce for palladium, platinum and gold and per pound for nickel and copper.

9

Revenue for the three months ended June 30, 2015 decreased by $23.2 or 46% compared to the second quarter of 2014 primarily due to the mill shutdown in the second quarter of 2015 that resulted in a significant decrease in all payable metals sold.  Lower revenues were also impacted by a decrease in all US$ metal prices realized partially offset by a weaker Canadian dollar.  For the six months ended June 20, 2015, revenues decreased by $7.9 or 8% primarily due to the mill shutdown reducing payable metals sold and, lower US$ realized prices for all metals partially offset by a weaker Canadian dollar.

Spot Metal Prices* and Exchange Rates

For comparison purposes, the following table sets out spot metal prices and exchange rates.

* Based on the London Metal Exchange

10

Smelting, refining and freight costs

Smelting, refining and freight costs for the three and six month periods ended June 30, 2015 were $2.7 and $9.4 compared to $4.1 and $8.3 in the respective 2014 periods.  The decrease in the quarter ended June 30, 2015 compared to the prior year quarter was primarily due to the mill shutdown.  The increase in the six months ended June 30, 2015 as compared to the prior year period is primarily due to the impact of a weaker Canadian dollar.

Royalty expense

For the three and six month periods ended June 30, 2015, royalty expenses were $1.0 and $3.5 compared to $2.2 and $4.3 in the respective 2014 periods.  The decreases in 2015 were primarily due to lower revenues in 2015 compared to the respective 2014 periods and the mill shutdown in the second quarter of 2015.

Production costs

For the three and six months ended June 30, 2015, production costs were $29.3 and $70.9 compared to $30.3 and $60.1 in 2014 respectively.  In the second quarter of 2015, the Company ceased milling operations from May 8, 2015 until June 26, 2015 due to water balance issues.  During this period, underground mining operations continued and no layoffs occurred; however, production costs for the three and six month periods ended June 30, 2015 include $3.7 of mine restoration and mitigation costs.

Mining costs for the three and six month periods ended June 30, 2015 increased by $3.8 (22%) and $8.9 (25%) respectively compared to the 2014 periods.  The increases were primarily due to 66% and 54% more underground tonnes mined respectively in the three and six month periods ended June 30, 2015, and increased costs associated with contractors, parts and labour partially offset by lower costs for propane, capital chargebacks and equipment rentals.

For the three month period ended June 30, 2015, milling costs decreased $0.6 (8%) while for the six month ended June 30, 2015, milling costs increased $2.4 (16%) compared to the respective 2014 periods.  These changes were primarily due to the impact of the 2015 mill shutdown, increased reagent use and higher labour and contractor costs and running the mill on a full time basis for the first four months of 2015.

Depreciation and amortization

Depreciation and amortization for the three and six months ended June 30, 2015 were $4.6 and $13.2 respectively, compared to $8.2 and $18.5 in the comparable 2014 periods. The 2015 decreases over the prior year periods were primarily due to lower unit of production depletion related to lower production and an increased reserve and resource base partially offset by more tonnes mined.

11

OTHER EXPENSES

Exploration

Exploration expenditures for the three and six month periods ended June 30, 2015 were $1.8 and $4.3 respectively compared to $1.9 and $2.6 in the respective 2014 periods. The changes were primarily due to an early start to the 2015 exploration program and a subsequent curtailment of the program in light of budget reductions.

Interest and other income

Interest and other income for the three and six months periods ended June 30, 2015 were $2.4 and $1.1 respectively compared to $2.6 and $2.4 in the comparable prior year periods. The decreases were primarily due to decreases in fair value of warrants associated with the convertible debentures issued in 2014.

Interest costs, prepayment fee and other

Interest costs, prepayment fee and other for the three and six month periods ended June 30, 2015 were $81.6 and $93.5 respectively compared to $16.0 and $29.0 in the comparable prior year periods. The increases were primarily due to changes in the carrying value of the senior secured term loan.

Financing costs

For the three and six month periods ending June 30, 2015, financing costs were $7.5 and $7.9 compared to $4.3 and $8.4 in the comparable 2014 periods. The 2015 amounts were primarily due to financing costs related to costs associated with the Recapitalization transaction while the 2014 amounts primarily related to the issuance of the 2014 convertible debentures.

Foreign exchange loss (gain)

Foreign exchange gains and loss for the three and six month periods ended June 30, 2015 were a gain of $4.0 and a loss of $18.4 respectively compared to a gain of $7.3 and a loss of $0.6 in comparable 2014 periods.  The 2015 and 2014 gains and losses were primarily due to the impact of exchange rate movements on the US$ denominated senior secured term loan and the US$ denominated credit facility.

12

SUMMARY OF QUARTERLY RESULTS

Summary of Quarterly Results

Trends:

·                  Revenue, production costs, tonnes milled and palladium ounces sold, varied over the last eight quarters as mining has transitioned from the Roby zone underground and the surface open pit to the Offset zone underground and surface stockpiles. In the second quarter of 2015, the mill shutdown and changes in tonnes, grades and sources of ore significantly impacted revenue realized, production costs, ore milling and palladium ounces produced.

·                  Realized quarterly average prices for palladium have ranged from US$721 to US$860 per ounce in the last eight quarters while US$ prices for platinum, gold, copper and nickel have generally been declining over the last five quarters. The weakening of the Canadian dollar versus the United States dollar generally results in higher revenues.

·                  Underground mining operations have been transitioning to a shaft based ore handling system from a ramp based one in the most recent quarters. The vast majority of ore currently brought to surface is using the shaft which, for accounting purposes, was considered in commercial production on January 1, 2014.

·                  Capital expenditures have been generally declining for the last eight quarters as activities associated with the construction of the shaft and related infrastructure to process the upper Offset zone ore were completed.

·                  Cash provided by operations in Q1 2015 increased primarily due to increases in accounts receivable and accounts payable.

·                  Cash provided by financing activities in Q2 2015 was primarily due to a US$25 credit facility provided by the senior secured term loan lender that was fully utilized in the quarter and the Q1 and Q2 2014 sources were primarily due to the issuance of convertible debentures.  The use of funds in Q3 2014 was primarily due to a partial repayment of the senior secured term loan.

13

FINANCIAL CONDITION, CASH FLOWS, LIQUIDITY AND CAPITAL RESOURCES

Sources and Uses of Cash