Global Expertise - European Focus September 2007 www.northlandresourcesinc.com
Cautionary Statement This PowerPoint presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as anticipates, believes, expects, plans, intends, potential and similar expressions. These statements reflect our current belief and are based on currently available information. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company s actual results, performance or achievements to differ materially from those expressed or implied by such statements. We undertake no obligation to update or advise in the event of any change, addition, or alteration to the information catered in this PowerPoint presentation including such forward-looking statements. This PowerPoint presentation does not constitute an offer of the securities described herein. Vance V. Thornsberry, P.Geol., Vice President of Exploration for Northland Resources, is the Qualified Person as defined in NI43-101, and has verified that the information in this presentation has been accurately summarized from the reports quoted herein and the assay data provided to Northland. Resource estimates for the Barsele gold project and the Stora Sahavaara magnetite body were prepared by third party consultant (Bart Stryhas, PhD Structural Geology); the resource model and estimates were subsequently reviewed by Chlumsky Armbrust & Meyer L.L.C. ( CAM ) an independent, mineral resource, consulting and engineering group based in Lakewood, Colorado USA. CAM has reviewed the database and modeling procedures used by Northland to calculate the Stora Sahavaara magnetite resource and the Barsele gold resource. On the basis of this review CAM believes that the Stora Sahavaara resource and resource model and the Barsele resource and resource model have been prepared according to accepted engineering practice for a project at this level of development and that the results obtained are suitable for determining if further exploration work on the property is warranted. The historic resource estimates quoted in this presentation were prepared prior to the implementation of National Instrument 43-101. None of the historical resource estimates prepared by the SGU or Geological Survey of Finland (GTK) reports use the resource categories stipulated in Section 1.3 of National Instrument 43-101, which are "inferred mineral resource", "indicated mineral resource" and "measured mineral resource." The Company believes that term resources is used differently from the use of that term in NI 43-101. With the exception of the Stora Sahavaara project, the Company does not have and is not aware of- any more recent resource estimates which conform to the standards laid out in NI43-101, and the Company advises that it has not completed the work necessary to verify the classification of either of the mineral resource estimates and such estimates have not been verified by a qualified person. The Company is not treating the historical resource estimates as a National Instrument 43-101-defined resource or reserve, and the historical resource estimates should not be relied upon. Work is currently underway to bring these estimates up to NI43-101 standard. Vance V. Thornsberry, PGeo, Vice-President of Exploration for Northland Resources, is the qualified person as defined in National Instrument 43-101 and has verified that the information presented in this presentation has been accurately summarized from the reports quoted herein.
Northland History 2003. Listed on the TSX-Venture Exchange as North American Gold Inc Exploration of Barsele/Norra gold properties in Västerbotten, Sweden 2004 Acquired 100% interest in Stora Sahavaara and surrounding properties near Pajala, Sweden In-house examination identifies substantial IOCG potential in Sweden and Finland Exploration Barsele/Norra project accelerates 2005 Acquired reservations covering the Hannukainen and Rautuvaara historic mining operations near Kolari, Finland Established regional headquarters in Rovaniemi Name changed to Northland Resources Inc. 2006 Listed on Oslo Exchange - Raised CAD +50 Expanded property positions in Sweden and Finland Acquired 100% of Barsele/Norra property thru purchase of Barsele Guld AB 2007 Exercised option to acquire 100% of Stora Sahavaara Expanded property positions in Finland and Sweden Raised CAD +$100M Market Capitalization of Northland hits $500,000,000 CAD Exploitation Concessions granted for Barsele/Norra Test mining of Stora Sahavaara completed 2003 2007 spent over $16 M in Sweden and continue to spend at the rate of about $1.0 M / month
Share Structure Shares Issued: 108.6m Options: 6.5m Fully Diluted: 115.1m Cash on hand: Exchanges: Insiders: ±C$145m (ca. 52 /sh) TSX-V: NAU Oslo Børs: NAUR Frankfurt: NBS 6.6% (diluted) TSX-V: NAU Oslo Børs: NAUR Frankfurt: NBS
Executive Management Arden (Buck) Morrow BSc Bill Wagener BSc Aurelian Bukatko BA/MBA/CPA Vance Thornsberry BSc PGeo Allen Gordon MSc Paul Marsden BSc Hardy Lindroos PhD Sc Kjell Larsson BSc President & Director COO CFO VP Exploration VP Mine Development and Operations VP Metallurgical Development and Operations Regional Director of Exploration Barsele Project Manager
European Iron Market Europe consumes roughly 190 Mtpa of ore, mostly from the southern hemisphere Domestic European iron ore production is approximately 26 Mtpa. Sweden produces 25 Mtpa, from the Kiruna and Malmberget mines
Iron Ore Benchmark Prices 1993-2007 US cents/dmtu FOB Brazil to Europe Standard Sinter Feed Blast Furnace Pellets Source: Corus Consulting/CRU
Iron Ore: European Imports It currently costs $12-18/t more to import iron ore by ship from the southern hemisphere compared to European sources Northland s Iron Projects Europe Asia S. America Africa Australia Source: www.dryships.com
EU Plans Action to Secure Raw Materials Market The European Commission wants to establish a coherent political approach to the problem of securing adequate supplies of raw materials for the EU's industries. Unprecedented global demand for minerals such as iron ore, nickel and zinc have affected the EU's access to these raw materials as well as making them more expensive. The issue will be on the agenda of the G8 summit in Germany this week. In advance of that meeting, EU industry commissioner Günter Verheugen said: European industries need predictability in the flow of raw materials and stable prices to remain competitive. We are committed to improve the conditions of access to raw materials, be it within Europe or by creating a level playing field in accessing such materials from abroad. Brussels is expected next week to make some policy proposals to attain that objective, Steel Business Briefing understands. The EU produces only 2% of the world's iron ore and 1.7% of its nickel. The region imported almost 180m tonnes of metallic minerals worth 1 0.4bn in 2004. *Reproduction of article from Steel Business Briefing, Global Edition dated Wednesday 6 June 2007
Northland IOGC Projects Near EU Consumers Excellent Regional Infrastructure Essential rail infrastructure largely in place Road access to all projects Power line through the field area 2 rail heads within the project area in Finland. Port facility available in Kemi, Finland Incremental infrastructure capacity required
Iron Oxide, Copper, Gold = IOCG Key Projects located in Sweden & Finland Stora Sahavaara, Sweden IOCG Hannukainen, Finland IOCG Barsele, Sweden Gold Lannavaara & Saarijärvi, Sweden IOCG Rautuvaara, Finland IOCG
Northland s IOCG Projects Northland controls 50 km of the Pajala Shear Zone, one of Europe s last under-explored iron ore provinces Over 23 known magnetite bodies, many with historical resources 2 past producing iron mines on Northland s Finnish licenses SWEDEN FINLAND Numerous other under explored targets Pajala Shear Zone: Northland s project area IOGC = Iron Oxide, Copper, Gold
IOCG Occurrences of the Pajala Shear Zone Hannukainen Stora Sahavaara Project Area Tapuli
Tapuli IOCG Target 5km North of Stora Sahavaara controlled 100% by Northland Near surface, sub-crops 11m below till Can be traced for 2,200m along strike Thickness ranges from 10m to 200m SGU identified a thick, higher grade resource of 17Mt averaging +40% Fe within a larger resource estimated at 60Mt @ 30% Fe* 33 drill holes completed in 2007 have confirmed the presence of higher grade zone Metallurgical test work underway Initial Davis Tube Tests indicate that high grade, low sulfur, iron concentrate may be achievable using only magnetic separation See June 15, 2007 press release Northland plans to complete a resource calculation for Tapuli in 2007 Target production of 2.5Mtpa sinter feed/coarse pellet plant feed Tapuli Stora Sahavaara
Stora Sahavaara Metallurgy 240t bulk sample sent to SGS laboratories in Canada for metallurgical testing Pilot plant testing completed and final report being developed Initial test results indicate the deposit will produce a high-grade iron ore products Pelletizing test work underway
Hannukainen Overview Former Producer with Expansion Potential Cluster of 5 IOCG deposits Historic production of 4.5m tonnes 5-6km to rail head at Rautuvaara Mine ±400 archived drill holes (65km of core) re-logged & sampled Ongoing drilling program to explore all 5 deposits Open pit and underground potential Aim to produce 5Mtpa high quality pellets
Hannukainen NI 43-101 Resource - 5 Deposits Measured 53 million tons 35.6% contained iron Kivivuopio Lauku Indicated 31 million tons 32.9% contained iron Laurinoja Kuervaara Inferred 81 million tons 35.7% contained iron Initial Metallurgical Results Potential pellet feed product: Total iron 71.00% SiO2 0.61% Al2O3 0.34% MgO 0.30% S 0.02% Area of 2006 drilling Vuopio Regional Magnetics
Hannukainen: Metallurgical Update The first sulphide float of the magnetic concentrate produced a concentrate with the following assay: Assay Fet S SiO2 Al2O3 MgO Au Cu Wt% 71.0 0.02 0.61 0.34 0.30 0.03g/t 0.003 Apart from the sulfuric acid created and consumed in the treatment of ore, there are no hazardous or toxic chemicals used in or produced by processing. Waste will be stored in compliance with regulatory requirements. Initial studies suggest that much of the available Copper and Gold can be recovered to a commercially salable concentrate. Bulk sample required for pilot scale test work, process flow sheet and pellet test work.
Conceptual Site Plan
Typical Mill / Concentrator Magnetic Concentrate Product Waste to Tailings Disposal
Typical Pellet Plant CAR DUMPER RECLAIMER Magnetic Concentrate ORE PILE THICKENER HOMOGENIZATION TA N K BALL MILL HYDROCYCLONES RECYCLE OF WATER FILTER CAKE BINS DISK FILTERS FILTER CAKE ROLLER PRESS BINDER ADDITION BALLING DISKS GREEN PELLETS MIXERS TRAVELLING GRATE FURNACE RECYCLE FOR HEARTH LAYER SCREENING SYSTEM STACKER FIRED PELLETS FIRED PELLETS STOCKYARD DISPOSAL OF FINES
Preliminary Estimation: Production Year 1 Tapuli Begin production sinter/pellet feed (2 million tonnes) Year 2 Tapuli ramp up production to 3 M tonnes sinter/pellet feed Hannukainen or Stora Sahavaara begin production pellets (2 million tonnes) Year 3-5 Tapuli at full production 3 M tonnes sinter/pellet feed Hannukainen or Stora Sahavaara ramp up production to 5 million tonnes pellets Hannukainen or Stora Sahavaara begins production and ramps up to 5 M tonnes pellets Tonnes/year 2 M 5 M 13 M
Preliminary Estimation: Capital Costs Metallurgical Complex 3 Mining Operations 3 Mills / Concentrators 2 Pellet Plants Estimated Capital Investment 3 Mines 50,000,000 each 3 Mills / Concentrators 200,000,000 each 2 Pellet Plants 200,000,000 each Total: 1,150,000,000 Note: Excludes infrastructure upgrade cost - roads, railroads, port, power, slurry pipeline, community development Approximate Capital Costs to Achieve 13 Mt / year of Production: 1,150,000,000
Estimated Direct Personnel Requirements Year 1 Year 2 Year 3 Year 4 Year 5 Total Tapuli Mine 173 173 173 173 173 Mill / Conc. / Loadout 0 115 115 115 115 288 Hannukainen Mine 0 150 300 300 300 Mill / Concentrator 0 100 200 200 200 Pellet Plant & Office 0 125 250 250 250 750 Stora Sahavaara Mine 0 0 150 300 300 Mill / Concentrator 0 0 100 200 200 Pellet Plant & Office 0 0 125 250 250 750 Totals 173 663 1413 1788 1788 1,788
Studies Required Environmental Feasibility Mine / Process Design Market Study Economic Analysis Infrastructure Transportation Mill to Pellet Plant - Rail versus Pipeline Rail Capacity / Upgrade Study Port Analysis Roads Power Water Supply Social Impact Analysis