TECHNICAL REPORT
AND
PRELIMINARY ECONOMIC ASSESSMENT
ON THE
EAGLE ONE DEPOSIT
DOUBLE EAGLE PROPERTY
MCFAULDS LAKE AREA
JAMES BAY LOWLANDS, ONTARIO

http://www.sedar.com/GetFile.do?lang...

RECOMMENDATIONS - Eagle One

P&E offers the following recommendations:

1. A total proposed budget of $5,700,000 is recommended to follow up at Eagle One. The authors feel that the large budget is warranted, given that the project is now entering a predevelopment stage and will require Inferred resource and infrastructure upgrades and advanced studies in order to proceed to the next level. The recommended budget breakdown is presented in the following Table 1.1.

SITE ACCESS ROAD

The Eagle One Deposit site is currently not accessible by road. It is assumed that a permanenta access road would be required from Nakina via Martin Falls to the project site. Road construction from Martin Falls to the site could utilize glacial eskers in the area which would facilitate road building and lower construction cost. Gravel road construction costs were based on a 7 m wide road bed which allows haulage truck travel speeds of at least 60 to 70 km/h.

Based on a limited amount of information on topography and lay of the land the estimated cost of access haul road construction is $306,000 per kilometre, excluding EPCM and contingency, as summarized in Table 1.9.

Noront’s share of the total estimated cost of road access is approximately $62.3 million.

The portion of access road between Nakina and Martin Falls is assumed to be on a 50% costs haring bases with the Ontario Provincial Government. In addition, to facilitate major river crossings of the Attawapiskat and the Albany Rivers, two Barges / Ferries, at an estimated cost of $2.5 M each, have been included in the capital cost estimate.

MINING OPERATION

The mine design is based on accessing the deposit on the footwall side (the east side of the northeast striking deposit) through a decline. Sublevels will be developed in 25 m vertical intervals with main haulage drifts parallel to the strike in the footwall. The decline, the main haulage drifts and the ore body are connected with access cross-cuts, driven on 15 m centers.

The stope orientation differs between the massive sulphide and the disseminated sulphide zones. The massive sulphide zone will be mined as longitudinal blasthole stopes. The main disseminated sulphide zone will be mined as transversal blasthole stopes. Sill pillars may be required in the extraction of the massive sulphide zone stopes; however, they will be extracted with the disseminated resources.

MINERAL PROCESSING

On site processing of the massive resource would not significantly increase the economic benefit of this resource thus these resources will be direct shipped to a toll-milling processing plant. P&E assumes that the Strrathcona Mill facility, located near Sudbury, will be able to process 1,000 tpd of massive resources, on a toll-milling basis. The disseminated sulphide resources will be processed, on site, starting at a rate of 750 tpd for the first 2.5 months then at a rate of 1,500 tpd, thereafter.

To the knowledge of P&E Mining Consultants no metallurgical testwork has been conducted for this deposit. Assumptions for metal recoveries are provisional and solely based on industry typical recoveries for other Canadian and international nickel, copper, platinum, palladium, gold (PGE) and silver mineralization.

The assumed flowsheet for this study includes a primary crushing via a jaw crusher, which will be suitable for crushing both direct shipping resources and disseminated resources for site concentration, grinding, two stages of rougher flotation to produce separate copper and copper-nickel rougher concentrates followed by regrinding and cleaning of both to produce saleable concentrate grades. Final concentrates will be filtered and shipped as damp filtercake.

A conventional tailings pond will receive unthickened tailings for disposal. The supernatant water will be reclaimed by means of barge mounted pumps or other means to provide most of the water requirements for the mill. This tailings management facility (TMF) will accommodate an estimated 817,600 tonnes of hydraulic tailings. The supernatant water will be reclaimed by means of barge mounted pumps or other means to provide most of the water requirements for the mill. It is anticipated that the majority of the mill tailings (estimated 1.5 M tonnes) will be placed underground as cemented hydraulic backfill in the mined out disseminated sulphide resource stopes.

CAPITAL AND OPERATING COST ESTIMATES

Mine operating costs were estimated based on the Aventurine Sherpa cost estimation software, adjusted to 3rd quarter 2008 Canadian Dollars. In addition cost estimates for mine air heating and cemented backfill were added to the Sherpa cost estimate.

The direct ship massive resource processing cost estimate includes the cost of custom toll milling at Xstrata’s Strathcona mill, and onsite primary crushing and resource handling. The onsite disseminated resource processing cost estimate is based on a similar size and types of processing facilities, excluding onsite mill administration and other non-process costs.

The G&A operating cost estimate includes the cost of mine, mill and project administration, and annual road maintenance and ferry service.

The average operating cost for the direct shipping massive sulfide resource is $116.07 per tonne and for the disseminated sulphide resource is $118.00 per tonne. The average life-of-mine operating cost for the project is estimated to be $117.69 per tonne.

Capital cost estimates are based on general budget pricing from suppliers, consultants, contractors and other Canadian projects. Capital expenditure estimates have been prepared to an accuracy of ±35%.

The pre-production period is estimated to last for 21 months, starting with the construction of road access. During this period the total project pre-production capital expenditures are estimated to be $173.4 million. Sustaining capital expenditures include all life-of-mine capital expenditures beyond the pre-production period. Sustaining capital expenditures total $113.0 million including recuperated credit value for salvage of plant and equipment.

8.5 GEOLOGICAL AND MINERALIZATION MODEL

On-going exploration work on the Double Eagle Property is partly predicated upon a conceptual model wherein the mineralizing systems are directly associated with the Ring of Fire Intrusion. This model has been formulated by incorporating recent drill data along with geophysical, geological and other technical survey results. Salient features from other established geological models for similar mineralizing systems from around the world have also been incorporated into the conceptual model, which is in a constant state of revision as new data become available. Key points of the Ring of Fire model are as follows:

The Eagle One Deposit was intersected in 23 out of the 35 holes drilled and is currently defined over a strike length of 200 metres and to a depth of 225 metres. The Deposit dips semi vertically and remains open at depth. All widths reported in the above drilling table are apparent, and true widths of the intersections are approximately 2/3 of those reported.

14.0 ADJACENT PROPERTIES

Since the Eagle One Deposit discovery in September 2007, interest in the area has increased tremendously, resulting in the entire arcuate shaped “Ring of Fire” having been staked in the past 11 months (Figure 14-1).

Noront’s land position in the “Ring of Fire” includes the Double Eagle Property, 11 additional joint ventures (of which Noront is operator of 9), and 3 floating blocks of claims that lie within the Ring of Fire but are not contiguous to any other defined property package.

VMS deposit types such as McFaulds No. 1 and No. 3 (Spider/KWG JV), MMS, (Noront’s Eagle One and Eagle Two), Chromite (Noront’s Blackbird One and Two), and Kyle kimberlite pipes (Spider/KWG JV) are all known to occur. The Metalex /WSR joint venture intersected VMS –style mineralization in May, 2008 in the “Ring of Fire”. The author has not verified the mineralization outside the Double Eagle Property and the reader is cautioned that mineralization on properties adjacent to the Double Eagle Property is not necessarily indicative of mineralization on the Double Eagle Property.

The mineral production phase is divided in two phases; Phase I - The extraction of high grade massive sulphide resources from longitudinal stopes, followed by Phase II - The mining of the disseminated sulphide resources in transverse stopes.

22.5.1 PHASE I – MASSIVE SULPHIDE RESOURCE MINING

The massive sulphide resources will be mined from the top down and the excavated stopes will be backfilled with cemented rock fill (CRF) once all the massive resources have been extracted, at the end of Phase I. Access to the longitudinal blasthole stopes will be via crosscuts driven from the haulage drifts, through the disseminated resource halo, to the massive resources, on all development levels. Please refer to Figure 22-7, Proposed Sub-level Open Stoping for Massive Mineralized Zone.

The disseminated sulphide stope resources will be mined from the bottom up. Excavated stopes will be backfilled with classified mill tailings and 3% cement (cemented hydraulic backfill (CHBF)) once stope mining has been completed in each primary or secondary stope. Access to the transverse blasthole stopes will be via crosscuts driven from the haulage drifts. Blasthole ring drilling and blasting will be completed from the upper stope crosscuts, on a retreat basis. Blasted mineral resources will be mucked using remotely operated 6 yd scooptrams from below. Slot raises will be driven at the massive resource / CRF backfill contact, between levels.

The transverse blasthole stopes will be 25 m high, 15 m wide and average 25.8 m long. Please refer to Figure 22-8 for an illustration of a typical primary or secondary stope.

Typical Blast Hole Stope Layout

Disseminated development resources will start to be mined during month 17. This development will continue for approximately 64 months, until month 81. A total of 109,300 tonnes of disseminated development resources, grading 1.1% Ni and 0.7% Cu will be extracted during that period. Disseminated stope mining will start at the beginning of month 37, at a production rate of 750 tpd. Production will increase to 1,500 tpd during the 39th month and continue for approximately 52 months, until the end of month 91. A total of 2,379,100 tonnes of disseminated stoping resources, grading 1.1% Ni and 0.7% Cu will be extracted by stoping. A summary of the disseminated resource production schedule is presented in Table 22.13.

23.0 SITE INFRASTRUCTURE

23.1 ELECTRICAL POWER SUPPLY

No grid electrical power supply exists in the area and the project would have to rely on diesel generated power for the mine and the mill requirements. The capital cost is estimated to be $1 million per MW installed generating capacity. A total of 5 MW installed power generation capacity was estimated.

27.0 OPERATING COST ESTIMATE

Mine operating costs were estimated based on the Aventurine Sherpa cost estimation software, adjusted to 3rd quarter 2008 Canadian Dollars. In addition cost estimates for mine air heating and cemented backfill were added to the Sherpa cost estimate.

The direct ship massive resource processing cost estimate includes the cost of custom toll milling at Xstrata’s Strathcona mill, and onsite primary crushing and resource handling. The onsite disseminated resource processing cost estimate is based on similar size and types of processing facilities, excluding onsite mill administration and other non-process costs.

The G&A operating cost estimate includes the cost of annual road maintenance between Martin Falls and the project site. The maintenance costs for the remainder of the road are assumed to be carried by the Ontario government. The G&A cost estimate also includes the cost of mine, mill and project administration.

In addition to the mine, mill and G&A costs an operating cost of $500,000 per year for the access road barging / ferrying river crossings was added to the total operating cost.

The average operating cost for the direct shipping massive sulphide resource is $116.07 per tonne and for the disseminated sulphide resource is $118.00 per tonne. A summary of operating costs is presented in Table 27.1.

28.1 PRE-PRODUCTION CAPITAL COST

The pre-production period is estimated to last for 21 months, starting with the construction of road access. During this period the total project pre-production capital expenditures are estimated to be $173.4 million. These expenditures include all direct and indirect costs, construction and commissioning, Owner’s costs, and contingencies.

28.2 SUSTAINING CAPITAL COST

Sustaining capital expenditures include all life-of-mine capital expenditures beyond the preproduction period. This includes all capital expenditures:

Sustaining capital expenditures total $113.0 million including recuperated credit value for salvage of plant and equipment

TABLE 32.1 – RECOMMENDED CAPITAL BUDGET

DELINEATION DRILLING

Upgrade Inferred Resources to Indicated Resources

2,000 m NQ drilling in 15 holes @$ 120/ m ....................................... Drill Support (Logging, assays, camp support)@$55/ m ....................................... Helicopter Support @175/ m .......................................

Subtotal Delineation Drilling .......................................

AIRSTRIP CONSTRUCTION

Semi-Permanent air strip..................................

Subtotal Pre-Development Construction...........................

ADVANCED ECONOMIC STUDY Eagle One Feasibility Study..................................

TOTAL EAGLE ONE PROPOSED BUDGET .......................................

Note: The Advanced Economic Study budget outlined above includes a geotechnical study(s), a hydrological study(s), an environmental study(s), road access and infrastructure studies, and metallurgical test work.

2. Investigate the marketing options and sales capacity of direct shipping massive sulphide ore.

3. Investigate the Ontario Government plans on developing the region.