Apologies for the formatting, or lack thereof.

Note that in my previous post I had my tongue firmly planted in my cheek regarding our burn rate. Irony, folks. Irony. RN got ousted ostensibly for spending too much on Windfall, spending too much per drill hole on Eagle 1, and not getting Noront on the TSX, according to the dissidents.

And the flow-through financing is $13.5M CN for this year, which I noted in said post, which quoted another poster as being $25M, which I thought was way high.

Why did the stock tank today? IMO, because of the loud press coverage of the FN press release, which drove home the idea that *nothing* is happening until the government and the FN's come to a written agreement. That means (to me): we're going to wait a long time for this to get resolved, and the folks who wanted their money to DO SOMETHING this quarter got out.

Silly me, I'm in it for the long haul.

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THIRD QUARTER ENDED JANUARY 31, 2010
Table of Contents
CAUTIONARY NOTE REGARDING FORWARD‐LOOKING STATEMENT ................................................. 2 COMPANY OVERVIEW ...................................................................................................................... 3 STRATEGY ........................................................................................................................................ 3 CAPABILITY TO DELIVER RESULTS ..................................................................................................... 5 QUARTERLY FINANCIAL INFORMATION ........................................................................................... 6
Summary of Cash Flows ......................................................................................................... 8
Summary of Quarterly Results ............................................................................................... 9 OVERVIEW OF ACTIVITY ................................................................................................................ 10 McFauld’s Lake Project......................................................................................................... 10 Eagle’s Nest Deposits ........................................................................................................... 12 AT‐12 .................................................................................................................................. 14 Blackbird Chromite Deposits ................................................................................................ 14 OPTION AGREEMENTS AND JOINT VENTURES ................................................................................ 16 DISCONTINUED PROJECTS .............................................................................................................. 17 LIQUIDITY AND CAPITAL RESOURCES.............................................................................................. 17 CONTRACTUAL OBLIGATIONS......................................................................................................... 18 RELATED PARTY AND OTHER TRANSACTIONS................................................................................. 19 FUTURE ACCOUNTING CHANGES.................................................................................................... 19
ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT SIGNIFICANT REVENUE.........................21 OUTSTANDING SHARE INFORMATION............................................................................................ 21 ADDITIONAL INFORMATION........................................................................................................... 21
1
The following is Management’s Discussion and Analysis (“MD&A”) of the consolidated financial condition and results of operations of Noront Resources Ltd. (“Noront” or the “Company”) for the quarter ended January 31, 2010, which have been prepared in accordance with Canadian Generally Accepted Accounting Principles. This discussion should be read in conjunction with the consolidated financial statements and the notes thereto. Additional Company information including the most recent Financial Statements can be accessed through the System for Electronic Document Analysis and Retrieval (“Sedar”) website at www.sedar.com and the Company’s website at www.norontresources.com. Information contained on the Company’s website is not incorporated herein and does not form part of this MD&A.
All financial measures are expressed in Canadian dollars unless otherwise indicated.
Unless otherwise indicated, a Qualified Person as defined by National Instrument 43‐101, has reviewed and is responsible for the technical information contained in this MD&A.
This information is provided as at March 5, 2010.
CAUTIONARY NOTE REGARDING FORWARD‐LOOKING STATEMENT
This MD&A includes certain “forward‐looking statements” within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical facts, included in this MD&A that address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as future business strategy, competitive strengths, goals, expansion and growth of the Company’s businesses, operations, plans and other such matters are forward‐looking statements.
When used in this MD&A, the words “estimate”, “plan”, “anticipate”, “expect”, “intend”, “believe” and similar expressions are intended to identify forward‐looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward‐looking statements.
Examples of such forward looking statements include statements regarding financial results and expectations for the remainder of fiscal year 2010 and beyond, such as, but not limited to, availability of financing, interpretation of drill results, the geology, grade and continuity of mineral deposits and conclusions of economic evaluations, metal prices, demand for metals, currency exchange rates, cash operating margins, expenditures on property, plant and equipment, increases and decreases in exploration activity, changes in project parameters, joint venture operations, resources and anticipated grades and recovery rates and are or may be based on assumptions and/or estimates related to future economic, market and other factors and conditions.
Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and
2
future events could differ materially from those reliant on forward‐looking statements. Factors that could cause actual results, developments or events to differ materially from those anticipated include, among others, the factors described or referred to elsewhere herein, and include unanticipated and/or unusual events. Many of such factors are beyond Noront’s ability to control or predict.
Readers of this MD&A are cautioned not to put undue reliance on forward‐looking statements due to their inherent uncertainty. Noront disclaims any intent or obligation to update any forward‐looking statements, whether as a result of new information, future events or results or otherwise. These forward looking statements should not be relied upon as representing management’s views as of any date subsequent to the date of this MD&A.
The risk factors which may impact the Company, its business, affairs and prospects are described in greater detail in the Company’s most recent Annual Information Form filed on November 9, 2009 with Canadian securities regulators and available via SEDAR.
COMPANY OVERVIEW
Noront is engaged in the acquisition, exploration and development of properties prospective in base and precious metals, including: nickel, copper, platinum group element metals (“PGE’s”), chromite, gold and vanadium. The Company’s focus is in the exploration and development of its properties at McFauld’s Lake (the “McFauld’s Lake Project”), in the James Bay Lowlands, Ontario within a geological feature (intrusion) referred to as the Ring of Fire (“ROF”). The Company owns a 100% interest in three nickel‐ copper‐platinum group metal discoveries known as “Eagle’s Nest”, “Eagle Two” and “AT‐12”; a chromite discovery known as “the Blackbird deposits”; a vanadium discovery known as “Thunderbird Occurrence”; and a gold zone known as the “Triple J Gold Zone.”
Noront controls mineral claims, held directly or indirectly, through joint ventures, optioned claims and earn‐in programs of approximately 120,000 hectares (300,000 acres) in the Ring of Fire area making Noront the largest claim holder in the region.
STRATEGY
The Company’s objective is to become a base metals producer through the development of its nickel‐ copper‐platinum group metals (“Eagle’s Nest”) and its chromite (“Blackbird”) discoveries. The Company’s strategy has been to define its most significant discoveries, being Eagle’s Nest and Blackbird, by completing NI 43‐101 compliant reports; to look for opportunities to consolidate the more significant discoveries in the region in order to gain from infrastructure synergies; to continue drilling at the site of Eagle’s Nest for associated deposits along what management believes is a magmatic conduit that could host other similarly important, potentially economic sulphide bodies; to continue an active regional exploration program in the McFauld’s Lake area; and to develop a plan for infrastructure and mine development.
3
Significant Events
Significant events for the three months ended January 31, 2010 and through the date of this report are:
 SNC‐Lavalin was engaged to complete an infrastructure and transportation study to evaluate and recommend a preferred route and method of all season access into the site;
 Drilling on the Eagle’s Nest deposit has confirmed that Eagle’s Nest is one structure and has continuous mineralization to a depth exceeding 1,100 metres and is open at depth;
 The Company completed and filed Canada’s first NI 43‐101 technical report on its Blackbird chromite deposits disclosing a measured and indicated resource of 8.9 million tones averaging 34.769 Cr2O3;
 The Company engaged Golder and Associates to update its NI 43‐101 compliant technical report on its Eagle’s Nest nickel, copper, PGE resource;
 The Company completed a $6.7 million equity financing which included filing of a short form prospectus; and
 Access to the Company’s camp has been limited by a logistics halt enacted by local First Nation’s. The Freewest Offer
On October 13, 2009, the Company formally commenced a bid to acquire all of the outstanding common shares of Freewest Resources Canada Inc. (“Freewest”).
On November 30, 2009, the Company increased its offer to acquire all of the outstanding common shares of Freewest. Under the revised offer, Freewest common shareholders were entitled to receive 0.2857 of a Company common share and 0.1429 of a five year Company common share purchase warrant.
On December 11, 2009 the Company’s offer to acquire all the common shares of Freewest Resources Canada Inc. expired as of 11:59 p.m. (EST) and was not extended. The Company, in accordance with the terms of its offer took up and paid for 5,053,518 Freewest shares that were validly tendered and deposited representing approximately 1.9% of Freewest. The Company issued an aggregate of 1,443,789 Noront common shares and 722,150 Noront common share purchase warrants to Freewest shareholders who tendered to the offer.
The previously reported number of shares of Freewest tendered to the Company’s Offer included shares held by certain investors that disputed the validity of their acceptance. The Company reached an agreement with this investor, which resulted in the private placement announced on January 14, 2010 and which was completed on February 17, 2010.
Costs related to the acquisition of the Freewest transaction up to January 31, 2010 have been expensed.
4
First Nations Action at the Ring of Fire
On January 18, 2010, the First Nations community of Marten Falls along with the support of the other surrounding First Nations communities implemented a logistics halt by denying access to the ice landing strip at Koper Lake. As a result of the First Nations actions in the Ring of Fire, the Company has been unable to resupply its exploration camp at McFauld’s Lake and has had to temporarily halt its drilling activities.
The Company’s drilling program will commence once the logistics halt has been resolved. In the meantime, the Company’s technical staff, both at camp and at its head office, has been updating geological and geophysical models, reviewing results from the fall program, initiating sampling of the newly discovered Triple J Gold Zone and initiating a preliminary evaluation of the Eagle’s Nest resource.
The Company is actively engaging the First Nations Communities and is working with the aforementioned communities, the government and other companies active in the Ring of Fire in order to negotiate a settlement. The Company is cautiously optimistic that a settlement will be reached soon allowing its planned exploration in the Ring of Fire to be completed.
In the event the logistics halt initiated by the First Nation communities is not resolved in the near term, there is a risk that the Company may not be able to complete its planned exploration program this year. As at January 31, 2010, the Company has a commitment to spend approximately $13.5 million on qualified exploration expenditures, as a result of raising flow through funds, by December 31, 2010.
CAPABILITY TO DELIVER RESULTS
The Company has sufficient financial resources to complete its planned exploration program and development activities for the remainder of fiscal 2010. The Company raised $25.0 million of flow‐ through funds on August 26, 2009. At January 31, 2010, the Company had cash and cash equivalents of $19.9 million and working capital of $23.8 million, including $2.3 million related to Quebec exploration tax credits and GST. This compares to cash and cash equivalents of $19.7 million and working capital of $24.8 million at April 30, 2009. Subsequent to the quarter end the Company generated $4.9 million in cash through sales of marketable securities and raised an additional $6.7 million through a private placement offering which closed on February 17, 2010.
During the quarter, the Company added to its management team with the addition of Glenn Nolan, VP Aboriginal Affairs. Mr. Nolan, a Chief of the Missanabie Cree First Nation has provided advice to both mining companies and aboriginal communities on partnership, development and training opportunities.
5
QUARTERLY FINANCIAL INFORMATION
The following financial data are derived from the Company’s financial statements for the three and nine months ended January 31, 2010 and 2009:
Three Months Ended January 31, 2010 Compared to Three Months Ended January 31, 2009
Income is comprised of interest earned on deposits and management fees. For the three months ended January 31, 2010, the Company earned $30.1 thousand in interest income for the quarter compared to $100.3 thousand in interest income for the prior year comparable period.
For the three months ended January 31, 2010, expenses excluding stock based compensation, amortization and non‐core property expense (recovery) increased by $472 thousand compared to the prior year comparable period. The net increase in expenses from the prior year comparable period is primarily related to:
 An increase in shareholder communication and advertising costs of $286 thousand incurred as a result of the Company’s offer to acquire all the outstanding common shares of Freewest;
 An increase in office and general expenses of $182 thousand which was comprised of a reduction in salaries and management fees of $76 thousand offset by increases in office, travel and information technology related costs of $185 thousand and donations of $73 thousand.
(expressed in $ thousands except per share amounts)
Three Months Ended
Nine Months Ended
2010
2009
2010
2009
Income Expenses Net (loss) before extraordinary items Net (loss) before extraordinary items ‐ basic and diluted Severence Mining properties and deferred exploration expenditures written off Realized loss on sale of investments Acquisition Costs Net (loss) Net (loss) per share – basic and diluted Cash flow from/(used in) operations Cash, cash equivalents and restricted cash Working Capital Assets Long‐term Liabilities
30 3,374
(3,344) (0.02)
‐ 1,014 403
863 (5,624) (0.03)
1,473 19,875 23,768 98,327
156
326 2,391
(2,065) (0.02)
500 ‐ ‐
‐ (2,565) (0.02)
1,915 30,488 33,549 98,002
514
174 7,189
(7,016) (0.04)
1,496 1,014
403 1,703
(11,632) (0.07)
528 19,875 23,768 98,327 156
917 12,765
(11,848) (0.09)
1,351 95 ‐
‐ (13,294) (0.10) (5,317)
30,488 33,549 98,002
514
6
Stock based compensation for the three months ended January 31, 2010 was $1.5 million compared to $1.1 million in the prior year comparable period. The fair value of stock options is amortized over the respective vesting periods.
Deferred expenditures of $1.0 million related to the Company’s 33 1/3 percent interest in the Fishhook property comprised of 960 claim units 50km south of Eagle’s Nest was written off. The property is not a priority for the Company at this time due to results of exploration work carried out to date.
During the period, the Company liquidated a portion of its portfolio of marketable securities. The Company received net proceeds of $136 thousand and recognized a loss of $403 thousand on the transactions.
Acquisition costs relate to expenditures incurred as a result of the Company’s offer to buy all the issued and outstanding shares of Freewest. Expenditures relate primarily to consulting and professional fees as well as other incidental costs.
In the prior year comparable period, the Company also paid severance of $500 thousand to certain former members of management pursuant to their employment contracts.
Nine Months Ended January 31, 2010 Compared to Nine Months Ended January 31, 2009
For the nine months ended January 31, 2010, the Company earned $142.9 thousand in interest income and $30.7 thousand in management fees compared to $691.7 thousand in interest income and $225.4 thousand in management fees for the prior year comparable period. The decrease in interest income is due to lower average cash balances and lower yields earned on deposits.
For the nine months ended January 31, 2010 overall expenses excluding stock based compensation, amortization and non‐core property expense (recovery) decreased by $362 thousand compared to the prior year comparable period. The net decrease in expenses from the prior year comparable period is primarily related to:
 Shareholder information expenses which were higher in the prior year comparable period by $482 thousand as a result of a dissident shareholder action;
 Increases in office, travel and information technology costs of $212 and donations of $131 thousand were offset by decreases in salaries and management fees of $296 thousand;
Stock based compensation for the nine months ended January 31, 2010 was $2.9 million compared to $8.1 million in the prior year comparable period. The fair value of stock options is amortized over the respective vesting periods. The majority of stock option expense in the current period related to options granted as a result of new management hires.
Severance costs paid to certain former members of management pursuant to their employment agreements were $1.5 million in the current period including $0.6 million in non‐cash stock option expense compared to $1.4 million in the prior year comparable period.
7
SUMMARY OF CASH FLOWS
Operating Activities
For the three and nine months ended January 31, 2010, the Company had negative $2.5 million and $3.5 million in cash flow from operations respectively compared to cash flow used in operations for the prior year comparable three month period of $0.9 million and $8.0 million for the nine months ended January 31, 2009.
Investing Activities
For the three and nine months ended January 31, 2010, cash used for investing activities was $3.7 million and $20.1 million respectively compared to $9.1 million and $35.1 million respectively in the prior year comparable period.
In the current three month period $6.9 million was spent on direct exploration on the Company’s projects in the McFauld’s Lake area, approximately $1.1 million of this amount was due to reducing accounts payable; the majority of increase in exploration advances represents deposits paid for fuel; the Company also received $0.1 million in proceeds from the disposition of certain marketable securities. Investing activities in the prior year comparable three month period substantially represent the Company’s spend on its exploration properties being the McFauld’s Lake and Windfall Lake properties. In the prior three month comparable period $12 million was spent on exploration of which $7.6 million of this amount was due to reducing accounts payable.
In the current nine month period $22.6 million was spent primarily on the Company’s projects in the McFauld’s Lake region, approximately $1.4 million was due to a reduction in accounts payable; increases in exploration advances relates to deposits paid for fuel and advances to a third party for the financing of certain capital projects. In the prior nine month comparable period $38 million was spent on exploration of which $4.6 million of this amount was due to a reduction in accounts payable.
Financing Activities
For the three and nine months ended January 31, 2010, cash flow from financing was $0.1 million and $23.7 million respectively compared to $15.9 million and $17.8 million respectively in the prior year comparable period. The cash from financing activities in the current year nine month period is a result of raising $25 million in a flow‐through equity issuance.
(expressed in $ thousands)
Three Months Ended Nine Months Ended January 31, January 31,
2010
2009
2010
2009
Cash provided by (used in) operating activities Cash provided by (used in) investing activities Cash provided by (used in) financing activities
( 2, 528) ( 3, 771)
113
(928) ( 9, 154)
15,939
(3,474) (20,051)
23,726
( 8, 025) ( 35, 097)
17,780
( 6, 186)
5,856
201
( 25, 342)
8
SUMMARY OF QUARTERLY RESULTS
Interest income varies quarterly based on the average cash balance on hand over the quarter and the corresponding yield earned on the Company’s deposits. The quarterly variation in expenses is mainly attributable to non‐cash stock option expense which is recognized at the time of grant in accordance with the vesting provisions. Expenses excluding stock option expense have decreased from the second quarter of fiscal 2009. In the current fiscal year expenses excluding stock option expense have increased in the second and third quarter over their prior quarter by $0.3 million and $0.6 million respectively due to management additions, corporate initiatives and seasonal increases in corporate activity.
(expressed in thousands except per share amounts) (quarterly results are unaudited)
2010 2010 2010 2009 Q3 Q2 Q1 Q4
2009 2009 2009 2008 Q3 Q2 Q1 Q4
Income Expenses Severence Write‐down of mining properties and deferred exploration
Write‐down / realized loss on sale of marketable securities Acquisition Costs Future income (tax) recovery
Net income/(loss) Net income(loss) per share – basic and diluted Cash flow from/(used in) operations Cash, cash equivalents and restricted cash Working Capital
Assets Long‐term Liabilities
30 3,374 ‐
1,014
403
863 ‐
93 51 59 2,626 1,190 1,064 ‐1,496 ‐
‐ ‐ 15,803
‐ ‐ 350
840 ‐ ‐ ‐ ‐5,472
(5,624) (3,373) (2,635) (11,874)
(0.03) (2,528)
19,875
23,768 98,327 156
(0.02)
731
26,061
29,760 99,666 153
(0.02) (2,363)
9,299
15,434 77,269 150
(0.08)
1,712
19,674
24,798 79,867 147
326 224 367 392 2,391 3,019 7,355 1,107 500 851 ‐ ‐
‐ 95 ‐ 598
‐‐‐‐
‐‐‐‐
‐‐‐‐ (2,565) (3,742) (6,987) 264
(0.02) 1,915 30,488
33,549 98,002 514
(0.03) (0.05) 0.00 (1,255) (2,629) (658)
24,632 43,957 55,831
20,327 44,584 54,781 91,047 88,531 91,124 505 495 485
9
OVERVIEW OF ACTIVITY
The following financial data are for the three and nine months ended January 31, 2010 and 2009:
McFauld’s Lake Project (Ring of Fire, James Bay Lowlands, Ontario)
For the three and nine months ended January 31, 2010, $5.8 million and $21.2 million was spent on exploration work, respectively. Drilling for the three months ended January 31, 2010 focused on further exploration drilling beneath Eagle’s Nest and on new AT‐12 targets. During the three and nine months
(expressed in $ thousands)
Three Months Ended January 31,
Capitalized Exploration Expenditure 2010 2009
Nine Months Ended January 31, 2010 2009
Exploration Projects McFaulds Lake Project ‐ "Ring of Fire", James Bay Lowlands, Northeastern Ontario
Acquisition costs Drilling and camp costs Other exploration costs Environmental and resource studies Health and safety Community relations
‐ (178) ‐ 799 4,599 2,249 18,131 17,038 508 128 1,605 3,368 293 (4) 480 14 50 ‐ 107 ‐ 27 ‐ 123 ‐
Sub‐total
Other exploration projects
Joint Venture Probe Project, Ontario Golden Valley Project, Ontario
Acquisition costs Drilling and camp costs Other exploration costs Health and safety
5,477 2,195 20,447 21,219 ‐ (1) ‐ 69
‐ 290
‐ 175 ‐ 175 285 315 340 315 43 76 43 76 10 ‐ 10 ‐
Sub‐total
Garden Island Project, Quebec Acquisition Costs Drilling and camp costs Other exploration costs Environmental and resource studies
339 566 394 566
‐ ‐ ‐ 18 ‐ 36 ‐ 158 92 95 624 ‐ ‐ ‐ 22
Sub‐total
Windfall Lake, Urban Township Acquisition costs Drilling, sub‐surface work and camp costs Other exploration costs Environmental and resource studies Community relations Other (non‐cash)
‐ 127
‐ 8 ‐ 815 ‐ 101 ‐ 12 ‐ ‐ ‐ 10
95 822
‐ 17 ‐ 8,878 ‐ 699 ‐ 407 ‐ 106 ‐ 29
Sub‐total ‐ 945 ‐ 10,137 Other joint venture's 2 523 2 523
Total $ 5,818 $ 4,355 $ 21,228 $ 33,335
10
ended January 31, 2010, 7,991 and 41,173 metres were drilled which compared to planned drilling of 12,375 and 42,303 metres, respectively. Drilling in the current quarter was impacted by production issues and the Company’s halt in drilling activity in January due to the First Nations action.
Project activity during the quarter included:
 Drilling on the Eagle’s Nest deposit intersected a high grade platinum zone and has confirmed the continuity of the previously reported mineralization encountered below Eagle’s Nest. The results confirm that Eagle’s Nest is one structure and has continuous mineralization to a depth exceeding 1,100 metres and is open at depth;
 The Company completed and filed its NI43‐101 compliant technical report on its Blackbird chromite deposits ;
 Golder and Associates was engaged to update the Company’s NI 43‐101 on its Eagle’s Nest nickel, copper, PGE deposit. The updated report is expected to be complete in the fourth quarter of fiscal 2010;
 The project to build a structural model of the “Ring of Fire” area was initiated which will lead to a refined interpretation of the area; the model is expected to be completed by the end of the fourth quarter of fiscal 2010;
 The airborne geophysics from the gradient magnetometer survey over the Company’s known deposits was completed in the second and third quarter; the interpretation of the geophysics will be used to identify additional targets;
 The re‐sampling of core of all the drill holes that went through the Triple J gold zone was sent for assaying and the results are expected during the fourth quarter of fiscal 2010;
Planned exploration work on the Company’s claims in the McFauld’s Lake area has been impacted as a result of the First Nations logistics halt. The Company will be able to complete its planned exploration activity if the logistics halt is resolved shortly. The start of the Company’s winter exploration program has been delayed. Once the logistics halt is resolved the Company’s plans are as follows:
 Infill drilling on the Eagle’s Nest deposit to a depth of 1,200 metres in order to provide sufficient data to support a feasibility study;
 Drilling down to a depth of over 2,000 metres on the Eagle’s Nest deposit to confirm the continuity of the deposit at depth;
 Completing the remaining two sections of the airborne gradient magnetometer survey over all of the Company’s properties which will provide enhanced drill targeting capabilities;
 Conducting further drilling on the AT‐12 anomaly as a result of refining the geological interpretation of the anomaly;
 Carrying out ground geophysics over the Company’s all known deposits to further refine drill targeting; and
 Conducting overburden drilling over the Triple J gold zone and other potential gold zones in the McFauld’s Lake area to locate high priority targets.
11
McFauld’s Lake Project Development Milestones
The Company plans to complete the feasibility studies on the Eagle’s Nest (nickel, copper, PGE’s) and the Blackbird (chromite) deposits in 2011. The following project development milestones have been identified to bring the projects into production:
 Establish feasibility schedules for various project components  Initiate socio‐economic studies  Complete environmental baseline and environmental studies  Initiate project consultations with First Nations communities  Environmental review and permitting
 Complete marketing and sales studies  Define project execution plans including potential partnerships for infrastructure development
During the quarter the Company initiated the feasibility study process by engaging SNC‐Lavalin to conduct an infrastructure study on access into the McFauld’s Lake area. The study is intended to review all potential transportation alternatives and routes from site to existing permanent infrastructure such as road and rail lines in Northern Ontario. The study is intended to be in two phases with the first phase to be completed in the first quarter of calendar 2010. At the end of the first phase, preferred routes are to be identified and a field program defined. The completion of the field program during the winter months of 2010 would allow the estimates for the routes to be refined to a Feasibility Study level by the end of 2010.
Eagle’s Nest Deposit
During the quarter, the company released additional results from drilling on the Eagle’s Nest deposit which confirm the deposit’s continuity and which also encountered high platinum grades within the massive sulphide mineralization. Hole NOT‐09‐068‐W1 was targeted to completely fill in the gap between what were formerly known as the B and C lenses at Eagle’s Nest. In addition, hole‐09‐070‐W1 intersected significant massive mineralization including the highest platinum grades encountered to date at Eagle’s Nest. The massive sulphide zone is close to being defined along the down‐dip length of the deposit.
HOLE ID
FROM
TO
INT.
MINERALIZATION TYPE
NI
CU
Pt
Pd
(m)
(m)
(m)
%
%
g/t
g/t
NOT-09-053-W5
933.0
1020.6
87.6
Net Textured/Massive
1.83
1.84
1.44
NOT-09-053-W6
727.9
785.0
57.1
Net Textured/Massive
1.89
0.85
1.06
NOT-09-064
1079.3
1132.5
53.1
Net Textured/Massive
1.94
0.95
0.60
Including
1104.5
1117.7
13.2
Massive
4.98
1.92
0.07
NOT-09-068-W1
683.0
818.2
135.2
Net Textured
1.65
0.80
1.03
NOT-09-070-W1
607.6
630.4
22.8
Massive
4.41
2.38
28.07
Including
607.6
613.3
5.7
Massive
5.78
4.42
37.87
Also including
612.8
621.2
8.4
Massive
1.19
1.46
68.78
Also including
622.4
630.4
8.0
Massive
7.41
2.19
0.18
Note NOT-09-053-W5 ended in mineralization, reached drill depth capacity
4.2
4.54 3.85
6.71
3.24
7.95 8.26 7.55
9.33
12
Additional assay’s released during the quarter, confirmed continuation of the Eagle’s Nest deposit for another 100 metres to 1,100 metres. Four holes intersecting the Eagle’s Nest mineralization were reported as follows:
HOLE ID
Eagle’s Nest
NOT-09-69A NOT-09-070-W2 NOT-09-071 Including NOT-09-072
FROM (m)
1,094.1 510.9 720.9 727.5 666.0
TO INT. (m) (m)
1,154.0 59.9 515.8 4.9 851.2 130.3 728.8 1.3 678.8 12.8
MINERALIZATION TYPE
Net Textured Net Textured Net Textured/Massive Massive Disseminated
Ni Cu % %
1.40 0.84 1.23 0.30 1.55 0.83 3.55 1.63
0.41 0.14
Pt Pd g/t g/t
Results Pending 0.35 1.60 Results Pending 25.44 13.58 Results Pending
Subsequent to quarter end the Company released additional assays from Eagle’s Nest which confirms the high grade nature of the deposit. The results from four holes were released which were targeted at defining the extents of the Eagle’s Nest mineralization, which continues to be open along strike for most of the deposit and at depth as follows:
HOLE ID
NOT‐09‐064‐W1
Including NOT‐09‐073
NOT‐09‐074
Including NOT‐09‐075
FROM TO INT. (m) (m) (m)
MINERALIZATION NI TYPE %
CU Pt Pd % g/t g/t
1099.9
1167.7 693.4
552.6
628.2 602.1
1231.8
1176.4 753.2
635.2
623.9 612.6
131. Net 8 Textured/Massive 8.7 Massive 59.8 Net
Textured/Massive 82.6 Net
Textured/Massive 6.7 Massive
10.5 Massive
1.27 0.56 0.85 2.89
5.82 1.62 0.05 6.62 1.70 0.90 1.45 3.73
2.05 1.00 0.64 2.94
7.41 1.26 0.93 6.64 6.51 1.68 2.00 8.18
Drilling for the remainder of fiscal 2010 will include infill drilling to a depth of 1,200 metres to support the planned feasibility study and additional drilling to a depth of 2,500 meters to test the continuity of the deposit.
13
AT‐12 Nickel, Copper, PGE Discovery
The AT‐12 deposit is located approximately eight kilometers northeast of the Eagle’s Nest‐Blackbird complex and within two kilometers of the Company’s Thunderbird vanadium deposit. The AT‐12 property has a similar geophysical signature as Eagle’s Nest, which triggered the initial drilling.
During the quarter, the company released assays from six holes; three of the six holes contain encouraging nickel‐copper‐platinum group element mineralization as follows:
As part of the comprehensive data review conducted in the fall of 2009, the drilling and borehole geophysics were reviewed and all significant holes were re‐surveyed and re‐logged. This has lead to a new interpretation of the emplacement and potential orientation of the mineralization. An expanded exploration program for 2010 will test the new interpretation through ground geophysics and continued drilling.
Blackbird Chromite Deposits
Two zones of massive‐disseminated chromium (Cr2O5) mineralization were identified approximately 2 kilometres southeast of Eagle’s Nest within the main ultramafic sill defining the Ring of Fire. These zones, known as Blackbird One and Blackbird Two, have been drill traced from surface on roughly 50 metre centers. The deposits remain open at depth. In certain zones, the grade of the mineralization is in excess of 40% Cr203 with chromium to Iron (“Cr:Fe”) ratios as high as 2.2 enabling it to process into high grade ferrochrome at a lower cost relative to industry standards.
HOLEID
FROM (m)
TO
INT. (m)
MINERALIZATION TYPE
Ni
Cu
Pt
Pd
(m)
%
%
g/t
g/t
AT12
NOT-09-2G26
No significant mineralization
NOT-09-2G27
No significant mineralization
NOT-09-2G28
720.8
735.5
14.7
Net Textured/Massive
1.02
0.5
0.43
1.07
Including
730.7
732.3
1.6
Massive
4.16
1.72
1.51
0.7
NOT-09-2G29
No significant mineralization
NOT-09-2G30
143.2
153.7
10.5
Net Textured/Disseminated
1.08
0.56
Results Pending
NOT-09-2G31
228.1
237
8.9
Net Textured/Disseminated
0.58
0.42
Results Pending
14
The NI 43‐101 estimate of chromium tonnage and grades is as follows:
(1) The “Technical Report on the Blackbird Chromite Discovery” was prepared by MICON International Limited (“Micon”), an independent consulting firm, in accordance with NI 43‐101 requirements.
(2) The above estimate capped high values for chromite at 43%. The estimate was completed using a cutoff of 30% Cr2O3 for the massive chromite and 0% Cr2O3 for the intercalated chromite. All sample preparation and analyses were completed at Activation Laboratory, ISO 17025 accredited and independent of the Company and Micon.
(3) The information in the above table has been prepared under the supervision of Mr. Richard Gowans, P.Eng and Mr. Charley Murahwi , M. Sc., P. Geo, MAusIMM who are “Qualified Persons” for the purposes of NI 43‐101 in Canada.
The resource is a classic stratiform deposit with original chromite layers broken up into segments 300 to 400 metres in length. The chromite layers are sub‐vertical and extend from surface to beyond 300 metres and are open at depth. The deposit geometry is very well suited for a low impact, underground mine.
The Company is planning on infill drilling on the Blackbird chromite discoveries during the fourth quarter of fiscal 2010 in order to upgrade a portion of the inferred resource to measured and indicated as required for the feasibility study.
BLACKBIRD MINERAL RESOURCE SUMMARY REPORT BY CATEGORY
MASSIVECHROMITERESOURCES
DEPOSIT
ZONE
T ONNES
AVG Cr203%
Cr:Fe Ratio
Measured
BLACKBIRD 2
BB 2-1
1,635,000
38.42
1.97
BB 2-2
881,000
35,35
1.95
BB 2-4
1,675,000
35.36
1.9
Indicated
BLACKBIRD 1
BB 1
1,895,000
36.56
1.97
BLACKBIRD 2
BB 2-1
816,000
36.75
1.94
BB 2-2
438,000
32.91
1.88
BB 2-4
223,000
35.76
1.85
Total Measured and Indicated
7,562,000
36.34
1.94
BLACKBIRD 2
BB 2-1
2,142,000
36,07
1.95
Inferred
BB 2-2
624,000
24.83
1.65
BB 2-4
772,000
40.26
2.19
Total Inferred
3,488,000
34.93
1.95
INTERCALATED CHROMITE RESOURCES (FRAGMENTED ZONES)
DEPOSIT
ZONE
T ONNES
AVG Cr203%
Cr:Fe Ratio
Measured
BLACKBIRD 2
BB 2-3a(301)
450,000
20,35
1.39
BB 2-3b (302)
537,000
29.63
1.79
Indicated
BLACKBIRD 2
BB 2-3a (301)
245,000
25.42
1.55
BB 2-3b (302)
61,000
28.31
1.67
Total Measured and Indicated
1,293,000
25.54
1.6
BLACKBIRD 2
BB 2-3a (301)
121,000
22,38
1,37
Inferred
BB 2-3b (302)
185,000
30.51
1.84
BB 2-Lenses (50)
2,280,000
31.94
1.78
Total Inferred
2,586,000
31.39
1.77
15
OPTION AGREEMENTS AND JOINT VENTURES
PROBE JOINT VENTURE AGREEMENT
On May 19, 2009, the Company entered into a Joint Venture Agreement with Probe Mines Limited (“Probe”) covering 87 claims (“Black Creek”) approximately eight kilometres northeast of the Eagle One Deposit. Under the terms of the joint venture the Company has been granted a 50% interest in the property and is responsible for its proportionate share of expenditures. Probe is the operator and the exploration program and budget are required to be approved by the Company.
The operator has completed phase two drilling on the Black Creek Chromite occurrence. A total of 1,706 metres in 11 holes was completed. Assays have returned chromite mineralization which has now been intersected over a distance of 225 m to a depth of 150 m to 175 m. The operator will be submitting a plan to complete an NI 43‐101 resource estimate on the mineralization in the fourth quarter of fiscal 2010.
GOLDEN VALLEY
Golden Valley is a joint venture located in the northern portion of the Ring of Fire and operated by White Pine Resources Ltd. (“White Pine”). The initial drill program to assess geophysical targets north of Oval Lake commenced during fiscal 2009. The large property surrounds a copper‐zinc discovery by Metalex Ventures Ltd.; a total of fourteen holes were completed at the joint venture in the fiscal 2009 year yielding two copper‐zinc anomalies. As per the terms of the option agreement, White Pine Resources and Noront are earning a 33.3% interest each in the property from Golden Valley Minerals Ltd.
The operator completed an Airborne EM survey (ZTEM) to detect deeper anomalies around the known mineralization and completed 1,600 metres of drilling in December 2009. The assay’s from the drilling in December are expected in the fourth quarter of fiscal 2010.
GARDEN ISLAND, QUEBEC
The Garden Island property is comprised of 568 mining claims totaling 23,763 hectares, most of which are in Pascalis, Manneville and Senneville townships, which lie along a northwest‐southwest trending Abitibi volcanic greenstone belt.
The Company has earned a 50% interest in the Garden Island gold, base‐metal property as a result of an amended option agreement (July 10, 2008) entered into with a private arms length Quebec company, TSR Resources Inc. (“TSR”).
The operator TSR will be submitting a further exploration program in the fourth quarter of fiscal 2010. WINDFALL LAKE PROJECT, URBAN TOWNSHIP, QUEBEC
Per the press release dated July 21, 2009, the Company has entered into a property option agreement with Eagle Hill Exploration Corporation pursuant to which Eagle Hill may earn up to a 100% interest subject to a 2% net smelter royalty in the Company’s 100% owned Windfall Lake Property, located in
16
Quebec, Canada. Eagle Hill satisfied the financing condition during the current quarter and as such made the first property of payment of $400 thousand towards earning a 10% interest in the property.
DISCONTINUED PROJECTS
The Company is the operator of an exploration program on a property located 20 kilometers northeast of the Eagle One deposit subject to an option agreement with an arm’s length private company. The private company has the right to earn a 50% interest in the property consisting of 10 claims, by spending a total of $2.3 million over a three year period from March 27, 2008 to March 27, 2011.
The initial proposed budget was completed; the Company has reviewed the results of the program and has concluded that no further work is warranted on the property.
FREEEWEST JOINT EXPLORATION AGREEMENT
On May 14, 2008, the Company entered into a joint exploration agreement with Freewest Resources Canada Inc (“Freewest”) to explore an airborne geophysical anomaly, situated at the boundary of claims owned by the two companies approximately 8 kilometres northeast of the Eagle One deposit in the McFauld’s Lake area.
Freewest is the operator of the initial exploration program. During the year exploration drilling commenced on the anomaly within the joint venture properties. Results obtained indicate that the anomaly was the result of barren iron formation and as such the joint venture partners discontinued any further work. The discontinuation of this joint venture does not affect the Company’s exploration and development plans for the region.
LIQUIDITY AND CAPITAL RESOURCES
As at January 31, 2010, the Company had working capital of $23.8 million and a cash position (cash, equivalents and restricted cash) of $19.9 million compared to $24.8 million and $19.7 million respectively as at April 30, 2009.
During the nine month period ended January 31, 2010 the Company raised $25.0 million of flow‐through financing which was completed in August of 2009 to support the Company’s exploration plan for the McFaulds Lake Region. The Company has approximately $13.5 million of this remaining for the fiscal 2010 / 2011 exploration plans.
During the current quarter the Company issued 1,443,789 shares and 722,150 share purchase warrants in exchange for 5,053,518 shares in Freewest pursuant to the Company’s offer for Freewest. Subsequent to quarter end the Company received proceeds of $4.9 million for the consideration received as a result of the Freewest offer. Also, subsequent to the current quarter end the Company received $6.7 million pursuant to a private placement. The proceeds from the issuance of shares as a result of the Freewest offer and the private placement will be used for general corporate, working capital purposes as well as development activities related to its projects in the McFaulds Lake region.
17
The Company continues to have a strong cash and working capital position. Surplus funds are invested in a blend of high interest savings accounts in order to provide liquidity while minimizing risk.
The Company has financed a significant portion of its exploration activities through the issue of flow‐ through shares, which transfer the tax deductibility of exploration expenditures to the investor. Proceeds received from the issue of such shares have been credited to capital stock and the related exploration costs have been charged to mining and resource properties. Proceeds raised are being used for continued exploration of Noront’s properties. Resource expenditure deductions for income tax purposes related to exploration and development activities funded by flow‐through share arrangements are renounced to investors in accordance with income tax legislation. When these expenditures are renounced, temporary taxable differences created by the renunciation will reduce share capital.
Noront has no credit facilities with financial institutions. The Company’s financial instruments consist of cash, marketable securities, accounts receivable, and accounts payable and accrued liabilities. Unless otherwise noted, the Company does not expect to be exposed to significant interest, currency or credit risks arising from these financial instruments. The Company estimates that the fair value of cash and cash equivalents, accounts receivable, accounts payable and taxes payable approximate the carrying values.
The Company has raised sufficient capital to further explore and develop its properties and projects. Management anticipates raising additional equity financing to fund exploration and development activities in calendar 2010. However, the timing and ability to do so will depend on the liquidity of the financial markets as well as the acceptance of investors to finance resource based junior companies, in addition to the results of the Company’s exploration programs and the acquisition of additional projects.
CONTRACTUAL OBLIGATIONS
At July 31, 2009, the Company has fulfilled its spending commitment on Canadian exploration activity related to the $18.9 million flow‐through share financing, which occurred on December 4, 2008.
On August 26, 2009, the company raised an additional $25 million of flow‐through funds which the Company has a commitment to spend on eligible Canadian exploration activity by December 31, 2010. As at January 31, 2010, the Company has approximately $13.5 million of this commitment remaining.
Under the terms of occupancy leases for office space and equipment, the Company is obligated to minimum annual rent payments of $91,096 for the remainder of fiscal 2010, $351,905 in fiscal 2011, $214,657 in fiscal 2012 and 156,338 in fiscal 2013.
The Company is also committed to minimum annual payments for the rental of exploration facilities and services in fiscal 2010 of $106,800.
18
RELATED PARTY AND OTHER TRANSACTIONS
During the three and nine months ended January 31, 2010, $27,200 and $303,884 respectively (three and six months ended January 31, 2009 ‐ $50,001 and $146,335) was payable for management services to a company controlled by an officer and former director of the Company. Included in accounts payable as at January 31, 2010 is $NIL (April 30, 2009 ‐ $19,662) owed with respect to these services and ancillary expense reimbursements.
During the three and six months ended January 31, 2010, $NIL and $44,000 respectively (three and six months ended January 31, 2009 ‐ $76,000 and $76,000) was payable for management services to a company controlled by a director and former senior officer of the Company. Included in accounts payable as at January 31, 2010 is $NIL (April 30, 2009 ‐ $NIL) owed with respect to these services and ancillary expense reimbursements.
During the three and nine months ended January 31, 2010, $NIL and $14,000 respectively (three and nine months ended January 31, 2009 ‐ $78,000 and $78,000) was paid or payable for management services to a company controlled by a director and former officer of the Company. Included in accounts payable as at January 31, 2010 is $NIL (April 30, 2009 ‐ $33,191) owed with respect to these services and ancillary expense reimbursements.
During the three and nine months ended January 31, 2010, $16,500 (three and nine months ended January 31, 2009 ‐ $NIL and $NIL) was paid to a company controlled by an officer of the Company for office equipment, services and other assets. Included in accounts payable as at January 31, 2010 is $NIL (April 30, 2009 ‐ $NIL) owed with respect to these services.
The above noted transactions are in the normal course of business and are measured at the exchange amount, as agreed upon by the parties.
Future Accounting Changes
Business Combinations, Consolidated Financial Statements and Non‐Controlling Interests
The CICA issued three new accounting standards in January 2009: Section 1582, Business Combinations, Section 1601, Consolidated Financial Statements and Section 1602, Non‐Controlling interests. These new standards will be effective for fiscal years beginning on or after January 1, 2011. The Company is in the process of evaluating the requirements of the new standards.
Sections 1582 replaces section 1581 and establishes standards for the accounting for a business combination. It provides the Canadian equivalent to International Financial Reporting Standards IFRS 3 – Business Combinations. The section applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2011. Sections 1601 and 1602 together replace section 1600, Consolidated Financial Statements. Section 1601 establishes standards for the preparation of consolidated financial statements. Section 1601 applies to interim and annual consolidated financial statements relating to fiscal years
19
beginning on or after January 1, 2011. Section 1602 establishes standards for accounting for a combination. It is equivalent to the corresponding provisions of International Financial Reporting Standards IAS 27 – Consolidated and Separate Financial Statements and applies to interim and annual consolidated financial statements relating to fiscal years beginning on or after January 1, 2011.
International Financial Reporting Standards (“IFRS”)
The Canadian Accounting Standards Board (AcSB) has confirmed that IFRS will replace current Canadian GAAP for publicly accountable enterprises, including Noront, effective for fiscal years beginning on or after January 1, 2011. Accordingly, the Company will report interim and annual financial statements in accordance with IFRS beginning with the quarter ended July 31, 2011.
The Company is in the process of developing its IFRS implementation plan to prepare for this transition. To date, the Company has completed the initial assessment of the key areas where changes to current accounting policies may be required. During the remainder of fiscal 2010, the Company will be performing detailed analysis to further assess the areas that will require a change to accounting policies, and those which have accounting policy alternatives available under IFRS.
Analysis will be required for all current accounting policies, however the initial key areas for detailed analysis include:
 Deferred exploration expenditures,  Property, plant and equipment,  Impairment of assets,  Provisions, including remediation provisions,  Stock options (share‐based payments), and  First‐time adoption of International Financial Reporting Standards (IFRS 1)
As the detailed analyses of the each of the key areas progresses, other elements of the Company’s IFRS implementation plan will be addressed including the implication of changes to accounting policies, processes or financial statement note disclosures on information technology, internal controls, contractual arrangements and employee training.
20
The table below summarizes the expected timing of activities related to the Company’s transition to IFRS.
ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT SIGNIFICANT REVENUE
Additional disclosure concerning the Company’s general and administrative expenses and resource property costs has been provided in the analysis of the Quarterly Financial Information and the Overview of Activity above.
OUTSTANDING SHARE INFORMATION
ADDITIONAL INFORMATION
Additional information including the Company’s Annual information Form is available on the Internet on the SEDAR website www.sedar.com , and is available on the Company’s website located at www.norontresources.com.
Initial analysis of key areas for which changes to accounting policies may be required.
Complete
Detailed analysis of all relevant IFRS requirements and identification of areas requiring accounting policy changes or those with accounting policy alternatives.
Throughout fiscal 2010 – Q1 fiscal 2011
Assessment of first‐time adoption (IFRS 1) requirements and alternatives.
Throughout fiscal 2010 – Q1 fiscal 2011
Final determination of changes to accounting policies and choices to be made with respect to first‐time adoption alternatives.
Q4 fiscal 2010 – Q2 fiscal 2011
Resolution of the accounting policy change implications on information technology, internal controls and contractual arrangements.
Q4 fiscal 2010 – Q2 fiscal 2011
Management and employee education and training.
Throughout the transition process
Quantification of the Financial Statement impact of changes in accounting policies.
Throughout fiscal 2011
As at March 8, 2010
Authorized Issued and outstanding shares Options and warrants outstanding
Unlimited 167,852,109
11,317,151 Fully diluted 179,169,260
21