Dundee: Massive 64% Increase in Total Mineral Inventory at Eagle’s Nest Over 1 billion lbs Contained Nickel Equivalent

We maintain our Buy recommendation, speculative risk, and raise our 12-month target price to C$1.60 from C$1.40.

In our note dated September 10, 2010, we observed that the Eagle’s Nest capital cost presented in the preliminary economic assessment (between C$870 million and C$975 million) for a conventional 2,700 tpd underground mine and flotation mill was a challenge for robust economics at reasonable long term prices. Our investment thesis would call for a higher through-put to effectively lower the capital intensity of this project.

This resource increase is a solid step in setting the ground work for a larger-scale mine. The discovery of the new East Zone further underlines the potential inherent in Noront’s massive land position, the target-rich environment, and the technical skill of the management team in discovering yet another deposit in the area.

Massive increase in Total Mineral Inventory: Noront has announced a 64% increase in total mineral inventory (496,143 tonnes Ni, from 302,637 tonnes March 2010), with a contained nickel equivalent now exceeding 1 billion pounds (Refer to Table 1).

Main Zone - Increase

Measured and Indicated resources increased 58% to 11 million tonnes grading 1.78% Ni, 0.98% Cu, 0.99 gpt Pt, 3.41 gpt Pd, and 0.20 gpt Au;

Inferred resources increased 110% to 9 million tonnes grading 1.10% Ni, 1.14% Cu, 1.16 gpt Pt, 3.49 gpt Pd, and 0.30 gpt Au

East Zone – New Discovery

Inferred resource of 1.6 million tonnes grading 0.31% Ni, 0.09% Cu, 0.12 gpt Pt, 0.45 gpt Pd, and 0.04 gpt Au.