Dundee – Confidence in Eagle’s Nest Rises on Pre-Feasibility Study Delivery

We maintain our Buy recommendation, Speculative risk, with a 12-month target price of C$1.70.

Event: Noront Resources has announced an initial estimate of proven and probable mineral reserves as well as results of a recently completed Pre-Feasibility Study ("PFS") for a stand-alone nickel, copper, platinum group element mining and milling operation.

Impact on Valuation:

Higher Confidence Reserve: The new study increases the confidence in the mineral inventory, graduating resources from the Measured and Indicated categories to the Proven and Probable reserve categories (Table 1). Standard allowances were made for dilution and ore loss, which led to minor changes to grades from those estimated on March 4, 2011, the previous resource estimate. The "reserve designation" is significant in the eyes of potential senior partners such as Baosteel Resources.

Project Definition Has Not Changed: The Pre-Feasibility Study is in-line with the results of the Preliminary Economic Assessment, announced on September 9, 2010. As a result, there is no material impact on our valuation;

No Effect on Permitting: The wholly owned Eagle's Nest project is similar in scope and definition as previously envisioned and does not diverge from filings with the Canadian Environmental Assessment Agency and the Province of Ontario's Ministry of Northern Development, Mines, and Forestry (refer to Dundee note dated March 23, 2011).

The Way Forward is Fully Funded:

Blackbird Chromite Deposit Drilling: Company plans to complete a drill program targeting resource growth at the Blackbird chromite discovery (80% of the planned 12,000 meter program is completed), which is an area of interest of Baosteel Resources (refer to Dundee note dated May 2, 2011). This drilling will also target the Eagle 2 deposit, a nickel-copper-PGE target, which could compliment the Eagle's Nest deposit. Assay results are pending;

Cash on Hand C$25 million: The planned winter exploration program, permitting and feasibility work is fully funded. As at June 15, 2011, Noront discloses a working capital balance of C$25 million and budgets C$17.6 million for 2011 exploration (fiscal year-end April 30). Baosteel can exercise warrants that bring in an additional C$11.7 million (at C$1.16/share over 24 months);

The environmental and community consultation process are ongoing and are not cash intensive.