Northland Resources, Inc. ("Northland") is an exploration and development company trading as NAU on the Toronto Stock Exchange, and NAUR on the Oslo Børs in Norway. The Company has a balanced portfolio of advanced and early stage iron projects in Sweden and Finland. Northland has no mining operations and no production, although its projects are at a fairly advanced stage and approaching feasibility study.
If you are planning to invest in Northland, you should be clear that you are comfortable with the investment risks associated with exploration companies. While buying shares in junior exploration companies such as NAU is one of the riskiest types of investment it can potentially be one of the most rewarding. If you have any doubts about the suitability of NAU shares in your portfolio, you should contact your investment advisor for further information.
Q
What is Northland's corporate objective?
A
Northland aims to become a producing European iron ore mining company in the next 2-5 years. If we're successful in executing our business plan, we will become Europe's second largest iron ore producer after the Swedish state company, LKAB. We anticipate production initially of about 3Mtpa from the Tapuli project, rising over time to 13Mtpa from Tapuli, Stora Sahavaara in Sweden and Hannukainen in Finland.
Q
What is the company's strategy?
A
Northland plans to achieve its objectives by developing the Hannukainen iron-copper-gold project in Finland, the Tapuli iron project and the Stora Sahavaara iron-copper project in Sweden, and exploring additional early stage iron or iron-copper-gold targets in Finland and Sweden such as Pellivuoma and Kuevitikko. Our management will also assess new opportunities within the region as they arise.
Q
How long has Northland been involved in Sweden and Finland?
A
We first entered Sweden in late 2003 under an option agreement covering the Barsele project. In December 2004 we acquired a package of prospective mineral concessions via an agreement with Anglo American. We also staked additional mineral concessions under the Northland name in both in Finland and Sweden. In 2007 we bought out Anglo's royalty interest in the Stora Sahavaara project, which is now owned 100% by Northland.
Q
Why are you exploring in Sweden and Finland?
A
Sweden and Finland both have excellent infrastructure with well developed road, rail and power networks. Both countries also have very skilled workforces and, importantly, a long history of mining. The governments of both countries are actively supporting the exploration and mining industry and have made huge amounts of high quality exploration data available to the industry at essentially no cost.
From an infrastructure stand point, the location of our projects could hardly be better. They represent strategic supplies of key metals within the European market. Our iron and iron-copper-gold resources are within 10-20km of a maintained railway in Finland leading to the port of Kemi in Finland.
From a geological stand point, the region hosts a number of giant mineral deposits, including the Kiruna iron deposit in Sweden, one of the world's great ore bodies. So we're exploring in the right geological address.
Q
What projects are you currently focused on?
A
We are fast-tracking development of the Tapuli project in Sweden, which is about 4km from the Stora Sahavaara project. We believe Tapuli has the best chance of reaching early development and cash flow, to allow us to capitalise on the current strength in the ireon ore markets.
Q
What minerals are you looking for?
A
Northland is exploring mainly for iron, copper and gold associated with a kind of mineral deposit known as an iron-oxide-copper-gold system (usually referred to by the abbreviation IOCG.) IOCG systems are an economically significant deposit style that has become an important target type in the portfolio of many companies. Deposits with IOCG affinities occur in a variety of geological settings around the world. Examples of world-class IOCG deposits include the Olympic Dam mine in Australia which hosts a resource of 2.7-billion tonnes grading 1.2% Cu, 0.5 g/t Au, and 0.4kg /t U3O8. Other examples include the huge Kiruna magnetite body in Sweden which has been mined for iron ore for close to 100 years. It originally hosted over 2-billion tonnes of magnetite ore but much of this is now mined out. For more information, please visit our IOCG page.
Q
Does management have the expertise to take these projects to production?
A
Buck Morrow, President of Northland, discovered and brought into production some of Nevada's most significant gold deposits including Barrick's Goldstrike mine. The team surrounding Buck is made up of experienced exploration and mining professionals. We believe that the combination of experience and talent within the team is second to none in the junior sector. The team members' biographies are available for review on our Management page.
If and when management feel that more experience is needed to advance a specific project, it will look to add to Northland's team by hiring skilled individuals or bringing specialist consultants on board.
Q
When does Northland plan to complete economic studies on their iron-copper-gold projects?
A
We have already published preliminary economic assessments of the key projects. These can be found on the project pages for Tapuli, Stora Sahavaara and Hannukainen. In the second half of 2008 we anticipate releasing revised reosurce calculations for key projects, and new NI43-101 compliant resource calculations for the Pellivuoma and Kuervitikko projects.
Q
How will Northland overcome the ice conditions during the winter?
A
Our exploration projects operate all year round. In fact, much of our exploration --particularly drilling operations- can only be carried out in many areas when there is sufficient ice on the lakes and bogs to support the weight of a drill rig.
There are a number of mines in Finland and Sweden that operate 12 months a year, including Kiruna and Malmberget in Sweden and Pahtavaara, and Kemi in Finland. In addition, Sweden and Finland cooperate in maintaining year round shipping lanes in the Gulf of Bothnia.
Q
How restrictive are the environmental regulations in Sweden and Finland?
A
The environmental regulations are comparable to any sophisticated industrialized country. The advantage in Finland and Sweden is that the regulations and permitting processes are mature, clearly defined and managed through a professional, efficient and timely permitting procedure. Northland has a team of environmental scientists and engineers dedicated to ensuring that our permit applications are submitted on time, and backed up with all of the necessary data to ensure that the project impacts are described as fully as possible.
Q
Are there producing mines in the region?
A
Yes, Finland has 4 major active metallic mines and 9 major active non-metallic mines. The Swedish government owns two iron mines in the region (Kiruna and Malmberget) where we are working which produce some 25 million tonnes annually of concentrates and pellets. There are 10 active non-ferrous mines in Sweden.
As well, there are 2 past producing mines on our mineral concessions in Finland; the Rautuvaara mine and the Hannukainen mine.
Q
What was produced from the Finnish deposits/mines that Northland controls?
A
Our research into the production histories of Hannukainen and Rautuvaara indicates that Hannukainen produced roughly 4.6 million tonnes of ore at a grade of 1g/t gold, 0.9% copper and 43% iron, and the Rautuvaara mine 11.6 million tonnes of ore at a grade of 46% iron and 0.36% copper. Both projects have historic resources remaining on the projects although Northland has done sufficient work to confirm the resources.
Q
What type of product does Northland want to produce?
A
An upgraded iron concentrate will be produced either in lump, sinter fines or pellet form. The price varies between products as does the cost of production. The product mix will be gauged to deliver the highest investor return.
Q
What are iron ore lump, sinter fines and pellets?
A
Briefly, there are 3 main types of iron ore.
Lump Ore
This is raw broken rock. It is ore of sufficient purity that it can be shipped to the smelters directly with only minimal processing. Usually it is crushed to specific size, generally to between 10-25mm, before shipping, and may be washed but no other processing takes place.
Sinter Fines
Sinter fines are material that is too fine-grained to feed directly to a blast furnace and must therefore be sintered. Sintering is a process by which granular fine ore is agglomerated into larger lumps by heating. At the sinter plant, fine ore is mixed with coke breeze which is ignited and combusts under the addition of air. The mixture must be relatively porous and not too densely packed or fine-grained. Normally, a size distribution of the sinter fines with maximum 20% under 0.1mm is required. Sintering is done almost exclusively on the premises of the consumer, since the material disintegrates easily during transport.(taken from the LKAB website)
Pellets
Pellets, like conventional sinter, are an agglomerate. They are rounded, marble or ball-bearing sized lumps of iron ore. In the pelletizing process fine-grained ore, so-called pellet feed, unsuitable for common sintering, is used. After mixing with additives to make the ore stick together and to enhance its metallurgical characteristics, the pellets are roasted to form hard spherical balls of ore. The feed used to make pellets can be either an extremely fine-grained material produced through grinding and concentration or natural "ultrafines" (from e.g., Brazil). Pellets are normally produced by the mining company. (Adapted from the LKAB website)
Q
How will Northland deliver the iron pellets or sinter feed to its customers?
A
We are currently examining the potential infrastructure required to handle 5-10 million tonnes of product per year. Our projects are only a few kilometers to a rail head on the Finnish side of the border that links to the port of Kemi on the Gulf of Bothnia, which is kept ice free by ice breakers. The rail extension into the field area was originally built to service the historic Rautuvaara iron mine (one of Northland's current projects), and a cement plant. Once at the coast, it will be loaded onto ships and shipped to the customer.
Q
Is it cheaper to deliver Swedish iron ore to Europe vs. ore from Brazil or Australia?
A
There is a substantial difference in the shipping cost per tonne between European iron ore shipments and southern hemisphere shipments to, say, Germany. It is generally cheaper to bring iron ore from Sweden because of the shorter shipping route. The difference in transport cost per tonnes varies depending in part on the availability of shipping and the cost of fuel oil. In recent years, it has ranged from $5-6/tonne to as much as $25-30/tonne of ore. So, for an importer bringing in 5-million tonnes per year of pellets, there are substantial potential savings in annual shipping costs if the ore can be sourced from Sweden or Finland.
Q
Are you able to separate the copper and gold from the iron in the deposits?
A
The iron is first separated from the host rock which also contains the copper and gold by-products. This initial separation is typically accomplished through a process referred to as Magnetic Separation --essentially the rock is crushed and the magnetic iron ore is extracted using a large industrial magnet. Once the iron has been stripped from the feed material, the copper and gold are recovered from the remaining material through a standard flotation process.
Q
Do you plan to raise any money in the near future?
A
Not in the near term. Financing activities in 2006 & 2007 raised over C$150 million. This funding should be sufficient to complete feasibility studies on our key projects and to being the process of ordering long-lead time capital items.
Q
I live in the US. How can I buy Northland shares?
A
If your broker can not buy Northland shares via the Toronto Stock Exchange, we also trade on the Oslo Børs under the symbol NAUR and on the Frankfurt Exchange in Germany under the symbol NBS. If you are still unable to purchase shares, and would like to find a US-based broker familiar with the Canadian markets, please call us on +1 604 408 7965 or 1-888-627-9378 for further information.
Q
Who is your qualified person, as required by the Canadian NI43-101?
A
You can find a profile of our QP by clicking this link
Q
Who should I contact if I have more questions?
A
If you are unable to find the information you require on the web site, please call us on our Toll Free number (1-888-627-9378) and we will do our best to answer any questions you may have (If you're calling from outside North America, please dial +1 604 408 7965.). Alternatively, you can e-mail us your questions to us at
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