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Northland Exercises its Option Over The Pajala Properties, Sweden

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Vancouver, January 4, 2007:  Mr. Buck Morrow, President of Northland Resources Inc. (TSX-V: NAU, Oslo Børs: NAUR, "Northland") is very pleased to announce that Northland is exercising its option to acquire 100% of the Pajala properties in northern Sweden from Anglo American Exploration B.V. ("Anglo").  The Pajala properties host the Stora Sahavaara magnetite project, which Northland has been exploring for the last 2 years, as well as a number of iron-oxide-copper-gold targets.
 
On January 2, 2007, Northland formally notified Anglo in writing that it has fulfilled all of its obligations under the Amended and Restated Option, Royalty and Back in Agreement dated April 5, 2005 (see Northland News Release dated December 8, 2004).  Specifically, Northland has:
 
  • Delivered a total of  325,980 common shares in Northland to Anglo in two tranches;

  • Incurred over US$1.4-million in exploration expenses against a requirement to spend US$1-million within 2 years of signing of the Agreement.
 
Background
 
The Pajala properties host the Stora Sahavaara magnetite body, which was originally discovered in the 1960s.  Northland has been exploring Stora Sahavaara for the last 2 years and is currently completing the permitting to extract a 1,000 tonne bulk sample from the body.  In May 2006, Northland completed and published a NI43-101 compliant resource calculation for Stora Sahavaara (See Northland Press Release dated May 18, 2006).  Using a 25% Fe cut off, the study delineated:
 


               Category                
            Tonnes              
    Fe %             
          Cu %           
 Measured
77,063,210
43.32
0.080
Indicated
44,634,770
43.28
0.076
Inferred
23,346,373
41.76
0.051
 
Additional drilling is planned for 2007 to expand the resource down dip, to upgrade the confidence categories of the recent resource, and to investigate variability within the body for mine planning purposes.
 
 
Qualified Person
 
Resource estimates were prepared by third party consultant (Bart Stryhas, PhD Structural Geology); the resource model and estimates were subsequently reviewed by Chlumsky Armbrust & Meyer L.L.C. ("CAM") an independent, mineral resource, consulting and engineering group based in Lakewood, Colorado USA. 
 
Vance V. Thornsberry, P.Geol., Vice-President of Exploration for Northland Resources, is the Qualified Person as defined in NI43-101, and has verified that the information presented in this release has been accurately summarized from the reports quoted herein.
 
Background
 
Northland Resources Inc. is a well-structured, debt free junior exploration company with a portfolio of high quality iron, gold, and base metal exploration projects in Sweden and Finland.
 
 
ON BEHALF OF THE BOARD
 
"Buck Morrow"
NORTHLAND RESOURCES INC.
 
 
The TSX Venture Exchange has not reviewed and does not take responsibility for the accuracy of this release.
 
CONTACT INFORMATION
Northland Resources Inc.
Buck Morrow, President
Ralph Rushton, Investor Relations
Toll Free: 1-866-719-8962