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Northland Resources Operational Update – March 2013

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Luxembourg, March 22, 2013 – Northland Resources S.A. (OSL: NAUR, Frankfurt: NPK, STO: NAURo – “Northland” or the “Company”) announces its seventh bi-monthly operational and construction update on the Kaunisvaara project. During this period, January 24, 2013 - March 22, 2013, Northland has amongst other things shipped its first iron ore concentrate to end customer Tata Steel.

  • First shipments of concentrate left the Port of Narvik on February 25, 2013
  • The first Kaunisvaara process line in hot commissioning/production
  • Logistics chain proven solid and is operating as planned
  • The permanent storage building in Narvik has been completed and is operational. The building can store up to 210,000 tonnes of iron ore concentrate and is a vital part in the efficient loading of the Company’s product
  • The Company plans to produce 1.5 dmt[1] in 2013 and to reach the production capacity of 4.0 dmtpa[2] at the beginning of third quarter of 2014
  • Due to the current financial situation and the ongoing reorganization of Northland’s three Swedish subsidiaries, the Company has as a first step, re-phased its capital investment program to a level to better meet its current cash flow. The Company has agreed with its bondholders for additional short-term funding to maintain the present operations. The assessment is that this re-phasing will not have any material impact on the Company’s long-term production plan. For more details, please refer to Unaudited Year-End and Q4 2012 Report published on February 26, 2013 and subsequent press releases

THE MINE AND PROCESSPLANT

  • The first Kaunisvaara process line in hot commissioning/production
  • The second Kaunisvaara process line has progressed 65% of the assigned time plan

PRODUCTION

  • Commissioning is close to completion
  • Northland is currently producing approximately 2,500 tonnes of iron ore concentrate per day
  • The quality of the product is well in line with planned specifications
  • Northland has on March 22, 2013 in total produced more than 123,000 tonnes of iron ore concentrate

THE LOGISTICS CHAIN

  • The logistics chain is operating as planned. Approximately 81,000 tonnes of iron ore concentrate have been transported to Narvik
  • The rented box cars will be used until the arrival of the specially designed railcars from Kiruna Wagon
  • To date 26 railcars have been manufactured according to Northland specification.
  • 55,000 tonnes of iron ore concentrate has been shipped out of the Port of Narvik
    • About 55,000 tonnes of concentrate was loaded onboard the first vessel and shipped to Northland’s off-take partner Tata Steel on February 25, 2013. The vessel arrived at IJmuiden, the Netherlands, on March 2, 2013
    • The second ship is expected to load 55,000 tonnes of iron ore concentrate and to arrive in Narvik at the end of March, 2013

Pitkäjärvi trans-loading terminal

  • The Pitkäjärvi trans-loading terminal is now fully operational

The Port

  • The temporary loading facilities, that are used awaiting the completion of the new ore terminal at Narvik, is operational. The terminal is operated by Grieg Logistics AS
  • Construction of the permanent Fagernes Terminal remains on schedule and is expected to be completed in August, 2013
    • Construction of the storage building is completed
    • One out of two boom stackers has been delivered
    • Quay construction expected to be complete end of March, 2013
    • The next important milestone is the unloading facilities, expected to be operational in July 2013
    • Ship-loader is expected to be erected in June, 2013 and operational by August, 2013

Health & Safety

Lost Time Injury Frequency Rate (“LTIFR”) according to the Swedish standard[3] from the end of February 2012 until end of February 2013 was 3.10 (3.18 for the previous period that ended December 31).

The corresponding number according the international standard[4] for the same period was 0.50 per 200,000 worked hours (0.52 for the previous period that ended December 31).

There was one LTIFR incident reported for both the International and Swedish standards during this period, January 1-February 28 (November 1-December 31: one).

A total of 52 near hits were reported for the same period (previous two-month period: 40).

Pellivuoma

Pellivuoma is located approximately 15 km west of Sahavaara. The Company controls 100% of the exploration permit, which totals 11,346 hectares. The deposit constitutes potentially significant additional tonnage in the Kaunisvaara area.

The DFS report for the Pellivuoma deposit is expected to be published shortly after a long term financial solution has been secured.

Organization

The recruiting process of operators to new mining machines is ongoing, as well for the planning department (surveyors, planner, mine engineer and sampler for drill cuttings)

Next Operational Update

The eight issue of Operational Update is expected to be published on May 30, 2013.

Financial Statements and MD&A for the first quarter 2013

The Company will publish its Financial Statements and Management’s Discussion and Analysis for the period ending March 31, 2013, on May 8, 2013.

[1] Dry million tonnes

[2] Dry million tonnes per annum

[3] Lost Time Injury Swedish standard as adopted by SveMin members: Absence of one shift or more from regular duty following the accident. Reference period: 1 million worked hours.

[4] International Lost Time Injury definition: Absence of three shifts or more from regular duty following the accident. Reference period: 200,000 worked hours.

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