Duluth Metals – Low Cost Production Potential

Overview

Based on Indicated and Inferred Resources for the Nokomis Deposit, the Nokomis Deposit ranks as one of the largest Polymetallic Resources to be discovered in North America in decades containing a higher than average grade for deposits within the Duluth Complex. The Nokomis Deposit is located in Northeastern Minnesota, southeast of the town of Ely, 300 kilometers from Thunder Bay, Ontario and 70 kilometers to Lake Superior. The property is in close proximity to major infrastructure such as ports, railways, power and roads and the established mining district known as the Iron Range.

Duluth Metals Nokomis Deposit – Potential to be One of the World’s Low Cost Producers

An updated Interim Resource Estimate for the Nokomis Deposit was received on June 4, 2008 from Scott Wilson Roscoe Postle Associates Inc. which is based on drilling completed to April 2008. The Updated Nokomis Resource Estimate defines 449 million tonnes Indicated Resources grading 0.624% copper, 0.199% nickel, 0.600 grams per tonne TPM (copper equivalent grade of 1.46%), plus an additional 284 million tonnes of Inferred Resources grading 0.627% copper, 0.194% nickel, 0.718 grams per tonne TPM (copper equivalent grade of 1.50%). (Note – Copper Equivalent is based on US metal prices of: Copper – $1.75/lb, Nickel – $7.00/lb, Cobalt – $10.00/lb, Gold – $600/oz, Platinum – $1,100/oz, Palladium – $350/oz and Silver – $8.50/oz, and the methodology with metallurgical recoveries, refining costs and other charges being considered for all metals in accordance with the Net Smelter Return Factors contained in the January 22, 2008, NI 43-101 Scoping Study produced by Scott Wilson RPA.)

CONTAINED METALS IN EXPANDED NOKOMIS RESOURCE*:

*Based on resource estimated at 1.0% copper equivalent cut-off
On January 12, 2009, Duluth Metals announced the receipt of a new independent NI 43-101 Preliminary Assessment (Scoping Study) on its Nokomis Project from independent consultants Scott Wilson Roscoe Postle Associates. This report provides a second Preliminary Assessment of the Nokomis Project, based on the June 2008 Mineral Resource Estimate, and is based on an expanded 40,000 metric tonne per day (“tpd”) production rate scenario, doubling the January 2008 PA production rate case. The report confirms positive economics for the Nokomis Deposit even at today’s lower metal prices with the potential to be one of the world’s low cost copper-nickel producers.

The new Scoping Study used three metal price scenarios (all monetary units are in $US) to examine the economics of developing and mining the Nokomis Deposit:

• Low-Price Case – reflecting recent low metal prices of 1.55/lb Cu; $4.90/lb Ni; $10.00/lb Co; $795/oz Pt; $295/oz Pd; $600/oz Au.
• Base Case – same base case prices used in the previous Technical Report (January 2008 PEA), based on long-term average price forecasts of the past several years. ($1.75/lb Cu; $7.00/lb Ni; $10.00/lb Co; $1,100/oz Pt; $350/oz Pd; $600/oz Au)
• Market-Price Case – prices as of January 13, 2008*, for direct comparison to the previously-reported 20,000 tpd scenario contained in the January 2008 PA.

Potential annual metal production under the 40,000 tpd expanded production scenario for all three price cases is as follows:

• 181.7 million pounds of copper per annum;
• 42.3 million pounds of nickel per annum; and
• 251,000 ounces of platinum-palladium-gold per annum.

This new Preliminary Assessment for the Nokomis Project encompasses the following general process flow: Ore production rate of 40,000 tonnes per day, or 14 million tonnes per year; Underground mining by blasthole open stoping with partially recoverable pillars; Underground access by shaft and ramp; Underground ore handling by conveyor systems; Underground primary crushing, further crushing and grinding on surface; Transfer from mine to concentrator via 10 km slurry line; Agitated holding tanks at mill with a minimum capacity of 11,000 m3; Flotation concentration, producing a bulk copper-nickel-cobalt-PGM-gold concentrate; Hydrometallurgical processing using PLATSOL™ process; Production of saleable copper and nickel metal via standard electrowinning, and production of cobalt and PGM-gold products to be shipped to refineries for final processing to metal; and a brownfields tailings disposal facility within three kilometers of the processing site.

Management

• Christopher C. Dundas, B.Comm., MBA – Chairman and Director.
• Henry (Rick) J. Sandri, Ph.D. – President and CEO, Director.
• Dean Peterson, Ph.D. Geology – Senior Vice President, Exploration.

Search for Duluth Metals News