Northland's Iron Projects Return Robust Preliminary Economic Valuations

Bill Wagener, the COO of Northland Resources Inc.
(TSX:NAU)(FRANKFURT:NBS)(OSLO:NAUR), is pleased to announce the results of a NI
43-101 compliant Preliminary Economic Assessment ("PEA") for its three main
magnetite projects: Tapuli and Stora Sahavaara in northern Sweden, and
Hannukainen in northern Finland. The three projects in total deliver a Net
Present Value ("NPV") of EUR 1.119 Billion at a 10% discount rate, Earnings
Before Interest and Tax ("EBIT") of EUR 5.466 Billion and an Internal Rate of
Return ("IRR") of 27%.


The key economic findings of the individual studies for each project, which were
performed by Wardell Armstrong International ("WAI"), are:




Tapuli           NPV at a 10% discount rate (NPV10) of EUR 141.5 million,
                 EBIT of EUR 456 million and an IRR of 43% with a payback
                 period of 4 years. Estimated Capital Expenditures
                 ("CAPEX") of EUR 146.6 million for mine development and
                 construction of the processing facility includes EUR 17.6
                 million in contingency and EUR 13.2 million in
                 Engineering, Procurement, Construction Management ("EPCM")
                 costs.

Stora Sahavaara  NPV10 of EUR 632.8 million, EBIT of EUR 3,090 million and
                 an IRR of 29% with a payback period of 6 years. Estimated
                 CAPEX of EUR 258.2 million for mine and processing
                 facilities and EUR 279 million to build a 5 million tonne
                 per annum ("Mtpa") pelletizing facility includes EUR 25.2
                 million in contingency and EUR 21.6 million in EPCM.

Hannukainen      NPV10 of EUR 344.7 million, EBIT of EUR 1,920 million and
                 an IRR of 23% with a payback period of 5 years. Estimated
                 CAPEX of EUR 276.3 million for mine processing facilities
                 and EUR 279 million for construction of a 5Mtpa
                 pelletizing facility includes EUR 35.1 million in
                 contingency and EUR 33.6 million in EPCM.



WAI conclude that all three projects are robust and strongly positive in terms
of NPV and IRR. The Preliminary Economic Assessment is preliminary in nature. It
includes inferred mineral resources that are considered too speculative
geologically to have economic considerations applied to them that would enable
them to be categorized as mineral reserves. There is no certainty the
preliminary assessment will be realized.


Buck Morrow, the President/CEO of Northland, commented: "We're very pleased to
be able to deliver such a comprehensive and robust study of our 3 development
projects to our shareholders. The results are a major step towards demonstrating
that Northland owns three economically viable iron ore projects which positions
the Company to become a major European iron ore miner. Northland will focus its
efforts in three areas; 1) putting Tapuli, the lowest capital cost and highest
IRR project, into production first while progressing Stora Sahavaara and
Hannukainen to development, 2) there is considerable room to optimize the
studies and we will be pushing hard to evaluate the alternatives identified by
the PEA and optimize the project designs, and 3) our on-going drill programs
within the Pajala Shear Zone and more particularly the drilling at Pellivuoma
and Kuervittiko, with the aim of adding substantial resource tonnes which will
be brought into the financial models down the road. This study has taken a huge
amount of effort from all of our staff and consultants and I would like to thank
them for delivering the financial and engineering models on time."


Copies of the executive summaries provided by WAI, which include the mining
schedules with detailed operating and capital cost estimates, have been posted
on Northland's website at www.northlandresourcesinc.com/s/pea.asp and the full
NI431-101 engineering report will be posted shortly on www.sedar.com. A
conference call hosted by Buck Morrow, President of Northland, will be held at
9:00 am (Pacific Time), 6:00 pm (Oslo Time), tomorrow, Thursday, June 19 to
discuss the findings of the study and future development plans. To participate
in the conference call, North American callers can call either 1-800-732-6179 or
[phone]. Call-in details for European callers will be published shortly
and will also be available on Northland's website.


Summary of PEA Results

The basic model and financial evaluation for each project is tabulated below.



--------------------------------------------------------------------------
                                                        Stora
Item                               Units    Tapuli  Sahavaara  Hannukainen
--------------------------------------------------------------------------
Total Iron Ore Mined               Mt        65.88     101.85       117.55
Average Grade                      % Fe      28.34      43.32        31.69
Iron Recovered                     Mt        15.55       36.4        26.08
Copper Recovered                   Kt            -          -       179.94
Gold Recovered                     Koz           -          -       124.25
Fe Concentrate Produced            Mt        22.51      52.68        36.94
Pellets Produced                                 -      54.74        38.52
Gross Revenue Generated            EUR M   1,381.0    6,227.0      4,622.0
Cash Operating Costs               EUR M     748.0    2,500.0      2,070.0
Mine and Processing Capital Costs  EUR M     146.6      258.2        276.3
Pelletizing Capital Cost           EUR M                279.0        279.0
--------------------------------------------------------------------------
EBIT                               EUR M     456.0    3,090.0      1,920.0
NPV                                EUR M     141.5      632.8        344.7
IRR                                %          43.0       29.0         23.0
Pay-back Period (Discounted)(i)    Years         4          6            5
--------------------------------------------------------------------------
(i) Note: The undiscounted Pay-back Period from first production is
          shorter. Inflation was not applied to the cash flow model on
          operating costs, capital costs or product pricing. Corporate
          income tax applied at a rate of 28% on net income.



Near Term Development Strategy

Tapuli combines low CAPEX, low operating cost, and production capacity which
fits the existing infrastructure with development timing suited to meet
anticipated market demand. Northland will now focus its permitting and
engineering efforts on developing first production and cash flow from the Tapuli
project. The current plan envisages a development sequence of Tapuli, Stora
Sahavaara then Hannukainen. However, each mine is being treated by management as
a "stand alone" project and the development sequence may change depending on
operational realities including customer requirements for specific products,
terms of off take agreements, permitting, transportation routes and availability
of processing equipment. Tapuli has a low waste to ore stripping ratio (2.27:1)
coupled with favorable mining geometry, simple processing scheme to concentrates
and yearly production rate sized to fit existing infrastructure. These
attributes make Tapuli Northland's first choice for production of concentrates
for pellet producers. Northland's marketing studies indicate a growing demand
for high quality pellet feed and its projects are well positioned to serve these
markets.


Optimization of the PEA

The base case PEA presented here was developed around three discrete and stand
alone operations producing 10Mtpa of Direct Reduction ("DR") and Blast Furnace
("BF") pellets and 3Mtpa of pellet feed concentrate. It reflects the CAPEX,
operating costs and infrastructure development necessary to establish Northland
as an independent merchant producer and seller of iron ore products.
Alternatives that are available to enhance the development sequence, reduce the
capital and operating costs and improve the economics include:


- Developing a complementary port at Kalix in Sweden which is a natural deep
water port and will be able to accommodate vessels with a global reach.


- Eliminating the need to construct one or more of the pellet plants by securing
potential customers to take pellet feed instead of pellets, reducing the planned
tonnage of pellet production. This would also eliminate some of the longest lead
time items.


- Optimizing the mining and processing areas. For example, alternative
transportation methods to truck haulage as the pits deepen were not included.
Use of alternative haulage methods could significantly reduce capital and/or
operating costs in the outlying years as strip ratios and volumes increase.


- The use of autogenous mills for the second stage of size reduction, thereby
reducing power consumption, consumables and operating costs. The PEA assumes use
of high pressure grinding rolls for secondary crushing, and ball mills for
grinding.


- Mine life is based on the existing NI43-101 surface mineable resources. It is
anticipated that systematic exploration of 35 nearby known magnetite occurrences
could extend surface mineable operations.


PEA Background

WAI, in association with GBM Minerals Engineering Ltd ("GBM"), were commissioned
to prepare a PEA of the Tapuli, Stora Sahavaara and Hannukainen iron ore
deposits and to assess the combined infrastructure required to transport the
ores to market. The PEA design criteria include:


- Tapuli will produce 3Mtpa of iron ore concentrate commencing in 2009,
initially producing 300Ktpa of High Density Aggregate. Iron ore concentrate
production will begin in 2010 targeting markets in Northern Europe and the
Middle East.


- Stora Sahavaara will produce 1Mtpa of BF pellets in 2012 increasing to 5Mtpa
of pellets in 2013. The target markets for the pellets are the Baltic and
Northern Europe.


- Hannukainen will produce 1Mtpa of DR grade Pellets in 2013 and 5 Mtpa of DR
grade pellets from 2014 onwards. The target markets for the pellets are Northern
Africa and the Middle East.


- Mine life must be based on the existing NI43-101 measured, indicated and
inferred resources. (Northland is systematically exploring at least 35 nearby
known magnetite occurrences. It is anticipated that operation of the processing
facilities will, in the long term, be sustained by the continued exploration and
resource growth.)


- Contract mining will be used at all 3 projects: no mining equipment capital
was included in the CAPEX. This reduces the upfront capital cost but increases
the per unit operating costs. A 15% surcharge was included to cover contractor
profit, depreciation and equipment purchases.


- The CAPEX assumptions should be conservative: all capital costs assumed by
Northland in the financial model were based on the purchase of new equipment -
there is an opportunity to acquire at least some of the equipment on the used
market to reduce capital costs.


- Each project should be examined on a stand-alone basis.

- All infrastructure CAPEX was identified. Since much of the required
infrastructure will be shared between the 3 projects, it was assumed that a
third party provider will make the necessary investments and Northland will
compensate for that investment through usage charges. A surcharge of 20% was
added to all infrastructure Operating Costs to address the necessary return on
investment to the infrastructure providers.


Commodity Price Assumptions

Northland commissioned Raw Materials Group to provide base sales price forecasts
out to 2023, incorporating shipping rate forecasts to key iron ore markets which
were provided and confirmed independently. The pricing strategy assumes that
Northland will sell iron ore on a 'Free On Board' basis, at the port of origin
and will be able to sell its iron ore products at prices competitive to those
secured by the major producers, at the same destination port.


Operating and Capital Expenditure Summaries for the 3 Projects

The basic operating costs defined by the PEA for the 3 projects are summarized
below:




--------------------------------------------------------------------------
                                                        Stora
Operating Cost              Units           Tapuli  Sahavaara  Hannukainen
--------------------------------------------------------------------------
Initial Mining Cost         EUR/t of ore      4.21       1.67         1.89
                             mined
End of Life Mining Cost     EUR/t of ore      4.19      11.59        11.77
                             mined
Processing Cost             EUR/t of ore      3.17       6.99         5.24
                             processed
Pelletizing Costs           EUR/ of pellets      -       6.25         6.05
Rail Costs to Kemi          EUR/t of product  2.98       2.98            -
Rail Costs to Narvik        EUR/t of product  1.63       1.63         1.84
Port Handling Costs Narvik  EUR/t of product  3.50       3.50         3.50
Port Handling Costs Kemi    EUR/t of product  2.50       2.50            -
--------------------------------------------------------------------------
Av. Cash Operating Cost     EUR/t of         13.10      26.69        22.54
                             saleable
                             product
--------------------------------------------------------------------------



The major items that make up the operating costs for all 3 mines are salaries,
drilling, blasting, loading and hauling of the ore and waste. A significant
proportion of the cost of these mining related activities is fuel. Fuel
consumption figures were generally supplied by the manufacturers of each plant
item. The fuel cost is assumed to be EUR 0.70 per liter.


A summary of the estimated capital costs defined in the study for each project
is shown below (all figures in millions of Euros (EUR M):




-----------------------------------------------------------
                                       Stora
Capital Cost           Tapuli      Sahavaara    Hannukainen
-----------------------------------------------------------
Heavy Aggregate           8.4              -              -
 Mining                   8.7           12.9           11.9
Processing              129.5          245.3          264.3
Pelletizing                 -          279.0          279.0
-----------------------------------------------------------
Total CAPEX             146.6          537.2          555.2
-----------------------------------------------------------



Tapuli

Resources

Tapuli contains a large resource of open-pittable magnetite. Exploration
drilling has delineated the deposit from near-surface to 300m depth with a
thickness of between 10m to 200m. The mineralization remains open at depth. A
conceptual mine plan was developed to mine an estimated 65.8Mt of mineralized,
surface mineable material averaging 28.3% Fe within a previously defined
NI43-101 compliant resource of:




---------------------------------------------------------------------
Resource Category(1)        Tonnage        Fe %        S %        P %
---------------------------------------------------------------------
Indicated                     54.38       27.68       0.24       0.06
Inferred                      47.60       26.27       0.26       0.07
---------------------------------------------------------------------
(1) 15% Fe cut off. See Northland's news release dated Feb. 11, 2008.



The stripping ratio is 2.27:1 tonnes of waste mined per tonne of ore. The
mineralized material includes dilution and allowances for losses which may occur
when the material is mined and accounts for realistic mining, metallurgical,
economic, marketing, legal, environmental, social and governmental factors.


Mining and Processing Capital and Operating Costs

A conceptual open pit mining schedule was developed using NPV Scheduler(R)
optimized, where possible, to maintain an even head grade and an even stripping
ratio. The mining fleet requirements for each year of operation were calculated
from this schedule. On average 8.5Mtpa of iron ore is mined to produce 3.0Mtpa
of iron ore concentrate.


The design of processing plant and facilities, based on conventional crushing,
screening, grinding and low intensity magnetic separation ("LIMS") technology,
allows for production of 3.0Mtpa of iron ore concentrate at a CAPEX of EUR
106.3M. The Tapuli plant is located on the same site as the Stora Sahavaara
processing plant to enable sharing of facilities and resources between the two
operations. Thus an additional facility CAPEX cost of EUR 41.2M will be shared
between both Tapuli and Stora Sahavaara.


Stora Sahavaara

Resources

Stora Sahavaara contains a large, near surface resource of iron ore amenable to
open pit mining. Application of mining and metallurgical economic factors to the
resource has demonstrated that a potentially surface-mineable mineralized body
exists containing 102Mt of ore at a grade of 43.3% Fe within a broader NI43-101
compliant resource of:




--------------------------------------------------------
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
--------------------------------------------------------
Using a 25% Fe cut off. See Northland's press release
 dated May 18, 2006.



Mining, Processing and Pelletizing Capital and Operating Costs

The conceptual mine plan contains 101.8Mt of iron ore averaging 43.3% Fe. This
average grade includes diluting materials and allowances for losses which may
occur when the material is mined. A conceptual open pit mining schedule was
developed using NPV Scheduler(R) optimized, where possible, to maintain an even
head grade and an even stripping ratio. The stripping ratio over the life of the
open-pit mine averages 5.94:1.


The capital costs for the Stora Sahavaara mine is EUR 12.8M and processing plant
is estimated to be EUR 222.2M with an additional facility CAPEX cost of EUR
46.6M shared between both Stora Sahavaara and Tapuli. The processing plant
flowsheet design is based upon conventional crushing, screening, grinding, LIMS
and flotation technology. The plant and processing facilities have been designed
to produce 5.0Mtpa of iron ore concentrate which will feed into a separate
pelletizing facility located on-site.


CAPEX for the pelletizing facility is estimated at EUR 278.6M and operating
costs for the Stora Sahavaara processing and pelletizing plant have been
estimated at EUR 65.7M per annum, which is EUR 7/t of ore feed, or EUR 13.14/t
of product per year. Total cash operating costs per tonne of saleable product,
including transport costs, are estimated at EUR 26.69/t.


Hannukainen

Resources

The Hannukainen deposit contains a large resource of near surface iron ore
amenable to open pit mining. Application of mining and metallurgical economic
factors to the resource has demonstrated that potentially surface mineable
mineralized material exists containing 117.5Mt of iron ore at an average grade
of 31.7% Fe, 0.16% Cu and 0.07g/t Au within a broader resource of:




---------------------------------------------------------------------
Category                     Tonnes        Fe %       Cu %     Au g/t
---------------------------------------------------------------------
Measured                 53,140,000        35.6       0.25      0.124
Indicated                31,460,000        32.9       0.11      0.043
Inferred                 81,630,000        35.7       0.13      0.036
---------------------------------------------------------------------
Using a 15% Fe cut off. See Northland's press release dated August 23,
 2007.



Mining, Processing and Pelletizing Capital and Operating Costs

A conceptual open pit mining schedule was developed using NPV Scheduler(R)
optimized, where possible, to maintain an even head grade and an even stripping
ratio. The average stripping ratio over the life of the mine is 3.93:1.


The processing plant flowsheet design is based upon conventional crushing,
screening, grinding, LIMS and flotation technology. The capital costs for the
Hannukainen mine are estimated at EUR 11.9M and processing plant costs are
estimated to be EUR 262.5M including the equipment necessary to recover the
copper and gold by-products. The plant and processing facilities have been
designed to produce 5.0Mtpa of iron ore concentrate which will feed into a
separate pelletizing facility located on-site. The operating costs for the
Hannukainen processing plant are estimated at EUR 5.24 per annual tonne of ore
feed or EUR 17.10 per annual tonne of product.


The Estimated CAPEX of for the design and supply of a 5Mtpa plant is EUR 278.6M
and Operating costs have been estimated at EUR 30.3M per year or EUR 6.05/t of
product.


Rail and Port Options

The PEA for each of the 3 deposits assumes that a contract transport and
logistics provider will be responsible for building and operating the transport
system. As all three deposits will be using the same transport infrastructure
and it is difficult to proportion capital costs accurately to each of the
deposits, transport operating costs from the Tapuli, Stora Sahavaara and
Hannukainen mine sites to the ports of Kemi and Narvik have been calculated and
then inflated by 20% to provide for this contract logistics company.


The Port of Kemi in Finland is the nearest port to all three operations and is
approximately 235km to the south by Finnish Railways. The state owned port has
an existing bulk handler with a capability of 2Mtpa, which could be increased to
3Mtpa with minimal investment.


The Port of Narvik in Norway is a deep water port located on the north-west
coast of Norway with direct access to the Norwegian Sea and the Atlantic Ocean.
The port is ice free all year round and capable of handling Capesize vessels
with a draft of up to 26m. Narvik port is connected to the heavy-haul rail line
with its 30t axle loading. Narvik has the advantages of good high capacity rail
connection and an ice free port capable of handling the largest size vessels,
removing any economic disadvantage by shipping to Middle East or European steel
producers with smaller vessels.


Qualified Person & NI43-101 Statements

Qualified Person

Mr. Owen Daniel Mihalop, BSc, MSc, MCSM, Professional Member of the Institute of
Materials, Minerals and Mining and a Chartered Engineer (Registrant No. 569812),
Principal Mining Engineer and Associate Director of Wardell Armstrong
International Ltd., is the principle author and Qualified Person in accordance
with National Instrument 43-101 responsible for the preparation of the report
titled "Preliminary Economic Assessment of the Fennoscandian Iron Ore Mines" and
dated June 2008, Ref WAI/61-0495 and for the three executive summaries of this
report, dated June 2008 titled "Summary of the Preliminary Economic Assessment
of the Hannukainen Iron Ore Deposit, Finland", "Summary of the Preliminary
Economic Assessment of the Tapuli Iron Ore Deposit, Finland", and "Summary of
the Preliminary Economic Assessment of the Stora Sahavaara Iron Ore Deposit,
Finland" upon which this news release is based.


Paul Marsden, VP Metallurgical Development and Operations for Northland, is a
member of the IMMM, a Chartered Engineer and a Chartered Scientist and is the
Qualified Person as defined in NI 43-101 responsible for overseeing the
preparation of this news release. Mr. Marsden has verified that the results
presented here have been accurately summarized from the engineering studies
provided to Northland by its contracting engineers.


Metallurgical Test-Work

Metallurgical test-work on Hannukainen ore was performed by SGS Lakefield
Research Ltd. Test-work was completed on Tapuli magnetite ore by the Geological
Survey of Finland (GTK) in Outokumpu, Finland and by SGS in Truro, UK. The
majority of the metallurgical test-work for Stora Sahavaara was completed by SGS
in Lakefield, Ontario and a program of Davis tube testing was completed by
Midland Standard Research Laboratories, Minnesota. Northland commissioned Corus
RD&T to perform a preliminary study including basic balling and induration tests
on Stora Sahavaara magnetite. Further test-work is underway at COREM. GBM used
the metallurgical test-work data from all three deposits (see below) as part of
their engineering design in order to determine capital and operating cost
estimates.


Resource Estimates

The Hannukainen resource modeling was completed in a joint effort between Micon
International of Norwich, United Kingdom and Geovista of Lulea, Sweden. Mr. D.K.
Mukhopadhyay, MAusIMM, of Micon served as the independent Qualified Person for
the resource modeling. The Stora Sahavaara resource estimates were prepared by a
third party consultant (Bart Stryhas, PhD Structural Geology); the resource
model and estimates were subsequently reviewed by Chlumsky Armbrust & Meyer LLC
an independent, mineral resource, consulting and engineering group based in
Lakewood, Colorado USA. Thomas Lindholm was the Qualified Person responsible for
the preparation of all sections in the report entitled "NI 43-101 Technical
Report - Tapuli Resource Estimate" for Northland Exploration Sweden AB. Mr. D.K.
Mukhopadhyay, MAusIMM, of Micon, also a Qualified Person as defined in NI
43-101, verified the Tapuli grade interpolation protocol for the resource model
calculation.


About Northland (www.northlandresourcesinc.com)

Northland 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

Bill Wagener

NORTHLAND RESOURCES INC.