the past year and a half have been very challenging for...

August 29, 2013

Fellow Shareholder,

The past year and a half have been very challenging for junior mining companies. Yet, our Company continues to be very active

in advancing the development of our flagship Eagle’s Nest (nickel, copper, platinum and palladium) Project with the objective of making a

commercial production decision.

Significant highlights for the fiscal year ended April 30, 2013 include:

• Completeda$10.0millionequityfinancingwithResourceCapitalFund(“RCF”)anda$1.33millionequityfinancingwith

BaosteelResourcesInternationalCo.Ltd.(“Baosteel”)duringthefirstquarter;

• AnnouncedtheresultsofapositiveFeasibilityStudyforastandalonenickel,copper,platinumgroupelement(“Ni-Cu-PGE”)

mineandmillcomplexexploitingtheCompany’s100%ownedEagle’sNestdeposit(the“Project”).Theresultsofthe

independentstudy,completedbyIndependentConsultantsunderthesupervisionofMiconInternational(“Micon”),

confirmsthatEagle’sNestoffersrobusteconomics.Eagle’sNestremainsoneofthemostexcitingopportunitiesinthenickel

sectortoday,withnickelproductioncostsinthelowestquartileofexistingandplannednickelproducers;

• EnteredintoaloanfacilitywithRCFintheprincipalamountofUS$15.0million(the“Facility”).TheFacilityisaone

yearbridgeloan(the“BridgeLoan”)whichmaturesonFebruary25th,2014andautomaticallyrollsintoaconvertibleloan

(the“ConvertibleLoan”)withamaturitydateofDecember31,2015,iftheFacilityisnotrepaidpriortotheBridgeLoan

maturitydate.TheproceedsfromtheFacilitywillbeusedtofurtherthedevelopmentoftheEagle’sNestProject;

• AnnouncedtheformationoftheRingofFireAboriginalTrainingAlliancebetweenMatawaFirstNations,Kiikenomaga

KikenjigewenEmploymentTrainingServices(KKETS),ConfederationCollegeofAppliedArtsandTechnologyand

NoronttoprovidetrainingforemploymentopportunitiestothemembersoftheMatawacommunitiesattheRingofFire

miningprojects;and

• CompletedthesaleoftheCompany’sremaininginterestinitsnon-coreWindfallLakePropertytoEagleHillExploration

Corp.(“EagleHill”)for$5millionand25millionEagleHillcommonshares.

Fiscal2013alsosawmanychangestotheBoardofDirectors.IwanttothankKeithMcKay,JoeHamilton,andHarryLinfor

theirdedicationandservicetotheCompanyandwelcomethenewdirectors,DavidThomas,TomAnselmi,PeterMahandYuangingXu

totheBoard.AlsoinJanuary,WesHanson,ourCEOforthepastthreeyearslefttheCompanyandIespeciallywanttothankhimforhis

effortsanddedicationtotheCompanyandleadingthecompletionoftheFeasibilityStudy.

Although the investment climate for junior mining companies and commodities is currently challenging, we are well positioned

withastrongbalancesheet.Aswemoveforwardinfiscal2014,oureffortswillremainfocusedonadvancingthedevelopmentandthede-risking

oftheEagle’sNestProject.Inparticular,oureffortswillbefocusedonsubmittingourEnvironmentalAssessment/EnvironmentalImpact

Statementbytheendofcalendar2013,continuingtoworkwiththegovernmentsofOntario,Canadaandotheraffectedstakeholderswith

respecttoinfrastructure,continuingtoworkwithouradvisorstoseekfinancingfortheconstructionofEagle’sNest,andcontinuingto

workwiththeFirstNationstowardsfinalizingImpactBenefitAgreements.

(Signed)

Paul Parisotto

Interim President and Chief Executive Officer

Noront Resources Ltd.

110 Yonge Street, Suite 400, Toronto, Ontario, Canada, M5C 1T4 | Phone 416.367.1444 | Fax 416.367.5444www.norontresources.com | www.mikawaa.com | www.eaglesnestmine.com

635300_4pg_Insert.indd 1 8/19/13 11:31 PM

OPERATIONS REVIEW

On September 5, 2012, the Company released the results of its Feasibility Study, led by Micon International, for its Eagle’s Nest nickel, copper, platinum, palladium Project. The Feasibility Study was based on a 1.0 million tonne per year underground mine and shipping a bulk nickel-copper-platinum group element concentrate to a North American smelter. The study assumed the access road would be built under a public private partnership with government support where the Company would pay a toll for its proportional usage.

Feasibility Study Highlights

A Discounted Cash Flow (“DCF”) based on the Assumed Metal Prices indicates:• an after tax Net Present Value at an 8% discount rate (“NPV(8%)”) of

$543 million;• an after tax Internal Rate of Return (IRR) exceeding 28%;• an estimated initial capital investment of $609 million;• an estimated life of mine sustaining capital cost of $160 million;• estimated operating costs (including road access fees) of $97 per

tonne or $2.34 per pound of nickel equivalent or -$0.31 per pound of nickel net by-product credits;

• an estimated mine life of 11 years; and• a capital payback period of under 3 years based on a 100% equity

project.

The following sensitivity graph shows the Project’s NPV at an 8% discount rate using the base case feasibility study assumptions and the impact on NPV of changes (percentage above or below the base case of 100%) to metal prices, operating and capital costs.

The Feasibility Study also confirmed the following previously stated reserves.

Eagle’s Nest Mineral Reserve Estimate – August 23, 2011

Tonnes Nickel Copper Platinum Palladium

Classification (X 1000) (%) (%) (g/t) (g/t)

Proven 5,264 2.02 1.04 1.01 3.45

Probable 5,867 1.38 0.72 0.78 2.76

ProvenandProbable 11,131 1.68 0.87 0.89 3.09

Eagle’s Nest Development

Based on the positive results of the Feasibility Study, the Company began focusing on mine development. The initial phase of mine development required the Company to commence work on:• Mine Design Optimization;• Infrastructure;• Environmental Assessment / Environmental Impact Study

(“EA/EIS”); • Community Engagement; and • Project Financing.

Mine Design Optimization

Mine design optimization largely focused on the development of an execution plan for the Eagle’s Nest Project. This included detailed scheduling to understand the material handling for a remote project reliant on a winter road for construction. In addition, potential construction contractors continue to be evaluated for core construction duties as well as potential out-sourced packages for non-core facilities.

Additional technical work was also advanced on rock mechanics to determine rock conditions, rock strength and ground support requirements for underground excavation.

Infrastructure

Access infrastructure in and out of the Ring of Fire is required in order for the Eagle’s Nest Project to proceed. We expect that the infrastructure developed for the Ring of Fire will be shared between local communities, Noront and other industrial users. The Company has taken a collaborative approach to this critical shared infrastructure and has been working with all stakeholders to develop a plan which will be supported by the Provincial Government of Ontario, the Federal Government of Canada, local communities and other industrial users. With these stakeholders in mind, the Company included a North-South access road under its base case assumptions in its Feasibility Study.

The Feasibility Study economic analysis is based on the following metal prices derived on a three year trailing average basis as of August 31, 2012:

Nickel: US$9.43/pound, Copper: US$3.60/pound, Platinum: US$1600/oz, andPalladium: US$599/oz.

130125120115110105100

Percentage of Base Case

959085807570

1,000NPV(CAD Millions)

Product Price

800

600

400

200

0

Opcosts

Capex

635300_4pg_Insert.indd 2 8/20/13 12:05 AM

The North-South access road, as announced on May 9, 2012,is supported by Cliffs Natural Resources Inc. (“Cliffs”), which is developingthe Black Thor Chromite Project approximately 10 km from the Company’sflagship Eagle’s Nest Project, and the Provincial Government of Ontario.

The Company recognizes the announcement made by Cliffs on June 12,2013 in which they announced a temporary suspension to their Environmental Assessment activities for their chromite project in the Ring of Fire and the Company recognizes that building the North-Southaccess route, due to the capital cost of the project, is dependent on Cliff ’s proceeding with their chromite project. The Company’s project plan as incorporated in the Company’s EA, however, includes an alternative access route, the East-West access corridor, which the Company believes is viable based on providing access infrastructure to local communities and having Noront as the primary industrial user. The Company is working closely with the Provincial Government of Ontario, the Federal Government of Canada and local communities to advance the East-West access corridor to the Ring of Fire.

Environmental Assessment / Environmental Impact Study (“EA/EIS”)

On March 23, 2011, the Company filed its Project Description for the Eagle’s Nest Project with the Canadian Environmental Assessment Agency and the Province of Ontario’s Ministry of Northern Development, Mines and Forestry. The Project Description outlines what the Companybelieves is an environmentally and socially responsible proposal for theconstruction and operation of a 1.0 million tonne per annum undergroundmining and milling complex. The Canadian Environmental Assessment Agency (“CEAA”) recommended a Comprehensive Review Process for the Eagle’s Nest Project. Noront volunteered to have the Provincial Environment Act applied under an Individual Environmental Assessment.

Underground mining will utilize electric powered mobile equipment to the greatest extent possible so diesel requirements are reduced. The current plan considers highly productive sub-level blast-hole stoping of the Eagle’s Nest deposit. Waste rock from the underground development will be recycled to provide construction aggregate for the limited surface facilities consisting of a camp, airstrip, office building, power plant, and concentrate drying and load-out areas, and access roads. Tailings from the mill will be stored as either cemented paste backfill in production stopes or paste backfill in aggregate stopes.

For greater detail, the reader can refer to the Project Description document available on the Company’s website.

In December 2011, the Company announced that the Draft Terms of Reference and the Draft Environmental Impact Statement Guidelines for the Eagle’s Nest Mine were available for public comment. Draft Terms of Reference (Provincial process) and Environmental Impact Statement Guidelines (Federal process) were made available for public comment at www.ene.gov.on.ca and www.ceaa.gc.ca. In January 2012, the Federal Environmental Impact Statement Guidelines were issued by CEAA. The Province is still reviewing the revised Terms of Reference prepared by Noront in October 2012 following public consultations. The approval of these documents will establish the basis of the Project EA/EIS. Based on the comments on these documents, the Company has been advancing the EA/EIS compilation.

The EA/EIS will include the environmental impacts and mitigation methods, as well as socioeconomic impacts on any First Nations aboriginal traditional land usage and Treaty rights. These will be determined through direct dialogue with the affected First Nation whenever possible. This program is currently underway. The Company has and continues to hold community open houses to provide information so community members can provide informed input into the project design.

The Company has completed all baseline studies except for the socioeconomic work, which is currently being completed. The joint Environmental Assessment/Environmental Impact Statement Report for the project is targeted for completion during the fourth quarter of calendar 2013.

635300_4pg_Insert.indd 3 8/19/13 11:31 PM

Baseline environmental data collection has been ongoing since 2009. During the fiscal year, additional data was collected in support of the following:• Meteorological, Air and Noise Studies• Geology and Soils Studies• Breeding Bird and Habitat Survey • Migratory Bird Survey• Vegetation Survey• Wildlife Survey• Surface and Groundwater Water Studies• Baseline Hydrological Studies• Hydrogeological Studies• Aquatic Resources, Fish and Fish Habitat Studies• Aboriginal Traditional Knowledge Study• Traditional Land Use Study• Archaeological Study

The studies noted above were concentrated in the immediate vicinity of the planned Eagle’s Nest underground mine and along the proposed access corridor as outlined in Noront’s Project Description.

Community Engagement

Noront, as a Company, recognizes the importance of working closely with the communities that will be impacted, or potentially impacted, by the development of the Eagle’s Nest Mine to create a lasting and meaningful relationship for the benefit of the Company and the communities.

Noront believes in the value of responsible planning to ensure the work we do has minimal environmental impact and maximal social benefits to the region.

Noront understands the importance of creating a sustainable economy for the communities and the people who live there. Providing opportunities for training, jobs and business prospects promotes long-term sustainable growth and development.

In support of training for the Eagle’s Nest Project, Noront worked with Kiikenomaga Kikenjigewen Employment & Training Services (KKETS), Confederation College and the Matawa First Nation communities to develop a Ring of Fire Aboriginal Training Alliance. The objective of this alliance is to identify gaps in the skills required for mine development and operation, identify the requirements to fill these gaps and train people for these positions. To date the training alliance has received federal and provincial funding and over 1,000 people in northwestern Ontario have enrolled in the program.

Noront’s success in engaging the community begins with listening to the community leaders and members. The Company seeks to learn from the issues that are raised by the communities and then respond to the comments in a meaningful and thoughtful manner.

The activities listed below were completed during fiscal 2013:

• Signed new agreements with communities focused on working together in the development of the Eagle’s Nest Project

• Provided financial support for various community-based programs (health and wellness, youth, social programs, fundraising efforts, etc.)

• Conducted skills assessment with communities to identify community members interested in working with Noront

• Continued to support youth-based educational programs (DAREarts, Mining Matters, Right to Play, OMA’s So You Think You Know Mining Camps, etc.)

• Hosted open house meetings in numerous communities • Attended meetings with community leaders from local communities• Worked with communities on all season road development concepts• Worked with federal and provincial governments to identify training

funds for skill development• Continued to work with community partners in development of

relevant training programs, which led to the development of the training alliance

• Held on-going discussions with communities on business opportunities related to the Eagle’s Nest Mine

• Continued development and maintenance of the Mikawaa Community web portal

• Hosted Mikawaa monthly radio show

A priority over the next few months will be to complete the work required for the EA/EIS report. The EA/EIS report will largely define the Impact Benefit Agreements (IBA) with the affected communities. The finalization of the IBA negotiations will set a clear plan for a working relationship with the communities for the life of the Project.

Project Financing

Based on the Feasibility Study, the Company has been working with our financial advisors to determine an optimal financing plan for the Eagle’s Nest Mine. These discussions are on-going and include banks, private equity firms, and strategic partners.

Blackbird

The Blackbird chromite deposit remains an important asset for the Company. Although the primary focus is on the development of the Eagle’s Nest Project, the Company continues to consider the development of Blackbird once Eagle’s Nest is in development and the project can benefit from regional infrastructure.

635300_4pg_Insert.indd 4 8/19/13 11:31 PM

2013 ANNUAL REPORT

The Road to Development

635300_48pg.indd 1 8/19/13 11:58 PM

For the year ended April 30, 2013

Table of Contents

Management’s Discussion and Analysis 1

Management’s Responsibility for Financial Reporting 19

Independent Auditors’ Report 20

Consolidated Statement of Financial Position 21

Consolidated Statement of Loss 22

Consolidated Statement of Comprehensive Loss 22

Consolidated Statement of Changes in Shareholders’ Equity 23

Consolidated Statement of Cash Flows 24

Notes to the Consolidated Financial Statements 25

Corporate Information Back Page

635300_48pg.indd 2 8/19/13 11:58 PM

The following is Management’s Discussion and Analysis (“MD&A”) of the consolidated financial condition and results of operations of Noront Resources Ltd. (“Noront” or the “Company”) for the year ended April 30, 2013, which have been prepared in accordance with International Financial Reporting Standards. This discussion should be read in conjunction with the consolidated financial statements and the notes thereto for the same period as noted above (collectively, the “Financial Statements”). Additional Company information, including the Company’s most recent Financial Statements can be accessed through the System for Electronic Document Analysis and Retrieval (“SEDAR”) website at www.sedar.com and the Company’s website at www.norontresources.com. Information contained on the Company’s website is not incorporated herein and does not form part of this MD&A.

All financial measures are expressed in Canadian dollars unless otherwise indicated.

Paul Semple, P. Eng., Chief Operating Officer of Noront and a Qualified Person as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”), has reviewed and is responsible for the technical information contained in this MD&A. For further information on the McFaulds Lake Project, please refer to Noront’s NI 43-101 compliant technical reports entitled “Feasibility Study, McFaulds Lake Property, Eagle’s Nest Project, James Bay Lowlands, Ontario, Canada (effective date of September 4, 2012), the “Technical Report on the Updated Mineral Resource Estimate for the Blackbird Chrome Deposits, McFaulds Lake Project, James Bay Lowlands, Ontario, Canada” dated May 4, 2012 (effective date of December 31, 2011) (the “Blackbird Update Technical Report”), the “Pre-Feasibility Study, McFaulds Lake Property, Eagle’s Nest Project, James Bay Lowlands, Ontario”, dated October 6, 2011 (effective date of August 23, 2011) (the “McFaulds Pre-Feasibility Study”), the “Technical Report on the Updated Mineral Resource Estimate for the Eagle’s Nest Property, McFaulds Lake Project, James Bay Lowlands, Ontario, Canada” dated April 18, 2011 (effective date of March 4, 2011) (the “Eagle’s Nest Update Technical Report”), and the “Technical Report on the Mineral Resources Estimate for the Blackbird Chrome Deposit, James Bay Lowlands, Northern Ontario, Canada” dated January 22, 2010 (effective date of December 31, 2009) (the “Blackbird Technical Report”) available on SEDAR and the Company’s website.

This information is current as of July 9, 2013.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This MD&A includes certain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking information is provided as of the date of this MD&A or, in the case of documents incorporated by reference herein, as of the date of such documents.

Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Examples of such forward-looking statements include statements regarding financial results and expectations for fiscal year 2013, such as, but not limited to, availability of financing, interpretation of drill results, the geology, grade and continuity of mineral deposits and conclusions of economic evaluations, metal prices, demand for metals, currency exchange rates, cash operating margins, expenditures on property, plant and equipment, increases and decreases in exploration activity, changes in project parameters, joint venture operations, resources and anticipated grades and recovery rates and are, or may be, based on assumptions and/or estimates related to future economic, market and other factors and conditions. All statements, other than statements of historical facts, included in this MD&A that address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as future business strategy, competitive strengths, goals, expansion and growth of the Company’s businesses, operations, plans and other such matters are forward-looking statements.

Forward-looking information is based on reasonable assumptions that have been made by the Company as at the date of such information and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: the impact of general business and economic conditions; risks related to government and environmental regulation, actual results of current exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be refined; problems inherent to the marketability of base and precious metals; industry conditions, including fluctuations in the price

Noront Resources Ltd. – Management’s Discussion and Analysis – 1

MANAGEMENT’S DISCUSSION AND ANALYSIS(Expressed in Canadian Dollars)

Years ended April 30, 2013 and 2012

635300_48pg.indd 3 8/19/13 11:58 PM

of base and precious metals, fluctuations in interest rates; government entities interpreting existing tax legislation or enacting new tax legislation in a way which adversely affects the Company; stock market volatility; competition; risk factors disclosed on pages 14-18 herein under the heading “Risk Factors”; risk factors disclosed under the heading “Risk Factors” in the Company’s most recent Annual Information Form (“AIF”) dated August 14, 2012 on pages 57-62, available electronically on SEDAR; and such other factors described or referred to elsewhere herein, including unanticipated and/or unusual events. Many of such factors are beyond Noront’s ability to control or predict.

Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those reliant on forward-looking statements.

All of the forward-looking statements made in this MD&A are qualified by these cautionary statements and readers of this MD&A are cautioned not to put undue reliance on forward-looking statements due to their inherent uncertainty. Noront disclaims any intent or obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by law. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this MD&A.

NOTE TO U.S. INVESTORS REGARDING RESOURCE ESTIMATES

All resource estimates contained in this MD&A have been prepared in accordance with National Instrument 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Classification System in compliance with Canadian securities laws, which differ from the requirements of United States securities laws. Without limiting the foregoing, this report uses the terms “measured resources”, “indicated resources” and “inferred resources”. Any U.S. Investors are advised that, while such terms are recognized and required by Canadian securities laws, the U.S. Securities and Exchange Commission (“SEC”) does not recognize them. Under U.S. standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Any U.S. investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves. Further, inferred resources have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. It cannot be assumed that all or any part of the inferred resources will ever be upgraded to a higher category. Any U.S. investors are cautioned not to assume that all or any part of the inferred resources exists, or that they can be mined legally or economically. Information concerning descriptions of mineralization and resources contained in this report may not be comparable to information made public by U.S. companies subject to the reporting and disclosure requirements of the SEC.

COMPANY OVERVIEW

Noront is engaged in the development, exploration and acquisition of properties prospective in base and precious metals, including: nickel, copper, platinum group elements (“PGE’s”), chromite, iron, titanium, vanadium, gold and silver. The Company is currently focused on the development of its 100% owned Eagle’s Nest deposit, a high grade nickel, copper, platinum and palladium deposit located in the James Bay Lowlands of Ontario, within a geological feature (intrusion) commonly referred to as the “Ring of Fire”. The Company has recently released a feasibility study on the project demonstrating positive economic returns. The Company also has a development stage chromite project known as “Blackbird”; two nickel-copper-platinum group metal discoveries known as “Eagle Two” and “AT-12”; an iron-vanadium-titanium discovery known as “Thunderbird”; and a zone of gold mineralization known as the “Triple J Gold Zone”, in the same Ring of Fire area.

Noront controls and has 100% mineral rights ownership of 278 claims of approximately 76,224 hectares (188,354 acres) in the Ring of Fire area.


635300_48pg.indd 4 8/19/13 11:58 PM

OBJECTIVES

The Company’s primary objectives for fiscal 2014 are to:• Further develop its flagship Eagle’s Nest (nickel-copper-platinum-palladium) Project with the objective of establishing commercial

production in and around 2017: • Submit the Environmental Assessment by the end of Calendar 2013 and secure required mining permits in Calendar 2014; • Secure support for access road infrastructure from the Provincial Government of Ontario and the Federal Government of Canada; and • Evaluate and progress project financing options for project development.• Evaluate the Company’s other mineral deposits in the Ring of Fire region to maximize value.

STRATEGY

Eagle’s Nest Project

The Company released the results of its feasibility study on September 5, 2012. The NI 43-101 compliant feasibility study (the “Feasibility Study”) led by Micon International showed robust economics with an after tax Net Present Value at an 8% discount rate (“NPV 8%”) of $543 million and an after tax Internal Rate of Return (“IRR”) exceeding 28%, based on metal prices derived on a three year trailing average basis as of August 31st, 2012.1

Based on the positive economics of the Feasibility Study, the Company is completing all necessary pre-development work in order for it to meet its planned production date. The Company is currently completing its Environmental Assessment (the “EA”), including consultation with affected local communities, in order to obtain all required permits for mine development and operations. The EA is due to be submitted in the fall of 2013 with the objective of having it approved by mid-calendar 2014.

Access infrastructure in and out of the Ring of Fire is required in order for the Eagle’s Nest Project to proceed. The infrastructure developed for the Ring of Fire will be shared between local communities, Noront and other industrial users. The Company has taken a collaborative approach to this critical shared infrastructure and has been working with all stakeholders to develop a plan which will be supported by the Provincial Government of Ontario, the Federal Government of Canada, local communities and other industrial users. In this respect the Company included a North-South access road under its base case assumptions in its feasibility study. The North-South access road, as announced on May 9th, 2012 is supported by Cliffs Natural Resources Inc. (“Cliffs”), which is developing their Black Thor Chromite Project approximately 10 km from the Company’s flagship Eagle’s Nest Project, and the Provincial Government of Ontario.

The Company recognizes the announcement made by Cliffs on June 12, 2013 in which they announced a temporary suspension to their Environmental Assessment activities for their chromite project in the Ring of Fire and the Company recognizes that building the North-South access route, due to the capital cost of the project, is dependent on Cliff ’s proceeding with their chromite project. The Company’s project plan as incorporated in the Company’s EA, however, includes an alternative access route which the Company believes is viable based on providing access infrastructure to local communities and having Noront as the primary industrial user. The Company is working closely with the Provincial Government of Ontario, the Federal Government of Canada and local communities to advance the East-West access corridor to the Ring of Fire.

The Company is also evaluating several sources of financing to develop the Eagle’s Nest Project and continues to work with its financial advisor to maximize value.

The Company’s strategy in order to achieve its planned production date is to continue negotiations with stakeholders concerning the East-West access road to garner necessary financial and non-financial support; do all things necessary to submit the EA by the fall of 2013 and obtain all required mining permits; and enter into formal partnership agreements and financing arrangements in advance of infrastructure commitments from government in order to allow project development to proceed.

1The feasibility study economic analysis is based on the following metal prices derived on a three year trailing average basis as of August 31, 2012:Nickel US$9.43 per poundCopper US$3.60 per poundPlatinum US$1,600 per ouncePalladium US$599 per ounce


635300_48pg.indd 5 8/19/13 11:58 PM

Blackbird Chromite Project

The Company is focused on developing its most advanced project, the Eagle’s Nest Mine. The Company’s longer term plan has always been to start development and production from the Blackbird chromite deposits once production commences at Eagle’s Nest. The Company continues to evaluate opportunities to accelerate the anticipated production date of the Blackbird Chromite Deposits.

CORPORATE AND OPERATIONS REVIEW

Corporate

On May 10, 2012, the Company completed a non-brokered private placement with gross aggregate proceeds of $10 million with Resource Capital Funds (“RCF”) which increased their ownership position in Noront to 18.19%. In a subsequent transaction, Baosteel exercised its anti-dilution rights, on the same terms as the RCF May 10, 2012 private placement, pursuant to its previous subscription agreement dated June 2, 2011, to maintain its 9.9% interest, with aggregate gross proceeds to the Company of approximately $1.3 million. In conjunction with the closing of RCFs private placement, Mr. David Thomas, P.Geo, Managing Director of RCF Canada joined the Company’s board of directors upon the resignation of Mr. Keith McKay.

On February 26, 2013, the Company entered into a loan facility with Resource Capital Fund V L.P. (“RCF”) in the aggregate principal amount of US$15.0 million (the “Facility”). The Facility is a one year bridge loan (the” Bridge Loan”) which matures on February 25th, 2014. If the Facility is not repaid prior to the Bridge Loan maturity date, it automatically rolls into a convertible loan (the “Convertible Loan”) with a maturity date of December 31, 2015. Due to RCF’s existing equity ownership interest in Noront of approximately 18%,if the Bridge Loan rolls into the Convertible Loan then, on a partially diluted basis, RCF’s equity ownership interest will exceed 20% of the total number of outstanding shares of the Company. Shareholder approval, which was required to grant the Conversion Rights and was a condition to entering into the Facility (which includes the Conversion Rights), was granted at a special meeting of shareholders held on April 30, 2013. The proceeds from the Facility will be used to further the development of the Company’s advanced stage Eagle’s Nest nickel, copper, platinum, palladium project; for working capital and for corporate requirements.

The Company announced on March 22, 2013 the appointment of Mr. Peter Mah and Mr. Yuanqing Xu to the board of directors of Noront (the “Board”). Mr. Joe Hamilton has resigned from the Board to allow Mr. Peter Mah to join the Board. Mr. Hamilton served in several different capacities during his time on the Board from Interim Chief Executive Officer, Chairman of the Board and Chairman of the Corporate Governance and Compensation Committees. Mr. Hamilton played a significant role in shaping Noront’s future and his contributions will be missed. Mr. Yuanqing Xu replaces Mr. Lin as Baosteel’s representative on the Board. The Company appreciates Mr. Lin’s contributions to the Board and looks forward to working with his replacement.

On April 19, 2013, the Company announced that an agreement (the “Amending Agreement”) had been signed between the Company and Eagle Hill Exploration Corp. (“EAG”) to amend certain provisions of the option agreement entered into between the parties on July 20, 2009 (the “Option Agreement”) in regards to the Windfall Lake Property (the “Project”).

Subsequent to the year ended April 30, 2013, the Company signed a binding letter agreement (the “Letter Agreement”) to sell its remaining 25% interest, all royalty interests, and all other associated rights in the Windfall Lake Project to EAG (the “Project”). In consideration for the sale of Noront’s 25% interest in the project EAG will pay to Noront (i) an aggregate cash payment of $5 million, and (ii) 25 million freely tradeable (subject only to such hold periods required under applicable Canadian securities laws) common shares of EAG to be issued to Noront on closing of the transaction. In accordance with the binding agreement, EAG continues to be obligated to provide a financial guarantee to the Quebec government for the reclamation obligation on the Project and apply to transfer the reclamation obligation from the Company to EAG.

Eagle’s Nest

The Company continues to work diligently to advance its Eagle’s Nest Project, located in the James Bay Lowlands, to production.The priorities of the Company are to submit the Environmental Assessment / Environmental Impact Statement (the “EA”) by December 2013 and to continue working with the Federal and Provincial governments, the affected First Nation communities and other industry participants to arrange for the development of the necessary infrastructure into the Ring of Fire.


635300_48pg.indd 6 8/19/13 11:58 PM

The Company has completed its environmental baseline studies and submitted the terms of reference for the Provincial Environmental Assessment to the Ministry of the Environment (MOE). The Company is continuing with its socioeconomic baseline studies and joint Environmental Assessment / Environmental Impact Statement to be submitted to Federal and Provincial agencies by the end of calendar year 2013.

The Company is planning on moving forward with pre-development work which includes continuing with pre-development studies anddue diligence with independent consultants in support of project financing.

Eagle’s Nest Feasibility Study

The Company completed its National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) compliant Feasibility Study1 for a standalone nickel, copper, platinum group element (“NI-Cu-PGE”) mine and mill complex exploiting the Company’s 100% owned Eagle’s Nest deposit (the “Project”), McFaulds Lake, James Bay Lowlands, Ontario. The results of the independent study, completed by Independent Consultants under the supervision of Micon International (“Micon”), confirm that Eagle’s Nest offers robust economics. The results of the feasibility study were summarized in a Press Release on September 4th, 2012 and are available on SEDAR.

The discounted cash flow (“DCF”) from the feasibility study based on the assumed metal prices2 indicates:• an after tax Net Present Value at an 8% discount rate (“NPV(8%)”) of $543 million;• an after tax Internal Rate of Return (“IRR”) exceeding 28%; • an estimated initial capital investment of $609 million;• an estimated life of mine sustaining capital cost of $160 million;• annual production of approximately 150,000 tonnes of high grade nickel-copper concentrate containing approximately 34 million pounds

of nickel, 19 million pounds of copper, 23 thousand ounces of platinum and 89 thousand ounces of palladium with estimated operating costs (including road access fees) of $97 per tonne or $2.34 per pound of nickel equivalent or -$0.31 per pound of nickel net by-product credits;

• an estimated mine life of 11 years; and• a capital payback period of under 3 years.

The base case for the feasibility study assumed the Company would use a North-South access road as its transportation corridor for the project. Government support for the access road was announced by the government of Ontario on May 9th, 2012.

The Company has maintained an East-West access road as its access alternative in its project plan in case the North-South road does not proceed as planned. The East-West access road is included as part of the Company’s Environmental Assessment. The Company believes the East-West access road is a viable alternative to the North-South road and the Company continues to progress discussions with stakeholders in the region concerning infrastructure.

1 The feasibility study was completed by Micon and included technical input from: Tetra Tech WEI, Cementation Canada Ltd., Knight Piesold Ltd., Penguin ASI, SGS Canada Inc., Outotec, Ausenco, Nuna Logistics, and Golder Associates.

2 The feasibility study economic analysis is based on the following metal prices derived on a three year trailing average basis as of August 31, 2012:Nickel US$9.43 per poundCopper US$3.60 per poundPlatinum US$1,600 per ouncePalladium US$599 per ounce


635300_48pg.indd 7 8/19/13 11:58 PM

The project description is as follows:• 1.0 million tonnes per year throughput rate, producing approximately 150,000 tonnes of high grade nickel-copper concentrate per annum;• A proven and probable mineral reserve of:

Tonnes Nickel Copper Platinum PalladiumClassification (X 1000) (%) (%) (g/t) (g/t)Proven 5,264 2.02 1.04 1.01 3.45Probable 5,867 1.38 0.72 0.78 2.76Proven and Probable 11,131 1.68 0.87 0.89 3.09

• Metallurgical recoveries of: Nickel 83.1% Copper 89.7% Platinum 74.0% Palladium 82.3%• Underground mining will be conducted utilizing highly productive blast hole sub-level stoping;• All major earthworks will utilize non-acid generating mine waste rock as aggregate;• Surface disturbance will be limited to less than 50 hectares;• Camp supported mining operation will be supported by a year round airstrip;• All major mining facilities (including the mill) will be located underground; • All tailings will be stored underground as paste fill; • Concentrate will be trucked to a rail load-out facility near Nakina along a toll road following the North-South all-season road corridor

supported by the Province of Ontario and Cliffs;• Power will be generated on-site with the use of diesel generators, with recovered heat used to dry concentrate in a facility positioned on

the surface area adjacent to the power plant;• Initial mine production will be from an internal ramp; and• Production ramps will be developed after year three to access the lower levels of the deposit.

The DCF model includes operating costs to operate the mine and process plant, selling of bulk concentrate, environmental monitoring, overall management of the proposed operation, closure costs and taxes.

Of the estimated operating cost of $97 per tonne, approximately 35% was attributed to underground mining, and approximately 34% was attributed to on-site processing (including power costs); 9% was attributed to road toll related costs, and 22% was attributed to general and administrative (“G&A”) related costs.

Mine production was estimated based on a mining recovery rate of 95% of the measured and indicated resource defined in Micon’s technical report titled “Technical Report on the Updated Mineral Resource Estimate, McFaulds Lake Project, James Bay Lowlands, Ontario, Canada” dated April 18, 2011 (effective date March 4, 2011). Mining dilution of 7% at zero grade was included in the estimation of proven and probable reserves.

Blackbird

The Company continues to evaluate a northwest Ontario based mine, mill and ferrochrome furnace facility capable of producing high quality ferrochrome. The Company is currently evaluating its options to potentially expedite the development of this project by attracting a strategic partner.

Highlights of the Blackbird chromite property include:• Measured and indicated resource of 20.5 million tonnes sufficient for a 15 year project producing 600,000 tonnes of ferrochrome

annually and a further inferred resource of 23.5 million tonnes with the potential to add an additional 10 years to the project;• Mineralization remains open at depth;• Canada’s first independent NI-43-101 resource estimate for chromite; • The resource is a classic stratiform deposit with original chromite layers broken up into segments 300 to 400 metres in length;• The chromite layers are sub-vertical and extend from surface to beyond 300 metres;• There are four massive segments, grading approximately 35% Cr2O3 and ranging from 7 to 18 metres in average true thickness;• There are two intercalated lenses, grading approximately 25 to 28% Cr2O3 and ranging in thickness from 150 to 200 metres;• All chromite layers are open at depth and additional gravity targets that have potential to expand the resource have not been drill tested

to date; and• Deposit geometry is very well suited for a low impact, underground mine with a limited environmental footprint. Noront Resources Ltd. – Management’s Discussion and Analysis – 6

635300_48pg.indd 8 8/19/13 11:58 PM

Regional Exploration

The Company has shifted its focus from exploration to the development of the Eagle’s Nest deposit in the McFaulds Lake area of Northern Ontario and as a result no significant near-term exploration activity at site is planned in the upcoming fiscal year. The Company, however, continues to further develop its geological model of the district which will further the Company’s understanding of the Eagle’s Nest deposit and may refine existing or identify new exploration targets.

Joint Ventures

Windfall Lake

On July 20, 2009, the Company entered into a property option agreement (the “Agreement”) with Eagle Hill Exploration (“Eagle Hill”) pursuant to which Eagle Hill as of April 20, 2012 has earned a 75% interest in the Windfall Lake Property (the “Property”).

On April 19, 2013, the Company announced that an agreement (the “Amending Agreement”) had been signed between the Company and Eagle Hill Exploration Corp. (“EAG”) to amend certain provisions of the option agreement entered into between the parties onJuly 20, 2009 (the “Option Agreement”) in regards to the Windfall Lake Property (the “Project”). The Amending agreement gives Eagle Hill a three year extension to deliver on certain obligations required under the option agreement in consideration for EAG (i) providing a financial guarantee to the Quebec government for the reclamation obligation on the Project and apply to transfer the reclamation obligation from the Company to EAG (ii) paying cash consideration to the Company of $615,000 and (iii) removing the provisions in the Option Agreement requiring the Company to obtain the prior consent of EAG for the transfer of the Company’s interest in the Project.

In accordance with the Option Agreement, EAG earned a 75% interest in the Project and the Company retains a 25% interest subject to the provisions of the Option Agreement. Upon earning its 75% interest under the Option Agreement, EAG was required to deliver either a bankable feasibility study (providing for a minimum internal rate of return of 15%) or commit to cause the commencement of commercial production (the “Delivery Requirement”) by April 20, 2013. If EAG does not complete a bankable feasibility study or take the project to production by April 20, 2013, then the Company has the option to purchase back the 75% of the Project from EAG for the lesser of (i) an amount equal to the expenses incurred by EAG and (ii) $6 million (the “Buy-Back Provisions”).

Under the provisions of the Amending Agreement, the Company has agreed to extend the Delivery Requirement date to April 20, 2016. The Company retains its rights under the Buy-Back Provisions if the Delivery Requirements are not satisfied by April 20, 2016.

The Amending Agreement further provides that if the Company exercises its rights under the Buy-Back Provisions and then takes the Project into production, the Company will pay to EAG the amount EAG has spent during the period from April 20, 2013 to April 20, 2016 from the proceeds of production, in priority to all amounts otherwise payable except senior debt, interest on senior debt, operating costs and $11.9 million (the Company’s previous exploration expenditures on the project).

The Company has also granted EAG a 90 day exclusivity period to negotiate the purchase of the Company’s interest in the Project.The closing of the Amending Agreement is subject to EAG paying $615,000 in cash to the Company within 90 days from the date hereof. If EAG is unable to meet these conditions within 90 days, Noront retains its rights under the Buy-Back Provisions or if Noront does not elect to exercise the Buy-Back right, the Company’s interest in the Project will automatically increase to 30%.

On June 28, 2013, the Company signed a binding letter agreement (the “Letter Agreement”) to sell its remaining 25% interest, all royalty interests, and all other associated rights in the Windfall Lake Project to EAG (the “Project”). In consideration for the sale of Noront’s 25% interest in the project EAG will pay to Noront (i) an aggregate cash payment of $5 million, and (ii) 25 million freely tradeable (subject only to such hold periods required under applicable Canadian securities laws) common shares of EAG to be issued to Noront on closing of the transaction. In accordance with the binding agreement, EAG continues to be obligated to provide a financial guarantee to the Quebec government for the reclamation obligation on the Project and apply to transfer the reclamation obligation from the Company to EAG.

In conjunction with entering into the Letter Agreement, EAG entered into a binding financing agreement with its strategic partner Southern Arc pursuant to which Southern Arc Minerals Inc. has agreed, subject to terms therein, to invest, together with Dundee Corporation an aggregate of $12 million in Eagle Hill to complete the transaction with Noront and advance the Project.


635300_48pg.indd 9 8/19/13 11:58 PM

The Letter Agreement is subject to standard closing conditions including obtaining shareholder approval of the transaction from the shareholders of EAG and Southern Arc. A non-refundable deposit of $615,000 was paid to Noront on entering into the Letter Agreement with the balance to be paid upon closing. If the Letter Agreement is terminated, in certain circumstances, Noront’s undivided right, title and interest in and to the royalty option and the Property shall increase from 25% to 30% in lieu of a break fee.

Until closing of the transaction as contemplated above, Noront retains all rights and obligations under the July 20, 2009 option agreement as amended. Only upon closing will the Option Agreement be terminated.

Golden Valley

Given the results of past exploration work, the Company decided not to participate in future exploration work on this property and as a result the option agreement was terminated. The Company does not retain any interest or rights in regards to this property and the capitalized acquisition costs were written off during the year.

Garden Island, Quebec

The Company has a 50% interest in the Garden Island property comprised of 568 mining claims totaling 23,763 hectares, most of which are in Pascalis, Manneville and Senneville townships, which lie along a northwest-southwest trending Abitibi volcanic greenstone belt. During the year, the Company determined that further exploration is neither budgeted nor planned in the near future due to the Company’s focus on the development of the McFaulds Lake Property. In addition, exploration for mineral resources has not led to the discovery of commercially viable quantities of mineral resources. Therefore, the Company has discontinued exploration activities permanently and has written off the acquisition cost of $250,000.

SELECTED ANNUAL FINANCIAL INFORMATION

The following financial data are derived from the Company’s financial statements for the fiscal years ended April 30, 2013 and 2012:

(expressed in $ thousands except per share amounts) For the year ended April 30 2013 2012 Development and exploration expenditures 10,822 21,852 Office and general 5,632 4,744 Amortization 625 408 Share-based compensation 1,005 2,257 Write-off of mineral property 425 - Interest income 75 158 Interest expense 266 - Gain on sale of marketable securities 1 13 Net loss (18,786) (28,752) Net loss per share – basic and diluted (1) (0.08) (0.14) Cash flow used in operations (16,760) (24,256) Cash and cash equivalents 14,028 5,067 Working Capital 13,570 3,849

(1) Fully diluted weighted average common shares outstanding, used in the calculation of fully dilutive net loss per share, are not reflective of the outstanding stock options and warrants at that time as their exercise would be anti-dilutive in the net loss per share calculation.


635300_48pg.indd 10 8/19/13 11:58 PM

Year Ended April 30, 2013 Compared to the Year Ended April 30, 2012

Development and Exploration Expenditures

(expressed in $ thousands) For the year ended April 30 2013 2012

Eagle’s Nest Technical Studies $ 1,332 $ 3,514 Permitting 2,116 3,475 Drilling & Camp Costs 3,995 - Other 450 - 7,893 6,989 Blackbird Drilling and Camp Costs - 8,267 Geophysics - 30 - 8,297 Regional Drilling and Camp Costs 2,042 5,444 Geophysics and Other 22 832 2,064 6,276 Other 865 290 Total $ 10,822 $ 21,852

Eagle’s Nest

Technical studies consist of expenses related to the completion of the Company’s feasibility study which was released September 5th, 2012. During the fiscal year ended April 30, 2013, $1.3 million was spent compared to $3.5 million in the prior year.

Permitting expenses consist of certain costs related to the Feasibility Study, environmental baseline and assessment work and community consultation required for the Company’s environmental assessment application. During the fiscal year ended April 30, 2013, $1.9 million was spent on environmental baseline and assessment work and $0.2 million was spent on community consultation compared to $2.9 million and $0.6 million respectively, in the prior year.

Drilling and camp costs consist of geotechnical drilling necessary to examine the rock characteristics within the areas planned for major infrastructure development and expenses related to the construction of a temporary trail to the proposed mine portal site. A total of $4.0 million was spent on drilling 4,416 metres. Included in other costs are expenses related to surveying the Eagle’s Nest property to convert the claims to mining leases.

Blackbird

The Company did not have any active exploration or drilling programs on Blackbird during the year ended April 30, 2013. During the fiscal year ended April 30, 2012, there was active exploration and resource definition drilling on Blackbird with $8.3 million being spent during the year. Regional

The Company did not have any active exploration programs during the year ended April 30, 2013. Regional exploration costs relate to the cost of maintaining the Company’s camp in the Ring of Fire. For the fiscal year ended April 30, 2012, the majority of the Company’s camp costs were allocated to Blackbird due to the active exploration and resource drilling occurring on the Blackbird chromite deposits.


635300_48pg.indd 11 8/19/13 11:58 PM

Other

Included in the year ended April 30, 2013, are costs to verify the geological data of the area encompassing the Eagle’s Nest and Blackbird deposits. Also included in other costs for the year ended April 30, 2013, are $0.7 million for exploration expenditures incurred in fiscal years 2008 and 2009 which were previously refunded by the Government of Quebec as tax credits. The Company received a notice of assessment disallowing the inclusion of the underlying expenditures in the refundable tax credit calculation. The Company filed a notice of objection in relation to these expenditures, paid 50% of the amount assessed as required, and continues to defend its position. The Company has accrued the full potential liability of $895,748.

Office and General

(expressed in $ thousands) For the year ended April 30 2013 2012 General Administration 3,852 3,279 Professional fees 1,126 678 Communications and travel 654 787 $ 5,632 $ 4,744

General administration costs for the year ended April 30, 2013, includes executive severance and consulting pay of $0.4 million. For the fiscal year ended April 30, 2013, the office and general expenses increased from the prior year primarily due to the engagement of project advisors related to the financing of the Eagle’s Nest Project and an increase in legal fees which is included in professional fees. The Company wrote off two mineral properties during the year with a total acquisition cost of $0.4 million.

Income

Income is comprised of interest earned on deposits. The Company earned $0.08 million in interest income during the year compared to $0.2 million in interest income during the prior year. The decrease is due to lower average cash balances in the current year compared to the prior year.

SUMMARY OF CASH FLOWS

(expressed in $ thousands) For the year ended April 30 2013 2012 Cash used in operating activities (16,760) (24,256) Cash used in investing activities (618) (84) Cash provided by financing activities 26,339 20,518 8,961 (3,822)

Operating Activities

For the year ended April 30, 2013, the Company had a cash outflow from operations of $16.8 million compared to a cash outflow of $24.3 million in the fiscal year 2012. The development activity during the year ended April 30, 2013, was the completion of the site investigations drill program at Eagle’s Nest. The activity in the prior year included active surface drill testing at Blackbird as well as a geophysical survey program that included the area near Eagle’s Nest.

Investing Activities

For the year ended April 30, 2013, the Company had a cash outflow from investing activities of $0.6 million compared to a cash outflow of $0.1 million in the prior year. The increase in cash outflow is due to the purchase of certain assets relating to the camp operations at the Eagle’s Nest property and leasehold improvements relating to the relocation of the head office in Toronto in December 2012.


635300_48pg.indd 12 8/19/13 11:58 PM

Financing Activities

For the year ended April 30, 2013, cash provided from financing was $26.3 million compared to $20.5 million in the prior fiscal year. The cash provided from financing is a result of raising net proceeds of $15.1 million in February 2013 through a loan facility by Resource Capital Funds (“RCF”), $9.9 million in May 2012 from an investment by RCF and $1.3 million from Baosteel Resources Inc. (“Baosteel”). In the prior year, the cash provided from financing was a result of raising net proceeds of $17.3 million in June 2011 as a result of an investment by Baosteel and net proceeds of $3.2 million from a flow-through share private placement. The cash provided from these financings is net of the cost of issuance.

SUMMARY OF QUARTERLY RESULTS AND FOURTH QUARTER REVIEW

The following information is derived from the Company’s quarterly consolidated financial statements for the past eight quarters:

(expressed in $ thousands except per share amounts) 2013 2013 2013 2013 2012 2012 2012 2012 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1

Expenses 3,439 3,873 7,180 4,186 6,700 6,619 8,168 7,772 Interest Income 6 13 23 33 23 31 53 51

Gain on sale of marketable securities - - - 1 13 - - - Write-down of marketable securities 169 - - - - - - - Write-off of mineral property 250 - 175 - - - - - Severence - 417 - - - 7 - - Acquisition costs - - - - - - 8 - Net loss (3,615) (3,861) (7,157) (4,153) (6,502) (6,508) (8,115) (7,627) Net loss per share – basic and diluted (1) (0.01) (0.02) (0.03) (0.02) (0.03) (0.03) (0.04) (0.04) Cash and cash equivalents 14,028 2,025 5,755 10,817 5,067 11,781 12,916 19,145 Working Capital 13,570 750 4,424 10,966 3,849 9,887 12,657 20,029 Assets 18,632 6,592 10,523 16,281 10,201 16,396 19,389 26,192 Long-term Liabilities 16,289 708 720 726 705 141 141 138

(1) Fully diluted weighted average common shares outstanding, used in the calculation of fully dilutive net loss per share, are not reflective of the outstanding stock options and warrants at that time as their exercise would be anti-dilutive in the net loss per share calculation.

Interest income varies quarterly based on the average cash balance on hand over the quarter and the corresponding yield earned on the Company’s deposits. The quarterly variation in expenses is mainly attributable to timing of exploration drill programs and mining studies and stock option expense which is recognized at the time of grant in accordance with vesting provisions.

Three Months Ended April 30, 2013 compared to Three Months Ended April 30, 2012

For the three months ended April 30, 2013, total expenses were $3.4 million compared to $6.7 million in the prior year comparable period. The decrease is due to less site work in the current period. During the prior year comparable period, the Company had an active drill program to complete resource definition drilling on the Blackbird chromite deposits and for exploration drilling on other regional targets.

For the three months ended April 30, 2013, the Company earned $0.01 million in interest income from deposits compared to $0.03 million in interest income for the prior year comparable quarter. Interest income earned in the current and comparable quarter consists of interest earned on bank balances.


635300_48pg.indd 13 8/19/13 11:58 PM

LIQUIDITY AND CAPITAL RESOURCES

As at April 30, 2013, the Company had working capital of $13.6 million and a cash position (cash and cash equivalents) of $14.0 million compared to $3.8 million and $5.1 million respectively as at April 30, 2012.

On May 10, 2012, the Company completed a non-brokered private placement with gross aggregate proceeds of $10 million with Resource Capital Funds (RCF). In a subsequent transaction Baosteel exercised its anti-dilution rights pursuant to its previous subscription agreement to maintain its 9.9% interest, with aggregate gross proceeds to the Company of approximately $1.3 million.

On February 26, 2013, the Company entered into a loan facility with RCF in the aggregate principal amount of US$15.0 million.The Facility will bear interest at 10% per annum during the Bridge Loan period and at 8% per annum during the Convertible Loan period. Interest will be paid quarterly, in arrears, in common shares of the Company based on the volume weighted average trading price of the Company’s common shares during the 20 days prior to the date of each interest period determination, or at RCF’s option, in cash. The Facility will be secured by a first ranking perfected lien over all assets associated with the Company’s projects, initially excluding the Company’s interest in the Windfall Lake gold project; all shares or equity interests in subsidiaries of the Company and all intercompany debt.An Establishment Fee of 2% of the principal amount of the Facility was paid to RCF in common shares of the Company. The shares were valued using the volume weighted average trading price for the twenty days prior to November 28th, 2012, resulting in the issuance of 977,954 common shares.

The Convertible Loan may be converted into common shares of the Company at the option of RCF at a price of $0.45 cents per share at any time subsequent to the Bridge Loan maturity date and prior to December 31, 2015, (the “Conversion Rights”). RCF has an existing equity ownership interest in Noront of approximately 18%. If the Bridge Loan rolls into the Convertible Loan then, on a partially diluted basis, RCF’s equity ownership interest will exceed 20% of the total number of outstanding shares of the Company.

On April 24, 2013, the Company announced that pursuant to a loan agreement entered into between Noront and Resource Capital Funds V L.P. (“RCF”) dated February 26, 2013, (the “Loan Agreement”) that it has satisfied the payment of interest for the first quarter of calendar 2013 by delivery of 474,941 common shares of the Company (the “Interest Shares”) at an effective price of $0.2942 per Interest Share to RCF. The Interest Shares are subject to a four month hold period, expiring on August 22, 2013. The calculation of the number of Interest Shares issued was based on the volume weighted average trading price of the common shares of the Company during the 20 trading days prior to March 28, 2013. After giving effect to the issuance of the Interest Shares, there will be 231,750,555 common shares of the Company issued and outstanding.

Noront’s financial instruments consist of cash, marketable securities, duties and tax receivable and accounts payable, accrued liabilities and long-term debt. Noront estimates that the fair value of cash and cash equivalents, duties and tax receivable, accounts payable and taxes payable approximate the carrying values.

The Company will need to raise sufficient capital to further develop its properties and projects beyond fiscal 2014. The timing and ability to do so will depend on, among others, the status of the financial markets as well as the acceptance of investors to finance resource based junior companies, in addition to the results of the Company’s exploration programs and development activities and the acquisition of additional projects. At this time, the Company will rely on its ability to obtain equity or debt financing for the foreseeable future.

CONTRACTUAL OBLIGATIONS AND CONTINGENCIES

The contractual obligations for the ensuing five-year period can be summarized as follows:

(expressed in $ thousands) Less then After Contractual Obligations Total 1 year 1 - 3 years 4 - 5 years 5 years Operating Leases 1,961 449 1,213 299 - Other Long-Term Obligations 1,256 - 541 28 687

Total Contractual Obligations 3,217 449 1,754 327 687

Operating lease obligations represent future minimum annual rentals under non-cancellable operating leases for Noront office space, vehicles and equipment.

Other Long-Term Obligations represent commitments related to a demobilization plan for the McFaulds Lake Project and a site remediation plan established in accordance with the requirements of the Quebec Ministry of Natural Resources for Windfall Lake.


635300_48pg.indd 14 8/19/13 11:58 PM

RELATED PARTY AND OTHER TRANSACTIONS

During the year ended April 30, 2013, the Company engaged Penguin Automated Systems (“Penguin”) after completing an independent tendering process; under the direction of Micon International, lead consultant for certain technical studies. The Company’s Chief Operating Officer has a 38.5% ownership interest in Penguin. Professional fees paid to Penguin for the year ended April 30, 2013, were $202,925 (year ended April 30, 2012 - $1,098,239) and the amount payable to Penguin as at April 30, 2013 is $Nil (April 30, 2012 – $392,292).

Also during fiscal year 2013, the Company remunerated its Interim CEO through Coniston Investment Corp. (“Coniston”). The Company’s Interim CEO has a 100% interest in Coniston. Amounts paid to Coniston for the year ended April 30, 2013 were $72,317 (year ended April 30, 2012 – $Nil) and the amount payable to Coniston as at April 30, 2013 is $27,000 (April 30, 2012 – $Nil).

The above noted transactions are in the normal course of business and are measured at the exchange amount, as agreed to by the parties, and approved by the board of directors in strict adherence to conflict of interest laws and regulations.

DISCLOSURE CONTROLS AND PROCEDURES

Management has established processes, which are in place to provide them with sufficient knowledge to support management representations that they have exercised reasonable diligence that:

(i) the audited annual financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of and for the periods presented by the audited annual financial statements; and

(ii) the audited annual financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of the date of and for the periods presented by the audited annual financial statements.

In contrast to the certificate required of non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), the Company utilizes the Venture Issuer Basic Certificate which does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing the Certificate are not making any representations relating to the establishment and maintenance of:

(i) controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(ii) a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

The certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer, such as the Company, to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

CRITICAL ACCOUNTING ESTIMATES

Deferred Mining Property Acquisition

Noront capitalizes mining property acquisition costs which are to be amortized when production is attained or the balance thereof written off should the property be disproven through exploration or abandoned. On an ongoing basis, the Company evaluates deferred expenditures relating to each property to assess whether there has been impairment in value. The Company recognizes write-downs for impairment where the carrying value of the mining property exceeds its estimated long-term net recoverable value. Recoverable value is estimated based upon current exploration results and upon the Company’s assessment of the future probability of positive cash flows from the property or from the sale of the property.


635300_48pg.indd 15 8/19/13 11:58 PM

Future Site Restoration Costs

The Company has an obligation for future site restoration costs. The Company records the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development and/or normal use of the assets. The fair value of the liability is added to the carrying amount of the associated asset and this additional carrying amount is depreciated over the life of the asset. Subsequent to the initial measurement of the asset retirement of the asset retirement obligation, the obligation is adjusted at the end of each period to reflect the passage of time and changes in the estimated future cash flows underlying the obligation. If the obligation is settled for other than the carrying amount of the liability, the Company will recognize a gain or loss on settlement.

Stock Options and Warrants

The Black-Scholes option valuation model used by the Company to determine fair values for stock-based compensation was developed for use in estimating the fair value of freely traded options. This model requires input of highly subjective assumptions including future stock volatility and expected time until exercise. Changes in the subjective input assumptions can materially affect the fair value estimate.

Repayment Options

The Company’s convertible debt agreement contains embedded derivatives related to the Company’s prepayment option and the Lender’s convertible feature (“Repayment Options”). The fair value assigned to the Repayment Options uses Level 2 assumptions with the main inputs to the valuation being credit spreads of the Company, historical prices of the underlying stock, USD discount curve and CAD/USD foreign exchange rates. The most significant assumption is the probability of the loan being repaid prior to reaching the conversion date, which was estimated by obtaining credit spreads for an index of comparable companies residing in the same industry.

RISKS AND UNCERTAINTIES

Noront’s business of exploring mineral resources involves a variety of operational, financial and regulatory risks that are typical in the natural resource industry. The risk factors include risks summarized below, risk factors referenced at page 2 herein, and risk factors disclosed under the heading “Risk Factors” in the Company’s most recent AIF, available electronically on SEDAR. The Company attempts to mitigate these risks and minimize their effect on its financial performance, but there is no guarantee that the Company will be profitable in the future, and an investment in Noront common shares should be considered speculative.

Mineral Exploration

The business of exploration for minerals and mining involves a high degree of risk. A relatively small proportion of properties that are explored are ultimately developed into producing mines. At present, there are no known bodies of commercial ore on any of the mineral properties in which the Company holds interest or intends to acquire an interest and the proposed exploration program is an exploratory search for ore. Unusual or unexpected formations, formation pressures, fires, power outages, labour disruptions, flooding, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labour are other risks involved in the conduct of exploration programs. The Company has limited experience in the development and operation of mines and has relied on and may continue to rely upon consultants and others for exploration and operating expertise. The economics of developing gold, base metal and other mineral properties is affected by many factors including the cost of operations, variation of the grade of ore mined, and fluctuations in the price of any minerals produced.

Additional Funding Requirements and Potential Dilution

Noront has no current or foreseeable prospect of generating significant revenues. Accordingly, the success of the Company is dependent, among other things, on obtaining sufficient funding to enable the Company to explore and develop its properties. There can be no assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing will be favourable. Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and development of its projects with the possible loss of such properties.

The Company will require new capital to continue to operate its business and to continue with exploration on its mineral properties, and there is no assurance that capital will be available when needed, if at all. It is likely that such additional capital will be raised through the issuance of additional equity, which will result in dilution to the Company’s shareholders.


635300_48pg.indd 16 8/19/13 11:58 PM

As of July 9, 2013, the Company had 231,750,555 shares outstanding, 12,336,666 stock options outstanding with a weighted average exercise price of $0.95 expiring between 2013 and 2017 and 722,150 warrants outstanding. The issuance of common shares of the Company upon the exercise of options and/or warrants will dilute the ownership of the Company’s current shareholders. Noront may also issue additional securities convertible into common shares of Noront in the future, the conversion of which would result in further dilution to the shareholders of the Company.

Continuation of Operating Losses

The Company does not have a long historical track record of operating upon which investors may rely. Consequently, investors will have to rely on the expertise of the Company’s management. Further, the Company’s properties are in the exploration stage and are not commercially viable at this time. The Company does not have a history of earnings or the provision of return on investment, and there is no assurance that it will produce revenue, operate profitably or provide a return on investment in the future.

Title to Mineral Properties (Ownership Rights)

Although title to the properties has been reviewed by or on behalf of Noront, no assurances can be given that there are no title defects affecting the properties. Title insurance generally is not available for mining claims in Canada and Noront’s ability to ensure that it has obtained secure claim to individual mineral properties or mining concessions may be limited. Noront has not conducted surveys of the claims in which it holds direct or indirect interests; therefore, the precise area and location of such claims may be in doubt. It is possible that the properties may be subject to prior unregistered liens, agreements, transfers or claims, including native land claims and title may be affected by, among other things, undetected defects. In addition, Noront may be unable to operate the properties as permitted or to enforce its rights with respect to its properties.

Resource Estimates

The resources presented in this document are estimates and no assurance can be given that the anticipated tonnages and grades will be achieved or that the expected level of recovery will be realized. Such figures have been determined based upon assumed metal prices. Future production could differ dramatically from estimates due to mineralization or formations different from those predicted by drilling, sampling and similar examinations or declines in the market price of the metals may render the mining of some or all of the resources as uneconomic.

Economic

Even if the Company’s exploration programs are successful, factors beyond the control of the Company may affect the marketability of any mineral products discovered. The prices of mineral products have historically fluctuated widely and are affected by numerous factors beyond the Company’s control, including international, economic and political trends, expectations for inflation, currency exchange fluctuations, interest rates, global or regional consumption patterns, speculative activities and worldwide production levels. The effect of these factors cannot accurately be predicted.

Commodity Price Risk

The ability of the Company to develop its mining properties and the future profitability of the Company is directly related to the market price of gold and base minerals.

Competition

The mining industry is intensely competitive in all its phases. The Company competes with many companies possessing greater financial resources and technical facilities than itself for the acquisition of mineral interests as well as for the recruitment and retention of qualified employees, contractors and consultants.

Environmental

The Company’s operations are subject to environmental regulations promulgated by local, provincial and federal government agencies from time to time. Environmental legislation provides for restrictions and prohibitions of spills, releases or emissions of various substances produced in association with certain mining industry operations, such as seepage from tailing disposal areas, which could result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties. In addition, certain types of operations require submissions to and approval of environmental impact assessments. Environmental legislation is evolving in a manner, which means stricter standards and enforcement, and fines and penalties for non-compliance are more stringent. Environmental


635300_48pg.indd 17 8/19/13 11:58 PM

assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers and employees. The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of operations. The Company intends to fully comply with all environmental regulations.

Failure to comply with applicable laws, regulations, and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations and, in particular, environmental laws.

Although variable, depending on location and the governing authority, land rehabilitation requirements are generally imposed on mineral exploration companies, as well as companies with mining operations, in order to minimize long-term effects of land disturbance. Rehabilitation may include requirements to control dispersion of potentially deleterious effluents and to reasonably re-establish pre-disturbance land forms and vegetation. In order to carry out rehabilitation obligations imposed on the Company in connection with its mineral exploration, the Company must allocate financial resources that might otherwise be spent on further exploration and/or development programs.

First Nations

Noront is committed to working in partnership with our local communities and First Nations in a manner which fosters active participation and mutual respect. Noront works towards minimizing negative project impacts, encouraging certain joint consultation processes, addressing certain decision making processes and towards maintaining meaningful ongoing dialogue not only for the Company but for all participants in the Ring of Fire region.

Many of Noront’s contractors and suppliers live and work in the local communities. The Company regularly consults with communities proximal to the Company’s exploration activities to advise them of plans and answer any questions they may have about current and future activities. The objective is to operate to the benefit of the shareholders and the local communities using the resources and the environment today without compromising the long-term capacity to support post-exploration and ultimately post-mining land uses.

First Nations in Ontario are increasingly making lands and rights claims in respect of existing and prospective resource projects on lands asserted to be First Nation traditional or treaty lands. Should a First Nation make such a claim in respect of the Company’s properties and should such claim be resolved by government or the courts in favour of the First Nation, it could materially adversely affect the business of Noront.

Government Regulations

The Company’s mineral exploration and planned development activities are subject to various federal and provincial government laws and regulations governing, among other things, acquisition of mining interests, maintenance of claims, tenure, expropriation, prospecting, development, mining, production, price controls, taxes, labour standards, occupational health, waste disposal, toxic substances, water use, land use, treatment of indigenous peoples, environmental protection and remediation, endangered and protected species, mine safety and other matters. Although the Company’s exploration and planned development activities are currently believed by the Company to be carried out in accordance with all applicable rules and regulations, no assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied or amended in a manner that could have a material adverse effect on the business, financial condition and results of operations of Noront, including changes to government mining laws and regulations or changes in taxation rates.

The costs and delays associated with obtaining and complying with necessary licences and permits as well as applicable laws and regulations could stop or materially delay or restrict Noront from proceeding with the development of an exploration project. Any failure to comply with applicable laws, regulations or licencing and permitting requirements, even if inadvertent, may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing interruption or closure of exploration, development or mining operations or material fines, penalties or other liabilities.

The Company attempts to mitigate these risks and minimize their effect on its financial performance, but there is no guarantee that the Company will be profitable in the future, and Noront common shares should be considered speculative.


635300_48pg.indd 18 8/19/13 11:58 PM

Joint Ventures and Option Agreements

Noront Resources enters into option agreements and joint ventures as a means of gaining property interests and raising funds. Any failure of any partner to meet its obligations to Noront or other third parties, or any disputes with respect to third parties’ respective rights and obligations could have a material adverse effect on such agreements. In addition, Noront may be unable to exert direct influence over strategic decisions made in respect to properties that are subject to the terms of these agreements.

Litigation

The Company is subject to litigation risks. All industries, including the mining industry, are subject to legal claims, with and without merit. Defence and settlement costs of legal claims can be substantial, even with respect to claims that have no merit. Due to the inherent uncertainty of the litigation process, the resolution of any particular legal proceeding to which the Company is or may become subject could have a material effect on its financial position, results of operations or the Company’s mining and project development operations.

Legal

Amendments to current laws, regulations and permits governing operations and activities of mining companies, or more stringent implementation thereof, could have a material adverse impact on Noront Resources and cause increases in expenditures or exploration costs or reduction in levels of activities on our exploration projects, or require abandonment or delays in the development of new exploration properties.

Regulations and Permitting

The operations of the Company may require licenses and permits from various local, provincial and federal governmental authorities. There can be no assurance that the Company will be able to obtain all necessary licenses and permits that may be required to carry out exploration, development, or mining operations, at its projects.

Uninsurable Risks

The mining industry is subject to significant risks that could result in damage to, or destruction of, mineral properties, personal injury or death, environmental damage, delays in exploration, and monetary losses and possible legal liability. Where Noront considers it practical to do so, it maintains insurance in amounts believed to be reasonable, including coverage for directors’ and officers’ liability and fiduciary liability and others.

Such insurance, however, contains exclusions and limitations on coverage. Accordingly, Noront’s insurance policies may not provide coverage for all losses related to Noront’s activities (and specifically do not cover environmental liabilities and losses). The occurrence of losses, liabilities or damage not covered by such insurance policies could have a material and adverse effect on Noront’s results of operations and financial condition. Noront cannot be certain that insurance will be available to the Company, or that appropriate insurance will be available on terms and conditions acceptable to the Company. In some cases, coverage is not available or considered too expensive relative to the perceived risk.

Dependence on Key Employees, Contractors and Management

Noront currently has a small executive management group, which is sufficient for the Company’s present stage of activity. Given that our success to date has depended, and in the future will continue to depend, in large part on the efforts of the current executive management group, the loss of a significant number of the members of this group could have a material adverse effect on the Company, its business and its ability to develop its projects. Noront does not maintain key person life insurance. Accordingly, the loss of the services of one or more of such key management personnel could have a material adverse effect on the Company.

The mining industry has been impacted by increased worldwide demand for critical resources including industry consultants, engineering firms and technical experts. These shortages have caused increased costs and delays in planned activities. Noront is also dependent upon a number of key personnel, including the services of certain key employees and contractors. Noront’s ability to manage its activities, and hence its success, will depend in large part on the efforts of these individuals. Noront faces intense competition for qualified personnel,and there can be no assurance that the Company will be able to attract and retain such personnel.


635300_48pg.indd 19 8/19/13 11:58 PM

Labour and Employment

Relations between the Company and its employees may be affected by changes in the scheme of labour relations that may be introduced by the relevant governmental authorities in whose jurisdictions the Company carries on business. Changes in such legislation or in the relationship between the Company and its employees may have a material adverse effect on the Company’s business, results of operations and financial condition. As the Company’s business grows, it will require additional key financial, administrative, mining, marketing and public relations personnel as well as additional staff for operations.

Conflict of Interest

Certain directors or proposed directors of the Company are also directors, officers or shareholders of other companies that are similarly engaged in the business of acquiring, developing and exploiting natural resource properties. Such associations may give rise to conflicts of interest from time to time. The directors of the Company are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interest, which they may have in any project opportunity of the Company. If a conflict of interest arises at a meeting of the board of directors, any director in a conflict will disclose his interest and abstain from voting on such matter. In determining whether or not the Company will participate in any project or opportunity, the directors will primarily consider the degree of risk to which the Company may be exposed and its financial position at that time.

Share Price

The market price of a publicly traded stock is affected by many variables not directly related to the success of the Company. In recent years, the securities markets have experienced a high level of price and volume volatility, and the market price of securities of many companies, particularly those considered to be development stage companies, has experienced wide fluctuations which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. There can be no assurance that such fluctuations will not affect the price of the Company’s securities.

ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT SIGNIFICANT REVENUE

Additional disclosure concerning the Company’s general and administrative expenses and resource property costs is available in the Company’s consolidated financials for the year ended April 30, 2013.

OUTSTANDING SHARE INFORMATION

As at July 9, 2013 Authorized Unlimited Issued and outstanding shares 231,750,555 Options outstanding 17,136,666 Warrants outstanding 722,150 Fully diluted 249,609,371

ADDITIONAL INFORMATION

Additional information relating to Noront is available on the Internet at the SEDAR website www.sedar.com and is available on the Company’s website located at www.norontresources.com.


635300_48pg.indd 20 8/19/13 11:58 PM

The accompanying consolidated financial statements of Noront Resources Ltd. (the “Company”) were prepared by management in accordance with International Financial Reporting Standards (IFRS). Management acknowledges responsibility for the preparation and presentation of the consolidated financial statements, including responsibility for significant accounting judgments and estimates and the choice of accounting principles and methods that are appropriate to the Company’s circumstances. The significant accounting policies of the Company are summarized in Note 3 to these consolidated financial statements.

Management has established processes, which are in place to provide them sufficient knowledge to support management representations that they have exercised reasonable diligence that (i) the consolidated financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of and for the years presented by the consolidated financial statements and (ii) the consolidated financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of the date of and for the years presented in the consolidated financial statements.

The board of directors is responsible for ensuring that management fulfills its financial reporting responsibilities and for reviewing and approving the consolidated financial statements together with other financial information. An Audit Committee assists the board of directors in fulfilling this responsibility. The Audit Committee meets with management to review the internal controls over the financial reporting process and the consolidated financial statements together with other financial information of the Company. The Audit Committee reports its findings to the board of directors for its consideration in approving the consolidated financial statements together with other financial information of the Company for issuance to the shareholders.

Management recognizes its responsibility for conducting the Company’s affairs in compliance with established financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.

(Signed) (Signed)

Paul Parisotto Greg Rieveley, CAInterim President and Chief Financial OfficerChief Executive Officer

Toronto, OntarioJuly 9, 2013

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

Noront Resources Ltd. – Consolidated Financial Statements – 19

635300_48pg.indd 21 8/19/13 11:58 PM

INDEPENDENT AUDITORS’ REPORT

To the Shareholders of Noront Resources Ltd.

We have audited the accompanying consolidated financial statements of Noront Resources Ltd., which comprise the consolidated statement of financial position as at April 30, 2013 and 2012 and the consolidated statements of loss, comprehensive loss, cash flows and changes in shareholders’ equity for the years then ended, and the related notes, which comprise a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the consolidated financial statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards (IFRS), and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Noront Resources Ltd. as at April 30, 2013 and 2012 and its financial performance and its cash flows for the years ended April 30, 2013 and 2012 in accordance with IFRS.

(Signed)

PricewaterhouseCoopers LLP Chartered Accountants Licensed Public Accountants

Toronto, Ontario July 9, 2013


635300_48pg.indd 22 8/19/13 11:58 PM

As at As at April 30, April 30, Note 2013 2012

Assets Current Assets Cash and cash equivalents 6 $ 14,027,965 $ 5,066,944 Restricted cash 13 385,046 385,046 Marketable securities 30,769 60,987 Taxes and other receivables 7 266,361 262,907 Supplies inventory 174,113 305,422 Prepaid expenses 110,037 336,070

Total Current Assets $ 14,994,291 $ 6,417,376

Non-Current Assets Equipment 8 2,136,182 1,852,284 Intangible assets 9 63,140 68,017 Mineral properties 10 1,438,104 1,863,104

Total Non-Current Assets $ 3,637,426 $ 3,783,405

Total Assets $ 18,631,717 $ 10,200,781

Liabilities and Shareholders’ Equity Current Liabilities Accounts payable and accrued liabilities $ 1,400,583 $ 2,052,325 Finance lease obligation 11 23,224 - Provision for environmental expenditure 13 - 516,480

Total Current Liabilities 1,423,807 2,568,805

Non-Current Liabilities Provision for environmental expenditure 13 1,511,290 704,775 Loan facility 12a 14,004,258 - Repayment options 12b 731,000 - Finance lease obligation 11 42,243 -

Total Non-Current Liabilities $ 16,288,791 $ 704,775

Total Liabilities $ 17,712,598 $ 3,273,580

Shareholders’ Equity Capital stock 14b $ 168,297,819 $ 156,663,209 Warrants 14d 2,575,675 2,575,675 Contributed surplus 29,760,116 28,755,355 Deficit (199,714,491) (180,928,025) Accumulated other comprehensive loss - (139,013)

Total Shareholders’ Equity $ 919,119 $ 6,927,201

Total Shareholders’ Equity and Liabilities $ 18,631,717 $ 10,200,781

Commitments and Contingencies (Note 18) Approved on behalf of the Board of Directors: (Signed) (Signed) Paul Parisotto Darren Blasutti Director Director

The accompanying notes are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION(Expressed in Canadian Dollars)


635300_48pg.indd 23 8/19/13 11:58 PM

For the years ended April 30, Note 2013 2012

ExpensesDevelopment and exploration expenditures 20a $ 10,822,315 $ 21,852,135

Office and general 20b 5,632,247 4,743,730 Amortization 8, 9 624,471 407,555 Share-based compensation 14c 1,004,761 2,257,010 Write-down of marketable securities 169,231 - Write-off of mineral property 10 425,000 -

Loss before finance items $ (18,678,025) $ (29,260,430) Interest income 74,987 158,454 Interest expense (265,727) - Gain on sale of marketable securities 823 13,296 Flow-through share premium - 338,798 Accretion expense 12, 13 (32,636) (2,399) Transaction costs 12b (22,615) - Remeasurement of repayment options 12b (148,045) - Foreign exchange gain on loan facility 12a 284,772 -

Net loss $ (18,786,466) $ (28,752,281)

Loss per share - basic and fully diluted 17 $ (0.08) $ (0.14)

For the years ended April 30, 2013 2012

Net loss $ (18,786,466) $ (28,752,281) Other comprehensive loss Unrealized loss on marketable securities, net of taxes (30,218) 30,484 Reclassification of losses realized 169,231 -

Total comprehensive loss $ (18,647,453) $ (28,721,797)


CONSOLIDATED STATEMENT OF LOSS(Expressed in Canadian Dollars)

CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS(Expressed in Canadian Dollars)


635300_48pg.indd 24 8/19/13 11:58 PM

Accumulated Warrants Other

Common Capital and Broker Contributed Comprehensive Shares Stock Warrants Surplus Deficit Income (Loss) Total

Balance, April 30, 2011 184,141,974 $ 137,522,091 $ 1,570,455 $ 26,370,950 $ (152,175,744) $ (169,497) $ 13,118,255 Issue of shares 20,234,967 17,402,072 - - - - 17,402,072 Cost of issue – cash - (418,380) - - - - (418,380) Exercise of options 49,999 31,001 - - - - 31,001 Fair value of options exercised - 26,849 - (26,849) - - - Warrants allocation - (1,159,464) 1,159,464 - - - - Flow-through private placement 4,073,800 3,503,468 - - - - 3,503,468 Flow-through share premium - (244,428) - - - - (244,428) Fair value of warrants expired - - (154,244) 154,244 - - - Share-based compensation - - - 2,257,010 - - 2,257,010 Net loss for the year - - - - (28,752,281) - (28,752,281) Net change in unrealized losses on available-for-sale marketable securities, net of taxes - - - - - 30,484 30,484

Balance, April 30, 2012 208,500,740 $ 156,663,209 $ 2,575,675 $ 28,755,355 $ (180,928,025) $ (139,013) $ 6,927,201 Issue of shares (Note 14b) 21,796,920 11,334,399 - - - - 11,334,399 Cost of issue – cash - (147,916) - - - - (147,916) Establishment fee on long term debt (Note 14b) 977,954 308,400 - - - - 308,400 Issuance of interest shares (Note 14b) 474,941 139,727 - - - - 139,727 Share-based compensation (Note 14c) - - - 1,004,761 - - 1,004,761 Net loss for the year - - - - (18,786,466) - (18,786,466) Net change in unrealized gains on available-for-sale marketable securities, net of taxes - - - - - (30,218) (30,218) Reclassification of losses realized - - - - - 169,231 169,231

Balance, April 30, 2013 231,750,555 $ 168,297,819 $ 2,575,675 $ 29,760,116 $ (199,714,491) $ - $ 919,119


CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY(Expressed in Canadian Dollars, unless otherwise indicated)


635300_48pg.indd 25 8/19/13 11:58 PM

For the years ended April 30, Note 2013 2012

Operating activitiesNet loss for the year $ (18,786,466) $ (28,752,281)

Amortization 8, 9 624,471 407,555 Share-based compensation 14c 1,004,761 2,257,010 Accretion expense 12, 13 32,636 2,399 Write-off of mineral property 10 425,000 - Write-down of marketable securities 169,231 - Issuance of interest shares 139,727 - Remeasurement of repayment options 148,045 - Gain on sale of marketable securities (823) (13,296) Flow-through share premium - (338,798) Foreign exchange on loan facility (284,772) - Net change in non-cash working capital: Taxes and duties receivable (3,454) 1,462,840 Prepaid expenses 226,033 (114,007) Accounts payable and accrued liabilities (651,742) (472,881) Supplies inventory 131,309 1,305,675 Finance lease 65,467 -

Net cash used in operating activities $ (16,760,577) $ (24,255,784)

Investing activities Mineral properties - (9,705) Acquisition of equipment 8 (572,154) (80,991) Acquisition of intangible assets 9 (46,373) (6,961) Proceeds on disposal of marketable securities 823 13,296

Net cash used in investing activities $ (617,704) $ (84,361) Financing activities Issue of common shares and units, net of share issue costs 14b 11,186,483 20,518,161 Proceeds from convertible loan, net of transaction costs 12 15,152,819 -

Net cash provided by financing activities $ 26,339,302 $ 20,518,161

Change in cash and cash equivalents $ 8,961,021 $ (3,821,984) Cash and cash equivalents, beginning of year 5,066,944 8,888,928

Cash and cash equivalents, end of year $ 14,027,965 $ 5,066,944


CONSOLIDATED STATEMENT OF CASH FLOWS(Expressed in Canadian Dollars)


635300_48pg.indd 26 8/19/13 11:58 PM

1. NATURE OF BUSINESS

Noront Resources Ltd. (the “Company” or “Noront”) is a resource company listed on tier 1 of the TSX Venture Exchange (“TSXV”) involved in the exploration, development and acquisition of properties prospective in base and precious metals, including: nickel, copper, platinum group metals, chromite, precious metals and vanadium. The Company’s flagship asset is the Eagle’s Nest nickel, copper, platinum, palladium and gold deposit, part of the Company’s McFaulds Lake Project, in the Ring of Fire area (“ROF”) that is located in the James Bay Lowlands, Ontario. Eagle’s Nest is the Company’s most advanced mineral discovery in the ROF, the first of five mineral discoveries the Company has made since August 2007. The address of Noront’s head office is 110 Yonge Street, Suite 400, Toronto, Ontario, Canada, M5C 1T4.

The Company is a development stage entity that does not generate operating revenues and has limited financial resources.The Company is subject to risks and challenges similar to companies in a comparable stage of development. These risks include the challenges of securing adequate capital in view of exploration, development and operational risks inherent in the mining industry and global economic and commodity price volatility. The underlying value of the Company’s mineral properties and the recoverability of the related capitalized costs are entirely dependent on the Company’s ability to obtain the necessary permits to operate and secure the required financing to complete development of and establish future profitable production from its mineral assets, or the proceeds from the disposition of, its mineral properties.

These consolidated financial statements have been prepared using International Financial Reporting Standards (“IFRS”) applicable to a going concern, which assumes the Company will be able to continue to operate for the foreseeable future and contemplates the realization of assets and settlement of liabilities in the normal course of business as they come due. For the year ended April 30, 2013, the Company recorded a net loss of $18.8 million (April 30, 2012 – net loss of $28.8 million) and reported an accumulated deficit of $199.7 million (April 30, 2012 – $180.9 million).

The Company is dependent on debt and issuance of equity securities for funding its development activities. The Company’s cash balance at April 30, 2013 is $14.0 million (April 30, 2012 – $5.1 million) and working capital at April 30, 2013 is $13.6 million (April 30, 2012 – $3.8 million).

The Company’s primary project is located in the James Bay Lowlands, a remote region of Northern Ontario. Over the next 12 months the Company plans to further the development of its Eagle’s Nest project by incurring expenditures towards obtaining all required permits which includes completing the environmental assessment on the Eagle’s Nest project, advancing infrastructure development and consulting with First Nation communities. On February 26, 2013, the Company raised US$15.0 million which will enable the Company to complete its plans for the ensuing year (Note 12). On an ongoing basis, the Company examines various financing alternatives to address future funding requirements.

2. BASIS OF PREPARATION

These consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS),as issued by the International Accounting Standards Board (IASB).

The financial statements are prepared on a going concern basis, under the historical cost convention, except for certain financial instruments that have been measured at fair value.

The principal accounting policies and critical estimates and judgments, used when compiling the financial statements are set out below.

These consolidated financial statements were approved by the board of directors on July 9, 2013.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Expressed in Canadian Dollars, unless otherwise noted)

For the years ended April 30, 2013 and 2012

Noront Resources Ltd. – Notes to the Consolidated Financial Statements – 25

635300_48pg.indd 27 8/19/13 11:58 PM

3. SIGNIFICANT ACCOUNTING POLICIES

a) Principles of ConsolidationThese consolidated financial statements include the accounts of Noront Resources Ltd. and its wholly-owned subsidiaries, Noront Resources 2008 Inc. and Noront Mexico S.A de C.V. All significant intercompany balances and transactions have been eliminated upon consolidation.

b) Functional and Presentation CurrencyItems included in the consolidated financial statements are measured using the currency of the primary economic environment in which the Company operates (the “functional currency”) which was determined to be Canadian dollars for all entities. The consolidated financial statements are presented in Canadian dollars, which is the Company’s presentation currency. Transactions in currencies other than the Canadian dollar are translated at rates of exchange at the time of the transactions as follows:

i) Monetary assets and liabilities are translated at current rates of exchange with the resulting gains or losses recorded in foreign exchange gain/loss in the statements of loss and comprehensive loss;

ii) Nonmonetary items are translated at historical exchange rates; and

iii) Expense items are translated at the average rates of exchange with any gains or losses recognized within foreign exchange gain/loss in the statements of loss and comprehensive loss.

c) Cash and Cash EquivalentsCash and cash equivalents have original maturities of less than 90 days.

d) Financial InstrumentsThe Company’s financial instruments consist of cash and cash equivalents, restricted cash, marketable securities, accounts payable and accrued liabilities, a finance lease obligation, a long-term loan facility and related repayment options.The Company has classified its cash and cash equivalents and restricted cash as loans and receivables which are measured at amortized cost. The carrying value of these instruments approximates their fair values due to their short-term nature. Marketable securities in publicly traded companies, which trade in an active market, have been designated as available-for-sale and are recorded in the consolidated statements of financial position at fair value. Fair value is determined directly by reference to quoted market prices in active markets. Changes in fair value are recorded in other comprehensive income (loss) until the investment is sold or impaired at which time the amounts would be recorded in the consolidated statement of loss. For investments classified as available-for-sale, a significant or prolonged decline in the fair value of the marketable security below its cost is evidence that the asset is impaired. If any such evidence exists for marketable securities, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss is removed from equity and recognised in the consolidated statement of loss.

The three levels of fair value hierarchy are:Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities;Level 2 Inputs other than quoted prices that are observable for assets or liabilities, either directly or indirectly; andLevel 3 Inputs for assets or liabilities that are not based on observable market data.

Marketable securities are classified as Level 1 and the Repayment Options are classified as Level 2 (Note 12b).

Financial liabilities classified as other financial liabilities are initially recognized at fair value net of transaction costs and are subsequently measured at amortized cost using the effective interest rate method. Accounts payable and accrued liabilities, the finance lease obligation, and the loan facility are classified as other financial liabilities. Other financial liabilities are classified as current liabilities unless the Corporation has an unconditional right to defer settlement of the liability for at least twelve months after the statement of financial position date.

e) Taxes and Other ReceivablesTaxes and other receivables consists primarily of HST receivable from government authorities in Canada in respect of the Company’s expenses and receivables from the rental of camp facilities and equipment to third parties.


635300_48pg.indd 28 8/19/13 11:58 PM

f) Supplies InventorySupplies inventory is comprised of diesel fuel and jet fuel and is valued at the lower of cost and net realizable value. Cost includes the cost of fuel and transportation to ship the supplies inventory to the site and is determined using the first in, first out method. Net realizable value is the estimated selling price to a third party in the event the Company would need to dispose of the fuel.

g) Intangible AssetsIntangible assets are recorded at cost less accumulated amortization and accumulated impairment loss. Amortization is provided over the related assets’ estimated useful life using the declining balance method of amortization at a rate of 50%.

h) EquipmentEquipment is recorded at cost less accumulated amortization and accumulated impairment loss. Amortization is provided over the related assets’ estimated useful lives using the following methods and annual rates:Equipment 20%-30% declining balanceFurniture and fixtures 20% declining balanceLeasehold improvements 20% declining balance

i) Mineral Properties, Exploration Expenditures and Mining StudiesMineral property acquisition costs are capitalized and the balance is written off should the property be disproven by exploration or abandoned. These assets are recorded at cost. The carrying value of these assets is dependent, among other things upon: the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete exploration and development, and upon future profitable production or proceeds from disposition of such properties. The assets are evaluated each quarter for indications of impairment.

Where the Company considers that there is an impairment indicator such as significant decrease in resource and reserve estimates, expiration or permanent cancellation of rights, impairment is assessed and if necessary, recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of fair value less cost to sell or value in use. An impairment loss is recognized whenever the carrying amount of these assets or its cash generating unit (which is the property) exceeds its recoverable amount. Impairment losses are recorded in the consolidated statement of net loss.

Exploration expenditures are the costs incurred in the initial search for mineral deposits with economic potential. Exploration expenditures typically include costs associated with prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore. Mining studies are the costs related to the technical, environmental, permitting and consultation in support of the Company’s prefeasibility and feasibility studies.

All exploration expenditures and mining studies are expensed as incurred. Exploration expenditures and mining studies will be capitalized when management determines that future economic benefits will be generated as a result of the expenditures.

j) LeasesLeases of property, plant and equipment are classified as finance leases when the lessee retains substantially all of the risks and rewards of ownership. Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.

Finance leases are capitalized at the lower of the fair value of the leased property and the present value of the minimum lease payments. The corresponding lease obligations, net of finance charges, are recorded as interest-bearing liabilities. Each lease payment is allocated between liability and finance cost when paid.

k) Provision for Environmental ExpenditureBoth legal and constructive obligations associated with the retirement of long-lived assets are recorded as a provision for environmental expenditure when there is a probability of an outflow of resources embodying economic benefits to settle the obligation. The amount of the provision is measured at the best estimate of the expenditure needed to settle the present obligation. It is possible that the Company’s estimates of its provision for environmental expenditure could change as a result of changes in regulations, the extent of environmental remediation required and the means of reclamation or costs estimates. Changes in estimates are accounted for prospectively from the period these estimates are revised.


635300_48pg.indd 29 8/19/13 11:58 PM

3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Significant judgments and estimates are involved in forming expectations of future activities and the amount and timing of the associated cash flows. Those expectations are formed based on existing environmental and regulatory requirements or, if more stringent, the Company’s environmental policies which give rise to constructive obligations. The cash flows are discounted using the current real risk free pre-tax discount rate.

l) Joint VenturesA joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. Joint control is the contractually agreed sharing of control such that significant operating and financial decisions require the unanimous consent of the parties sharing control. The Company’s joint ventures consist of jointly controlled assets (“JCAs”). The balances related to JCA’s are not material.

A JCA is a joint venture in which the venturers have joint control and ownership over the assets contributed to or acquired for the purposes of the joint venture. JCAs do not involve the establishment of a corporation, partnership or other entity. The participants in a JCA derive benefit from the joint activity through a share of production and bears an agreed share of expenses incurred as opposed to receiving a share of the net operating results. The Company’s proportionate interest in the assets, liabilities, expenses, and cash flows of the JCAs are incorporated into the consolidated financial statements under the appropriate headings. Also see New Accounting Standards IFRS 11 Joint Ventures in Note 3t.

m) Loss per Common ShareThe basic earnings (loss) per share is calculated based upon the weighted average number of common shares outstanding during the year. Stock options and warrants outstanding are not included in the computation of diluted earnings (loss) per share if their inclusion would be anti-dilutive.

n) Share-based CompensationThe Company grants stock options to certain employees and non-employees under the terms of the Company’s Stock Option Plan (“the Plan”). Each tranche in an option award is considered a separate award with its own vesting period and grant date fair value. The fair value of each tranche is measured at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires estimates for the expected life of options and stock price volatility which can materially affect the fair value estimate. Volatility and expected life of option is estimated based on an analysis of factors such as the Company’s historical price trends, history of option holder activity, and peer and industry benchmarks for similar transactions.

Share-based compensation expense is recognized over the tranche’s vesting period by increasing contributed surplus based on the number of awards expected to vest. This number is reviewed at least annually, with any change in estimate recognized immediately in share-based compensation expense with a corresponding adjustment to contributed surplus.

o) Income TaxesDeferred tax assets and liabilities are determined based on the differences between the financial statement carrying values of assets and liabilities and their respective income tax bases (temporary differences), and losses carried forward.

Deferred income tax is determined on a non-discounted basis using tax rates and laws that have been enacted or substantively enacted at the balance sheet date and are expected to apply when the deferred tax asset is realized or liability is settled. Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilized.

The determination of the ability of the Company to utilize tax loss carry-forwards to offset deferred tax payable involves judgment and certain assumptions about the future performance of the Company. Assessment is required about whether it is “probable” that the Company will benefit from the prior losses and other deferred tax assets. Changes in economic conditions, metal prices and other factors could result in revisions to the estimates of the benefits to be realized or the timing of the utilization of the losses.

p) Flow-through Shares The Company has adopted a policy whereby flow-through proceeds are allocated between the offering of the common shares and the sale of tax benefits when the flow-through common shares are offered. The allocation is made based on the difference (“premium”) between the quoted price of the common shares and the amount the investor pays for the flow-through shares. A liability is recognized for the premium paid by the investors and is then derecognized in the period the eligible expenditures are incurred, which is recorded in the consolidated statement of loss.


635300_48pg.indd 30 8/19/13 11:58 PM

q) Segment DisclosureThe Company’s chief operating decision makers are responsible for allocating resources and assessing performance of the operations according to strategic decisions. The Company’s operations comprise of a reporting segment engaged in the exploration and development of minerals in Canada.

r) Critical Accounting Estimates and JudgmentsThe preparation of these consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.

These consolidated financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the consolidated financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Significant assumptions about the future that management has made that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate, but are not limited to, the following:

Mineral PropertiesNoront capitalizes mining property acquisition costs which are to be amortized when production is attained or the balance thereof written off should the property be disproven through exploration or abandoned. On an ongoing basis, the Company evaluates deferred expenditures relating to each property to assess whether there has been impairment in value. The Company recognizes write-downs for impairment where the carrying value of the mining property exceeds its estimated long-term net recoverable value. Recoverable value is estimated based upon current exploration results and upon the Company’s assessment of the future probability of positive cash flows from the property or from the sale of the property.

Future Site Restoration CostsThe Company has an obligation for future site restoration costs. The Company records the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development and/or normal use of the assets. The fair value of the liability is added to the carrying amount of the associated asset and this additional carrying amount is depreciated over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation is adjusted at the end of each period to reflect the passage of time and changes in the estimated future cash flows underlying the obligation. If the obligation is settled for other than the carrying amount of the liability, the Company will recognize a gain or loss on settlement.

Stock Options and Warrants The Black-Scholes option valuation model used by the Company to determine fair values for stock-based compensation was developed for use in estimating the fair value of freely traded options. This model requires input of highly subjective assumptions including future stock volatility and expected time until exercise. Changes in the subjective input assumptions can materially affect the fair value estimate.

s) Critical Accounting Estimates and Judgments

Repayment OptionsThe Company’s convertible debt agreement contains embedded derivatives related to the Company’s prepayment option and the Lender’s convertible feature (“Repayment Options”). The fair value assigned to the Repayment Options uses Level 2 assumptions with the main inputs to the valuation being credit spread of the Company, historical prices of the underlying stock, USD discount curve and CAD/USD foreign exchange rates. The most significant assumption is the probability of the loan being repaid prior to reaching the conversion date. This was estimated by obtaining credit spreads for an index of comparable companies residing in the same industry, which has an impact on the probability that the bridge loan will be repaid at maturity. Refer to Note 12b for further information on the Repayment Options.


635300_48pg.indd 31 8/19/13 11:58 PM

3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

t) New accounting standards issued but not yet appliedIFRS 9 Financial InstrumentsIFRS 9 Financial Instruments addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and October 2010 and replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured at fair value and those measured at amortized cost, with the determination made at initial recognition. The classification depends on the entity’s business model for managing its financial instruments, and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the requirements of IAS 39, with the principal change being that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change that is due to an entity’s own credit risk is recorded in OCI rather than the consolidated statement of loss, unless this creates an accounting mismatch. IFRS 9 must be applied starting January 1, 2015, with early adoption permitted. The Company is currently assessing the impact of adopting IFRS 9 on its consolidated financial statements.

IFRS 10 Consolidated Financial StatementsIn May 2011, the IASB issued IFRS 10 Consolidated Financial Statements to replace IAS 27 Consolidated and Separate Financial Statements and SIC 12 Consolidation – Special Purpose Entities. The new consolidation standard changes the definition of control so that the same criteria apply to all entities, both operating and special purpose entities, to determine control. The revised definition focuses on the need to have both power and variable returns before control is present. IFRS 10 must be applied to annual periods starting on or before January 1, 2013, with early adoption permitted. The Company is currently assessing the impact of adopting IFRS 10 on its consolidated financial statements.

IFRS 11 Joint ArrangementsIn May 2011, the IASB issued IFRS 11 Joint Arrangements to replace IAS 31, Interests in Joint Ventures. The new standard defines two types of arrangements: Joint Operations and Joint Ventures. Focus is on the rights and obligations of the parties involved to reflect the joint arrangement, thereby requiring parties to recognize the individual assets and liabilities to which they have rights or for which they are responsible, even if the joint arrangement operates in a separate legal entity. IFRS 11 must be applied to annual periods starting on or before January 1, 2013 with early adoption permitted. The Company is currently assessing the impact of adopting IFRS 11 on its consolidated financial statements.

IFRS 12 Disclosure of Interests in Other EntitiesIn May 2011, the IASB issued IFRS 12 Disclosure of Interests in Other Entities to create a comprehensive disclosure standard to address the requirements for subsidiaries, joint arrangements and associates, including the reporting entity’s involvement with other entities. It also includes the requirements for unconsolidated structured entities (i.e. special purpose entities). IFRS 12 must be applied to annual periods starting on or before January 1, 2013, with early adoption permitted. The Company is currently assessing the impact of adopting IFRS 12 on its consolidated financial statements.

IFRS 13 Fair Value MeasurementIn May 2011, the IASB issued IFRS 13 Fair Value Measurement as a single source of guidance for all fair value measurements required by IFRS, in order to reduce complexity and improve consistency across its application. The standard provides a definition of fair value and guidance on how to measure fair value, as well as a requirement for enhanced disclosures. IFRS 13 must be applied to annual periods starting on or before January 1, 2013, with early adoption permitted. The Company is currently assessing the impact of adopting IFRS 13 on its consolidated financial statements.

4. CAPITAL MANAGEMENT

The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition, exploration and development of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business. The Company defines capital to include its capital stock, warrant, and option components of its shareholders’ equity.

The properties in which the Company currently has an interest are in the early development stage; as such the Company is dependent on external financing to fund its activities. In order to carry out the planned development activity and pay for administrative costs, the Company will spend its existing working capital and raise additional amounts as needed. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so.


635300_48pg.indd 32 8/19/13 11:58 PM

Management has chosen to mitigate the risk and uncertainty associated with raising additional capital within current economic conditions by:i) minimizing discretionary disbursements;ii) reducing or eliminating expenditures which are of limited strategic value; andiii) exploring alternate sources of liquidity.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Company’s approach to capital management during the year ended April 30, 2013. The Company is not subject to externally imposed capital requirements.

5. PROPERTY AND FINANCIAL RISK FACTORS

a) Property RiskThe Company’s major mineral property is the McFaulds Lake Property in the “Ring of Fire” (Note 10). Unless the Company acquires or develops additional material properties, the Company will be mainly dependent upon its existing property. Any adverse development affecting the Company’s major mineral property would have a materially adverse effect on the Company’s financial condition and results of operations.

b) Financial RiskThe Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including interest rate, foreign exchange rate, and commodity price risk).

Risk management is carried out by the Company’s management team with guidance from the Audit Committee under policies approved by the Board of Directors. The Board of Directors also provides regular guidance for overall risk management.

Credit RiskCredit risk is the risk of loss associated with a counterparty’s inability to fulfil its payment obligations. The Company’s credit risk is primarily attributable to cash and cash equivalents and restricted cash. Cash and cash equivalents and restricted cash, consist of cash on hand, term deposits and savings accounts with reputable financial institutions with strong credit ratings which are closely monitored by management.

Liquidity RiskThe Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at April 30, 2013, the Company had cash and cash equivalents, restricted cash and liquid marketable securities balances of $14,443,780 (April 30, 2012 – $5,512,977) to settle current liabilities of $1,423,807 (April 30, 2012 – $2,568,805). All of the Company’s accounts payable and accrued liabilities have contractual maturities of less than 30 days and are subject to normal trade terms. The Company remains dependent upon financing from capital markets and a loan facility(Note 1).

Market RiskMarket risk is the risk of loss that might arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices.

i) Interest Rate RiskThe Company has cash balances and a loan facility with a fixed interest rate. The Company’s current policy is to invest excess cash in investment-grade short-term deposit certificates and deposit accounts managed by its banking institutions.The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks.

ii) Foreign Currency RiskThe Company is exposed to foreign currency risk as a result of the loan facility held in a currency other than its functional currency, the Canadian dollar. The majority of the Corporation’s expenses are denominated in Canadian dollars. The Company does not currently have any plans for exploration or development activities in foreign jurisdictions.


635300_48pg.indd 33 8/19/13 11:58 PM

5. PROPERTY AND FINANCIAL RISK FACTORS (Continued)

At April 30, 2013, the Company had monetary assets and liabilities denominated in U.S. dollars as follows:

April 30, 2013 April 30, 2012

Cash US$ 10,946,386 $ - Loan Facility & Repayment Options US$ (15,000,000) $ -

iii) Price Risk The Company is exposed to price risk with respect to commodity and equity prices. The Company closely monitors

commodity prices as it relates to the value and the future outlook of the Company’s mineral properties and equity prices to determine the appropriate course of action to be taken for current and future projects.

Sensitivity AnalysisBased on management’s knowledge and experience of the financial markets, the Company believes the following movements are “reasonably possible” over a twelve month period.

i) The Company has cash balances and a loan facility in foreign currencies that give rise to exposure to foreign exchange risk. Sensitivity to a 2% change in the foreign currency exchange rate would have affected the net loss by approximately $0.1 million for the year ended April 30, 2013.

ii) Commodity price risk could adversely affect the Company. In particular, the Company’s future profitability and viability from mineral exploration depends upon the world market price of valuable minerals. Commodity prices have fluctuated significantly in recent years. There is no assurance that, even as commercial quantities of minerals may be produced in the future, a profitable market will exist for them. As of April 30, 2012, the Company is not a producer of valuable minerals. As a result, commodity price risk may affect the completion of future equity transactions such as equity offerings. This may also affect the Company’s liquidity and its ability to meet its ongoing obligations.

6. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of: April 30, 2013 April 30, 2012

Cash deposits $ 13,927,776 $ 4,966,752 Guaranteed investment certificate 100,189 100,192

$ 14,027,965 $ 5,066,944

7. TAXES AND OTHER RECEIVABLES

Taxes and duties receivable consist of: April 30, 2013 April 30, 2012

Recoverable Sales Taxes $ 76,884 $ 203,143 Other receivables 189,477 59,764

$ 266,361 $ 262,907


635300_48pg.indd 34 8/19/13 11:58 PM

8. EQUIPMENT

Furniture & LeaseholdApril 30, 2013 Equipment Fixtures Improvements Total

Cost $ 3,251,993 $ 115,027 $ 200,287 $ 3,567,307 Accumulated Amortization (1,191,480) (77,868) (161,777) (1,431,125)

Closing Net Book Value $ 2,060,513 $ 37,159 $ 38,510 $ 2,136,182

Opening Net Book Value $ 1,715,964 $ 32,461 $ 103,859 $ 1,852,284 Additions* 803,869 11,990 41,260 857,119 Amortization (459,320) (7,292) (106,609) (573,221)


Furniture & LeaseholdApril 30, 2012 Equipment Fixtures Improvements Total

Cost $ 2,448,124 $ 103,037 $ 159,026 $ 2,710,187 Accumulated Amortization (732,160) (70,576) (55,167) (857,903)


Opening Net Book Value $ 1,379,274 $ 40,576 $ 129,824 $ 1,549,674 Additions* 647,369 - - 647,369 Amortization (310,679) (8,115) (25,965) (344,759)


* Included in additions for the year ended April 30, 2013 is $284,966 relating to the asset retirement obligation of equipment located at the McFaulds Lake property (April 30, 2012 – $566,378).

9. INTANGIBLE ASSETS

Computer software April 30, 2013 April 30, 2012

Cost $ 332,163 $ 285,790 Accumulated Amortization (269,023) (217,773)

Closing Net Book Value $ 63,140 $ 68,017

Computer software April 30, 2013 April 30, 2012 Opening Net Book Value $ 68,017 $ 123,852 Additions 46,373 6,961 Amortization (51,250) (62,796)

Closing Net Book Value $ 63,140 $ 68,017


635300_48pg.indd 35 8/19/13 11:58 PM

10. MINERAL PROPERTIES

The Company’s projects consist of:

April 30, 2013 April 30, 2012

(i) McFaulds Lake Property “Ring of Fire”, James Bay Lowlands,Northeastern Ontario100% interest subject to net smelter return (“NSR”) of 1% $ 1,438,104 $ 1,438,104

(ii) Golden Valley Project, Ontario (a) - 175,000 (iii) Garden Island, Quebec (b) - 250,000

$ 1,438,104 $ 1,863,104

(a) Under the terms of the Golden Valley option agreement, the Company had exploration expenditure commitments to be made by October 10, 2012. The Company decided to not incur these exploration expenditures and as a result, the option agreement was terminated. The Company does not retain any interest or rights in regard to the property, therefore the acquisition cost of $175,000 has been written off.

(b) Exploration for mineral resources on the Garden Island property has not led to the discovery of commercially viable quantities of mineral resources and substantive expenditure on the exploration for and evaluation of mineral resources is not budgeted or planned. Therefore, the acquisition cost for Garden Island of $250,000 has been written off.

11. FINANCE LEASE OBLIGATION

As at April 30, 2013, the Company had a finance lease obligation of $65,467 (April 30, 2012 – $NIL) bearing interest at a rate of 2.81% per annum. This finance lease matures in January 2016 and is repayable in blended monthly installments of principal and interest as summarized below.

Present Future value of minimum minimum lease lease payments Interest payments

Less than one year $ 24,766 $ 1,542 $ 23,224 Greater than one year 43,340 1,097 42,243

$ 68,106 $ 2,639 $ 65,467

12. CONVERTIBLE DEBT AGREEMENT

On February 26, 2013, the Company entered into a loan facility with Resource Capital Fund V L.P. (“RCF” or “the Lender”) in the aggregate principal amount of US$15.0 million (the “Facility”). The Facility is a one year bridge loan (the” Bridge Loan”) which matures on February 25th, 2014. If the Facility is not repaid prior to the Bridge Loan maturity date, it automatically rolls into a convertible loan (“the “Convertible Loan”) with a maturity date of December 31, 2015. The proceeds from the Facility will be used to further the development of the Company’s advanced stage Eagle’s Nest nickel, copper, platinum, palladium project;for working capital and for corporate requirements.


635300_48pg.indd 36 8/19/13 11:58 PM

The Facility will bear interest at 10% per annum during the Bridge Loan period and at 8% per annum during the Convertible Loan period. Interest will be paid quarterly, in arrears, in common shares of the Company based on the volume weighted average trading price of the Company’s common shares during the 20 days prior to the date of each interest period determination, or at RCF’s option, in cash. The Facility will be secured by a first ranking perfected lien over all assets associated with the Company’s projects, initially excluding the Company’s interest in the Windfall Lake gold project; all shares or equity interests in subsidiaries of the Company and all intercompany debt. An Establishment Fee of 2% of the principal amount of the Facility was paid to RCF in common shares of the Company. The shares were valued using the volume weighted average trading price for the 20 days prior to November 28th, 2012, resulting in the issuance of 977,954 common shares.

The Convertible Loan may be converted into common shares of the Company at the option of RCF at a price of $0.45 cents per share at any time subsequent to the Bridge Loan maturity date and prior to December 31, 2015 (the “Conversion Rights”).The Company’s shareholders approved the Facility which enables the Bridge Loan to roll into a convertible loan with a maturity date of December 31, 2015.

The convertible debt agreement contains embedded derivatives related to the Company’s prepayment option and the Lender’s convertible feature (“Repayment Options”). The Repayment Options are recognized at fair value at inception and subsequently remeasured to fair value at each reporting date (Note 12b). The fair value attributed to the loan facility at inception is equal to the principal less the fair value attributed to the Repayment Options. The loan facility (net of transaction costs) is subsequently measured at amortized cost over the term of the loan (Note 12a).

On April 24, 2013, the Company satisfied the payment of interest of $139,728 for the first quarter of 2013 by delivery of 474,971 common shares of the Company to RCF. The Interest Shares are subject to a four month hold period, expiring on August 22, 2013. The Company accrued interest in the amount of $126,000 for April 2013.

a) Loan Facility April 30, 2013

Balance, beginning of year $ - Loan 14,837,045 Transaction costs cash (267,181) Transaction costs establishment fee (308,400)

Loan Facility, net of transaction costs (at inception) 14,261,464 Foreign exchange gain (284,772) Accretion of loan facility 27,566

Balance, end of year $ 14,004,258

b) Repayment Options

The Company’s convertible debt agreement contains embedded derivatives related to the Company’s prepayment option and the Lender’s convertible feature (“Repayment Options”). The fair value assigned to the Repayment Options uses Level 2 assumptions with the main inputs to the valuation being the USD discount curve, credit spread of the Company, historical prices of underlying stock in order to calculate the volatility, and forward CAD/USD foreign exchange rates.

At inception, the fair value attributed to the Repayment Options was $582,955. This was subsequently remeasured to $731,000 at April 30, 2013 with the related loss of $148,045 being recognized in the statement of loss. Transaction costs related to the convertible debt agreement of $22,615 was apportioned to the Repayment Options and included in the statement of loss.

The most significant assumption in relation to the fair value estimate of the Repayment Options is the probability of the loan being repaid prior to reaching the conversion date. This was estimated by obtaining credit spreads for an index of comparable companies residing in the same industry, which has an impact on the probability of the Bridge Loan being repaid on maturity. An increase of 200 basis points in relation to the estimated credit spread would result in an increase in the Repayment Options of $165,000 at inception, and $121,000 at April 30, 2013. A decrease of 200 basis points in relation to the estimated credit spread would result in a decrease in the Repayment Options of $124,000 at inception, and $126,000 at April 30, 2013.


635300_48pg.indd 37 8/19/13 11:58 PM

13. PROVISION FOR ENVIRONMENTAL EXPENDITURE

McFaulds LakeThe Company has established a provision of $870,478 representing the estimated present value of its future asset retirement obligation. None of these costs are expected to be incurred within the next twelve months.

The site remediation provision liability is based upon the following estimates and assumptions:a) Total undiscounted future demobilization cost is $1,078,936 (2012 – $725,730)b) Real risk-free pre-tax discount rate of 2.17% (2012 – 2.51%)c) Asset Retirement Obligation expected to be realized in 10 years (2012 – 10 years)

A summary of the changes in the site remediation provision is set out below:

April 30, 2013 April 30, 2012

Balance, beginning of year $ 566,378 $ - Accretion expense for the year 19,134 - Re-measurement of provision 284,966 566,378

$ 870,478 $ 566,378

Windfall LakeIn accordance with the requirements of the Quebec Ministry of Natural Resources, the Company has developed a site remediation and restoration plan for its Windfall Lake project operations. The Company has established a provision of $640,813, representing the estimated present value of its future asset retirement obligation. Of this provision, $NIL will be incurred within the next twelve months. A summary of the changes in the site remediation provision is set out below:

April 30, 2013 April 30, 2012

Balance, beginning of year $ 654,877 $ 652,478 Accretion expense (recovery) for the year (14,064) 2,399

$ 640,813 $ 654,877

The site remediation provision liability is based upon the following estimates and assumptions:a) Total undiscounted future remediation costs is estimated to be $665,280. (2012 – $665,280)b) Real risk-free pre-tax discount rate of 0.97% (April 30, 2012 – 1.34%)

The Company secured a financial guarantee in favour with the Minister of Finance of Quebec on August 30, 2008, in the amount of $385,046, which was satisfied by means of a letter of credit. The letter of credit is secured by a guaranteed investment certificate which is included in restricted cash.

On April 20, 2013, an agreement (the “Amending Agreement”) was signed between the Company and Eagle Hill Exploration Corp. (“Eagle Hill”) to amend certain provisions of the option agreement entered into between the parties on July 20, 2009,(the “Option Agreement”) in regards to the Windfall Lake Property.

Per the Amending Agreement, Eagle Hill is obligated to continue work on the property, and as such, the reclamation liability is classified as long-term.


635300_48pg.indd 38 8/19/13 11:58 PM

14. CAPITAL STOCK

(a) AuthorizedUnlimited common shares without par value.

(b) Issued

Number of Shares Value

Balance, April 30, 2011 184,141,974 $ 137,522,091 Flow-through private placement (i) 4,073,800 3,503,468 Flow-through share premium - (244,428) Issue of shares (ii) 20,234,967 17,402,072 Share issue costs - (418,380) Warrants allocation - (1,159,464) Exercise of options 49,999 31,001 Fair value of exercise of options - 26,849

Balance, April 30, 2012 208,500,740 $ 156,663,209 Issue of shares (iii) 21,796,920 11,334,399 Share issue costs - (147,916) Establishment fee (Note 12) 977,954 308,400 Issue of interest shares (Note 12) 474,941 139,727

Balance, April 30, 2013 231,750,555 $ 168,297,819

(i) On December 20, 2011, the Company closed a private placement financing, issuing 4,073,800 flow-through common shares (“Flow-Through Shares”) at a price of $0.86 per Flow-Through Share for gross proceeds of $3,503,468

(the “Offering”). Costs of the issue include 5% of the gross proceeds of the Offering, paid to the Agents.

(ii) On June 2, 2011, the Company completed an investment by Baosteel Resources International Co., Ltd. (“Baosteel”). Baosteel has acquired 20,234,967 Units of Noront at a price of $0.86 per Unit. Each Unit consists of one common share and one half of one common share purchase warrant (each whole warrant a “Warrant”). Each Warrant shall be exercisable to acquire one common share of Noront at an exercise price equal to $1.16 for a period of 24 months following the closing date. Net proceeds of the common share portion are approximately $17.4 million.

(iii) On May 10, 2012, the Company completed a private placement with Resource Capital Fund V L.P. (“RCF”), pursuant to which RCF subscribed for 19,230,769 common shares in the capital of the Company (the “Common Shares”) at a purchase price of $0.52 per Common Share, representing gross proceeds to the Company of approximately $10 million.

On May 25, 2012, the Company completed a private placement with Baosteel Resources International Co. Ltd. (“Baosteel”), pursuant to which Baosteel has exercised its right to maintain its 9.9% interest in the Company. Baosteel acquired an additional 2,566,151 Common Shares at a purchase price of $0.52, representing gross proceeds to the Company of approximately $1.33 million.

(c) Stock Options

Under the provisions of the Company’s 2007 Incentive Stock Option Plan, an aggregate maximum of 10% of the issued and outstanding common shares may be issued for granting of options to directors, senior officers, full time employees of the Company, affiliates or subsidiaries, or any consultants to the Company. The terms of the awards under the Plan are determined by the board of directors.

For the year ended April 30, 2013, stock based compensation of $1,004,761 (2012 – $2,257,010) was charged to net loss.


635300_48pg.indd 39 8/19/13 11:58 PM

14. CAPITAL STOCK (Continued)

(i) On July 17, 2012, the Company granted 2,500,000 incentive stock options to employees and directors of the Company at an exercise price of $0.46. The share price on July 17, 2012 was $0.46.

The fair value assigned was estimated using the following assumptions:Dividend yield 0%Expected volatility 93.56%Risk-free interest rate 1.14%

Expected life 5 yearsForfeiture rate 7%

The stock options were assigned a value of $820,000.

(ii) On October 12, 2012, the Company granted 300,000 incentive stock options to employees and directors of the Company at an exercise price of $0.35. The share price on October 12, 2012 was $0.34.

The fair value assigned was estimated using the following assumptions:Dividend yield 0%Expected volatility 89.54%Risk-free interest rate 1.31%Expected life 5 yearsForfeiture rate 7%


(iii) On March 21, 2013, the Company granted 300,000 incentive stock options to a director of the Company at an exercise price of $0.30. The share price on March 21, 2013 was $0.29.



(iv) On March 21, 2013, the Company granted 500,000 incentive stock options to a consultant of the Company at an exercise price of $0.30. The share price on March 21, 2013 was $0.29.




635300_48pg.indd 40 8/19/13 11:58 PM

The weighted average remaining contractual life and weighted average exercise price of options outstanding and options exercisable as at April 30, 2013 are as follows:

Number of Remaining Number of Stock Options Black-Scholes Exercise Contractual Stock Options Outstanding Value Price Life (Years) Exercisable Expiry Date

590,000 1,952,900 $ 3.90 0.36 590,000 June 2013 1,600,000 1,001,600 $ 0.80 0.78 1,600,000 November 2013 2,500,000 1,342,500 $ 0.62 1.41 2,500,000 June 2014 100,000 194,400 $ 2.15 1.61 100,000 September 2014 900,000 1,480,500 $ 1.84 1.71 900,000 October 2014 390,000 710,580 $ 2.09 1.86 390,000 December 2014 250,000 251,000 $ 1.36 2.33 166,667 June 2015 180,000 130,392 $ 1.25 2.90 180,000 December 2015 2,783,333 1,893,780 $ 0.88 3.26 1,461,111 May 2016 300,000 179,400 $ 0.86 3.76 300,000 November 2016 200,000 108,800 $ 0.86 3.85 200,000 December 2016 2,333,333 765,333 $ 0.46 4.46 1,177,778 July 2017 300,000 70,200 $ 0.35 4.70 300,000 October 2017 500,000 69,000 $ 0.30 2.90 - March 2016 300,000 51,900 $ 0.30 4.90 300,000 March 2016

13,226,666 $ 10,202,285 $ 0.95 2.36 10,165,556

The assigned value of unvested options as at April 30, 2013 is $1,431,329.

The following table summarizes the stock option transactions for the years ended April 30, 2013 and 2012.

Number Weighted Average of Options Exercise Price

April 30, 2011 8,239,167 $ 1.48 Granted 3,950,000 $ 0.88 Exercised (49,999) $ (0.62) Expired (75,000) $ (0.75) Forfeited (512,500) $ (1.68)

April 30, 2012 11,551,668 $ 1.27 Granted 3,600,000 $ 0.43 Exercised - $ - Expired (275,000) $ (5.08) Forfeited (1,650,002) $ (1.29)

Balance, April 30, 2013 13,226,666 $ 0.95

There were no options exercised in the year ended April 30, 2013. The weighted average share price at the date of exercise was $0.79 for the year ended April 30, 2012.


635300_48pg.indd 41 8/19/13 11:58 PM

14. CAPITAL STOCK (Continued)

(d) Warrants

The following table lists the Company’s warrants as at April 30, 2013. There were no changes during the year endedApril 30, 2013.

Number of Weighted Average Fair Value Expiry Warrants Exercise price Date

Issued December 11, 2009 722,150 $ 4.00 1,416,211 December 2014 Issued June 2, 2011 10,117,483 $ 1.16 1,159,464 June 2013

At April 30, 2012 and April 30, 2013 10,839,633 $ 1.35 $ 2,575,675

15. INCOME TAXES

A reconciliation between the tax expense and the product of accounting loss multiplied by the Company’s domestic tax rate is as follows:

2013 2012

Statutory tax rate 26.50% 27.59%

Loss before recovery of income taxes $ (18,786,466) $ (28,752,281)

Expected income tax recovery (4,978,413) (7,932,754) Permanent differences 266,262 529,185 Benefits of tax attributes not recognized 4,712,151 7,403,569

Total tax expense $ - $ -

The 2013 statutory tax rate of 26.5% differs from the 2012 statutory tax rate of 27.59% because of the reduction in both federal and Ontario substantively enacted tax rates.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off the current tax assets and current tax liabilities or deferred tax assets and liabilities and they relate to taxes levied by the same tax authority.

The tax benefit of the following unused tax losses and deductible temporary differences have not been recognized in the financial statements due to the unpredictability of future earnings.

2013 2012

Deductible Temporary Differences Marketable securities $ 236,103 $ 207,173 Mineral properties 74,876,229 63,703,094 Provision for environmental expenditure 1,511,290 1,221,255 Capital losses 3,629,488 3,784,323 Loss carryforwards 43,591,063 36,592,330 Share issue costs 2,109,636 2,705,893 Investment tax credits 6,295,599 6,262,892

132,249,408 114,476,960


635300_48pg.indd 42 8/19/13 11:58 PM

The Company’s non-capital income tax losses expire as follows:

2014 $ 63,219 2015 388,136 2027 499,732 2028 1,179,805

2029 6,895,022 2030 7,720,158 2031 6,614,041

2032 8,385,059 2033 11,845,891

$ 43,591,063

16. RELATED PARTY TRANSACTIONS

The Company engaged Penguin Automated Systems (“Penguin”) after completing an independent tendering process, under the direction of Micon International, Lead Consultant for certain technical studies. The Company’s Chief Operating Officer has a 38.5% ownership interest in Penguin. Professional fees paid to Penguin for the year ended April 30, 2013 were $202,925 (year ended April 30, 2012 – $1,098,239) and the amount payable to Penguin as at April 30, 2013 is $NIL (April 30, 2012 – $392,292).

The Company’s interim CEO is remunerated through Coniston Investment Corp. (Coniston). The Company’s interim CEO has a 100% ownership interest in Coniston. Amounts paid to Coniston for the year ended April 30, 2013 were $72,317 (year ended April 30, 2012 – $NIL) and the amount payable to Coniston as at April 30, 2013 is $27,000 (April 30, 2012 – $NIL).

The above noted transactions are in the normal course of business or normal commercial terms and conditions, as agreed by the parties.

17. LOSS PER SHARE

2013 2012 Net loss attributable to common shareholders $ (18,786,466) $ (28,752,281)

Weighted average shares outstanding basic and fully diluted 229,789,848 204,051,816

Loss per share basic $ (0.08) $ (0.14)

As a result of the net loss for the years ended April 30, 2013 and 2012, the potential effect of the exercise of stock options and warrants was anti-dilutive. Thus, basic loss per share and diluted loss per share are equal for the years presented.

18. COMMITMENTS AND CONTINGENCIES

a) Under the terms of leases for office space, vehicles and equipment, the Company is obligated to minimum annual rent payments of $448,659 in fiscal 2014, $413,398 in fiscal 2015, $398,655 in fiscal 2016, $399,094 in fiscal 2017 and $299,320 in fiscal 2018.

b) The Company has secured a letter of credit in favour of the Quebec Government in the amount of $385,046, to cover a portion of the estimated cost of work under a corresponding site remediation plan submitted thereto.


635300_48pg.indd 43 8/19/13 11:58 PM

19. COMPENSATION OF KEY MANAGEMENT

2013 2012

Salaries, benefits and directors’ fees $ 1,648,499 $ 1,777,162 Share-based compensation 883,919 1,913,843

$ 2,532,418 $ 3,691,005

Key management includes the 7 directors and 6 members of the executive management team (2012 – 7 directors and 5 members of the executive management team).

20. SUPPLEMENTARY EXPENSE INFORMATION

a) Development and Exploration Expenditures:

2013 2012

Camp operations $ 4,526,389 $ 5,221,949 Drilling 1,510,718 8,489,285 Geophysics 22,376 862,398 Technical studies 1,331,611 3,513,811 Permitting 2,116,499 3,474,801 Other 1,314,722 289,891

$ 10,822,315 $ 21,852,135

Included in development and exploration expenditures expenses is $1,523,805 of salaries and benefits for the year ended April 30, 2013 (year ended April 30, 2012 – $1,445,472), and $865,907 of fuel (year ended April 30, 2012 – $1,948,886).

Included in other costs for the year ended April 30, 2013 is $650,245 (April 30, 2012 – $245,503) for exploration expenditures incurred in fiscal years 2008 and 2009 which were previously refunded by the Government of Quebec as tax credits.

The Company received a notice of assessment disallowing the inclusion of the underlying expenditures in the refundable tax credit calculation. The Company has accrued the full potential liability of $895,748 as a result.

b) Office and General:

2013 2012

Salaries, benefits and directors’ fees $ 2,023,874 $ 2,465,094 Employee severance 426,783 7,000 Donations & sponsorships 158,843 98,053 Administrative and other expenses 1,242,319 708,871 Professional fees 1,126,243 678,147 Communications & travel 654,185 786,565

$ 5,632,247 $ 4,743,730


635300_48pg.indd 44 8/19/13 11:58 PM

21. SUBSEQUENT EVENT

On June 28, 2013, the Company signed a binding letter agreement (the “Letter Agreement”) to sell its remaining 25% interest, all royalty interests, and all other associated rights in the Windfall Lake Project (the “Project”) to Eagle Hill Exploration Corp. (“Eagle Hill”). In consideration for the sale of Noront’s 25% interest in the project, Eagle Hill will pay to Noront (i) an aggregate cash payment of $5 million, and (ii) 25 million freely tradable (subject only to such hold periods required under applicable Canadian securities laws) common shares of Eagle Hill to be issued to Noront on closing of the transaction. In accordance with the binding agreement, Eagle Hill continues to be obligated to provide a financial guarantee to the Quebec government for the reclamation obligation on the Project and apply to transfer the reclamation obligation from the Company to Eagle Hill.


635300_48pg.indd 45 8/19/13 11:58 PM

Noront Resources Ltd.

110 Yonge Street, Suite 400Toronto, Ontario, Canada M5C 1T4T: 416 367 1444F: 416 367 5444W: www.norontresources.comW: www.eaglesnestmine.comW: www.mikawaa.com

Transfer Agent

Computershare Investor Services100 University Ave.9th Floor, North TowerToronto, Ontario, Canada M5J 2Y1

Legal Counsel

Bennett Jones LLPToronto, Ontario, Canada

Exchange Information

Shares Outstanding: 233,258,760Shares Fully Diluted: 249,717,576Toronto Venture Exchange: TSX.VSymbol: NOT

Management

Paul Parisotto,Interim President andChief Executive Officer

Gregory R. Rieveley, CA,Chief Financial Officer

Paul G. Semple, P.Eng,Chief Operating Officer

Mark Baker, P.Eng,Vice President, Projects

Glenn NolanVice President, Aboriginal Affairs

Leanne HallVice President, Human Resources

Board of Directors

Thomas Anselmi

Ted Bassett, P.Eng

Darren Blasutti, CA

Peter Mah, P.Eng

Paul Parisotto, Chairman

David Thomas, P.Geo

Yuanqing Xu

CORPORATE INFORMATION

Concept and Design: Kirkwood Communications • Project Management and Production: Walter J. Mishko & Co. Inc.

Forward-Looking StatementsThis release contains “forward-looking statements” within the meaning of applicable Canadian securities legislation, including predictions, projections and forecasts. Forward-looking statements include, but are not limited to, statements that address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as future business strategy, competitive strengths, goals, expansion, growth of the Company’s businesses, operations, plans and with respect to exploration results, the timing and success of exploration activities generally, permitting time lines, government regulation of exploration and mining operations, environmental risks, title disputes or claims, limitations on insurance coverage, timing and possible outcome of any pending litigation and timing and results of future resource estimates or future economic studies.

Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “planning”, “planned”, “expects” or “looking forward”, “does not expect”, “continues”, “scheduled”, “estimates”, “forecasts”, “intends”, “potential”, “anticipates”, “does not anticipate”, or “belief ”, or describes a “goal”, or variation of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.

Forward-looking statements are based on a number of material factors and assumptions, including, the result of drilling and exploration activities, that contracted parties provide goods and/or services on the agreed timeframes, that equipment necessary for exploration is available as scheduled and does not incur unforeseen break downs, that no labour shortages or delays are incurred, that plant and equipment function as specified, that no unusual geological or technical problems occur, and that laboratory and other related services are available and perform as contracted. Forward-looking statements involve known and unknown risks, future events, conditions, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, prediction, projection, forecast, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the interpretation and actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of gold; possible variations in grade or recovery rates; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of exploration, as well as those factors disclosed in the Company’s publicly filed documents. Although Noront has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

635300_48pg.indd 46 8/19/13 11:58 PM

635300_48pg.indd 47 8/19/13 11:59 PM

110 Yonge Street, Suite 400 • Toronto, Ontario, Canada M5C 1T4Phone: (416) 367-1444 • Fax: (416) 367-5444

www. norontresources.com

Printed in Canada using vegetable-based inkson chlorine-free paper containing post consumer

product and which is 100% recyclable.

NORONT RESOURCES LTD.

635300_48pg.indd 48 8/19/13 11:59 PM

the past year and a half have been very challenging for...

Documents