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ANNUAL INFORMATION FORM



FOR THE YEAR ENDED DECEMBER 31, 2016



This annual information form ("AIF") is as of March 28, 2017







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Item
1.             
Table of Contents

|         |                                                                          | Page
|-------- | ------------------------------------------------------------------------ | ----
|         |                                                                          |     
|Item 1.  | Table Of
      Contents                                                  | 2   
|         |                                                                          |     
|Item 2.  | Preliminary Notes                                                        | 3   
|         |                                                                          |     
|Item 3.  | Corporate
      Structure                                                | 10  
|         |                                                                          |     
|Item 4.  | General
      Development Of The Business                                | 10  
|         |                                                                          |     
|Item 5.  | Description Of Business                                                  | 12  
|         |                                                                          |     
|Item 6.  | Dividends                                                                | 38  
|         |                                                                          |     
|Item 7.  | Description Of Capital Structure                                         | 38  
|         |                                                                          |     
|Item 8.  | Market
      For Securities                                              | 39  
|         |                                                                          |     
|Item 9.  | Escrowed
      Securities                                                | 40  
|         |                                                                          |     
|Item 10  | Directors
      And Officers                                             | 40  
|         |                                                                          |     
|Item 11. | Promoters                                                                | 48  
|         |                                                                          |     
|Item 12. | Legal
      Proceedings                                                  | 49  
|         |                                                                          |     
|Item 13. | Interest
      Of Management And Others In Material Transactions         | 55  
|         |                                                                          |     
|Item 14. | Transfer
      Agent And Registrar                                       | 55  
|         |                                                                          |     
|Item 15. | Material
      Contracts                                                 | 55  
|         |                                                                          |     
|Item 16. | Interests
      Of Experts                                               | 56  
|         |                                                                          |     
|Item 17. | Additional Information                                                   | 56  
|         |                                                                          |     
|Item 18. | Disclosure For Companies Not Sending Information
      Circulars         | 56  
|         |                                                                          |     
|Item 19. | Audit And
      Risk Committee, Auditor Fees, Exemptions, Code Of Ethics | 56  
|         |                                                                          |     
|         | **Appendix A - Audit And Risk Committee
      Charter**                  | 59  

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Item 2.       
Preliminary Notes

This AIF contains "forward-looking information" within the
meaning of applicable Canadian securities legislation. Wherever possible, words
such as "plans", "expects", or "does not expect", "budget", "scheduled",
"estimates", "forecasts", "anticipate" or "does not anticipate", "believe",
"intend" and similar expressions or statements that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur or be
achieved, have been used to identify forward-looking information.

Forward-looking information in this AIF include, without limitation statements
  regarding:

- the outcome of our multi-dimensional strategy to address the United States
  Environmental Protection Agencys (the "EPA") pre-emptive regulatory action
  under Section 404(c) of the Clean Water Act(the "CWA") and our
  plans to prepare the Pebble Project (as hereinafter defined) to initiate
  federal and state permitting under the National Environmental Policy Act (the
  "NEPA") (the "Multi-dimensional Strategy");
- the outcome of the legal and direct discussions, including possible
  mediation proceedings that we are engaged in with the EPA and any future
  actions that may or may not be taken by the EPA;
- the outcome of any other legal proceedings in which we are engaged;
- the impact of any change in the administration of the EPA resulting from
  the new federal administration in Washington, DC;
- our ability to proceed with applications for federal and state permitting
  under the CWA and the NEPA;
- our expectations regarding the potential for securing the necessary
  permitting of a mine at the Pebble Project;
- our expected financial performance in future periods;
- our plan of operations, including our plans to carry out and finance the
  Multi-dimensional Strategy activities, exploration and development activities,
  legal and direct discussions, including possible mediation proceedings with
  the EPA;
- our ability to raise capital for the Multi-dimensional Strategy activities,
  exploration and development activities;
- our expectations regarding the exploration and development potential of the
  Pebble Project; and
- factors relating to our investment decisions.

Forward-looking information is based on the reasonable
assumptions, estimates, analysis and opinions of management made in light of its
experience and its perception of trends, current conditions and expected
developments, as well as other factors that management believes to be relevant
and reasonable in the circumstances at the date that such statements are made,
but which may prove to be incorrect. We believe that the assumptions and
expectations reflected in such forward-looking information are reasonable.

Key assumptions upon which the Companys forward-looking
information are based include:

- that we will be able to secure sufficient capital necessary for the
  Multi-dimensional Strategy activities, the outcome of litigation against and
  discussions, including possible mediation with the EPA, continued
  environmental assessment and permitting activities and engineering work which
  must be completed prior to any potential development of the Pebble Project
  which would then require engineering and financing in order to advance to
  ultimate construction;
- we will ultimately have the opportunity to proceed with permit application
  preparations under the CWA and NEPA for the Pebble Project;

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|2016 Annual Information Form | P a g e| 3 | 

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- that the Company will ultimately be able to demonstrate that a mine at the
  Pebble Project can be developed and operated in an environmentally sound and
  socially responsible manner, meeting all relevant federal, state and local
  regulatory requirements so that we will be ultimately able to obtain permits
  authorizing construction of a mine at the Pebble Project;
- that the market prices of copper, gold, molybdenum and silver will not
  decline significantly or stay depressed for a lengthy period of time;
- that key personnel will continue their employment with us; and
- that we will continue to be able to secure minimum adequate financing on
  acceptable terms.

Readers are cautioned that the foregoing list is not exhaustive
of all factors and assumptions which may have been used. Forward looking
statements are also subject to risks and uncertainties facing our business, any
of which could have a material impact on our outlook.

Some of the risks and uncertainties that could cause actual
results to differ materially from those expressed in the forward-looking
statements include:

- a negative outcome of the Multi-dimensional Strategy, including legal and
  political challenges with which we are engaged regarding the Pebble Project,
  which would have a material adverse effect on us;
- an inability to ultimately obtain permitting for a mine at the Pebble
  Project;
- an inability to continue to fund the Multi-dimensional Strategy,
  exploration and development activities and other operating costs;
- the highly cyclical and speculative nature of the mineral resource
  exploration business;
- the pre-development stage economic viability and technical uncertainties of
  the Pebble Project and the lack of known reserves on the Pebble Project;
- an inability to recover even the financial statement carrying values of the
  Pebble Project if we cease to continue on a going concern basis;
- the potential for loss of the services of key executive officers;
- history of, and expectation of further, financial losses from operations
  impacting our ability to continue on a going concern basis;
- inability to establish that the Pebble Project contains commercially viable
  deposits of ore;
- the volatility of gold, copper, molybdenum and silver prices;
- the inherent risk involved in the exploration, development and production
  of minerals, and the presence of unknown geological and other physical and
  environmental hazards at the Pebble Project;
- the potential for changes in, or the introduction of new, government
  regulations relating to mining, including laws and regulations relating to the
  protection of the environment and project legal titles;
- potential claims by third parties to titles or rights involving the Pebble
  Project;
- the unpredictability of the outcome of litigation;
- the possible inability to insure our operations against all risks;
- the highly competitive nature of the mining business;
- the potential dilution to current shareholders due to any future equity
  financings;
- the potential dilution to current shareholders from the exercise of share
  purchase options to purchase the Companys shares; and
- that we have never paid dividends and will not do so in the foreseeable
  future.

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This list is not exhaustive of the factors that may affect any
of the Companys forward-looking statements or information. Forward-looking
statements or information are statements about the future and are inherently
uncertain, and actual achievements of the Company or other future events or
conditions may differ materially from those reflected in the forward-looking
statements or information due to a variety of risks, uncertainties and other
factors, including, without limitation, the risks and uncertainties described
above. See Risk Factors on page 33.

Our forward-looking statements are based on the reasonable
beliefs, expectations and opinions of management on the date of this AIF.
Although we have attempted to identify important factors that could cause actual
results to differ materially from those contained in forward-looking
information, there may be other factors that cause results not to be as
anticipated, estimated or intended. There is no assurance that such information
will prove to be accurate, as actual results and future events could differ
materially from those anticipated in such information. Accordingly, readers
should appreciate the inherent uncertainty of, and not place undue reliance on,
forward-looking information. We do not undertake to update any forward-looking
information, except as, and to the extent required by, applicable securities
laws.

Incorporation of Continuous Disclosure Documents by
Reference

In this AIF, the "Company" or "Northern Dynasty" refers to
Northern Dynasty Minerals Ltd. and all its subsidiaries and affiliated
partnerships together unless the context states otherwise.

The AIF incorporates by reference a technical report prepared
pursuant to National Instrument 43-101, Standards of Disclosure for Mineral
Projects ("NI 43-101") dated December 2014, copies of which are available on
request from the offices of Northern Dynasty or by downloading from the SEDAR
website under the Companys profile at www.sedar.com.

Currency and Metric Equivalents

All dollar amounts are expressed in Canadian dollars unless
otherwise indicated. The Companys accounts are maintained in Canadian dollars.
The rate of exchange on December 31, 2016 (based on the last business day which
was December 30, 2016), as reported by the Bank of Canada for the conversion of
one Canadian dollar into one United States dollar ("U.S. dollar"), was
1.3427.

Currency and Exchange Rates

On March 28, 2017, the rate of exchange of the Canadian Dollar,
based on the daily noonrate in Canada as published by the Bank of
Canada, was US$1.00 = C$1.3363. Exchange rates published by the Bank of Canada,
available on its website www.bankofcanada.ca,
are nominal quotations - not buying or selling rates - and are intended for
statistical or analytical purposes.

The following tables set out the exchange rates, based on the
daily noonrates in Canada as published by the Bank of Canada for the
conversion of Canadian Dollars into U.S. Dollars.

Year Ended December 31(Canadian Dollars per U.S. Dollar)2016
    2015
    2014
    2013Rate at end of year
    $1.3427
    $1.3840
    $1.1601
    $0.9402Average rate for year
    $1.3248
    $1.2787
    $1.1046
    $0.9711High for year
    $1.4589
    $1.3990
    $1.1656
    $1.0165Low for year
    $1.2544
    $1.1728
    $1.0639
  $0.9342


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|2016 Annual Information Form | P a g e| 5 | 

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Monthly High and Low Exchange Rate (Canadian Dollar per U.S.
      Dollar)Month or Period
    High
    LowMarch 2017 (to March 28,
      2017)
    $1.3505
    $1.3316February 2017
    $1.3248
    $1.3004January 2017
    $1.3438
    $1.3030December 2016
    $1.3556
    $1.3120November 2016
    $1.3582
    $1.3337


For ease of reference, the following factors for converting
metric measurements into Imperial equivalents are as follows:

Metric Units
    Multiply by
    Imperial Unitshectares
    2.471
    =
      acresmetres
    3.281
    =
      feetkilometres
    0.621
    =
      miles (5,280 feet)grams
    0.032
    =
      ounces (troy)tonnes
    1.102
    =
      tons (short) (2,000 pounds)grams/tonne
    0.029
    = ounces (troy)/ton


Glossary

In this AIF the following terms have the meanings set forth
herein:

Alkalic
    Igneous rock containing a relatively high percentage of
      sodium and potassium feldspar; alteration can also introduce alkali
      minerals.Argillic
    Hydrothermal alteration of wall rock which forms clay
      minerals including kaolinite, smectite, illite and other species.CuEQ
    Copper EquivalentComminution
    Reduction of solid materials from one average particle
      size to a smaller average particle size by crushing, grinding, cutting,
      vibrating, or other means.Deportment
    Assessment of how minerals contribute to grade, as each
      mineral is likely to behave differently to comminution, flotation or
      leaching.Diorite
    Grey to dark-grey igneous intrusive rock of intermediate
      composition, composed principally of plagioclase feldspar along with
      biotite, hornblende and/or pyroxene.Element Abbreviations
    Au - Gold; Ag - Silver; Al - Aluminum; Cu - Copper; Fe -
      Iron; Mo - Molybdenum; Na - Sodium; O - Oxygen; Pb - Lead; S - Sulphur; Zn
      - Zinc.Geometallurgy
    Practice of combining geology and/or geostatistics with
      metallurgy.Graben
    Down-dropped block of land bordered by faults.Granodiorite
    Medium- to coarse-grained acid igneous rock with quartz
      (>20%), plagioclase and alkali feldspar, commonly with minor hornblende
      and/or biotite.Hypogene
    Processes below the earth's surface which, in mineral
      deposits, result in precipitation of primary minerals like sulphides.


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Hydrothermal mineral deposit
    Any concentration of metallic minerals formed by the
      precipitation of solids from hot waters (hydrothermal solution). The
      solutions may be sourced from a magma or from deeply circulating water
      heated by magma.Intrusion (batholith, dyke, pluton)
    Medium to coarse grained igneous bodies which
      crystallized at depth within the Earth's crust. Large intrusive bodies are
      called batholiths; smaller bodies are plutons and linear bodies are dykes.Leached Cap
    Rock which originally contained mineralization that was
      subsequently removed due to weathering processes.Locked Cycle Test
    A repetitive batch flotation test used in mineral
      processing laboratories while developing a metallurgical flowsheet.Monzonite
    Igneous intrusive rock with approximately equal amounts
      of plagioclase and alkali feldspar, and less than 5% quartz by volume.National Instrument 43- 101 ("NI 43-101")
    The Canadian securities instrument which establishes
      disclosure standards for mineral projects of Canadian publicly-traded
      resource companies.Kriging
    A method of estimation of a variable value (such as metal
      grade) at an unmeasured location from measured values, weighted by
      distance and orientation, at nearby locations.Porphyry deposit
    A type of mineral deposit genetically related to igneous
      intrusions in which ore minerals are widely distributed, generally of low
      grade but commonly of large tonnage.Potassic
    Hydrothermal alteration which results in the production
      of potassium- bearing minerals such as biotite, muscovite or sericite,
      and/or orthoclase.Pyrophyllite
    Aluminosilicate hydroxide mineral that forms as a result
      of hydrothermal alteration or low grade metamorphism.Sodic
    In this report, refers to a type of hydrothermal
      alteration that contains sodium-bearing minerals, most commonly albite
      feldspar.Subduction
    Process by which one tectonic plate moves under another
      tectonic plate.Supergene
    Refers to processes which occur relatively near the
      surface of the earth which modify or destroy original (hypogene) minerals
      by oxidation and chemical weathering.Superterrane
    A group of physically connected and related geological
      terranes (group of related rock units).


Resource Category (Classification) Definitions

The discussion of mineral deposit classifications in this AIF
adheres to the mineral resource and mineral reserve definitions and
classification criteria developed by the Canadian Institute of Mining and
Metallurgy ("CIM") 2014. Estimated mineral resources fall into two broad
categories dependent on whether the economic viability of them has been
established and these are namely "resources" (potential for economic viability)
and "reserves" (viable economic production is feasible). Resources are
sub-divided into categories depending on the confidence level of the estimate
based on level of detail of sampling and geological understanding of the
deposit. The categories, from lowest confidence to highest confidence, are
inferred resource, indicated resource and measured resource. The Company does
not claim to have any reserves at this time. These resource classifications can
be more particularly described as follows:

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Mineral Resource
    A concentration or occurrence of solid material of
      economic interest in or on the Earths crust in such form, grade or
      quality and quantity that there are reasonable prospects for eventual
      economic extraction. The location, quantity, grade or quality, continuity
      and other geological characteristics of a Mineral Resource are known,
      estimated or interpreted from specific geological evidence and knowledge,
      including sampling.Inferred Mineral Resource
    That part of a Mineral Resource for which quantity and
      grade or quality are estimated on the basis of limited geological evidence
      and sampling. Geological evidence is sufficient to imply but not verify
      geological and grade or quality continuity. It has a lower level of
      confidence than that applying to an Indicated Mineral Resource and must
      not be converted to a Mineral Reserve. It is reasonably expected that the
      majority of Inferred Mineral Resources could be upgraded to Indicated
      Mineral Resources with continued exploration.Indicated Mineral Resource
    That part of a Mineral Resource for which quantity, grade
      or quality, densities, shape and physical characteristics are estimated
      with sufficient confidence to allow the application of Modifying Factors
      in sufficient detail to support mine planning and evaluation of the
      economic viability of the deposit. Geological evidence is derived from
      adequately detailed and reliable exploration, sampling and testing and is
      sufficient to assume geological and grade or quality continuity between
      points of observation. It has a lower level of confidence than that
      applying to a Measured Mineral Resource and may only be converted to a
      Probable Mineral Reserve.Measured Mineral Resource
    That part of a Mineral Resource for which quantity, grade
      or quality, densities, shape, and physical characteristics are estimated
      with confidence sufficient to allow the application of Modifying Factors
      to support detailed mine planning and final evaluation of the economic
      viability of the deposit. Geological evidence is derived from detailed and
      reliable exploration, sampling and testing and is sufficient to confirm
      geological and grade or quality continuity between points of observation.
      It has a higher level of confidence than that applying to either an
      Indicated Mineral Resource or an Inferred Mineral Resource. It may be
      converted to a Proven Mineral Reserve or to a Probable Mineral Reserve.


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|2016 Annual Information Form | P a g e| 8 | 

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Cautionary Notes to United States Investors Concerning Mineral Resource Estimates

This AIF uses terms that comply with reporting standards in Canada and certain estimates are made in accordance with NI 43-101. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public
disclosure an issuer makes of scientific and technical information concerning mineral projects.  Unless otherwise indicated, all resource estimates contained in or incorporated by reference in this prospectus have been prepared in accordance with NI
43-101. These standards differ significantly from the requirements of the United States Securities Exchange Commission (the "SEC"), and resource information contained herein and incorporated by reference herein may not be comparable to similar
information disclosed by companies in the United States (“US companies”).

In addition, this AIF uses the terms "measured mineral resources", "indicated mineral resources" and "inferred mineral resources" to comply with the reporting standards in Canada. We advise United States investors that while those terms are
recognized and required by Canadian regulations, the SEC does not recognize them. United States investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into mineral reserves.
These terms have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility.

Further, "inferred resources" have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Therefore, United States investors are also cautioned not to assume that all or any part of the
inferred resources exist. In accordance with Canadian rules, estimates of "inferred mineral resources" cannot form the basis of feasibility or other economic studies, except in limited circumstances where permitted under NI 43-101.

It cannot be assumed that all or any part of "measured mineral resources", "indicated mineral resources", or "inferred mineral resources" will ever be upgraded to a higher category. Investors are cautioned not to assume that any part of the reported
"measured mineral resources", "indicated mineral resources", or "inferred mineral resources" in this prospectus is economically or legally mineable.

In addition, disclosure of "contained ounces" is permitted disclosure under Canadian regulations; however, the SEC only permits issuers to report mineralization as in place tonnage and grade without reference to unit measures.

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|2016 Annual Information Form | P a g e| 9 | 

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Item 3.        Corporate
Structure

Northern Dynasty is a mineral exploration company incorporated
on May 11, 1983 pursuant to the Company Act of the Province of British Columbia
(predecessor statute to the British Columbia Corporations Act in force since
2004), under the name "Dynasty Resources Inc." On November 30, 1983 the Company
changed its name to "Northern Dynasty Explorations Ltd." and subsequently, on
October 11, 1997, changed its name to Northern Dynasty Minerals Ltd. Northern
Dynasty became a reporting company in the Province of British Columbia on April
10, 1984 and was listed on the Vancouver Stock Exchange (now absorbed by the TSX
Venture Exchange and herein generally "TSX-V") from 1984-1987, listed on the
Toronto Stock Exchange (TSX) from 1987-1993, and delisted from trading but
continued to comply with its continuous disclosure obligations from 1993 to
1994, and thereafter listed on TSX-V from 1994 to October 30, 2007 when it again
began trading on the TSX. In November 2004, the common shares of Northern
Dynasty were also listed on the American Stock Exchange ("AMEX"). AMEX was
purchased by the New York Stock Exchange ("NYSE") and the Company now trades on
the NYSE MKT Exchange ("NYSE MKT").

The head office of Northern Dynasty is located at 1040 West
Georgia Street, 15th floor, Vancouver, British Columbia, Canada V6E 4H1,
telephone (604) 684-6365, facsimile (604) 684-8092. The Companys legal
registered office is in care of its Canadian attorneys, McMillan LLP, Barristers
& Solicitors, at Suite 1500, 1055 West Georgia Street, Vancouver, British
Columbia, Canada V6E 4N7, telephone (604) 689-9111, facsimile (604) 685-7084.

The Companys Alaska mineral resource exploration business is
operated through a wholly-owned Alaskan registered limited partnership, the
Pebble Limited Partnership (the "Pebble Partnership" or "PLP"), in which the
Company owns a 100% of the Pebble Partnership through an Alaskan general
partnership, the Northern Dynasty Partnership, which is a partnership formed by
two of its subsidiaries. An indirectly wholly-owned subsidiary of the Company,
Pebble Mines Corp. is the general partner of the Pebble Partnership and
responsible for its day-to-day operations. The business address of the Northern
Dynasty Partnership is Suite 404, 3201 C Street, Anchorage, Alaska, USA,
99503.

In this AIF, a reference to the "Company" or "Northern Dynasty"
includes a reference to PLP and the Companys wholly-owned subsidiaries and
other consolidated interests and entities, unless the context clearly indicates
otherwise. Certain terms used herein are defined in the text and others are
included in the glossary of this AIF.

Item 4.        General
Development of the Business

Company Development

Northern Dynasty is a mineral exploration company focused on
the exploration and advancement towards feasibility, permitting and ultimately
development of the Pebble Project, a copper-gold-molybdenum mineral project
located in southwest Alaska (the "Pebble Project" or the
Project). The Pebble Project is comprised of mineral claims that are
held by subsidiaries of the Pebble Partnership, a 100% wholly-owned subsidiary
of Northern Dynasty.

Northern Dynasty acquired a 100% interest the Pebble Project
from an Alaskan subsidiary of Teck Resources Limited (Teck) in a series of
transactions from October 2001 through to June 2006. Teck has retained certain
royalties in the Pebble Project, as described in detail below under Item 5 
Description of Business.

The Pebble Partnership was converted into a limited partnership
in July 2007 in connection with a joint venture for the Pebble Project entered
into between the Company and an affiliate of Anglo American plc ("Anglo
American"). From July 2007 to December 2013, approximately $595 million (US$573
million) was provided to the Pebble Partnership by the affiliate of Anglo
American. A major portion of these funds were spent on exploration programs,
resource estimates, environmental data collection and technical studies, with a
significant portion spent on engineering of various possible mine development
models and related infrastructure, power and transportation systems. These costs
are not reflected in the Companys asset accounts as they were largely incurred by third parties or are
required to be expensed. Whether any portion these past expenditures will prove
to have significant value to the Company in future is currently unknown.

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Anglo American withdrew from the Pebble Partnership effective
December 10, 2013, at which time Northern Dynasty re-acquired Anglo Americans
50% ownership interest in the Pebble Partnership. The Company has since that
time held a 100% interest in the Pebble Partnership.

To December 31, 2016, approximately $814 million (US$758
million)1 in expenditures have been incurred on the Pebble Project. In addition,
Northern Dynasty has spent approximately $106 million in acquisition costs on
the Pebble Project.

Northern Dynasty does not have any operating revenue, although
currently and historically it has had non-material annual interest revenue as a
consequence of investing its surplus funds.

Three Year History

In February 2014, the United States Environmental Protection
Agency (EPA) announced the initiation of a regulatory action under the Clean
Water Act (CWA) to consider restriction or a prohibition on mining activities
associated with the Pebble deposit. Much of the Companys efforts since that
time have been focused around providing information and responses to ward off
this action. The background and history of the regulatory action initiated by
the EPA, and our efforts to address this regulatory action, are summarized in
detail below in Item 12  Legal Proceedings and Regulatory Actions.

In 2015 and 2016, work by Northern Dynasty and the Pebble
Partnership was concentrated on:

- advancing a Multi-dimensional Strategy to address the EPAs pre-emptive
  regulatory action under Section 404(c) of the CWA;
- maintaining an active corporate presence in Alaska in order to advance
  relationships with political and regulatory offices of government, Alaska
  Native partners and other stakeholder groups; and
- working toward securing a transaction with a potential partner(s) to
  further advance the Pebble Project.

The goal of the Multi-dimensional Strategy is to position the
Pebble Project to initiate federal and state permitting under the National
Environmental Policy Act (NEPA) unencumbered by any extraordinary development
restrictions imposed by the federal agency. This strategy includes three
discrete pieces of litigation against the EPA, as described in more detail below
in Item 12  Legal Proceedings and Regulatory Actions:

- challenging the EPAs statutory authority to pre-emptively impose
  development restrictions at the Pebble Project under Section 404(c) of the CWA
  prior to the Pebble Partnership submitting a proposed development plan for the
  project or the development of an Environmental Impact Statement (EIS) under
  NEPA;
- alleging that the EPA violated Federal Advisory Committee Act (FACA) in
  the course of undertaking the Bristol Bay Watershed Assessment and subsequent
  Section 404(c) of the CWA regulatory action; and
- alleging that the EPA is unlawfully withholding relevant documentation and
  other information sought by the Pebble Partnership under Freedom of
  Information Act (FOIA).

________________________

1 During the period 2007 to 2013, a major part of the project expenditures were on exploration programs, resource estimates, environmental data collection and technical studies, with a significant portion spent on engineering of various possible mine development models, as well as related infrastructure, power and transportation systems.  As described above, these costs are not reflected in the Company’s asset accounts as they were largely incurred by third parties or are required to be expensed.  The technical and engineering studies that were completed relating to mine-site and infrastructure development are not considered to be current or necessarily representative of management’s current understanding of the most likely development scenario for the Project. Accordingly, the Company is uncertain whether it can realize significant value from this prior work. Environmental baseline studies and data, as well as geological information from exploration, remain important information available to the Company from this period in continuing its advancement of the Project.

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The Companys plans for advancement of the Multi-Dimensional
Strategy in 2017 are described in detail below under Section 3 of this Item 5  Plans for 2017.

The Company has completed the following financings within the
past three years in order to fund its business operations, including the
advancement of its Multi-Dimensional Strategy:

- in late December 2014 and early January 2015, the Company completed a
  financing and raised gross proceeds of approximately $15.5 million through the
  issuance of 35,962,735 Special Warrants, each convertible into one common
  share without payment of additional consideration. All these Special Warrants
  were automatically converted or converted into common shares by September
  2015. See Item 15 Material Contracts on page 55;
- in September 2015, the Company completed a financing and raised gross
  proceeds of approximately $15 million through the issuance of 37,600,000
  Special Warrants, each convertible into one common share without payment of
  additional consideration. These Special Warrants were automatically converted
  into common shares in November 2015. See Item 15 Material Contracts on page
  55;
- in October 2015, the Company issued 12,573,292 common shares to acquire
  Cannon Point Resources Ltd., a company with a primary asset of $4.25 million
  in cash;
- in December 2015, the Company issued 27,593,341 common shares to acquire
  Mission Gold Ltd. ("Mission Gold"), a company with primary assets of
  approximately $9 million in cash and a 100% interest in a titanium project
  that was sold by Mission Gold to a third party as part of the transaction with
  Northern Dynasty. The Company also completed a private placement of 12,881,344
  common shares at a price of $0.412 per share for gross proceeds of
  approximately $5.2 million;
- in June and July 2016, the Company completed a prospectus offering of
  38,000,000 units and a private placement of 4,444,376 units respectively, in
  the capital of the Company. The units were priced $0.45 per unit and the
  Company raised gross proceeds of approximately $17.1 million and $2 million
  respectively. Each Unit comprised of one common share and one common share
  purchase warrant ("Warrant"), each exercisable into one common share of the
  Company at an exercise price of $0.65 per share until June10, 2021. The
  Warrants were listed and trade on the TSX under the symbol NDM.WT.B.; and
- in January 2017, the Company completed a bought deal offering of 20,240,000
  common shares which includes the exercise in full of the Underwriters
  over-allotment option, at price of US$1.85 per share for gross proceeds of
  approximately US$37.4 million.

Item 5.       
Description of Business

A.   The Pebble Project

The Companys business is the exploration and advancement
towards feasibility, permitting and ultimately development of the Pebble
Project.

The Pebble Project Is Subject To
State and Federal Laws

PLP and its subsidiaries are required to comply with all Alaska
statutes in connection with the Pebble Project. These statutes govern titles,
operations, environmental, development, operating and generally all aspects of
exploration and development of a mine in Alaska.

Alaska Statute 38.05.185 among others establishes the rights to
mining claims and mineral leases on lands owned by the State of Alaska and open
to mineral entry. This group of statutes also covers annual labor and rental
requirements, and royalties.

Operations on claims or leases on state owned land must be
permitted under a plan of operations as set out in Title 11 of the Alaska
Administrative Code, Chapter 86, Section 800. This regulation generally provides that the State Division of Mining can be the lead
agency in coordinating the comments of all agencies which must consent to the
issuance of a plan of operations, and sets the requirements for the approval of
a plan of operations.

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Environmental conditions are controlled by Alaska Statute 46.08
(which prohibits release of oil and hazardous substances), Alaska Statute
46.03.060 (which sets water quality standards), and Alaska Statute 46.14 (which
sets air quality standards).

Once a decision is made to enter permitting, the Pebble Project
will be required to satisfy permitting requirements at three levels: federal,
state and local (borough). The process takes approximately 3-4 years to complete
and involves 11 regulatory agencies, 60+ categories of permits and significant
ongoing opportunities for public involvement. The Alaska Department of Natural
Resources Large Mine Permitting Team is responsible for coordinating permitting
activities for large mine projects.

To satisfy permitting requirements under the National
Environmental Policy Act ("NEPA") and other regulatory statutes, a project must
provide a comprehensive project design and operating plan for mine-site and
infrastructure facilities; documentation of development alternatives
investigated; mitigation and compensation strategies, and identification of
residual effects; and environmental monitoring, reclamation and closure plans.
The first step is to provide the required information (including a Project
Description and Environmental Baseline Document) for an Environmental Impact
Statement ("EIS") under NEPA, prepared by a third-party contractor under the
direction of a lead federal agency, expected to be the US Army Corps of
Engineers. The EIS will determine whether sufficient evaluation of the project's
environmental effects and development alternatives has been undertaken. It will
also provide the basis for federal, state and local government agencies to make
individual permitting decisions.

Under the US Clean Water Act, Section 404(c), the Administrator
of the US Environmental Protection Agency ("EPA") is given the right to disallow
the specification (including the withdrawal of specification) of any defined
area as a disposal site if he or she determines that the release of such
material will have an unacceptable adverse effect on municipal water supplies,
local wildlife, spawning and breeding areas of fisheries, shellfish beds, and/or
recreational areas. Such decisions made by the Administrator require notice and
opportunity for public hearings, and consultation with the Secretary of the Army
Corp of Engineers. The Administrator shall set forth in writing and make public
his or her findings and reasons for making any determination under this
subsection.

B.    Technical Summary

The following disclosure is mainly summarized from the "2014
Technical Report on the Pebble Project, Southwest Alaska, USA" by J. David
Gaunt, P.Geo., James Lang, P.Geo., Eric Titley, P.Geo., and Ting Lu, P.Eng.,
effective date December 31, 2014 ("2014 Technical Report"), and updated by
Company staff. J. David Gaunt, P.Geo., James Lang, P.Geo., Eric Titley, P.Geo.,
and Ting Lu, P.Eng., are the qualified persons for the 2014 Technical Report and
have reviewed and approved the content derived from that report. Additional
information is the Technical Summary has been reviewed and approved by qualified
person Stephen Hodgson, PEng., Vice President, Engineering for Northern
Dynasty.

Introduction

The Pebble deposit was originally discovered in 1989 and was
acquired by Northern Dynasty in 2001. Since that time, Northern Dynasty and
subsequently the Pebble Limited Partnership (the "Pebble Partnership", in which
Northern Dynasty currently owns a 100% interest) have conducted significant
mineral exploration, environmental baseline data collection, and engineering
work on the Pebble Project to advance it towards development.

Work at Pebble has led to an overall expansion of the Pebble
deposit, as well as the discovery of several other mineralized occurrences along
an extensive northeast-trending mineralized system underlying the property. Over
one million feet of drilling has been completed on the property, a large
proportion of which has been focused on the Pebble deposit.

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In light of more recent stakeholder and regulatory feedback,
Northern Dynasty initiated a comprehensive review of previous analyses of the
Pebble Project in late 2013 and in 2014 commissioned the 2014 Technical Report
to update information on the mineral resources and metallurgy for the project.

Property Description and Location

The Pebble Project is located in southwest Alaska,
approximately 200 miles southwest of Anchorage, 17 miles northwest of the
village of Iliamna, 160 miles northeast of Bristol Bay, and approximately 60
miles west of Cook Inlet.

Figure 1 ****Property Location  Pebble Project



Northern Dynasty holds, indirectly through a wholly-owned
subsidiary and wholly-owned subsidiaries of the wholly-owned Pebble Partnership,
a 100% interest in a contiguous block of 2,402 mineral claims covering
approximately 417 square miles (Figure 2). This includes 2,182 claims covering
364.2 square miles (including the Pebble deposit) held by Pebble Partnership
subsidiaries, Pebble East Claims Corporation and Pebble West Claims Corporation;
and 220 claims covering 52.5 square miles held by Northern Dynasty subsidiary U5
Resources Inc.

State mineral claims in Alaska are kept in good standing by
performing annual assessment work or in lieu of assessment work by paying $100
per year per 40 acre (0.06 square mile) mineral claim, and by paying annual
escalating state rentals. All of the assessment work payment obligations come
due annually on August 31. Credit for excess work can be banked for a maximum of
four years, and can be applied as necessary to continue to hold the claims in
good standing. The Project claims have a variable amount of work credit available that can be applied in this way1. State rentals for 2017 are approximately US$1,020,000 and are payable no
later than 90 days after the assessment work is due.

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The Pebble Partnership currently does not own surface rights
associated with the mineral claims that comprise the Pebble Property. All lands
are held by the State of Alaska, and surface rights may be acquired from the
state government once areas required for mine development have been determined
and permits awarded. Permits necessary for exploration drilling and other field
programs associated with pre-development assessment of the Pebble Project are
applied for each year. There are no existing material environmental liabilities
associated with the Pebble Project.

Figure 2 ****Mineral Claims  Pebble Project



Northern Dynasty acquired the Pebble Property by way of a
two-part (Resource Lands and Exploration Lands) purchase option from an Alaskan
subsidiary of Teck Cominco Limited (now Teck Resources Limited), which still
retains a 4% pre-payback advance net profits royalty interest (after debt
service) and 5% after-payback net profits interest royalty in any mine
production from the Exploration Lands portion of the Pebble property as shown on
the figure below.



______________________________________

2 Annual assessment work obligations for the
property of some US$667,700 are due in 2017 and will be covered by banked
assessment credits from work performed in 2016 and prior years.

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Accessibility, climate, local
resources, infrastructure and physiography

Current access to the property is by helicopter from Iliamna.
There is a modern airfield at Iliamna, with two paved 4,920 ft airstrips, that
services the communities of Iliamna, Newhalen and Nondalton. The runways are
suitable for DC-6 and Hercules cargo aircraft and commercial jet aircraft.

There are paved roads that connect the villages of Iliamna and
Newhalen to the airport and to each other, and a partly paved, partly gravel
road that extends to a proposed Newhalen River crossing near Nondalton. The
property is currently not connected to any of these local communities by road; a
road would be planned as part of the project design.

There is no access road that connects the communities nearest
the Pebble Project to the coast on Cook Inlet. From the coast, at Williamsport
on Iniskin Bay, there is an 18.6 mile state-maintained road that terminates at
the east end of Iliamna Lake, where watercraft and transport barges may be used
to access Iliamna. The route from Williamsport, over land to Pile Bay on Iliamna
Lake, is currently used to transport bulk fuel, equipment and supplies to
communities around the lake during the summer months. Also during summer,
supplies are barged up the Kvichak River, approximately 43.4 miles southwest of
Iliamna, from Kvichak Bay on the North Pacific Ocean.

A small run-of-river hydroelectric installation on the nearby
Tazamina River provides power for the three communities in the summer months.
Supplemental power generation using diesel generators is required during winter
months.

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Iliamna and surrounding communities have a combined population
of just over 400 people. As such, there is limited local commercial
infrastructure except that which services seasonal sports fishing and
hunting.

The property is situated at approximately 1,000 ft above mean
sea level in an area described as subarctic tundra. It is characterized by
gently rolling hills and an absence of permafrost. The climate is sufficiently
moderate to allow a well-planned mineral exploration program to be conducted
year-round at Pebble.

Geological Setting and Mineralization

Pebble is a porphyry-style copper-gold-molybdenum-silver
deposit that comprises two adjacent, contiguous, coeval hydrothermal centers
called the Pebble East and Pebble West zones. Mineralization in the Pebble West
zone extends from surface to depths of at least 3,000 ft whereas higher grade
mineralization in the Pebble East zone extends to a depth of at least 5,810 ft
but is concealed beneath an east-thickening wedge of unmineralized rock types.
An important exploration target is represented by high-grade, but as yet
undelineated, mineralization on the far eastern side of the deposit which was
dropped 1,970 to 2,950 ft by normal faults into the northeast-trending East
Graben.

The Pebble deposit formed about 90 million years ago in
response to intrusion of granodiorite magmas generated by subduction of the
Pacific Plate beneath the Wrangellia Superterrane. The Pebble deposit is hosted
by these granodiorite intrusions and by the sedimentary and volcanic rocks of
Jurassic to Cretaceous age, granodiorite and diorite sills and alkalic monzonite
intrusions and associated breccias which host them.

Mineralization at Pebble is predominantly hypogene, although
the Pebble West zone contains a thin zone of variably developed leached cap and
underlying supergene mineralization. Disseminated and vein-hosted
copper-gold-molybdenum-silver mineralization, dominated by chalcopyrite and
locally accompanied by bornite, is associated with early potassic alteration in
the shallow part of the Pebble East zone and with early sodic-potassic
alteration in the Pebble West zone and deeper parts of the Pebble East zone.
High-grade copper-gold mineralization is associated with younger pyrophyllite-
and sericite-bearing subtypes of advanced argillic alteration in the Pebble East
zone. The deposit is surrounded by weakly mineralized quartz-sericite-pyrite
alteration; in the upper center of the deposit quartz-illite-pyrite alteration
is an illite-altered relict of a mostly eroded quartz-sericite-pyrite cap to the
deposit.

Exploration

Historical

Cominco Alaska, a division of Cominco Ltd. now Teck ("Cominco
(Teck)") began reconnaissance exploration in the Pebble region in the mid-1980s
and in 1984 discovered the Sharp Mountain gold prospect near the southern margin
of the current property. Gold was discovered in quartz veins of probable
Tertiary age near the peak of Sharp Mountain. Grab samples of veins in talus
ranged from 0.045 oz/ton Au to 9.32 oz/ton Au and 3.0 oz/ton Ag. In 1987,
examination and sampling of several prominent limonitic and hematitic alteration
zones yielded anomalous gold concentrations from the Sill prospect and the
Pebble discovery outcrop.

Geophysical surveys were conducted on the property between 1988
and 1997. An induced polarization ("IP") survey in 1989 at Pebble displayed
response characteristics of a large porphyry-copper system. The surveys were
dipole-dipole IP surveys which defined a chargeability anomaly about 31.1 square
miles in extent within Cretaceous age rocks which surround the eastern to
southern margins of the Kaskanak batholith. All known zones of mineralization of
Cretaceous age on the Pebble property occur within the broad IP anomaly.

In 1991, baseline environmental and engineering studies were
initiated and weather stations were established. A preliminary evaluation was
undertaken by Cominco (Teck) in 1991, and updated in 1992. Historical estimates
of the mineral resources for the Pebble deposit were completed by Cominco
(Teck), most recently in 2000.

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Northern Dynasty and Pebble
Partnership

Between 2001 and 2006, the entire Pebble property was mapped
for rock type, structure and alteration at a scale of 1:10,000, providing an
important geological framework for interpretation of other exploration data. A
geological map of the Pebble deposit was also constructed but, due to a paucity
of outcrop, was based solely on drill hole information. The content and
interpretation of district and deposit scale geological maps have not changed
materially from those presented in 2009 and 2010.

A number of geophysical surveys, including IP, magnetic and
other survey types were completed by Northern Dynasty and the Pebble Partnership
between 2001 and 2010 to test the Pebble deposit and other occurrences on the
Pebble property. Between 2001 and 2003, Northern Dynasty collected 1,026 soil
samples, outlining high-contrast, coincident anomalies in gold, copper,
molybdenum and other metals in an area that measures at least 5.6 miles
north-south by up to 2.5 miles east-west, with strong but smaller anomalies in
several outlying zones. All soil geochemical anomalies lie within the 31.1
square mile IP chargeability anomaly. Limited surficial geochemical surveys were
completed in 2010 and 2011.

Drilling

Extensive drilling totalling 1,042,218 ft has been completed in
1,355 holes on the Pebble Project. These drill programs took place during 19 of
the 26 years from 1988 to 2013.

Northern Dynasty with its partners completed drilling for
exploration, deposit delineation, engineering and environmental purposes between
2002 and 2013. Highlights from exploration and deposit delineation drilling
since 2002 include:

- in 2002, drill testing of IP chargeability and multi-element geochemical
  anomalies outside of the Pebble deposit but within the larger and broader IP
  chargeability anomaly discovered the 38 Zone porphyry copper-gold-molybdenum
  deposit, the 52 Zone porphyry copper occurrence, the 37 Zone gold-copper skarn
  deposit, the 25 Zone gold deposit, and several small occurrences in which gold
  values exceeded 3.0 g/t.
- in 2003, drilling took place within and adjacent to the Pebble West zone
  and outside the Pebble deposit to test for extensions and new mineralization
  at four other zones, including the 38 Zone porphyry copper-gold-molybdenum
  deposit and the 37 Zone gold-copper skarn deposit.
- in 2004, 147 exploration holes were drilled in the Pebble deposit; the
  Pebble East zone is identified; the 308 Zone porphyry copper-gold-molybdenum
  deposit is discovered.
- in 2005 and 2006, drilling at Pebble East confirms its large size and
  higher grades of copper, gold and molybdenum.
- in 2007, 34 holes extend Pebble East to the northeast, northwest, south and
  southeast.
- in 2008, 31 delineation and infill holes were drilled at Pebble East.
  FMMUSA drilled seven exploration holes on land that is now controlled by the
  Pebble Partnership.
- in 2009 and 2010, delineation holes were drilled at the margins of Pebble
  West and exploration holes were drilled elsewhere on the property.
- in 2011 and 2012, holes drilled at the Pebble West zone indicate potential
  for resource expansion laterally and to depth; exploration targets were tested
  on the Kaskanak claims to the northwest and south of Pebble, and on the KAS
  claims further south.

Drilling for engineering (metallurgical and geotechnical) and
environmental (hydrological) purposes began in 2004 and continued through
2013.

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The spatial distribution and type of holes drilled are
illustrated below.

Figure 3 Location of Drill Holes  Pebble Project



Most of the footage on the Pebble Project was drilled using
diamond core drills and the Pebble resource estimate was calculated exclusively
from these holes. Many of the cored holes were advanced through overburden using
a tricone bit with no core recovery. These overburden lengths are included in
the core drilling total.

Since early 2004, all Pebble drill core has been geotechnically
logged. Over 69,000 measurements were made for a variety of geotechnical
parameters on 735,000 ft of core drilling. Recovery is generally very good and
averages 98.5% overall; two-thirds of all measured intervals have 100% core
recovery. Additionally, all Pebble drill core from the 2001 through 2013 drill
programs was photographed in a digital format.

All drill hole collars have been surveyed using a differential
global positioning system. A digital terrain model for the site was generated by
photogrammetric methods in 2004. All post-Cominco (Teck) drill holes have been
surveyed downhole, typically using a downhole survey (single shot magnetic
gravimetric) tool. A total of 989 holes were drilled vertically (-90°) and 192
were inclined from -42° to -85° at various azimuths.

A summary of drilling by various categories (operator, type,
year and area) to the end of the 2013 exploration program are compiled in the
table below. As shown in Figure 3 and Table 1 (East, West, Main), a large
proportion of the drilling has been directed toward the Pebble deposit.

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Table 1 Summary of Drill Holes  Pebble Project

No. of Holes
    Feet
    MetresBy OperatorCominco (Teck) 1
    164
    75,741.0
    23,086Northern Dynasty
    578
    495,069.5
    150,897Pebble Partnership 2
    606
    465,957.7
    142,024FMMUSA
    7
    5,450.0
    1,661Total
    1,355
    1,042,218.2
    317,668By TypeCore 1,5
    1,132
    1,023,297.6
    311,901Percussion 6
    223
    18,920.6
    5,767Total
    1,355
    1,042,218.2
    317,668By Year1988 1
    26
    7,601.5
    2,3171989 1
    27
    7,422.0
    2,2621990
    25
    10,021.0
    3,0541991
    48
    28,129.0
    8,5741992
    14
    6,609.0
    2,0141993
    4
    1,263.0
    3851997
    20
    14,695.5
    4,4792002
    68
    37,236.8
    11,3502003
    67
    71,226.6
    21,7102004
    267
    165,567.7
    50,4652005
    114
    81,978.5
    24,9872006 3
    48
    72,826.9
    22,1982007 4
    92
    167,666.9
    51,1052008 5
    241
    184,726.4
    56,3052009
    33
    34,947.5
    10,6522010
    66
    57,582.0
    17,5512011
    85
    50,767.7
    15,4742012
    81
    35,760.2
    10,9002013
    29
    6,190.0
    1,887Total
    1,355
    1,042,218.2
    317,668


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No. ofHoles
    Feet
    MetresBy AreaEast
    141
    446,379.3
    136,056West
    443
    351,986.7
    107,286Main 7
    101
    10,674.7
    3,254NW
    203
    45,948.4
    14,005North
    46
    25,695.9
    7,832NE
    10
    1,097.0
    334South
    98
    50,262.5
    15,32025 Zone
    8
    4,047.0
    1,23437 Zone
    7
    4,252.0
    1,29638 Zone
    20
    14,221.5
    4,33552 Zone
    5
    2,534.0
    772308 Zone
    1
    879.0
    268Eastern
    21
    3,105.0
    946Southern
    153
    60,442.4
    18,423SW
    51
    9,337.8
    2,846Sill
    39
    10,445.5
    3,184Cook Inlet
    8
    909.5
    277Total
    1,355
    1,042,218.2
    317,668


Notes to table: 1. Includes holes drilled on the Sill
prospect.2. Holes started by Northern Dynasty and finished by the Pebble
Partnership are included as the Pebble Partnership.3. Drill holes counted in
the year in which they were completed.4. Wedged holes are counted as a
single hole including full length of all wedges drilled.5. Includes FMMUSA
drill holes; data acquired in 2010.6. Percussion holes were drilled for
engineering and environmental purposes. Shallow (<15 ft) auger holes not
included.7. Comprises holes drilled entirely in Tertiary cover rocks within
the Pebble West and Pebble East areas.Some numbers may not sum exactly due
to rounding.

Sampling, Analysis and Security of
Samples

The Pebble deposit has been explored by extensive core
drilling, with 80,859 samples having been taken from drill core for assay
analysis. Nearly all potentially mineralized Cretaceous core drilled and
recovered has been sampled by halving in 10 ft lengths. Similarly, all core
recovered from the Late Cretaceous to Early Tertiary cover sequence has also
been sampled, typically on 20 ft sample lengths, with some shorter sample
intervals in areas of geologic interest. Unconsolidated overburden material,
where it exists, is generally not recovered by core drilling and therefore not
usually sampled.

Rock chips from the 223 rotary percussion holes were generally
not sampled for assay analysis, as the holes were drilled for monitoring wells
and environmental purposes. Only 35 samples were taken from the drill chips of
26 rotary percussion holes outside the Pebble deposit area, which were drilled
for condemnation purposes.

Analytical work in 2002 and from 2004 to 2013 was completed by
ALS Minerals Laboratories of North Vancouver, an ISO 9002 certified laboratory.
Analytical work for the 2003 drilling program was completed by SGS Canada Inc.
of Toronto, ON, an ISO 9002 registered, ISO 17025 accredited laboratory.

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Northern Dynasty maintained an effective Quality
Control/Quality Assurance (QA/QC) program consistent with industry best
practices, which was continued from 2007 to 2013 under the Pebble Partnership.
This program is in addition to the QA/QC procedures used internally by the
analytical laboratories. The QA/QC program has also been subject to independent
review by Analytical Laboratory Consultants Ltd. and Nicholson Analytical
Consulting. The analytical consultants provide ongoing monitoring, including
facility inspection and timely reporting of the performance of standards, blanks
and duplicates in the sampling and analytical program. The results of this
program indicate that analytical results are of a high quality, suitable for use
in detailed modelling and resource evaluation studies. The QA/QC sample types
used in the program are described in the table below.

Table 2 Summary of Quality Control/Quality Assurance Sampling
 Pebble Project

QC Code
    Sample Type
    Description
    % of TotalMS
    Regular Mainstream
    Regular samples submitted for preparation and
      analysis at the primary laboratory.
    90%ST
    Standard (Certified Reference
      Material)
    Mineralized material in pulverized form with
      a known concentration and distribution of element(s) of interest. Randomly
      inserted using pre-numbered sample tags.
    5% or 1 in 20DP
    Duplicate or Replicate
    An additional split taken from the remaining
      pulp reject, coarse reject, 1⁄4 core or 1⁄2 core remainder. Random selection
      using pre-numbered sample tags.
    5% or 1 in 20SD
    Standard Duplicate
    Standard reference sample submitted with
      duplicates and replicates to the check laboratory.
    <1%BL
    Blank
    Sample containing negligible or background
      amounts of elements of interest, to test for contamination.
    1%


Core was boxed at the rig and transported daily by helicopter
to the secure logging facility in Iliamna. Half cores remaining after sampling
were replaced in the original core boxes and stored at Iliamna, AK in a secure
compound. Crushed reject samples from the 2006 through 2013 analytical programs
are stored in locked containers at Delta Junction, AK. Drill core assay pulps
from the 1989 through 2013 programs are stored at a secure warehouse in Langley,
BC.

Mineral Resources

The current estimate of the mineral resources in the Pebble
deposit is based on approximately 59,000 assays obtained from 699 drill holes
completed to the end of 2013. The resource tabulated below was estimated using
ordinary kriging by David Gaunt, P.Geo., a qualified person who is not
independent of Northern Dynasty.

The tabulation is based on copper equivalency that incorporates
the contribution of copper, gold and molybdenum. Although the estimate includes
silver, it was not used as part of the copper equivalency calculation in order
to facilitate comparison with previous estimates which did not consider the
silver content or its potential economic contribution. A base case cut-off of
0.3% CuEq is highlighted.

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Cautionary Note to Investors
      Concerning Estimates of Measured and Indicated ResourcesThis section uses the terms,
      "measured resources" and "indicated resources". The Company advises
      investors that while those terms are recognized and required by Canadian
      regulations, the US Securities and Exchange Commission (the "SEC") does
      not recognize them. Investors are cautioned not to assume that all or any
      part of mineral deposits in these categories will ever be converted into
      reserves.


Table 3 2014 Estimate of Mineral Resources  Pebble DepositMeasured and Indicated Categories

Cut-off CuEq %
    CuEq%
    Tonnes
    Cu (%)
    Au (g/t)
    Mo (ppm)
    Ag (g/t)Measured0.3
    0.65
    527,000,000
    0.33
    0.35
    178
    1.660.4
    0.66
    508,000,000
    0.34
    0.36
    180
    1.680.6
    0.77
    279,000,000
    0.40
    0.42
    203
    1.841.0
    1.16
    28,000,000
    0.62
    0.62
    302
    2.27Indicated0.3
    0.77
    5,912,000,000
    0.41
    0.34
    245
    1.660.4
    0.82
    5,173,000,000
    0.45
    0.35
    260
    1.750.6
    0.99
    3,450,000,000
    0.55
    0.41
    299
    1.991.0
    1.29
    1,411,000,000
    0.77
    0.51
    343
    2.42Measured
      + Indicated0.3
    0.76
    6,439,000,000
    0.40
    0.34
    240
    1.660.4
    0.81
    5,681,000,000
    0.44
    0.35
    253
    1.750.6
    0.97
    3,729,000,000
    0.54
    0.41
    291
    1.981.0
    1.29
    1,439,000,000
    0.76
    0.51
    342
    2.42


Cautionary Note to Investors
      Concerning Estimates of Inferred ResourcesThis section
      also uses the term "inferred mineral resources". The Company advises
      investors that while this term is recognized and required by Canadian
      regulations, the SEC does not recognize it. "Inferred mineral resources"
      have a great amount of uncertainty as to their existence, and great
      uncertainty as to their economic and legal feasibility. It cannot be
      assumed that all or any part of a mineral resource will ever be upgraded
      to a higher category. Under Canadian rules, estimates of Inferred Mineral
      Resources may not form the basis of economic studies, except in rare
      cases. Investors are cautioned not to assume that all or any part of an
      inferred resource exists, or is economically or legally mineable.


Table 4 2014 Estimate of Mineral Resources  Pebble Deposit
Inferred Category

Cut-off CuEq %
    CuEq%
    Tonnes
    Cu (%)
    Au (g/t)
    Mo (ppm)
    Ag (g/t)Inferred0.3
    0.54
    4,460,000,000
    0.25
    0.26
    222
    1.190.4
    0.68
    2,630,000,000
    0.33
    0.30
    266
    1.390.6
    0.89
    1,290,000,000
    0.48
    0.37
    291
    1.791.0
    1.20
    360,000,000
    0.69
    0.45
    377
    2.27


The tabulated mineral resources are subject to the notes below:

These resource estimates have been prepared in accordance with
NI 43-101 and the CIM Definition Standards. Inferred resources have a great
amount of uncertainty as to their existence and 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.

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Copper equivalent calculations use metal prices of US$1.85/lb
for copper, US$902/oz for gold and US$12.50/lb for molybdenum, and recoveries of
85% for copper 69.6% for gold, and 77.8% for molybdenum in the Pebble West zone
and 89.3% for copper, 76.8% for gold, and 83.7% for molybdenum in the Pebble
East zone.

A 0.30% CuEQ cut-off is considered to be comparable to that
used for porphyry deposit open pit mining operations in the Americas.

The resource estimate is constrained by a conceptual pit that
was developed using a Lerchs-Grossman algorithm and is based on the parameters
set out below:

Parameter
    Units
    Cost ($)
    ValueMetal Price
    Gold
    US$/oz
    -
    1540.00Copper
    US$/lb
    -
    3.63Molybdenum
    US$/lb
    -
    12.36Metal Recovery
    Copper
    %
    -
    89Gold
    %
    -
    72Molybdenum
    %
    -
    82Operating Cost
    Mining (mineralized material or
      waste)
    $/ton mined
    1.01
    -Added haul lift from depth
    $/ton/bench
    0.03
    -Process Process cost adjusted by total
      crushing energy
    $/ton milled
    4.40
    - Transportation
    $/ton milled
    0.46
    - Environmental
    $/ton milled
    0.70
    - G&A
    $/ton milled
    1.18
    -Block Model
    Current block model
    ft
    -
    75 x 75 x 50Density
    Mineralized material and waste
      rock
    -
    -
    Block modelPit Slope Angles
    
    degrees
    -
    42


These mineral resource estimates may ultimately be affected by
a broad range of environmental, permitting, legal, title, socio-economic,
marketing and political factors commensurate with the specific characteristics
of the Pebble deposit (including its scale, location, orientation and
poly-metallic nature) as well as its setting (from a natural, social,
jurisdictional and political perspective).

Mineral Processing and Metallurgical
Testing

Metallurgical testwork for the Pebble Project was initiated by
Northern Dynasty in 2003 and continued under the direction of Northern Dynasty
until 2008. From 2008 to 2013, metallurgical testwork progressed under the
direction of the Pebble Partnership.

Geometallurgical studies were initiated by the Pebble
Partnership in 2008, and continued through 2012. The principal objective of this
work was to quantify significant differences in metal deportment that may result
in variations in metal recoveries during mineral processing. The results of the
geometallurgical studies indicate that the deposit comprises several
geometallurgical (or material type) domains. These domains are defined by
distinct, internally consistent copper and gold deportment characteristics that
correspond spatially with changes in silicate alteration mineralogy.

The first major distinction between domains is characterized by
hypogene and supergene mineralization. Hypogene mineralization reflects the
copper-, gold- and molybdenum-bearing minerals which precipitated from hot
hydrothermal solutions when the deposit initially formed in the Cretaceous
Period. In contrast, supergene mineralization represents modifications, mostly
to the copper-bearing minerals present in the near-surface parts of the Pebble
West zone, during a much more recent weathering phase of the deposit when it
became exposed for a time at the surface of the earth. The second critical
influence on metallurgical recoveries is related directly to different
alteration assemblages that formed over time in different parts of the Pebble
deposit.

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These alteration assemblages as listed in Table 5 include sodic
potassic, illite-pyrite (described as quartz-illite-pyrite in Geological
Setting and Mineralizationabove), K-silicate (potassic in Geological
Setting and Mineralization), QSP (quartz-sericite-pyrite in Geological
Setting and Mineralization), QP (pyrophyllite in Geological Setting and
Mineralization) and sericite types. Each of these assemblages contains a
distinct suite of minerals that precipitated from hydrothermal fluids under
different conditions of temperature, pressure and chemical composition, and
including, in some cases, differences in the types of copper- and gold-bearing
minerals.

Recognition of the relationships between metallurgical behavior
and mineralization styles and alteration assemblages provides significant
technical advantages to further optimize metal recoveries in testwork, as well
as to improve the future processing design in general on the Pebble Project. The
samples selected for the comminution, copper-gold-molybdenum bulk flotation, and
copper molybdenum separation testing were representative of the various types
and styles of mineralization present at the Pebble deposit.

Metallurgical testwork and associated analytical procedures
were performed by recognized testing facilities with extensive experience with
this analysis, with this type of deposit, and with the Pebble Project.

The test results on variable mineralization samples indicate
that marketable copper and molybdenum concentrates can be produced with gold and
silver contents that meet or exceed payable levels in representative smelter
contracts.

Metal recoveries projected in the 2014 Technical Report and in
the table below were based on the 103 locked-cycle (LCT) flotation tests,
results of the variability samples, and associated gold leach testwork as well
as sulphidization, acidification, recycling, and thickening (SART) tests.
Table 5 below provides projected overall metal recoveries from varied
mineralization domains, which include the flotation and gold plant
recoveries.

Table 5 Projected Metallurgical
Recoveries1 Pebble Project

Domain
    Flotation Recovery toConcentrate2
    **Gold Plant Recovery
      3**
    Overall RecoveryCu Con
    MoCon
    SART
    DoréCu%
    Aug/t
    Agg/t
    Mo%
    Cu%
    Aug/t
    Agg/t
    Cu%
    Aug/t
    Agg/t
    Mo%Supergene:Sodic Potassic
    74.7
    60.4
    64.1
    51.2
    1.5
    16.0
    6.0
    76.2
    76.4
    70.2
    51.2Illite Pyrite
    68.1
    43.9
    64.1
    62.6
    3.9
    26.8
    6.0
    72.1
    70.7
    70.2
    62.6Hypogene:Illite Pyrite
    86.4
    43.9
    64.1
    73.2
    1.9
    26.1
    6.0
    88.3
    70
    70.2
    73.2Sodic Potassic
    86.2
    60.4
    64.1
    76.6
    1.4
    16.7
    6.0
    87.6
    77.1
    70.2
    76.6K Silicate
    90.3
    61.3
    64.1
    82.3
    0.7
    13.8
    6.0
    91
    75.1
    70.2
    82.3QP
    94.3
    65.0
    64.1
    80.1
    1.4
    14.4
    6.0
    95.6
    79.4
    70.2
    80.1Sericite
    86.4
    39.2
    64.1
    73.2
    1.9
    26.7
    6.0
    88.3
    65.8
    70.2
    73.2QSP
    86
    31.6
    64.1
    82.5
    2.1
    32.1
    6.0
    88.1
    63.7
    70.2
    82.5


Notes to table:

|1. | Silver recovery projection based on a dataset of 10 LCT
      samples
|-- | ---------------------------------------------------------------------

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|2. | Flotation recovery to concentrate refers to metal
      recoveries to copper concentrate (Cu Con) and to molybdenum concentrate
      (Mo Con).                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                    
|3. | Gold plant recovery refers to copper recovery to SART 
      sulphidization, acidification, recycling, and thickening process tests to
      recover copper from leaching circuit residue, as well as gold and silver
      recoveries to dorébar.

Environmental and Socioeconomic

The Pebble deposit is located on state land that has been
specifically designated for mineral exploration and development. The project
area has been the subject of two comprehensive land-use planning exercises
conducted by the Alaska Department of Natural Resources (the ADNR), the first
in the 1980s and the second completed in 2005. The ADNR identified five land
parcels (including Pebble) within the Bristol Bay planning area as having
significant mineral potential, and where the planning intent is to accommodate
mineral exploration and development. These parcels total 2.7% of the total
planning area (ADNR, 2005).

Environmental standards and permitting requirements in Alaska
are stable, objective, rigorous and science-driven. These features are an asset
to projects like Pebble that are being designed to meet U.S. and international
best practice standards of design and performance.

Environmental Baseline Studies

Northern Dynasty and its partners carried out extensive field
study programs from 2004 onward to characterize the existing physical, chemical,
biological, and social environments in the Bristol Bay and Cook Inlet areas
where the Pebble Project might occur. The Pebble Partnership compiled the data
for the 2004-2008 study period into a multi-volume Environmental Baseline
Document (EBD)2. These studies have been designed to:

- Fully characterize the existing biophysical and socioeconomic environment;
- Support environmental analyses required for effective input into Project
  design;
- Provide a strong foundation for internal environmental and social impact
  assessment to support corporate decision-making;
- Provide the information required for stakeholder consultation and eventual
  mine permitting in Alaska; and,
- Provide a baseline for long-term monitoring of potential changes associated
  with mine development.

The baseline study program includes:

| |  | surface water                       |  | wildlife               
| | - | ----------------------------------- | - | -----------------------
| |  | groundwater                         |  | air quality            
| |  | surface and groundwater quality     |  | cultural resources     
| |  | geochemistry                        |  | subsistence            
| |  | snow surveys                        |  | land use               
| |  | fish and aquatic resources          |  | recreation             
| |  | noise                               |  | socioeconomics         
| |  | wetlands                            |  | visual aesthetics      
| |  | trace elements                      |  | climate and meteorology
| |  | fish habitat  stream flow modeling |  | Iliamna Lake           
| |  | marine                              |   |                        



____________________________________

3Baseline data collecting and monitoring has
continued since that time. The environmental baseline studies were continued
during the period 2009 to 2014, and that information is being compiled into a
supplementary EBD so that it can also be shared with state/federal agencies and
the public as part of the future permitting process under NEPA.

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Potential Environmental Effects and
Proposed Mitigation Measures

The application of sound engineering, environmental planning
and best management practices, including compliance with existing US federal and
state environmental laws, regulations and guidelines, will ensure that
environmental issues associated with the development and operation of the Pebble
Project can be effectively addressed and managed.

The major environmental components include air, water and
terrestrial resources. During the preliminary stages of the Pebble Project,
Northern Dynasty identified key environmental issues and design drivers that
have formed the basis of baseline data collection, environmental and social
analysis and continuing stakeholder consultations influencing the Pebble Project
design. The scoping-level assessment has confirmed these as important issues and
design drivers, and has identified mitigation measures for each. The key
mitigation strategies for these drivers include:

- Water: development of a water management plan that maximizes the collection
  and diversion of groundwater, snowmelt and direct precipitation away from the
  mine site;
- Wetlands: avoidance and minimization of project effects on wetlands and
  implementation of a water management plan (in accordance with US Army Corp of
  Engineers guidelines and regulations) to protect wetlands;
- Aquatic habitats: development of a water management plan and habitat
  mitigation measures that includes strategies to effectively manage the release
  of treated water in compliance with anticipated regulatory requirements to
  sustain necessary downstream flows and to protect downstream fish habitat and
  aquatic environments;
- Air quality: implementation of air emissions and dust suppression
  strategies;
- Marine environment: minimize the port facilitys footprint in the
  intertidal zone, particularly in soft sediment intertidal areas; and
- Compensatory mitigation measures to ensure compliance with the Clean Water
  Act.

Direct integration of these and other appropriate measures into
the Pebble Project design and operational strategies are expected to effectively
mitigate possible environmental effects and minimize residual environmental
effects associated with the construction, operation and eventual closure of any
proposed mine at the Pebble Project.

Community Consultation and
Stakeholder Relations

An active program of stakeholder outreach has also been
undertaken at Pebble, and has included community meetings, stakeholder visits,
presentations and event appearances, as well as stakeholder tours to the Pebble
Project site and to operating mines in the United States and Canada. The focus
of these outreach activities is to update stakeholders on the Pebble Project, to
receive feedback on stakeholder priorities and concerns and to advise
participants about modern mining practices. Stakeholder outreach and community
engagement is ongoing, although at a reduced scale commensurate with other
project activities. As the Pebble Project advances toward the completion of a
Project Description and preparation for project permitting under NEPA, it is
expected that the Pebble Partnership will initiate further stakeholder
engagement programs to involve stakeholders in the planning process.

Previous Mine Planning Work

During the period 2007 to 2013, the Pebble Partnership expended
hundreds of millions dollars on the Pebble Project, a major portion of which was
spent on exploration programs, resource estimates, environmental data collection
and technical studies involving engineering of various possible mine development
models, as well as related infrastructure, power and transportation systems.
These costs are not reflected in the Companys asset accounts as they were
largely incurred by third parties or are required to be expensed. During this
period, the Pebble Partnership was funded by the international mining company Anglo American which was at that time the owner
of a 50% interest in the Pebble Project. These studies informed a preliminary
economic assessment of the Project released by the Company in 2011.

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From 2011 to 2014 Northern Dynasty conducted two principal
economic studies of the Pebble Project in parallel with the work done by Pebble
Partnership and one subsequent to the departure of Anglo American from the
Pebble Partnership. These studies have provided management with important
information regarding factors that will impact on the economic viability of the
Pebble Project and will enable management to refine the proposed mine plan for
the Pebble Project as the Company moves forward with the permitting and
development decision process for the Pebble Project.

These economic studies were warranted given that the Pebble
Deposit has the ninth largest copper resource and the second largest gold
resource in the world and is believed to be the largest undeveloped resource for
both metals. It also contains significant quantities of molybdenum, a valuable
metal used for steel alloys and silver, which has wide industrial and financial
applications. The Measured and Indicated Resource portion of the Pebble Deposit
is estimated to contain approximately 57 billion pounds of copper; 3.4 billion
pounds of molybdenum, 344 million ounces of silver and 70 million ounces of
gold. The Inferred Resource contains a further 24.5 billion pounds of copper,
2.2 billion pounds of molybdenum, 170 million ounces of silver and 37 million
ounces of gold3.

Based on the significance of this undeveloped resource, the
Company has considered various development alternatives for a mine plan for the
Project. As with all mining projects, the development of the optimum mine plan
is an iterative process that involves both technical and economic assessment of
various mine plan scenarios which are refined, taking into consideration
socio-economic factors and regulatory requirements as initial studies are
completed and regulatory approvals are sought. The Companys overall objective
is to finalize a mine plan that seeks to provide an economic return balanced
against financial and permitting risks. These factors would be evaluated within
a final feasibility study for the Project. The economic studies that are
described below represent the Companys ongoing efforts in pursuing this
potential mine formulation and assessment process. This economic and technical
work has yielded significant information that has enhanced managements
technical, engineering and economic understanding of the Project. However,
further work remains to be completed by the Company in order to achieve a
finalized mine plan that the Company believes will support advancing to the
stage of completing final feasibility studies in conjunction with a successful
permitting application. The commercial viability and financial and economic
robustness of the Project cannot be definitively established until a final mine
design is selected and a positive final feasibility study is completed.
Accordingly there can be no assurance that the Companys development work will
be successful in completing a positive feasibility study that is necessary to
support a development decision to move forward with development of a mine at
the Project.

A Preliminary Economic Assessment (PEA), was completed and
disclosed in 2011 as a National Instrument 43-101 compliant Technical Report
(the 2011 PEA). This study was based on a similar analysis conducted by Pebble
Partnership which demonstrated similar results as discussed below. Northern
Dynasty has ceased referencing this study given its age and as the Companys
understanding of the most likely development scenario for the Project has
evolved based the Companys increased knowledge and understanding of the Project
as well as the concerns raised about mine plan parameters that may need to be
addressed in the mine that is actually proposed and permitted. Nevertheless the
2011 PEA remains instructive about financial and economic viability issues.

The 2011 PEA evaluated an open pit mine with a nominal daily
mining rate of 235,000 tons of ore per day, using three different mine life
scenarios: (i) a 25-year mine life (the Investment Decision Case, IDC); (ii) a
45-year mine life, which corresponded to the 2010 Value Seeking Phase (the
Reference Case); and (iii) a 78-year mine life, presenting an open pit life of
mine valuation (the Resource Case). The 2011 PEA estimated that the Pebble
Project would have an initial project capital cost of approximately $5.8
billion, which was subsequently reduced to a net cost $4.7 billion, after
considering third-party-provided infrastructure leased back to the project and precious metal streaming. For the 45-year Reference Case, the 2011 Preliminary Economic Assessment also estimated that the Pebble Project would yield a pre-tax NPV of approximately
$6.1 billion, using a 7% discount rate, and a 14.2% pre-tax IRR. The pre-tax 25-year IDC and 78-year mine life Reference Case scenarios resulted in an estimated $3.8 billion NPV, using a 7% discount rate, and IRR of 13.4%, and a $6.8
billion NPV, using a 7% discount rate, and IRR of 14.5%, respectively.

___________________________________

4For further details on the mineral resources, see
Mineral Resources above.

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Pursuant to the parameters of the 2011 Preliminary Economic Assessment, using a 45-year mine life, the Pebble Project was estimated to produce 30 billion pounds of copper, 30 million ounces of gold, and 1.4 billion pounds of molybdenum, 140 million
ounces of silver, 1.2 million kilograms of rhenium and 907,000 ounces of palladium while mining only 32% of the mineral resource at the Pebble Deposit.

Assessing the economic viability of a mineral project is inherently uncertain give that a key driver of viability, future minerals prices, is always an estimate or assumption. The Company is of the view that the 2011 PEA economic analyses were
reasonable at the time and believes they continue to inform an assessment of potential economic viability, appreciating that such an this assessment is always one involving probabilities and will be significantly influenced by the future metal
prices assumed in the analysis. In considering the economic analysis included in the 2011 PEA, the Company notes that the metal prices used in the 2011 PEA were $2.50/lb copper, $1,050/oz gold, $13.50/lb molybdenum and $15/oz silver,
whilst current long term consensus forecast prices are $2.99/lb copper, $1,300/oz gold, $8.00/lb molybdenum and $20/oz silver. The long term metal forecast prices, other than that for molybdenum are currently in excess of the prices
used in the 2011 PEA, a further indication that the Pebble Project has the potential to demonstrate strong economic fundamentals when the feasibility study is completed.

Investors are cautioned that the 2011 PEA was a preliminary economic or “scoping” analysis that does not contain the level of mine plan or costing detail that would be included in either a preliminary feasibility study or a final
feasibility study that would be necessary to make a determination of the existence of mineral reserves or for a production decision for the Project. In addition, the cost information used in the 2011 PEA will likely have changed, and will have to be
reconsidered. In this context, investors should not assume that any of the results of the economic analysis are determinative of the current economics of the Project, but should consider the results of the PEA as informing management’s view
that the Project has significant value and has prospects of demonstrating economic viability under various assumptions of future metal prices. Further refinement of the mine plan for the Project leading to feasibility studies on the Pebble Project
is considered by management to be fully warranted.

The 2014 Technical Report did not attempt to build on this previous engineering work given that, unless and until there is resolution in the litigation with the EPA in regards to the possibility of permitting any kind of mine at Pebble, it is not
appropriate for the technical report authors to use or build upon previously posited mine models or to make large dollar recommendations in furtherance of assessing the technical or economic feasibility of a potential mine at Pebble.

A second study which also touched on economics was conducted in 2012 (the “2012 Draft NDM Study”) in parallel to Pebble Partnership’s 2011 Pre-Feasibility work and followed similar parameters. This study was completed for
management’s internal purposes, and not for publication and therefore utilized Inferred Resources which are not permitted under NI 43-101. The 2012 Draft NDM Study envisioned an open pit mine with elevated cut-off grades. The study reflected
the macro economic conditions at the time, with greater capital costs that reflected escalated prices since the 2011 PEA but with a corresponding increase in the long term price for copper. This study also supported management’s belief as to
the high likelihood that the Pebble Project would prove viable when the Project proceeded to a Feasibility Study.

Northern Dynasty commenced a third study in 2014 which was to be completed in compliance with National Instrument 43-101 but was not
  finalized due to the EPA’s initiation of a CWA 404(c) regulatory action (“the 2014 Draft NDM Study”). Capital cost factors were similar to those used in the 2012 Draft NDM Study, as were the metal prices. Although not completed,
  this study again provides support for the possibility that the Pebble Project would prove viable when the Project proceeds to the feasibility study stage. A technical report updating geological information was completed in 2014 and filed at
www.sedar.com but this report did not consider project economics.

The 2014 Technical Report did not attempt to build on this previous engineering work given that, unless and until there is resolution in the litigation with the EPA in regards to the possibility of permitting any kind of mine at Pebble, it is not appropriate for the technical report authors to use or build upon previously posited mine models or to make large dollar recommendations in furtherance of assessing the technical or economic feasibility of a potential mine at Pebble.

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|2016 Annual Information Form | P a g e| 29 | 

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The 2011 PEA, 2012 Draft NDM Study and the 2014 Draft NDM Study
continue to be relevant as the material components informing managements belief
that the continued refinement of the mine plan for the Pebble Project is
warranted and that there is a solid basis for pursuing a feasibility study on
the Pebble Project. The Company has gained important information on the
sensitivity of the economics of the Pebble Project during the course of
completing these economic studies. This information includes a better
understanding of the factors that impact on the capital and operating costs of
the Pebble Project, including the relationships between the sizes of the
processing plant and various capital and operating costs and product rates and
recoveries and resulting impacts the economic viability of the Project. This
information will enable the Company to continue to refine the mine plan for the
Pebble Project with the objective of ultimately moving to the feasibility study
phase. This development work was largely ceased in 2014 as the Company has had
to shift its focus to reversing the EPAs proposed 404(c) veto. Accordingly, the
Company has not made any decision on the mine development plan (mine size,
throughput, mine life etc.) that it presumes it will be able to submit for
permitting under NEPA in the event the Company is allowed to move forward with
permitting of the Pebble Project. The final mine development may differ
substantially from that set out in the 2011 PEA.

Management believes the Pebble deposit provides a great deal of
optionality in the development of the Project. The scale of the deposit enables
a mine to be developed in a wide range of sizes. The deposit outcrops, which
enables early development with a very low strip ratio. A portion of this near
surface material is also of higher grade, further enhancing the development
opportunities. The eastern portion of the deposit is buried but its dimensions
create an opportunity for a large, relatively low strip ratio pit. The deposit
does not rely on value from only one or two products, but has multiple metals of
interest. This, combined with the scale, should allow mine operators the luxury
of revising the plan to accommodate future swings in metal prices. The Pebble
property is very large with numerous identified mineral showings. While current
plans envision open pit mining, management believes the opportunity to develop
an underground mine to exploit the eastern part of the deposit still remains.

C.   Plans For 2017

The Companys business objectives in 2017 are to:

- continue to advance the Multi-dimensional Strategy to address the EPAs
  pre-emptive regulatory action with the goal that the Pebble Project will be
  able to initiate federal and state permitting under the NEPA unencumbered by
  any extraordinary development restrictions imposed by the EPA.
- maintain an active corporate presence in Alaska to advance relationships
  with political and regulatory offices of government (both in Alaska and
  Washington, D.C.), Alaska Native partners and broader stakeholder
  relationships;
- if either the Multi-dimensional Strategy is successful or the EPA changes
  it position with the result that permit applications can proceed, prepare
  documentation to initiate federal and state permitting under the CWA and the
  NEPA. In the event permit applications can proceed, the Company plans to
  undertake environmental monitoring, engineering and environmental studies,
  field investigations and related technical studies to finalize a proposed
  development plan, in order to prepare documentation to initiate federal and
  state permitting;
- maintain the Pebble Project and Pebble claims in good standing; and
- continue to seek potential partner(s) to further advance the Pebble Project.

The current Multi-dimensional Strategy may be impacted by the
change in the leadership of the EPA that was completed in the first quarter of
2017 as a result of the new federal administration in Washington, DC. Through
the Pebble Partnership, the Company has had preliminary discussions with certain
members of the new administration and believes, based on these discussions and
other public statements, that there is a possibility that the new leadership of
the EPA will reconsider its position with respect to the EPAs previously
proposed pre-emptive action under Section 404(c) of the CWA. This would allow
the Pebble Project to proceed with the permitting process. These discussions
are, however, not binding and there is no assurance that this change of leadership will result in the EPA reversing its position.  In addition, on February 22, 2017, the US House Committee on Science, Space and Technology recommended that the new EPA
Administrator rescind the federal agency’s pre-emptive Section 404(c) action.  As of the date of this AIF, there has not yet been a formal response to this recommendation.

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|2016 Annual Information Form | P a g e| 30 | 

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On October 27, 2016, the Pebble Partnership and the EPA (“the parties”) filed a joint Notice in federal court stating their intent to enter into mediation in an effort to resolve ongoing litigation under the Federal Advisory Committee
Act (“FACA”) as described in 12 Legal below. To date, no mediator has been appointed in these mediation proceedings. On December 30, 2016, the parties filed a joint Notice in federal court staying the ongoing FACA litigation until March
20, 2017 and, on that date, the parties filed a Joint Motion in federal court to extend a stay of proceedings in ongoing litigation under FACA to May 4, 2017 in the interest of resolving the matter.

The Company has made substantial progress in recent discussions with the EPA and intends to continue negotiating the matter directly, rather than through mediation. Government representatives are actively engaged in these discussions and, along with
the Pebble Partnership, are focused on achieving a resolution that will be agreeable to both parties. In the meantime, the Court’s Preliminary Injunction of November 25, 2014, will remain in effect for the duration of any stay.

At this time, the Pebble Partnership is still planning to remain engaged in direct discussions, including possible mediation with the EPA. There can also be no assurance of the results of the discussion and possible mediation with the EPA. In the
event that there is a change in the EPA’s position that results in Pebble being able to proceed into the permitting process, it is anticipated that (i) the Multi-dimensional Strategy will change, as the key objective of this strategy will have
been met, however, political and stakeholder outreach efforts will continue; (ii) the Pebble Partnership will execute technical studies and prepare documentation to initiate applications for federal and state permitting under the CWA and the NEPA;
and (iii) the Company may re-direct some of its efforts on the Multi-dimensional Strategy to these permitting activities. In the event that there is no change in the EPA position, then the Multi-dimensional Strategy and the related discussion and
possible mediation proceedings with the EPA will continue. Even if the dealings with the EPA are successful and the permitting process for the Pebble Project commences, there can be no assurance that the permits required to build and operate the
Pebble Project will be successfully secured.

|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 31 | 

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D.   Organizational Structure

Structure as at December 31, 2016:



|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 32 | 

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E.   Property, Plant and Equipment

The Companys principal property is the Pebble Project, as
discussed A. above.

The Company has approximately $550,000 in plant and equipment
primarily at the Pebble Project site located in Iliamna.

The Company, through the Pebble Partnership, has leased
premises in Anchorage and at the Pebble Project site and as result the Company
has lease commitments which have been disclosed in the accompanying audited
financial statements.

F.   Risk Factors

The securities of Northern Dynasty are highly speculative and
subject to a number of risks. A prospective investor or other person reviewing
Northern Dynasty for a prospective investor should not consider an investment in
Northern Dynasty unless the investor is capable of sustaining an economic loss
of their entire investment. The risks associated with Northern Dynastys
business include:

In The Event That We Are Unsuccessful In Our Litigation
Against The EPA, The EPA Refuses to Withdraw Its Regulatory Action Or We Are
Otherwise Unable To Reach A Settlement With The EPA, We May Never Be Able To
Proceed With Permitting With Respect To The Pebble Project.

The principal risk currently facing the Company is that we may
be unable to resolve our ongoing issues with the EPA with respect to its
pre-emptive regulatory action under Section 404(c) of the CWA. While we believe
our position has merit, the proceedings have been lengthy and have required us
to expend substantial funds and time.

There is no assurance that there will be any change in
the position taken by the EPA with respect to its pre-emptive regulatory action
under Section 404(c) of the CWA resulting from the new federal administration in
Washington DC and the resulting change in the leadership of the EPA.

There has recently been a change in the leadership of the EPA
resulting from the appointment of a new administrator of the EPA by the new
federal administration in Washington, DC. There is no assurance that this change
of leadership will result in the EPA reversing its position with respect the
EPAs preemptive regulatory action under Section 404(c) of the CWA or otherwise
enable the Company to proceed with its permit application process. The Company
can provide no assurance with respect to the reaching or timing of a resolution,
if any, with the EPA or with respect to other matters relating to the EPA. Even
if the current issues with the EPA are resolved, there is no assurance that the
Company will be successful in obtaining the required permits to proceed with the
development of the Pebble Project.

Inability to Ultimately Achieve Mine Permitting and Build
a Mine at the Pebble Project

Notwithstanding any possible negotiated or other settlement
with the EPA or a change in the EPAs position that enables us to proceed with
our permit applications, the Company may ultimately be unable to secure the
necessary permits under United States (US) Federal and Alaskan State laws to
build and operate a mine at the Pebble Project. There is no assurance that the
EPA will not seek to undertake future regulatory action to impede or restrict
the Pebble Project. In addition, there are prominent and well organized
opponents of the Pebble Project and the Company may be unable, even if we
present solid scientific and technical evidence of risk mitigation, to overcome
such opposition and convince governmental authorities that a mine should be
permitted at the Pebble Project. The Company faces not only the permitting and
regulatory issues typical of companies seeking to build a mine, but additional
public and regulatory scrutiny due to its location and likely size. Accordingly,
there is no assurance that the Company will obtain the required permits even if
the current issues with the EPA are resolved and the Company is able to proceed
with the permit application process. In the ordinary course the Company’s permitting process would first involve filing CWA 404 permit applications with the US Army Corps of Engineers, which would trigger an EIS process under NEPA.  The EIS process under NEPA, and the requirement for the Company to secure a broad range or other permits and authorizations from multiple federal and state regulatory agencies will take several years. After all permits are in hand, a number of years would be required to finance and build a mine and commence operations. During these periods, the Company would likely have no income and
  so would require additional financing to continue its operations. Unless and until we build a mine at the Pebble Project we will be unable to achieve revenues from operations and may not be able to sell or otherwise recover our investment in the
  Pebble Project, which would have a material adverse effect on the Company and an investment in the Company’s common shares.

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|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 33 | 

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Negative Operating Cash Flow

The Company currently has a negative operating cash flow and will continue to have that for the foreseeable future. Accordingly, the Company will require substantial additional capital in order to fund its future exploration and development
activities. The Company does not have any arrangements in place for this funding and there is no assurance that such funding will be achieved when required. Any failure to obtain additional financing or failure to achieve profitability and positive
operating cash flows will have a material adverse effect on its financial condition and results of operations.

Risk of Secure Title or Property Interest

There can be no certainty that title to any property interest acquired by the Company or any of its subsidiaries is without defects. Although the Company has taken reasonable precautions to ensure that legal title to its properties is properly
documented, there can be no assurance that its property interests may not be challenged or impugned.  Such property interests may be subject to prior unregistered agreements or transfers or other land claims, and title may be affected by undetected
defects and adverse laws and regulations.

The Pebble Partnership’s mineral concessions at Pebble are located on State of Alaska lands specifically designated for mineral exploration and development. Alaska is a stable jurisdiction with a well-developed regulatory and legal framework
for resource development and public lands management, a strong commitment to the rule of law and lengthy track record for encouraging investment in the development if its land and natural resources.

The Pebble Project is Subject to Political and Environmental Regulatory Opposition

As is typical for a large scale mining project, the Pebble Project faces concerted opposition from many individuals and organizations who are motivated to preclude any possible mining in the Bristol Bay Watershed ("BBW"). The BBW is an important
wildlife and salmon habitat area. The EPA has gone so far as to suggest that it may peremptorily prevent the Pebble Project from proceeding even before a mine permitting application is filed. Accordingly, one of the greatest risks to the Pebble
Project is seen to be political/permitting risk which may ultimately preclude construction of a mine at Pebble. Opposition may include legal challenges to exploration and development permits, which may delay or halt development. Other tactics may
also be employed by opposition groups to delay or frustrate development at Pebble, included political and public advocacy, electoral strategies, media and public outreach campaigns and protest activity

The Pebble Partnership’s Mineral Property Interests Do Not Contain Any Ore Reserves or Any Known Body of Economic Mineralization.

Although there are known bodies of mineralization on the Pebble Project, and the Pebble Partnership has completed core drilling programs within, and adjacent to, the deposits to determine measured and indicated resources, there are currently no
known reserves or body of commercially viable ore and the Pebble Project must be considered an exploration prospect only. Extensive additional work is required before Northern Dynasty or the Pebble Partnership can ascertain if any mineralization may
be economic and hence constitute "ore".

|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 34 | 

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Mineral Resources Disclosed by Northern Dynasty or the Pebble Partnership for the Pebble Project are Estimates Only.

Northern Dynasty has included mineral resource estimates that have been made in accordance with National Instrument 43-101. These resource estimates are classified as “measured resources”, “indicated resources” and
“inferred resources”.  Northern Dynasty advises investors that while these terms are mandated by Canadian securities administrators, the US Securities and Exchange Commission does not recognize these terms. Investors are cautioned not to
assume that any part or all of mineral deposits classified as "measured resources" or "indicated resources" will ever be converted into ore reserves. Further, "inferred resources" have a great amount of uncertainty as to their existence, and
economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility
or prefeasibility studies, except in rare cases. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.

All amounts of mineral resources are estimates only, and Northern Dynasty cannot be certain that any specified level of recovery of metals from the mineralized material will in fact be realized or that the Pebble Project or any other identified
mineral deposit will ever qualify as a commercially mineable (or viable) ore body that can be economically exploited. Mineralized material which is not mineral reserves does not have demonstrated economic viability. In addition, the quantity of
mineral reserves and mineral resources may vary depending on, among other things, metal prices and actual results of mining. There can be no assurance that any future economic or technical assessments undertaken by the Company with respect to the
Pebble Project will demonstrate positive economics or feasibility.

Northern Dynasty Has No History Of Earnings and No Foreseeable Earnings, and May Never Achieve Profitability or Pay Dividends.

Northern Dynasty has only had losses since inception and there can be no assurance that Northern Dynasty will ever be profitable. Northern Dynasty has paid no dividends on its shares since incorporation. Northern Dynasty presently has no ability to
generate earnings as its mineral properties are in the pre-development stage.

Northern Dynasty’s Consolidated Financial Statements Have Been Prepared Assuming Northern Dynasty Will Continue on a Going Concern Basis.

Northern Dynasty’s consolidated financial statements have been prepared on the basis that Northern Dynasty will continue as a going concern. At December 31, 2016, Northern Dynasty had working capital of approximately $6.4 million.
Northern Dynasty has prioritized the allocation of available financial resources in order to meet key corporate and Pebble Project expenditure requirements in the near term. Additional financing will be required to pursue any material work programs
at the Pebble Project. Northern Dynasty’s continuing operations and the underlying value and recoverability of the amounts shown for mineral property interest are entirely dependent upon the existence of economically recoverable mineral
reserves at the Pebble Project, the ability of the Company to finance the completion of the exploration and development of the Pebble Project, the Pebble Partnership obtaining the necessary permits to mine, and on future profitable production at the
Pebble Project.  Furthermore, failure to continue as a going concern would require that Northern Dynasty's assets and liabilities be restated on a liquidation basis, which would likely differ significantly from their going concern assumption
carrying values.

As the Pebble Project is Northern Dynasty’s Only Mineral Property Interest, the Failure to establish that the Pebble Project Possesses Commercially Viable and Legally Mineable Deposits of Ore May Cause a Significant Decline in the
Trading Price of Northern Dynasty’s Common Shares and Reduce Its Ability to Obtain New Financing.

The Pebble Project is Northern Dynasty’s only mineral project.  Northern Dynasty’s principal business objective is to carry out further exploration and related activities to establish whether the Pebble Project possesses commercially viable deposits of ore.  If Northern Dynasty is not successful in its plan of operations, Northern Dynasty may have to seek a new mineral property to explore or acquire an interest in a new mineral property or project.
Northern Dynasty anticipates that such an outcome would adversely impact the price of Northern Dynasty’s common shares. Furthermore, Northern Dynasty anticipates that its ability to raise additional financing to fund exploration of a new
property or the acquisition of a new property or project would be impaired as a result of the failure to establish commercial viability of the Pebble Project.

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|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 35 | 

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If Prices for Copper, Gold, Molybdenum and Silver Decline, Northern Dynasty May Not Be Able to Raise the Additional Financing Required to Fund Expenditures for the Pebble Project.

The ability of Northern Dynasty to raise financing to fund the Pebble Project, will be significantly affected by changes in the market price of the metals for which it explores.  The prices of copper, gold, molybdenum and silver are volatile, and
are affected by numerous factors beyond Northern Dynasty’s control. The level of interest rates, the rate of inflation, the world supplies of and demands for copper, gold, molybdenum and silver and the stability of exchange rates can all cause
fluctuations in these prices. Such external economic factors are influenced by changes in international investment patterns and monetary systems and political developments. The prices of copper, gold, molybdenum and silver have fluctuated in recent
years, and future significant price declines could cause investors to be unprepared to finance exploration of copper, gold, molybdenum and silver, with the result that Northern Dynasty may not have sufficient financing with which to fund its
exploration activities.

Mining is Inherently Dangerous and subject to Conditions or Events beyond the Company’s control, which could have a Material Adverse Effect on the Company’s Business.

Hazards such as fire, explosion, floods, structural collapses, industrial accidents, unusual or unexpected geological conditions, ground control problems, power outages, inclement weather, seismic activity, cave-ins and mechanical equipment failure
are inherent risks in the Company’s exploration, development and mining operations. These and other hazards may cause injuries or death to employees, contractors or other persons at the Company’s mineral properties, severe damage to and
destruction of the Company’s property, plant and equipment and mineral properties, and contamination of, or damage to, the environment, and may result in the suspension of the Company’s exploration and development activities and any
future production activities.  Safety measures implemented by the Company may not be successful in preventing or mitigating future accidents.

Northern Dynasty Competes with Larger, Better Capitalized Competitors in the Mining Industry.

The mining industry is competitive in all of its phases, including financing, technical resources, personnel and property acquisition. It requires significant capital, technical resources, personnel and operational experience to effectively compete
in the mining industry.  Because of the high costs associated with exploration, the expertise required to analyze a project’s potential and the capital required to develop a mine, larger companies with significant resources may have a
competitive advantage over Northern Dynasty. Northern Dynasty faces strong competition from other mining companies, some with greater financial resources, operational experience and technical capabilities than Northern Dynasty possesses. As a result
of this competition, Northern Dynasty may be unable to maintain or acquire financing, personnel, technical resources or attractive mining properties on terms Northern Dynasty considers acceptable or at all.

Compliance with Environmental Requirements will take Considerable Resources and Changes to these Requirements Could Significantly Increase the Costs of Developing the Pebble Project and Could Delay these Activities.

The Pebble Partnership and Northern Dynasty must comply with stringent environmental legislation in carrying out work on the Pebble Project.  Environmental legislation is evolving in a manner that will require stricter standards and enforcement,
increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees.  Changes in environmental legislation could increase the cost to the Pebble Partnership of carrying out its exploration and, if warranted, development of the Pebble Project. Further, compliance
with new or additional environmental legislation may result in delays to the exploration and, if warranted, development activities.

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|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 36 | 

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Changes in Government Regulations or the Application Thereof and the Presence of Unknown Environmental Hazards on Northern Dynasty’s Mineral Properties May Result in Significant Unanticipated Compliance and Reclamation Costs.

Government regulations relating to mineral rights tenure, permission to disturb areas and the right to operate can adversely affect Northern Dynasty. Northern Dynasty and the Pebble Partnership may not be able to obtain all necessary licenses and
permits that may be required to carry out exploration at our projects.  Obtaining the necessary governmental permits is a complex, time-consuming and costly process. The duration and success of efforts to obtain permits are contingent upon many
variables not within our control. Obtaining environmental permits may increase costs and cause delays depending on the nature of the activity to be permitted and the interpretation of applicable requirements implemented by the permitting authority.
There can be no assurance that all necessary approvals and permits will be obtained and, if obtained, that the costs involved will not exceed those that we previously estimated. It is possible that the costs and delays associated with the compliance
with such standards and regulations could become such that we would not proceed with the development or operation of a mine at the Pebble Project. Refer to further discussion in Item 12 Legal Proceedings.

Litigation

The Company is currently and may in future be subject to legal proceedings, including with regard to actions in Item 12 Other Matters in the development of its Pebble Project. Given the uncertain nature of these actions, the Company cannot
reasonably predict the outcome thereof. If the Company is unable to resolve these matters favorably it will likely have a material adverse effect on the Company.

Northern Dynasty is Subject to Many Risks that Are Not Insurable and, as a Result, Northern Dynasty Will Not Be Able to Recover Losses Through Insurance Should Certain Events Occur.

Hazards such as unusual or unexpected geological formations and other conditions are involved in mineral exploration and development. Northern Dynasty may become subject to liability for pollution, cave-ins or hazards against which it cannot insure.
 The payment of such liabilities could result in increase in Northern Dynasty’s operating expenses which could, in turn, have a material adverse effect on Northern Dynasty’s financial position and its results of operations. Although
Northern Dynasty and the Pebble Partnership maintain liability insurance in an amount which we consider adequate, the nature of these risks is such that the liabilities might exceed policy limits, the liabilities and hazards might not be insurable
against, or Northern Dynasty and the Pebble Partnership might elect not to insure itself against such liabilities due to high premium costs or other reasons, in which event Northern Dynasty could incur significant liabilities and costs that could
materially increase Northern Dynasty’s operating expenses.

If Northern Dynasty Loses the Services of Key Personnel that It Engages to Undertake Its Activities, then Northern Dynasty’s Plan of Operations May Be Delayed or Be More Expensive to Undertake than Anticipated.

Northern Dynasty’s success depends to a significant extent on the performance and continued service of certain independent contractors, including Hunter Dickinson Services Inc. ("HDSI"). The Company has access to the full resources of HDSI, an
experienced exploration and development firm with in-house geologists, engineers and environmental specialists, to assist in its technical review of the Pebble Project. There can be no assurance that the services of all necessary key personnel will
be available when required or if obtained, that the costs involved will not exceed those that we previously estimated. It is possible that the costs and delays associated with the loss of services of key personnel could become such that we would not
proceed with the development or operation of a mine at the Pebble Project.

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|2016 Annual Information Form | P a g e| 37 | 

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The Market Price of Northern Dynastys Common Shares is
Subject to High Volatility and Could Cause Investor Loss.

The market price of a publicly traded stock, especially a
resource issuer like Northern Dynasty, is affected by many variables in addition
to those directly related to exploration successes or failures. Such factors
include the general condition of markets for resource stocks, the strength of
the economy generally, the availability and attractiveness of alternative
investments, and the breadth of the public markets for the stock. The effect of
these and other factors on the market price of the Companys common shares
suggests Northern Dynastys shares will continue to be volatile. Therefore,
investors could suffer significant losses if Northern Dynastys shares are
depressed or illiquid when an investor needs to sell Northern Dynasty shares.

Northern Dynasty Will Require Additional Funding to Meet
the Development Objectives of the Pebble Project.

Northern Dynasty will need to raise additional financing (share
issuances, debt or asset level partnering) to achieve permitting and development
of the Pebble Project. In addition, a positive production decision at the Pebble
Project would require significant capital for project engineering and
construction. Accordingly, the continuing development of the Pebble Project will
depend upon Northern Dynastys ability to obtain financing through debt
financing, equity financing, the joint venturing of the project, or other means.
There can be no assurance that Northern Dynasty will be successful in obtaining
the required financing, or that it will be able to raise the funds on terms that
do not result in high levels of dilution to shareholders.

Item 6.        Dividends

The Company has not paid any dividends on any of its shares
since incorporation and does not presently have any intention of paying
dividends.

Item 7.      
 Description of Capital Structure

Northern Dynastys share capital consists of one class only,
namely common shares without par value, of which an unlimited number of shares
are authorized and 270,869,561 common shares without par value were issued and
outstanding as fully paid and non-assessable as of December 31, 2016. As of
March 28, 2017, there were 298,787,573 common shares issued and outstanding as
fully paid and non-assessable. The audited consolidated annual financial
statements provide share issuances effected by Northern Dynasty and the weighted
average issue price for shares since January 1, 2016.

There have been no changes in the classification of common
shares (reclassifications, consolidations, reverse splits or the like) within
the previous five years. All common shares of Northern Dynasty rank pari passu
(i.e. equally) for voting and the payment of any dividends and distributions in
the event of a windup.

There are no constraints imposed on the ownership of
  securities of Northern Dynasty.

Northern Dynastys securities have not received any ratings
from any rating organization.

Northern Dynasty has entered in registration rights agreements
with certain United States shareholders as part of past financing activities.
See the Companys US public filings at www. sec.gov.

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|2016 Annual Information Form | P a g e| 38 | 

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Item
8.        Market for SecuritiesTrading Markets

Northern Dynasty's common shares have been listed in Canada on
the TSX since October 2007, under the symbol NDM.

The Company's common shares have traded in the U.S. on NYSE MKT
(formerly AMEX), since November 2004, under the symbol NAK.

The following tables set forth for the periods indicated the
price history of the Company's common shares on the TSX and on the NYSE MKT.
Share trading information is available through free internet search services
(for example, for TSX, refer to www.tmxmoney.com, enter NDM.TO. For NYSE MKT, use the
following: https://www.nyse.com/listings_directory/stock, enter NAK).

Fiscal YearEndedDecember 31,
    Trading under the symbol NDM**on the TSX**
    Trading under the symbol NAK**on the NYSE MKT**High($)
    Low($)
    Averagedailytradingvolume
    High(US$)
    Low(US$)
    Averagedailytradingvolume2016
    3.12
    0.28
    775,654
    2.50
    0.20
    1,295,0792015
    0.83
    0.37
    55,058
    0.72
    0.28
    103,7282014
    1.85
    0.38
    56,803
    1.70
    0.32
    204,5622013
    4.19
    1.07
    75,913
    4.26
    1.00
    271,5102012
    8.13
    2.23
    116,593
    8.19
    2.20
    269,0422011
    21.50
    5.16
    252,154
    21.76
    4.87
    612,224


Fiscal Quarter
    Trading under the symbol NDM**on the TSX**
    Trading under the symbol NAK**on the NYSE MKT**High($)
    Low($)
    Averagedailytradingvolume
    High(US$)
    Low(US$)
    AveragedailytradingvolumeQ4 2016
    3.12
    0.71
    1,402,529
    2.50
    0.54
    2,862,494Q3 2016
    1.48
    0.39
    1,186,214
    1.16
    0.30
    1,871,322Q2 2016
    0.57
    0.37
    314,544
    0.48
    0.28
    258,189Q1 2016
    0.52
    0.28
    207,582
    0.39
    0.20
    159,575Q4 2015
    0.58
    0.38
    76,251
    0.31
    0.29
    108,597Q3 2015
    0.67
    0.37
    34,517
    0.36
    0.30
    93,941Q2 2015
    0.54
    0.38
    25,070
    0.37
    0.34
    109,776Q1 2015
    0.83
    0.45
    85,348
    0.40
    0.36
    102,643


Last twelvemonths
    Trading under the symbol NDM**on the TSX**
    Trading under the symbol NAK**on the NYSE MKT**High($)
    Low($)
    Averagedailytradingvolume
    High(US$)
    Low(US$)
    AveragedailytradingvolumeFebruary 2017
    4.46
    1.81
    5,566,474
    3.41
    1.37
  16,064,595


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|2016 Annual Information Form | P a g e| 39 | 

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Last twelve months
    **Trading under the symbol NDM**
      on the TSX
    **Trading under the symbol NAK**
      on the NYSE MKTHigh ($)
    Low ($)
    Average daily
      trading volume
    High (US$)
    Low (US$)
    Average daily
      trading volumeJanuary 2017
    4.54
    2.30
    3,270,386
    3.45
    1.72
    8,633,185December 2016
    3.12
    1.54
    2,104,690
    2.50
    1.14
    4,300,424November 2016
    2.08
    0.93
    1,506,545
    1.55
    0.70
    1,983,952October 2016
    1.39
    0.71
    585,785
    1.04
    0.54
    1,290,186September 2016
    1.17
    0.87
    497,048
    0.90
    0.67
    879,252August 2016
    1.48
    0.74
    1,965,300
    1.16
    0.55
    3,221,387July 2016
    0.76
    0.39
    1,051,010
    0.58
    0.30
    1,349,170June 2016
    0.48
    0.37
    260,832
    0.38
    0.28
    227,623May 2016
    0.55
    0.40
    315,938
    0.45
    0.30
    210,110April 2016
    0.57
    0.38
    369,424
    0.48
    0.29
    338,276March 2016
    0.52
    0.41
    281,955
    0.39
    0.30
  199,300


Item 9.        Escrowed
Securities

Following the Companys acquisition of Mission Gold Ltd. on
December 24, 2015 there are currently 1,628,671 common shares in the capital of
the Company held in escrow pursuant to TSX-V value escrow agreements and
supplemental escrow agreements dated February 13, 2013 among Delta Gold
Corporation, a predecessor company to Mission Gold Ltd. (the issuer), Olympia
Trust Company and the holders of the escrowed shares.

In addition to the applicable TSX-V time-based release
conditions, the supplemental escrow agreements provide, among other things, that
the escrowed shares shall not be released from escrow until the issuer has
obtained requisite permits authorizing exploration and development activities at
the issuers Imperial Project which would allow the issuer to complete the
drilling component of the Phase 1 recommended work program as set out in the
issuers filing statement dated December 28, 2012. The issuer has provided to
the TSX-V written notice that it has sufficient time to raise funds and to incur
costs and expenses to meet its contractual obligations in respect of
expenditures required to be incurred on the issuers Imperial Project pursuant
to applicable contractual obligations and the TSX-V has consented to the
release.

Except as outlined above, there are no shares of Northern
Dynasty held in escrow.

Item 10        Directors
and Officers

The names and municipalities of residence of the directors and
officers of the Company, their principal occupations during the past five years,
and the period of time they have served as directors or officers of Northern
Dynasty are presented in the table below. Except where indicated, each director
and senior officer of Northern Dynasty has held the same or similar principal
occupation with the organization indicated or a predecessor thereof for the last
five years. Where shown the reference to "CEO" refers to "Chief Executive
Officer" and "CFO" to "Chief Financial Officer".

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|2016 Annual Information Form | P a g e| 40 | 

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Name
    Position
    Director or Officer
      SinceDesmond M. Balakrishnan Vancouver, BC, Canada
    Director
    December 2015Steven A. Decker (2)(4)Sherman Oaks, CA,
      United States
    Director
    March 2016Robert A. Dickinson Lions Bay, BC, Canada
    Chairman of the
      Board and Director
    June 1995Gordon B. Keep (3)Vancouver, BC, Canada
    Director
    October 2015David C. Laing (3)(4)Vancouver, BC, Canada
    Director
    May 2016Christian Milau (2)(4)Vancouver, BC, Canada
    Director
    May 2016Kenneth W. Pickering (2)(3)Chemainus, BC,
      Canada
    Director
    September 2013Marchand Snyman West Vancouver, BC, Canada
    CFO
    August 2008Ronald W. Thiessen West Vancouver, BC, Canada
    President, CEO and
      Director
    November 1995Trevor Thomas Vancouver, BC, Canada
    Secretary
    February 2008Bruce Jenkins Vancouver, BC, Canada
    Senior Vice
      President, Corporate Development
    June 2004Stephen Hodgson Vancouver, BC, Canada
    Vice President
      Engineering
    March 2005Sean Magee North Vancouver, BC, Canada
    Vice President
      Public Affairs
    October 2006Doug Allen Vancouver, BC, Canada
    Vice President
      Corporate Communications
    June 2012


|(1) | To the best of the Company's knowledge, none of such
      persons has any family relationship with any other and none were elected
      as a director or appointed as an officer as a result of an arrangement or
      understanding with a major shareholder, customer, supplier, or any other
      party.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Member of the Audit and Risk Committee.                                                                                                                                                                                                                                                                        
|(3) | Member of the Compensation Committee.                                                                                                                                                                                                                                                                          
|(4) | Member of the Nominating and Governance
  Committee.                                                                                                                                                                                                                                                           

As at March 28, 2017, the directors and officers of Northern
Dynasty, and their respective affiliates, directly and indirectly, own or
control as a group an aggregate of 10,643,239  common shares (3.56%), or (7.63%) on a
diluted basis.

Biographical information

The following is the biographical informationon each of
the persons listed above:

Desmond M. Balakrishnan BA., LLB. 
Director

Mr. Balakrishnan is a lawyer practicing in the areas of
Corporate Finance and Securities, Mergers and Acquisitions, Lending, Private
Equity and Gaming and Entertainment for McMillan LLP, where he has been a
partner since 2004. McMillan serves as the Companys Canadian attorneys. He has
been lead counsel on over $500 million in financing transactions and in mergers
and acquisitions aggregating in excess of $1 billion. He also serves as a
director and/or officer of several resource, finance and gaming firms. He holds CLA and BA from Simon Fraser University and a
Bachelor of Laws (with Distinction) from the University of Alberta.

|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 41 | 

---

Mr. Balakrishnan is, or was within the past five years, an
officer and/or director of the following public companies:

Company
    Name of Market
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    TSX, NYSE MKT
    Director
    December 2015
    PresentAroway Energy Inc.
    TSX-V
    Director
    July 2010
    PresentBig Sky Petroleum Corporation
    TSX-V
    Director
    November 2011
    PresentContagious Gaming Inc.
    TSX-V
    Director
    August 2014
    PresentElectric Metals Inc.
    TSX-V
    Secretary
    June 2009
    September 2013Hillcrest Petroleum Ltd.
    TSX-V
    Secretary
    January 2008
    August 2015Network Exploration Ltd.
    TSX-V
    Secretary
    May 2008
    PresentPetro Basin Energy Corp.
    TSX-V (NEX)
    Director
    February 2012
    PresentPoydras Gaming Finance Corp.
    TSX-V
    Secretary
    April 2010
    May 2014Red Rock Capital Corp.
    TSX-V (NEX)
    Director
    February 2012
    PresentShelby Ventures Inc.
    TSX-V (NEX)
    Director
    December 2010
    PresentYankee Hat Minerals Ltd.
    TSX-V
    Secretary
    January 2005
    November 2012


Steven A. Decker, CFA  Director

Mr. Decker is a Chartered Financial Analyst® charterholder with
more than 20 years of investment experience as an Analyst and Portfolio Manager.
He holds an MBA in Finance from the Marshall School of Business at the
University of Southern California where he received the Marcia Israel Award for
Entrepreneurship and was a manager of the California Equity Fund.

Mr. Decker is, or was within the past five years, an officer
and/or director of the following public companies:

Company
    Name of Market
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    TSX, NYSE MKT
    Director
    March 2016
  Present


Robert A. Dickinson, B.Sc., M.Sc. 
Chairman of the Board and Director

Mr. Dickinson is an economic geologist who has been actively
involved in mineral exploration and mine development for over 45 years. He is
Chairman of HDI and HDSI as well as a director and member of the management team
of a number of the public companies associated with Hunter Dickinson Inc. He is
also President and Director of United Mineral Services Ltd., a private resource
company. He also serves as a Director of the Britannia Mine Museum and a Trustee
of the BC Mineral Resources Education Program. Mr. Dickinson is, or was within
the past five years, an officer and/or director of the following public
companies:

|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 42 | 

---

Company
    Name of Market
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    TSX, NYSE MKT
    Director
    June 1994
    PresentChairman
    April 2004
    PresentAmarc Resources Ltd.
    TSX-V, OTCBB
    Director
    April 1993
    PresentChairman
    April 2004
    PresentCuris Resources Ltd.
    TSX
    Director
    November 2010
    November 2012Heatherdale Resources Ltd.
    TSX-V
    Director
    November 2009
    PresentNorthcliff Resources Ltd.
    TSX
    Director
    June 2011
    PresentChairman
    June 2011
    January 2013Quartz Mountain Resources Ltd.
    TSX-V
    Director
    December 2011
    PresentChairman
    December 2011
    November 2012Taseko Mines Limited
    TSX, NYSE MKT
    Director
    January 1991
    Present


Gordon B. Keep, B.Sc., MBA, P.Geo. 
Director

Gordon Keep is a Professional Geologist with extensive business
experience in investment banking and creating public natural resource companies.
Mr. Keep is CEO of Fiore Management & Advisory Corp., a private financial
advisory firm. He also serves as an officer and/or director for several natural
resource companies. He holds a B.Sc. in Geological Science from Queen's
University and an MBA from the University of British Columbia.

Mr. Keep is, or was within the past five years, an officer
and/or director of the following public companies:

Company
    Name of Market
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    TSX, NYSE MKT
    Director
    October 2015
    PresentCannon Point Resources Ltd.
    TSX-V
    CEO and Director
    July 2009
    April 2013Tekmodo Industries Inc. (previously CarbonOne
      Technologies Inc.)
    TSX-V
    Director
    July 2015
    January 31, 2017Catalyst Copper Corp.
    TSX-V
    Director
    April 2008
    May 2016Eastern Platinum Limited
    TSX, JSE
    Director
    November 2003
    July 2016Encanto Potash Corp.
    TSX-V
    Director
    December 2008
    PresentChairman
    October 2009
    PresentKlondike Gold Corp.
    TSX-V
    Director
    December 2013
    PresentOceanic Iron Ore Corp.
    TSX-V
    Director
    September 2010
    PresentPacific Topaz Resources Ltd.
    TSX-V (NEX)
    CFO and Secretary
    March 2011
    April 2013Peregrine Diamonds Ltd.
    TSX
    Director
    February 2005
    July 2015Petroamerica Oil Corp.
    TSX-V
    Secretary
    January 2008
    August 2014Petromanas Energy Inc.
    TSX-V
    Director
    August 2010
    May 2016PNO Resources Ltd.
    TSX-V (NEX)
    President and Director
    July 2007
    April 2013Prima Columbia Hardwood Inc.
    TSX-V
    Director
    July 2007
    June 2013Renaissance Oil Corp.
    TSX-V
    Director
    September 2014
    PresentRoyce Resources Corp.
    TSX-V (NEX)
    CFO and Secretary
    March 2011
    April 2013Rusoro Mining Ltd.
    TSX-V
    Director
    July 2016
    Present


|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 43 | 

---

Company
    Name of Market
    Positions Held
    From
    ToSandspring Resources Ltd.
    TSX-V
    Director
    March 24, 2017
    PresentSkyridge Resources Ltd.
    TSX-V (NEX)
    Director
    December 2007
    April 2013Tapango Resources Ltd.
    TSX-V (NEX)
    CFO and Secretary
    February 2007
    April 2013Uracan Resources Ltd.
    TSX-V
    Director
    November 2003
  Present


David Laing, BSc Mining Engineering 
Director

Mr. Laing is a Mining Engineer with 40 years experience in
mining operations, projects, engineering studies, mining finance, investor
relations, mergers and acquisitions, corporate development, and company
building. Mr. Laing is currently the Chief Operating Officer (COO) and a
Director of Luna Gold Corp. Prior to that, he was the COO of True Gold Mining
Inc. Prior to joining True Gold, Mr. Laing was COO and led the origination and
execution of stream financing transactions of Quintana Resources Capital ULC, a
base metals streaming company. He was also one of the original executives of
Endeavour Mining Corporation as the group grew from one mine in Burkina Faso to
a 500,000 ounce gold producer in West Africa. Mr. Laing was an integral part of
the acquisition and integration of three junior gold producers and led the
feasibility of a fourth project, in Burkina Faso. Prior to these recent roles,
Mr. Laing held senior positions in mining investment banking at Standard Bank in
New York, technical consulting at MRDI in California, the Refugio project at
Bema Gold Corp. and various roles at Billiton and Royal Dutch Shell's mining
business.

Mr. Laing is, or was within the past five years, an officer
and/or director of the following public companies:

Company
    Name of Market
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    TSX, NYSE MKT
    Director
    May 2016
    PresentArian Silver Corporation
    LSE
    Director
    December 2014
    July 2015Aton Resources Inc.
    TSX-V
    Director
    May 2016
    PresentCB Gold Inc.
    TSX-V
    Director
    April 2014
    August 2015Catalyst Copper Corp.
    TSX-V
    President, CEO and Director
    March 2014
    August 2014Fortuna Silver Mines Inc.
    TSX, NYSE
    Director
    September 2016
    PresentKBL Mining Limited
    ASX
    Director
    March 2015
    January 2016Luna Gold Corp. 2
    TSX
    COO and Director
    August 2016
    PresentSandspring Resources Ltd.
    TSX-V
    Director
    August 2015
    PresentTrue Gold Mining Inc. 1
    TSX-V
    COO
    July 2015
    April 2016


Note:

|1. | The Company was acquired by Endeavour in April 2016 and
      its shares were delisted.                  
|-- | ---------------------------------------------------------------------------------------------------------
|2. | The Company has announced it is entered into an agreement
      to merge with TSX-V listed JDL Gold Corp.

Christian Milau, CPA, CA, CPA
(Illinois)  Director

Mr. Milau is is a Chartered Professional Accountant (Chartered
Accountant). Mr Milau is Chief Executive Officer ("CEO") and Director of Luna
Gold Corp. Prior to this he was President and CEO of True Gold Mining Inc. and
negotiated and closed its sale to Endeavour Mining Corporation ("Endeavour"),
where previously he served as Executive Vice President and CFO. While at
Endeavour, Mr. Milau played a leading role in Endeavours acquisition,
financing, development, and operation of four gold mines in Burkina Faso, Côte
dIvoire, Ghana and Mali. Mr. Milau has finance and capital markets experience
as well as operational, government and stakeholder relations experience in West
Africa, including successfully negotiating with governments on various mining
conventions and tax matters. Prior to these recent roles, Mr. Milau was
Treasurer of New Gold Inc. during the companys high growth period from 2008 to 2011 when he was involved in the financing and
construction of the New Afton mine in British Columbia.

|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 44 | 

---

Mr. Milau is, or was within the past five years, an officer
and/or director of the following public companies:

Company
    Name of Market
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    TSX, NYSE MKT
    Director
    May 2016
    PresentEndeavour Mining Corporation
    TSX
    Executive Vice President and CFO
    April 2011
    March 2015Luna Gold Corp. 2
    TSX
    CEO and Director
    August 2016
    PresentPlateau Uranium Inc.
    TSX-V
    Director
    June 2016
    PresentTrue Gold Mining
      Inc.1
    TSX-V
    President, CEO and Director
    March 2015
    May 2016


|1. | The Company was acquired by Endeavour in April 2016 and
      its shares were delisted.                  
|-- | ---------------------------------------------------------------------------------------------------------
|2. | The Company has announced it is entered into an agreement
      to merge with TSX-V listed JDL Gold Corp.

Kenneth W. Pickering., PEng. 
Director

Mr. Pickering is a Professional Engineer and mining executive
with 40 years of experience in a variety of capacities in the natural resources
industry. He has led the development, construction and operation of world-class
mining projects in Canada, Chile, Australia, Peru and the United States,
focusing on operations, executive responsibilities and country
accountabilities.

Mr. Pickering is, or was within the past five years, an officer
and/or director of the following public companies:

Company
    Name of Market
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    TSX, NYSE MKT
    Director
    September 2013
    PresentEndeavour Silver Corp.
    TSX, NYSE
    Director
    August 2012
    PresentTHEMAC Resources Group Limited
    TSX-V
    Director
    March 2011
    PresentPan Aust Minerals
    ASX
    Director
    October 2011
    PresentEnaex Chile
    IPSA
    Director
    May 2011
    Present


Marchand Snyman, CA (SA), CA (Aust.)
 Chief Financial Officer

Marchand Snyman is a member of the Institute of Chartered
Accountants in Australia and of the South African Institute of Chartered
Accountants. He is a director and Chief Operating Officer of HDI and a director
of HDSI.

Mr. Snyman has over 18 years of experience in the mining
sector. Mr. Snyman was a director of Muratie Investments Pty Limited between
2003 and 2006, an Australian mining consultant providing advisory services to
businesses in Australia, China, South Africa and the USA, prior to joining HDI
in 2006. Mr. Snyman was General Manager Corporate Finance and Development for
Anglo Platinum Limited, the world's premier platinum producer from 1999  2002,
responsible for managing diverse projects including joint venture negotiations,
corporate tax structures and offshore corporate operations, having joined Anglo
Platinum in 1996 as Corporate Finance Manager. Prior to that, he was a senior
financial advisor for a multi-modal transportation company in South Africa.

Mr. Snyman is, or was within the past five years, an officer
and/or director of the following public companies:

|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 45 | 

---

Company
    Name of Market
    Positions Held
    From
    ToNorthern Dynasty
      Minerals Ltd.
    TSX, NYSE MKT
    Director
    August 2008
    February 2016CFO
    August 2008
    PresentHeatherdale Resources Ltd.
    TSX-V
    CFO
    November 2009
    April 2012Northcliff Resources Ltd.
    TSX
    Director and Chairman
    January 2013
    Present


Ronald W. Thiessen, FCPA  Director,
President and Chief Executive Officer

Ronald Thiessen is a Chartered Public Accountant with
professional experience in finance, taxation, mergers, acquisitions and
re-organizations. Since 1986, Mr. Thiessen has been involved in the acquisition
and financing of mining and mineral exploration companies. Mr. Thiessen is a
director of HDI and HDSI, a company providing management and administrative
services to several publicly-traded companies and focuses on directing corporate
development and financing activities.

Mr. Thiessen is, or was within the past five years, an officer
and/or director of the following public companies:

Company
    Name of Market
    Positions Held
    From
    ToNorthern Dynasty
      Minerals Ltd.
    TSX, NYSE MKT
    Director
    November 1995
    PresentPresident and CEO
    November 2001
    PresentAmarc Resources Ltd.
    TSX-V, OTCBB
    Director
    September 1995
    PresentCEO
    September 2000
    PresentPresident
    September 2000
    November 2014Detour Gold Corporation
    TSX
    Director
    July 2006
    May 2012Great Basin Gold Ltd.
    TSX, NYSE MKT,
      JSE
    Director
    October 1993
    June 2013Chairman
    November 2006
    June 2013Quartz Mountain Resources Ltd.
    TSX-V
    President, CEO and Director
    December 2011
    PresentTaseko Mines Limited
    TSX, NYSE MKT
    Director
    October 1993
    PresentChairman
    May 2006
    Present


Trevor Thomas, LLB  Secretary

Trevor Thomas has practiced in the areas of corporate
commercial, corporate finance, securities and mining law since 1995, both in
private practice environment as well as in house positions and is currently
general counsel for HDI. Prior to joining HDI, he served as in-house legal
counsel with Placer Dome Inc. Mr. Thomas is, or was within the past five years,
an officer of the following public companies:

Company
    Name of Market
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    TSX, NYSE MKT
    Secretary
    February 2008
    PresentAmarc Resources Ltd.
    TSX-V, OTCBB
    Secretary
    February 2008
    PresentCuris Resources Ltd.
    TSX
    Secretary
    June 2013
    November 2014Heatherdale Resources Ltd.
    TSX-V
    Secretary
    June 2013
    Present


|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 46 | 

---

Company
    Name of Market
    Positions Held
    From
    ToNorthcliff Resources Ltd.
    TSX
    Secretary
    June 2011
    PresentQuartz Mountain Resources Ltd.
    TSX-V
    Secretary
    June 2013
    PresentRathdowney Resources Ltd.
    TSX-V
    Secretary
    March 2011
    PresentRockwell Diamonds Inc.
    TSX, OTCBB, JSE
    Secretary
    February 2008
    September 2012Taseko Mines Limited
    TSX, NYSE MKT
    Secretary
    July 2008
    Present


Bruce Jenkins  Senior Vice
President, Corporate Development

Bruce Jenkins is an environmental and government relations
executive with more than 40 years of experience in project and corporate
management. He supports the Pebble Partnership and helps guide environmental
studies, mitigation planning and permitting activities. Mr. Jenkins is also
Executive Vice President of Environment and Sustainability for Hunter Dickinson
Inc.

Stephen Hodgson  Vice President,
Engineering

Stephen Hodgson is a professional engineer with over 35 years
of experience in mine operations, mine development and project engineering. He
is also Executive Vice President of Engineering for Hunter Dickinson Inc.

Mr. Hodgson is, or was within the past five years, a director
of the following public companies:

Company
    Name of Market
    Positions Held
    From
    ToRathdowney Resources Ltd.
    TSX-V
    Director
    December 2011
  August 2014


Sean Magee  Vice President, Public
Affairs

Sean Magee is a former journalist and speech writer with more
than 25 years communications experience. His experience and expertise spans the
fields of government and stakeholder relations, community and First
Nations/Native engagement, media relations, crisis and issues management. He has
played a central role at Pebble for more than a decade. Mr. Magee has had a
working relationship with Hunter Dickinson Inc. for more than 15 years and is
currently HDI's Executive Vice President of Strategic Communications and Public
Affairs.

Doug Allen  Vice President,
Corporate Communications

Doug Allen is an asset management industry specialist with more
than 30 years of experience on both the sell-side and the buy-side of the
investment industry. His experience includes extensive investment work in the
mining industry. Mr. Allen serves as the primary liaison between the
broker-dealer and asset management industries and the Company.

Committees of the Board of Directors

The following committees have been established by the members
of Northern Dynastys board of directors:

|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 47 | 

---

Committee
    MembershipAudit and Risk Committee
    Christian Milau (Chair)
      Steven Decker Kenneth PickeringCompensation Committee
    Gordon Keep David Laing
      Kenneth Pickering (Chair)Nominating and Governance Committee
    David Laing (Chair) Christian
      Milau Steven Decker


The mandate of each of these committees is more particularly
described in Northern Dynastys Corporate Governance Policies and Procedures
Manual available on the Companys website at: www.northerndynastyminerals.com.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

No director or officer of Northern Dynasty is, as of the date
of this Annual Information Form, or has been within the ten years before the
date of this Annual Information Form, a director or officer of any company that
while that person was acting in that capacity, was the subject of a cease trade
order, penalties, sanctions or bankruptcy, during the time the individual was a
director or within a one year period thereafter, or was a director or officer of
a company during the time in which an event occurred which led to a cease trade
order, penalties, sanctions or bankruptcy subsequent to the individual ceasing
to act as a director or officer. This information has been provided by each
director or officer, as the Company is unable to verify these statements
independently.

As publicly disclosed at www.sedar.com, Great Basin Gold Ltd.
("GBG"), a company on whose board Mr. Thiessen formerly served, became insolvent
and was liquidated commencing in September 2012. GBG was developing two gold
projects using substantial debt financing when gold prices began their
precipitous fall. Mr. Thiessen resigned in June 2013.

Potential Conflicts of Interest

Directors of Northern Dynasty also serve as directors of other
similar companies involved in natural resource development. Accordingly, it may
occur that properties will be offered to such other companies. Furthermore,
those other companies may participate in the same properties as those in which
Northern Dynasty has an interest. As a result there may be situations which
involve a potential conflict of interest or issues in connection with the
doctrine of "corporate opportunity". In that event, a financially interested
director would not be entitled to vote at meetings of directors in respect of a
transaction involving the Company if it evokes any such conflict. The directors
will attempt to avoid dealing with such other companies in situations where
conflicts or corporate opportunity issues might arise and will at all times use
their best efforts to act in the best interests of Northern Dynasty.

Item 11.      Promoters

Not applicable.

|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 48 | 

---

Item 12.      Legal Proceedings and
Regulatory Actions

Legal Proceedings

The Environmental Protection Agency
and the Bristol Bay Watershed Assessment

In February 2011, the EPA announced it would undertake a
Bristol Bay Watershed Assessment study focusing on the potential effects of
large-scale mine development in Bristol Bay and, specifically the Nushagak and
Kvichak area drainages. This process was ostensibly initiated in response to
calls from persons and groups opposing the Pebble Project for the EPA to
pre-emptively use its asserted authority under Section 404(c) of the CWA to
prohibit discharges of dredged or fill material in waters of the US within these
drainages. However, evidence exists that the EPA may have been considering a
Section 404(c) veto of the Pebble Project at least as far back as 2008  two
years before it received a petition from several Alaska Native tribes.

The EPAs first draft Bristol Bay Watershed Assessment ("BBWA")
report was released on May 18, 2012. In the Companys opinion after review with
its consultants, the draft report is a fundamentally flawed document. By the
EPAs own admission, it evaluated the effects of a "hypothetical project" that
has neither been defined nor proposed by the Pebble Partnership, and for which
key environmental mitigation strategies have not yet been developed and, hence,
would not yet be known. It is believed by the Company that the assessment was
rushed  because it was based on studies conducted over only one year in an area
of 20,000 square miles. In comparison, the Pebble Project has studied the
ecological and social environment surrounding Pebble for over a decade. The EPA
also failed to adequately consider the comprehensive and detailed data that the
Pebble Partnership provided as part of its 27,000-page Environmental Baseline
Document (further described under Environmental Baseline Studies above).

The EPA called for public comment on the quality and
sufficiency of scientific information presented in the draft BBWA report. In
response, the Pebble Partnership and Northern Dynasty made submissions on the
draft report. Northern Dynasty made a presentation highlighting these
shortcomings at public hearings held in Seattle, Washington, on May 31, 2012 and
in Anchorage, Alaska, on August 7, 2012. In July 2012, the Company also
submitted a 635-page critique of the draft report in response to the EPAs call
for public comment, and called upon the EPA to cease such unwarranted actions
until such time as a definitive proposal for the development of the Pebble
deposit is submitted into the rigorous NEPA permitting process. All submissions
prepared by Northern Dynasty and the Pebble Partnership with respect to the
EPAs BBWA and CWA 404(c) regulatory action can be found on Northern Dynastys
website.

Concerns about the reasonableness of the basis of risk
assessment in the draft EPA report were stated by many of the independent
experts on the peer review panel assembled to review the BBWA, as summarized, in
a report entitled External Peer Review of EPA's Draft Document: An Assessment
of Potential Mining Impacts on Salmon Ecosystems of Bristol Bay, Alaskareleased in November 2012. In a wide-ranging critique of the draft report's
methodology and findings, many peer review panellists called the EPA's effort to
evaluate the effects of a "hypothetical mining scenario" on the water, fish,
wildlife and cultural resources of Southwest Alaska "inadequate", "premature",
"unreasonable", suspect" and "misleading". A list of these peer review
documents can be found on the Companys website.

On April 26, 2013, the EPA released a revised draft of the BBWA
report and announced another public comment and Peer Review period. The Pebble
Partnership and Northern Dynasty made submissions on the revised draft. In late
May 2013, Northern Dynasty filed a 205-page submission which describes the same
major shortcomings as the original report published in May 2012.

In mid-January 2014, the EPA released the final version of its
BBWA. The report still reflects many of the same fundamental shortcomings as
previous drafts.

On February 28, 2014, the EPA announced the initiation of a
pre-emptive regulatory action under Section 404(c) of the CWA to consider
restriction or a prohibition on mining activities associated with the Pebble
deposit in order to protect aquatic resources in southwest Alaska. In late April
2014, the Pebble Partnership submitted a comprehensive response to the EPAs
February 28, 2014 notification letter.

|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 49 | 

---

Preliminary Injunction

In late May 2014, the Pebble Partnership filed suit in the US
District Court for Alaska and sought an injunction to halt the pre-emptive
regulatory action initiated by the EPA under the CWA, asserting that, in the
absence of a permit application, the action exceeds the federal agencys
statutory authority and violates the Alaska Statehood Act among other federal
laws. The State of Alaska and Alaska Peninsula Corporation, an Alaska Native
village corporation with extensive land holdings in the Pebble Project area,
later joined in the Pebble Partnerships lawsuit against the EPA as
co-plaintiffs. On September 26, 2014, a US federal court in Alaska granted the
EPAs motion to dismiss the case. This ruling did not judge the merits of the
statutory authority case, it only deferred that hearing and judgment until after
a final Section 404(c) determination has been made by the EPA. If or when the
EPA action is deemed "final", the Pebble Partnership will pursue the underlying
case. The Company also appealed the decision to grant the motion to dismiss to
the 9th Circuit Court of Appeals. This appeal was denied in May 2015. The Pebble
Partnership still holds the option to pursue its statutory authority case in the
instance that EPA finalizes a pre-emptive regulatory action under the CWA.

Proposed Determination

On July 18, 2014, EPA Region 10 announced a "Proposed
Determination" to restrict the discharge of dredged or fill material associated
with mining the Pebble deposit in a 268 square mile area should that disposal
result in any of the following: loss of five or more miles of streams with
documented salmon occurrence; loss of 19 or more miles of streams where salmon
are not documented but that are tributaries of streams with documented salmon
occurrence; the loss of 1,100 or more acres of wetlands, lakes, and ponds that
connect with streams with documented salmon occurrence or tributaries of those
streams; and stream flow alterations greater than 20 percent of daily flow in
nine or more linear miles of streams with documented salmon occurrence. Northern
Dynasty management does not accept that the EPA has the statutory authority to
impose conditions on development at Pebble, or any development project anywhere
in Alaska or the US, prior to the formal submission of a development plan and
its thorough review by federal and state agencies including development of an
Environmental Impact Statement ("EIS") and review under NEPA.

On September 19, 2014, the Pebble Partnership submitted a
comprehensive legal and technical response to EPA Region 10s Proposed
Determination. Northern Dynasty and the Pebble Partnership believe the Proposed
Determination is flawed and unsupported by the administrative record as
established by the Bristol Bay Watershed Assessment, and is therefore arbitrary
and capricious.

Federal Advisory Committee Act ("FACA")
action

On September 3, 2014, the Pebble Partnership initiated a second
action against EPA in federal district court in Alaska charging that EPA
violated the FACA due to its close interactions with, and the undue influence of
Environmental Non-Governmental Organizations and anti-mining activists in
developing the BBWA, and with respect to its unprecedented pre-emptive
regulatory actionunder the CWA. On September 24, 2014, the US federal
court judge in Alaska released an order recognizing that the EPA agreed not to
take the next step to advance its 404(c) regulatory action with respect to
southwest Alaskas Pebble Project until at least January 2, 2015.

On November 24, 2014, a US federal court judge in Alaska
granted the Pebble Partnerships request for a preliminary injunction in
relation to the FACA case. While the preliminary injunction does not resolve the
Pebble Partnerships claims that the EPA actions with respect to the BBWA and
subsequent 404(c) regulatory action violated FACA, the decision permits the
further discovery process of the underlying facts to enable the court to issue a
final decision on the merits of the FACA case. Granting of a preliminary
injunction also reflects the courts view that PLP has a likelihood of
prevailing on the merits of its case. On June 4, 2015, the federal court in
Alaska issued an order denying the EPAs motion to dismiss this case.

The Pebble Partnership has filed numerous requests for
production of documents and has received tens of thousands of documents produced
by the EPA. The Pebble Partnership has also served a number of notices of
depositions for current and former EPA employees, EPA contractors and relevant
third parties. More than a dozen depositions of EPA witnesses have been
completed. Additionally, the Pebble Partnership has asked the Court to compel
the Agency and certain third parties to produce documents that are relevant to its FACA claims and that are being
improperly withheld. Should the Pebble Partnership prevail in its FACA
litigation against the EPA, the federal agency may be unable to rely upon the
BBWA as part of the administrative record for any regulatory action at the
Pebble Project.

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|2016 Annual Information Form | P a g e| 50 | 

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Mediation

On October 27, 2016, the Pebble Partnership and the EPA filed a
joint Notice in federal court stating their intent to enter into mediation in an
effort to resolve ongoing litigation under FACA.

On December 30, 2016, the Pebble Partnership and the EPA filed
a joint Notice in federal court staying the ongoing FACA litigation until March
20, 2017 and, on that date the Pebble Partnership and EPA filed a Joint Motion
in federal court to extend a stay of proceedings in ongoing litigation under
FACA to May 4, 2017 in the interest of resolving the matter.

To date, no mediator has been appointed as the Company has made
substantial progress in recent direct discussions with the EPA and intends to
continue negotiating the matter directly, rather than through mediation.
Government representatives are actively engaged in these discussions and, along
with the Pebble Partnership, are focused on achieving a resolution that will be
agreeable to both parties. In the meantime, the Courts Preliminary Injunction
of November 25, 2014, will remain in effect for the duration of any stay.

Freedom of Information Act ("FOIA")
action

On October 14, 2014, the Pebble Partnership filed suit in
federal district court in Alaska charging that EPA has violated the FOIA by
improperly withholding documents related to the Pebble Project, the Bristol Bay
Watershed Assessment and consideration of a pre-emptive 404(c) veto under the
CWA. The EPA moved for summary judgment claiming that its search for and
disclosure of documents was adequate. The Pebble Partnership opposed the
governments motion, pointing out several deficiencies in the EPAs search
parameters and the agencys overly broad assertion of the deliberative process
privilege to withhold documents. On August 24, 2015, the US federal court judge
granted in part and deferred in part the EPAs motion for summary judgement on
the FOIA litigation. The court accepted the EPAs position that it had made an
adequate search for documents but left the matter open should the EPA not meet
its obligations in the FACA litigation or if additional documents surface.
Additionally, the judge ordered EPA to produce a sample of 183 partially or
fully withheld documents so that it could conduct an in-camera review of the
sample and test the merits of EPAs withholdings under the deliberative process
privilege. Before producing this sample to the Court, EPA chose to voluntarily
release 115 documents (or 63% of the sample ordered by the Court), relinquishing
its claim of privilege as to these documents.

In briefings before the Court, the Pebble Partnership argued
that the voluntary release of 63% of the agencys same documents conclusively
demonstrated that the EPA had been over broad in its assertion of the
deliberative process privilege, particularly because the content of the
voluntarily released documents was not in fact deliberative. The Court agreed,
finding that EPA "improperly withheld documents in full," and that "many of the
documents that defendant released should have been released to begin with
because the portions that defendant released were not deliberative." It then
ordered the EPA to review an additional 65 documents. Of these 65 documents, the
EPA voluntarily released 55 documents in whole or in part (or 85% of the
documents). Given the EPAs high rate of release, the Pebble Partnership
submitted a brief to the Court arguing that the EPA should be forced to review
the remaining documents being withheld and arguing that judgment should not be
granted to the agency at this time. The Court agreed, concluding that it had "no
confidence that [EPA] has properly withheld documents, either in full or in
part, pursuant to the deliberative process privilege." The Court reiterated its
earlier finding that EPA had been withholding documents that "should never have
been withheld to begin with." As a result, the Court ordered the Agency to
re-evaluate all remaining documents EPA is withholding in response to the Pebble
Partnerships January 2014 FOIA request and to submit these documents for
in-camera review. After this review, the Court issued an order resolving
Pebbles challenges to the remaining withholdings and forcing EPA, yet again, to
produce additional documents that the agency had been improperly withholding for
over two years.

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|2016 Annual Information Form | P a g e| 51 | 

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Office of the EPA Inspector General
(OIG) review

Counsel for Northern Dynasty and the Pebble Partnership has
submitted numerous letters to the independent OIG since January 2014, raising
concerns of apprehension of bias, process irregularities and undue influence by
environmental organizations in the EPA's preparation of the Bristol Bay
Watershed Assessment. In response to Congressional and other requests, on May 2,
2014, the OIG announced that it would investigate the EPAs conduct in preparing
An Assessment of Potential Mining Impacts on Salmon Ecosystems of Bristol
Bay, Alaska, "to determine whether the EPA adhered to laws, regulations,
policies and procedures in developing its assessment of potential mining impacts
in Bristol Bay, Alaska." On January 13, 2016, the OIG published its report (the
"OIG Report"). While acknowledging significant scope limitations in its review
and subsequent OIG Report, the OIG concluded that: we found no evidence of bias
in how the EPA conducted its assessment of the Bristol Bay watershed, or that
the EPA pre-determined the assessment outcome, but that an EPA Region 10
employee may have been guilty of a possible misuse of position.

Several other
  investigations of EPA conduct at Pebble contradict the OIG Report. The US
  Congress House Committee on Oversight and Government Reform found that EPA
  employees had inappropriate contact with outside groups and failed to conduct an
  impartial, fact-based review of the proposed Pebble mine. In addition, a report
  by former United States Senator and Defense Secretary William S. Cohen and his
  firm (further described below), said their investigation raise(s) serious
  concerns as to whether EPA orchestrated the process to reach a pre-determined
  outcome; had inappropriately close relationships with anti-mine advocates; and
  was candid about its decision-making process.

The findings of the OIG Report
  are not expected to materially affect the Pebble Partnerships strategy for
  addressing the EPAs CWA Section 404(c) regulatory action. The Company remains
  confident that the Pebble Project will ultimately enter federal and state
  permitting unencumbered by any extraordinary development restrictions.

Cohen report

In March 2015, William Cohen and his firm, The Cohen Group,
assisted by the law firm DLA Piper, was retained by the Pebble Partnership to
conduct an independent review of whether the EPA acted fairly in connection with
its evaluation of potential mining in the Bristol Bay watershed. Secretary Cohen
was requested to evaluate the fairness of EPA's actions and decisions in this
matter based upon a thorough assessment of the facts and relying on his
experience as a senior government official, as well as his 24 years as a member
of the US Senate and House of Representatives.

A team of independent investigators employed by The Cohen Group
and DLA Piper reviewed thousands of documents secured through FOIA requests and
interviewed approximately 60 individuals involved with the EPA or its review of
the Pebble Project. On October 6, 2015, Mr. Cohen released his report entitled
Report of an Independent Review of the United States
Environmental Protection Agencys Actions in Connection with its Evaluation of
Potential Mining in Alaskas Bristol Bay Watershed. The report stated the
conclusion of Mr. Cohen that he did not believe the EPA used the "fairest and
most appropriate process" in its proposed pre-emptive regulatory action under
the CWA 404(c).

Mr. Cohen urged policymakers to require that the permitting
process under NEPA and the regulations developed by the Council on Environmental
Quality (the "Permit/NEPA Process") be followed. Mr. Cohen commented that the
Permit/NEPA Process is more comprehensive than the pre-emptive Section 404(c)
action employed by the EPA and he could find no valid reason why that process
was not used.

The Cohen report also raised a number of concerns about the
EPAs Bristol Bay Watershed Assessment study and the CWA Section 404(c)
regulatory action, including possible prejudice and pre-determination of
outcomes by the EPA, inappropriately close relationships between certain EPA
officials and anti-mine advocates, EPAs candor with respect to certain actions
it took, lack of consistency between the BBWA and the proposed determination,
and lack of cooperation by EPA personnel with respect to Congressional queries
and FOIA requests.

Northern Dynasty does not consider the Cohen report to
constitute an "experts" report but rather considers it to constitute an
informed view of the Companys treatment by the EPA expressed by a person
familiar with governmental due process goals. Mr. Cohen has appeared before a
Congressional committee (House Committee on Science, Space and Technology)
with respect to the findings in his report.

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|2016 Annual Information Form | P a g e| 52 | 

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US House Committee on Science, Space and
Technology

On February 22, 2017, the US House Committee on Science, Space
and Technology Chairman Lamar Smith sent a letter to the EPA Administrator Scott
Pruitt recommending that the incoming Administration rescind the EPAs proposed
determination to use Section 404(c) in a pre-emptive fashion for the Pebble Mine
in Bristol Bay, Alaska. This simple action will allow a return to the
long-established Clean Water Act permitting process and stop attempts by the EPA
to improperly expand its authority. Moreover, it will create regulatory
certainty for future development projects that will create jobs and contribute
to the American economy. Multi-dimensional StrategyIn summary, in 2016
the Pebble Partnership has advanced a Multi-dimensional Strategy to address the
EPAs pre-emptive regulatory action under Section 404(c) of the CWA. The goal is
to position the Pebble Project to initiate federal and state permitting under
NEPA unencumbered by any extraordinary development restrictions imposed by the
federal agency. This strategy includes three discrete pieces of litigation
against the EPA, including:

- challenging the EPAs statutory authority to pre-emptively impose
  development restrictions at the Pebble Project under Section 404(c) of the CWA
  prior to the Pebble Partnership submitting a proposed development plan for the
  project or the development of an EIS under NEPA;
- alleging that the EPA violated FACA in the course of undertaking the
  Bristol Bay Watershed Assessment and subsequent Section 404(c) of the CWA
  regulatory action; and
- alleging that the EPA is unlawfully withholding relevant documentation and
  other information sought by the Pebble Partnership under FOIA.

In 2017, the Company intends to continue with the
Multi-dimensional Strategy and the Pebble Partnership plans to engage in direct
discussion, including possible mediation with the EPA. There can be no assurance
of the results of the discussion and possible mediation with the EPA. Even if
the dealings with the EPA are successful and the permitting process for the
Pebble Project commences, there can be no assurance that the permits required to
build and operate the Pebble Project will be successfully secured.

Northern
  Dynasty and the Pebble Partnership are represented by respected international
  law firm Steptoe & Johnson LLP ("Steptoe"), which for more than seven
  decades has been acknowledged as a leader in litigation and advocacy in
  Washington DC. Steptoe and the Pebble Partnership have agreed to cap legal fees
  related to the FACA suit and other ongoing legal matters at US$1 million to the
  point at which motions for summary judgment in the case have been fully argued
  to the court and are ripe for adjudication, expected to be in 2017. Steptoe will
  be due a success fee payment upon prevailing in the FACA litigation or arising
  from other positive outcomes (see the Companys Management Discussion and
    Analysisfor the year ended December 31, 2016 for additional information).

Other Matters

On February 14, 2017, short seller investment firm Kerrisdale
Capital Management LLC published a negative piece (the Kerrisdale Report)
regarding the Pebble Project, which the Company is attempting to develop.
Kerrisdale is not a mining company and does not disclose any record of success
in mining investments or issuing mining valuation or investment reports. On the
contrary, Kerrisdale has a track record of aggressive short selling and
activism. In contrast, Northern Dynastys Pebble team has extensive experience
in mining and a formidable track record of success in developing and operating
mines internationally. The Kerrisdale report relies on anonymous co-authors
whose mining credentials, if any, Kerrisdale has not disclosed and who likewise
may hold or have held short positions in Northern Dynasty. Specifically,
Kerrisdale has not disclosed if these anonymous authors have any requisite
technical qualifications or practical mining experience to substantiate the
claims of the short report. In contrast, Northern Dynasty publicly files
technical reports which have been certified by named, independent, experienced
and reputable Qualified Persons (as defined by securities laws) who have certified the accuracy and completeness of these reports. An
internationally recognized engineering firm conducted and compiled an extensive
and independent Preliminary Assessment (also referred to as a Preliminary
Economic Assessment, or PEA) of the Pebble Project on behalf of Northern
Dynasty. This PEA, published in 2011, showed the project has the potential to
posesses significant value, as discussed in greater detail above in Item 5  Description of Business  Technical Summary  Previous Mine Planning
Work. While the analyses of this assessment now require updating, it remains
a source of much useful information and is available for download at
www.sedar.com. The PEA shows the large mineral endowment and potential of the
Pebble Project. The Kerrisdales short report purports to develop a zero value
thesis without requesting or having had access to the necessary and extensive
technical, analytical, geological and economic information that Northern
Dynastys Qualified Persons used. No Kerrisdale personnel have visited the
Pebble Project or had discussions with Northern Dynastys technical team or
executives.

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|2016 Annual Information Form | P a g e| 53 | 

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On February 15 and 17, 2017, two purported shareholder class
actions were filed against the Company and certain of its current officers and
directors in US federal courts, specifically the Central District of California
(Los Angeles) and the Southern District of New York (New York City). The cases
are described below:

1.    Diaz v Northern Dynasty et al.-
February 2017

In US District Court for the Central District of California,
Case 2:17-cv-01241, one Victor Diaz is the named plaintiff and on behalf of
other shareholders suing the Company and two of its executives for alleged false
or misleading public disclosures. The class consists of all persons who
purchased shares of Northern Dynasty between September 16, 2013 and February 13,
2017. Plaintiff seeks to recover compensable damages allegedly caused by
Defendants allegedly violations of the federal securities laws and to pursue
remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
(the Exchange Act) and Rule 10b5. Defendants are alleged to have made false
and/or misleading statements and/or failed to disclose that: (1) the Companys
Pebble Project is commercially unviable; (2) the Companys Pebble Project had a
negative present value; and (3) as a result, Defendants statements about the
Companys business, operations and prospects were materially false and
misleading and/or lacked a reasonable bases at all relevant times. The suit was
filed immediately after the Kerrisdale short report, and cites that report as
evidence of its contentions.

No specific amounts are claimed by Diaz. The Company after
discussion with counsel believes the claims to be wholly without merit and will
vigorously defend itself and its officers against them.

2.    Kirwin v Northern Dynasty et. al.-
February, 2017

In US District Court for the Southern District of New York,
Case No. 17-cv-1238 Filed 02/17/17 one Patrick O. Kirwin filed a class action
suit against Northern Dynasty and the same two executives as did Mr. Diaz in the
above suit. The Kirwin suit also claims under Sections 10(b) and 20(a) of the
Exchange Act and Rule 10b-5. The Kirwin class period begins on September 16,
2013, and makes very similar claims to Diaz namely that Northern Dynasty made
false and/or misleading statements and/or failed to disclose that: (i) The
Pebble Project carries a negative net present value; (ii) the Pebble Project is
not commercially viable; and (iii) as a result of the foregoing, the Companys
financial statements, as well as Defendants statements about Northern Dynastys
business, operations, and prospects, were false and misleading and/or lacked a
reasonable basis. Like the similarly worded Diaz suit above, the Kirwin also
suit references the Kerrisdale short opinion as the basis for its contentions
using the identical subheading as in Diaz in the pleadings namely, The Truth
Emerges.

No specific amounts are claimed by Kirwin. The Company after
discussion with counsel believes the claims to be wholly without merit and will
vigorously defend itself and its officers against them.

3.    Other Potential Class Actions

After the Kerrisdale short opinion a number of other US law
firms announced they were investigating Northern Dynasty in connection with
the Kerrisdale allegations and were seeking potential lead plaintiffs. Therefore
it is quite possible that other lawsuits will be filed making similar claims as
Diaz and Kirwin and if they arise these suits too will be vigorously defended
against.

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|2016 Annual Information Form | P a g e| 54 | 

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Risk Factors

The outcomes of the legal proceedings described above cannot be
predicted and resolution of these legal proceedings will likely involve
significant expense to the Company. In addition, adverse outcomes in these legal
proceedings may have a material adverse effect on the Companys business, future
prospects and financial condition. Investors should refer to the risk factors
identified above under Item 5  Description of Business  Risk Factors,
starting on page 31, for a discussions of risks relating to the legal
proceedings described above.

Regulatory Actions

There have been no:

|(a) | penalties or sanctions imposed against the Company by a
      court relating to securities legislation or by a securities regulatory
      authority during the most recently completed financial year, or 
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                            
|(b) | other material penalties or sanctions imposed by a court
      or regulatory body against the Company, or                                                                                                  
|    |                                                                                                                                                                                                            
|(c) | settlement agreements the Company entered into before a
      court relating to securities legislation or with a securities regulatory
      authority during the most recently completed financial
  year.

Item 13.      Interest of
Management and Others in Material Transactions

None of the directors or senior officers of the Company, nor
any person who has held such a position since the beginning of the last
completed financial year end of the Company, nor any associate or affiliate of
the foregoing persons, has any substantial or material interest, direct or
indirect, by way of beneficial ownership of securities or otherwise, in any
material transactions of the Company other than as set out herein.

Certain directors of a private company, HDSI, a wholly owned
subsidiary of HDI (see Item 10) are also directors of the Company. Pursuant to a
management services agreement with HDSI, HDSI provides geological, corporate
development, administrative and management services to, and incurs third party
costs on behalf of, the Company and its subsidiaries at annually set rates.
During the year ended December 31, 2016, the Company paid HDSI approximately
$3.6 million (2015  $4.7 million) for services rendered by HDSI and reimbursed
HDSI approximately $0.5 million (2015  $0.6 million) for third party costs
incurred on the Companys behalf. In 2015, the Company also received cash
proceeds of approximately $0.3 million for the purchase of certain of the
Companys marketable securities. Certain members of the Companys senior
management including the Companys CFO are employed by HDSI rather than by
Northern Dynasty directly.

Item 14.      Transfer Agent and
Registrar

The Company's registrar and transfer agent is Computershare
Trust Company of Canada, located in Vancouver, BC.

Item 15.      Material Contracts

Northern Dynasty's only material contracts as of March 28, 2016
are:

- Corporate Services Agreement between Northern Dynasty and Hunter Dickinson
  Services Inc. dated July 2, 2010.

Other agreements are in the normal course of business.

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|2016 Annual Information Form | P a g e| 55 | 

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Item 16.      Interests of Experts

David Gaunt, P.Geo., James Lang, P.Geo., Eric Titley, P.Geo.,
of Hunter Dickinson Services Inc., and Ting Lu, P.Eng., Tetra Tech are persons:

- who are named as in a report described in a filing, or referred to in a
  filing, made under National Instrument 51-102 by the Company during, or
  relating to, the Companys most recently completed financial year; and
- whose profession or business gives authority to the report made by each of
  them.

Messrs. Gaunt, Lang and Titley hold interests in the common shares of the Company, directly or indirectly, or through share purchase options, representing less than 1% of the Company's outstanding share capital.  Ms. Lu holds no interest in the Company.

Stephen Hodgson, P.Eng., is a person who is named as an expert in this Annual Information Form and whose profession or business gives authority to the filing.  Mr. Hodgson holds interests in the common shares of the Company, directly or indirectly, or through share purchase options, representing less than 1% of the Company's outstanding share capital.

Deloitte LLP have prepared the Report of Independent Registered Public Accounting Firm on the consolidated financial statements of the Company as at and for the years ended December 31, 2016 and December 31, 2015.  Deloitte LLP is independent within the meaning of the Rules of Professional Conduct of the Chartered Professional Accountants of British Columbia and the rules and standards of the Public Company Accounting Oversight Board and the securities laws and regulations administered by the SEC .

Item 17.      Additional
Information

Additional information, including directors' and officers'
remuneration, indebtedness of officers, executive stock options and interests of
management and others in material transactions, where applicable, is contained
in annual financial statements, managements discussion and analysis, proxy
circulars and interim financial statements of the Company, available under the
Companys profile on SEDAR at www.sedar.comand from the SECs Electronic Document Gathering and Retrieval System
("EDGAR") at www.sec.gov.

The following documents can be obtained upon request from
Northern Dynastys Shareholder Communication Department by calling (604)
684-6365:

- this AIF, together with any document incorporated herein by reference;
- interim consolidated financial statements filed with Securities Commissions
  subsequent to the audited consolidated financial statements for the Company's
  most recently completed financial year; and
- the Proxy Circular for the annual general meeting of the Company when
  available.

The Company may require the payment of a reasonable charge from
persons, other than security holders of the Company, requesting copies of these
documents.

Item 18.      Disclosure for
Companies not Sending Information Circulars

Not applicable.

Item 19.      Audit and Risk
Committee, Auditor Fees, Exemptions, Code of Ethics

Audit and Risk Committee

Audit and Risk Committee ("Audit
Committee") Charter

The Audit Committee has adopted a charter that sets out its
mandate and responsibilities, and is attached to this AIF as Appendix A.

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|2016 Annual Information Form | P a g e| 56 | 

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Composition of the Audit Committee

The Audit Committee currently consists of Marcel de Groot,
David De Witt, and Steven Decker. Mr. de Groot is the Chairman of the Audit
Committee. The Committee reviews all financial statements of the Company prior
to their publication, reviews audits performed, considers the adequacy of audit
procedures, recommends the appointment of independent auditors, reviews and
approves the professional services to be rendered by them and reviews fees for
audit services. The Audit Committee Charter has set criteria for membership
which all members of the Audit Committee are required to meet consistent with
National Instrument 52-110 and other applicable regulatory requirements. The
Audit Committee, as needed, meets separately (without management present) with
the Companys auditors to discuss the various aspects of the Companys financial
statements and the independent audit.

Each Audit Committee member is an independent director and is
financially literate. Mr. Decker is a Chartered Financial Analyst with an MBA,
Finance. Mr. Pickering has been a member on other audit committees of publicly
listed companies. Mr. Milau, the Audit Committee Chairman is a Chartered
Professional Accountant and is a financial expert.

Relevant Education and Experience

As a result of their education and experience, each member of
the Audit Committee has familiarity with, an understanding of, or experience in:

- the accounting principles used by the Company to prepare its financial
  statements, and the ability to assess the general application of those
  principles in connection with estimates, accruals and reserves;
- reviewing or evaluating financial statements that present a breadth and
  level of complexity of accounting issues that are generally comparable to the
  breadth and complexity of issues that can reasonably be expected to be raised
  by the Company's financial statements, and
- an understanding of internal controls and procedures for financial
  reporting.

See disclosure regarding biographical information in Item 10
from page 40.

Reliance On Certain Exemptions
Available in NI 52-110

The Companys auditor, Deloitte LLP, has not provided any
material non-audit services during the most recently completed fiscal year.

Pre-Approval Policies and Procedures

The Company has procedures for the review and pre-approval of
any services performed by its auditor. The procedures require that all proposed
engagements of its auditor for audit and non-audit services be submitted to the
Audit Committee for approval prior to the beginning of any such services. The
Audit Committee considers such requests and, if acceptable to a majority of the
Audit Committee members, pre-approves such audit and non-audit services by a
resolution authorizing management to engage the Companys auditor for such audit
and non-audit services, with set maximum dollar amounts for each itemized
service. During such deliberations, the Audit Committee assesses, among other
factors, whether the services requested would be considered "prohibited
services" as contemplated by the regulations of the SEC, and whether the
services requested and the fees related to such services could impair the
independence of the auditors.

Principal Accountant Fees and
Services

The Audit Committee has reviewed the nature and amount of the
audit and non-audit services provided by Deloitte LLP to the Company to ensure
auditor independence. Fees incurred with Deloitte LLP for audit and non-audit
services in the last two fiscal years are outlined in the following table.

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|2016 Annual Information Form | P a g e| 57 | 

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Nature of Services
    
    Year ended December 31
      2016
    Year ended December 31
      2015Audit Fees
    the aggregate fees
      billed by our independent auditor for the audit of our annual consolidated
      financial statements, reviews of interim consolidated financial statements
      and attestation services that are provided in connection with statutory
      and regulatory filings or engagements.
    $ 122,000
    $ 167,000Audit-Related Fees
    include services that are traditionally performed by the auditor.  These audit-related services primarily related to services in connection with assistance with securities filings .
    182,000
    70,000Tax Fees
    include fees for
      all tax services other than those included in Audit Fees and
      Audit-Related Fees. This category includes fees for tax compliance, tax
      planning and tax advice. Tax planning and tax advice includes assistance
      with tax audits and appeals, tax advice related to mergers and
      acquisitions, and requests for rulings or technical advice from tax
      authorities.
    
    All Other Fees
    include all other
      non-audit services.
    
    Total
    
    $ 304,000
    $ 237,000


From time to time, management of the Company recommends to and
requests approval from the audit committee for audit and non-audit services to
be provided by the Company's auditors. The audit committee routinely considers
such requests at committee meetings, and if acceptable to a majority of the
audit committee members, pre-approves such audit and non-audit services by a
resolution authorizing management to engage the Company's auditors for such
non-audit services, with set maximum dollar amounts for each itemized service.
During such deliberations, the audit committee assesses, among other factors,
whether the non-audit services requested would be considered "prohibited
services" as contemplated by the SEC, and whether the non-audit services
requested and the fees related to such services could impair the independence of
the auditors.

Code of Ethics

The Company has adopted a code of ethics that applies to all
directors, officers and employees of the Company. A copy of the Code of Ethics,
which is included as part of the Companys Governance Policies and Procedures
Manual is available for download from the Companys website at www.northerndynastyminerals.com and under the Companys
profile on SEDAR at www.sedar.com.

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|2016 Annual Information Form | P a g e| 58 | 

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Appendix A - Audit and Risk Committee Charter

|1. | Purpose: Responsibilities and Authority                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Audit and Risk Committee (the Audit Committee or
      Committee) shall carry out its responsibilities under applicable laws,
      regulations and stock exchange requirements with respect to the
      employment, compensation and oversight of the Companys independent
      auditor, and other matters under the authority of the Committee. The
      Committee also shall assist the Board of Directors in carrying out its
      oversight responsibilities relating to the Companys financial, accounting
      and reporting processes, the Companys system of internal accounting and
      financial controls, the Companys compliance with related legal and
      regulatory requirements, and the fairness of transactions between the
      Company and related parties. In furtherance of this purpose, the Committee
      shall have the following responsibilities and
authority:

| | (a) | Relationship with Independent
    Auditor.
| | --- | ------------------------------------------

| | (i)   | Subject to the law of British Columbia as to the role of
      the Shareholders in the appointment of independent auditors, the Committee
      shall have the sole authority to appoint or replace the independent
      auditor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (ii)  | The Committee shall be directly responsible for the
      compensation and oversight of the work of the independent auditor
      (including resolution of disagreements between management and the
      independent auditor regarding financial reporting) for the purpose of
      preparing or issuing an audit report or related work.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (iii) | The independent auditor shall report directly to the
      Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (iv)  | The Committee shall approve in advance all audit and
      permitted non-audit services with the independent auditor, including the
      terms of the engagements and the fees payable; provided that the Committee
      Chair may approve services to be performed by the independent auditors and
      the fee therefor between Committee meetings if the amount of the fee does
      not exceed $50,000, provided that any such approval shall be reported to
      the Committee at the next meeting thereof. The Committee may delegate to a
      subcommittee the authority to grant pre-approvals of audit and permitted
      non-audit services, provided that the decision of any such subcommittee
      shall be presented to the full Committee at its next scheduled
    meeting.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (v)   | At least annually, the Committee shall review and
      evaluate the experience and qualifications of the lead partner and senior
      members of the independent auditor team.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (vi)  | At least annually, the Committee shall obtain and review
      a report from the independent auditor
regarding:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| | (A) | the independent auditors internal quality-control
      procedures;                                                                                                                                                                                                                                                    
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                         
| | (B) | any material issues raised by the most recent internal
      quality-control review, or peer review, of the auditor, or by any inquiry
      or investigation by governmental or professional authorities within the
      preceding five years respecting one or more independent audits carried out
      by the firm;
| |     |                                                                                                                                                                                                                                                                                                                         
| | (C) | any steps taken to deal with any such issues;
  and                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                         
| | (D) | all relationships between the independent auditor and the
      Company.                                                                                                                                                                                                                                                

|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 59 | 

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| | (vii)  | At least annually, the Committee shall evaluate the
      qualifications, performance and independence of the independent auditor,
      including considering whether the auditors quality controls are adequate
      and the provision of permitted non-audit services is compatible with
      maintaining the auditors independence.
| | ------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                                                                                                            
| | (viii) | The Committee shall ensure the rotation of the lead (or
      coordinating) audit partner having primary responsibility for the audit,
      the concurring partner responsible for reviewing the audit, and other
      audit partners as required by law.                                                                                
| |        |                                                                                                                                                                                                                                                                                                                                            
| | (ix)   | The Committee shall consider whether, in order to assure
      continuing auditor independence, it is appropriate to adopt a policy of
      rotating the independent auditing firm on a regular basis.                                                                                                                                    
| |        |                                                                                                                                                                                                                                                                                                                                            
| | (x)    | The Committee shall recommend to the Board policies for
      the Companys hiring of employees or former employees of the independent
      auditor who were engaged on the Companys account or participated in any
      capacity in the audit of the Company.                                                                          
| |        |                                                                                                                                                                                                                                                                                                                                            
| | (xi)   | The Committee shall oversee the implementation by
      management of appropriate information technology systems for the Company,
      including as required for proper financial reporting and
  compliance.                                                                                                                             

| | (b) | Financial Statement and Disclosure
      Review.
| | --- | ------------------------------------------------

| | (i)   | The Committee shall review and discuss with management
      and the independent auditor the annual audited financial statements,
      including disclosures made in managements discussion and analysis, and
      recommend to the Board whether the audited financial statements should be
      filed with applicable securities regulatory authorities and included in
      the Companys annual reports.                                                                                                                                                                                                                                 
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (ii)  | The Committee shall review and discuss with management
      (and, to the extent the Committee deems it necessary or appropriate, the
      independent auditor) the Companys quarterly financial statements,
      including disclosures made in managements discussion and analysis, and
      recommend to the Board whether such financial statements should be filed
      with applicable securities regulatory authorities.                                                                                                                                                                                                              
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (iii) | The Committee shall review and discuss with management
      and the independent auditor significant financial reporting issues and
      judgments made in connection with the preparation of the Companys
      financial statements, including the independent auditors assessment of
      the quality of the Companys accounting principles, any significant
      changes in the Companys selection or application of accounting
      principles, any major issues as to the adequacy of the Companys internal
      controls over financial reporting, and any special steps adopted in light
      of material control deficiencies.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (iv)  | At least annually and prior to the publication of annual
      audited financial statements, the Committee shall review and discuss with
      management and the independent auditor a report from the independent
      auditor on:                                                                                                                                                                                                                                                                                                                                                                                                             

| | (A) | all critical accounting policies and practices used by
      the Company;                                                                                                                                                                                                                                                                                                 
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                           
| | (B) | all alternative accounting treatments of financial
      information that have been discussed with management since the prior
      report, ramifications of the use of such alternative disclosures and
      treatments, the treatment preferred by the independent auditor, and an explanation
      of why the independent auditors preferred method was not adopted;

|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 60 | 

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| | (C) | other material written communications between the
      independent auditor and management since the prior report, such as any
      management letter or schedule of unadjusted differences, the development,
      selection and disclosure of critical accounting estimates, and analyses of
      the effect of alternative assumptions, estimates or GAAP methods on the
      Companys financial statements.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (v)  | Prior to their filing or issuance, the Committee shall
      review the Companys Annual Information Form/Annual Report to the SEC,
      quarterly and annual earnings press releases, and other financial press
      releases, including the use of pro forma or adjusted non-GAAP
      information.                  
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                               
| | (vi) | The Committee shall review and discuss with management
      the financial information and earnings guidance provided to analysts and
      rating agencies. Such discussion may be specific or it may be in general
      regarding the types of information to be disclosed and the types of
      presentations to be made.

| | (c) | Conduct of the Annual Audit.                                                                                                                                        
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                     
| |     | The Committee shall oversee the annual audit, and in the
      course of such oversight the Committee shall have the following
      responsibilities and authority:

| | (i)   | The Committee shall meet with the independent auditor
      prior to the audit to discuss the planning and conduct of the annual
      audit, and shall meet with the independent auditor as may be necessary or
      appropriate in connection with the audit.                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (ii)  | The Committee shall ascertain that the independent
      auditor is registered and in good standing with the Canadian Public
      Accountability Board and the Public Company Accounting Oversight Board
      (PCAOB) and that the independent auditor satisfies all applicable
      Canadian independence standards (Canadian Auditing Standard 200), PCAOB
      Rule 3526 and SEC Regulation S-X, Section 2- 01. The Committee shall
      obtain from the auditor a written description of all relationships between
      the auditor and the Company and persons in a financial reporting oversight
      role at the Company as per PCAOB Rule 3526, that may reasonably be thought
      to bear on independence.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (iii) | The Committee shall discuss with the independent auditor
      the matters required to be discussed by PCAOB Auditing Standard No. 16 and
      Canadian Auditing Standard 260 relating to the conduct of the
  audit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (iv)  | The Committee shall obtain from the independent auditor
      assurance that the audit was conducted in a manner consistent with Section
      10A of the Securities Exchange Act of 1934 and that, in the course of
      conducting the audit, the independent auditor has not become aware of
      information indicating that an illegal act has or may have occurred or, if
      such an act may have occurred, that the independent auditor has taken all
      action required by Section 10A(b) of the Securities Exchange Act of
      1934.                                                                                                                                                                       
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (v)   | The Committee shall make such inquiries to the management
      and the independent auditor as the Committee members deem necessary or
      appropriate to satisfy themselves regarding the efficacy of the Companys
      financial and internal controls and procedures and the auditing
      process.                                                                                                                                                                                                                                                                                                                                                                                                                   

|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 61 | 

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| | (d) | Compliance and
Oversight.
| | --- | -------------------------

| | (i)    | The Committee shall meet periodically with management and
      the independent auditor in separate executive sessions. The Committee may
      also, to the extent it deems necessary or appropriate, meet with the
      Companys investment bankers and financial analysts who follow the
      Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (ii)   | The Committee shall discuss with management and the
      independent auditor the effect of regulatory and accounting initiatives as
      well as off-balance sheet structures on the Companys financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (iii)  | The Committee shall discuss with management the Companys
      major financial risk exposures and the steps management has taken to
      monitor and control such exposures, including the Companys risk
      assessment and risk management policies, and regularly review the top
      risks identified by management and the policies and practices adopted by
      the Company to mitigate those risks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (iv)   | At least annually and prior to the filing of the
      AIF/Annual Report to the SEC, the Committee shall review with management
      and the independent auditor the disclosure controls and procedures and
      confirm that the Company (with CEO and CFO participation) has evaluated
      the effectiveness of the design and operation of the controls within 90
      days prior to the date of filing of the AIF/Annual Report to the SEC. The
      Committee also shall review with management and the independent auditor
      any deficiencies in the design and operation of internal controls and
      significant deficiencies or material weaknesses therein and any fraud
      involving management or other employees who have a significant role in the
      Companys internal controls. As a part of that review, the Committee shall
      review the process followed in preparing and verifying the accuracy of the
      required CEO and CFO annual certifications.
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (v)    | At least annually and prior to the filing of the
      AIF/Annual Report to the SEC, the Committee shall review with management
      and the independent auditor managements internal control report and
      assessment of the internal controls and procedures, and the independent
      auditors report on and assessment of the internal controls and
      procedures. In connection with its review of interim and annual financial
      statements and related managements discussion and analysis, the Committee
      shall confirm with management that the Company (with CEO and CFO
      participation) has taken all actions required in connection with the
      certifications required by National Instrument NI 52-109, Certification of
      Disclosure in Issuers Annual and Interim Filings.                                                                                                                                                                        
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (vi)   | The Committee shall establish procedures for the receipt,
      retention and treatment of complaints received by the Company regarding
      accounting, internal accounting controls or auditing matters, and the
      confidential, anonymous submission by employees of concerns regarding
      questionable accounting or auditing matters.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (vii)  | The Committee shall discuss with management and the
      independent auditor any correspondence with regulators or governmental
      agencies and any employee complaints or reports which raise material
      issues regarding the Companys financial statements or accounting
      policies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (viii) | At least annually, the Committee shall meet with the
      Companys legal counsel and discuss any legal matters that may have a
      material impact on the financial statements or the Companys compliance
      policies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 62 | 

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| | (ix) | The Committee shall oversee the preparation of reports
      relating to the Audit Committee required under applicable laws,
      regulations and stock exchange requirements.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                
| | (x)  | The Committee shall exercise oversight with respect to
      anti-fraud programs and controls                                                                                  

| | (e) | Related Party
  Transactions.
| | --- | -----------------------------

| | (i)  | The Committee shall review for fairness to the Company
      proposed transactions, contracts and other arrangements between the
      Company and its subsidiaries and any related party or affiliate, and make
      recommendations to the Board whether any such transactions, contracts and
      other arrangements should be approved or continued. The foregoing shall
      not include any compensation payable pursuant to any plan, program,
      contract or arrangement subject to the authority of the Companys
      Compensation Committee.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (ii) | As used herein the term related party means any officer
      or director of the Company or any subsidiary, or any shareholder holding a
      greater than 10% direct or indirect financial or voting interest in the
      Company, and the term affiliate means any person, whether acting alone
      or in concert with others, that controls, is controlled by or is under
      common control with another person. "Related party" includes Hunter
      Dickinson Services Inc., its principals, and their
  affiliates.                         

| | (f) | Additional duties. The Committee shall
      perform the following additional duties:
| | --- | -------------------------------------------------------------------------------------

| | (i)   | The Committee shall review and recommend dividend
      policies.                                                                                                                                                                         
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                           
| | (ii)  | The Committee shall oversee the Companys insurance
      program..                                                                                                                                                                       
| |       |                                                                                                                                                                                                                                           
| | (iii) | The Committee shall review the appointment of senior
      financial personnel and make recommendations to the Board of Directors
      regarding the appointment of the Chief Financial Officer.                                         
| |       |                                                                                                                                                                                                                                           
| | (iv)  | The Committee shall recommend to the Nominating and
      Governance Committee the qualifications and criteria for membership on the
      Committee.                                                                                     
| |       |                                                                                                                                                                                                                                           
| | (v)   | The Committee shall review and discuss with management
      the requirement for annual public disclosure pursuant to the Extractive
      Sector Transparency Measures Act and shall be responsible for approving
      such disclosures.

|2. | Structure and
Membership
|-- | ------------------------

| | (a) | Number and qualification.                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | The Committee shall consist of three persons unless the
      Board should from time to time otherwise determine. All members of the
      Committee shall meet the experience and financial literacy requirements of
      National Instrument NI 52-110 and the rules of the Toronto Stock Exchange
      and the NYSE MKT. At least one member of the Committee shall be a
      financial expert as defined in Item 407 of SEC Regulation S-K.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (b) | Selection and Removal.                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | Members of the Committee shall be appointed by the Board,
      upon the recommendation of the Nominating and Governance Committee. The
      Board may remove members of the Committee at any time with or without
      cause.                                                                                                                                                                                                                    

|                             |             | 
|---------------------------- | ----------- | 
|2016 Annual Information Form | P a g e| 63 | 

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| | (c) | Independence.                                                                                                                                                                                                                 
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                               
| |     | All of the members of the Committee shall be
      independent as required for audit committees by National Instrument NI
      52-110, the rules of the Toronto Stock Exchange and the NYSE MKT, and SEC
      Rule 10A-3. 
| |     |                                                                                                                                                                                                                               
| | (d) | Chair.                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                               
| |     | Unless the Board elects a Chair of the Committee, the
      Committee shall elect a Chair by majority vote.                                                                                                                   
| |     |                                                                                                                                                                                                                               
| | (e) | Compensation.                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                               
| |     | The compensation of the Committee shall be as determined
      by the Board.                                                                                                                                                  
| |     |                                                                                                                                                                                                                               
| | (f) | Term.                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                               
| |     | Members of the Committee shall be appointed for one-year
      terms. Each member shall serve until his or her replacement is appointed,
      or until he or she resigns or is removed from the Board or the
      Committee.

|3. | Procedures and Administration
|-- | -----------------------------
|   |                              
|   | (a)                          
|   |                              
|   |                              
|   |                              
|   | (b)                          
|   |                              
|   |                              
|   |                              
|   | (c)                          
|   |                              
|   |                              
|   |                              
|   | (d)                          
|   |                              
|   |                              
|   |                              
|   | (e)                          
|   |                              
|   |                              
|   |                              
|   | (f)                          
|   |                              
|   |                              

|                             |             | 
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|2016 Annual Information Form | P a g e| 64 | 

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| | (g) | Annual Self-Evaluation.                                                  
| | --- | -------------------------------------------------------------------------
| |     |                                                                          
| |     | The Committee shall evaluate its own performance at least
      annually.

4.        Additional
Powers

The Committee shall have such other duties as may be delegated
from time to time by the Board of Directors.

5.        Limitation of
Committees Role

While the Committee has the responsibilities and powers set
forth in this Charter, it is not the duty of the Committee to plan or conduct
audits or to determine that the Companys financial statements and disclosures
are complete and accurate and are in accordance with GAAP and applicable rules
and regulations. These are the responsibilities of management and the
independent auditor.

6.        Committee
Member Independence, Financial Literacy and Financial Expert Requirements

A.Independence

| | (a) | See Appendix 2 of the Companys Corporate Governance
      Overview and Guidelines.
| | --- | -----------------------------------------------------------------------------------

B.Financial Literacy and Financial Expert Requirements

NI 52-110

Section 3.1(4) states that each audit
committee member must be financially literate. Section 1.6 defines the meaning
of financial literacy as follows:

For the purposes of this Instrument,
an individual is financially literate if he or she has the ability to read and
understand a set of financial statements that present a breadth and level of
complexity of accounting issues that are generally comparable to the breadth and
complexity of the issues that can reasonably be expected to be raised by the
issuers financial statements.

NYSE MKT Section 803(B)(2)(a)(iii)

Each issuer must have an Audit
Committee of at least three members, each of whom:

is able to read and understand
fundamental financial statements, including a companys balance sheet, income
statement, and cash flow statement. Additionally, each issuer must certify that
it has, and will continue to have, at least one member of the audit committee
who is financially sophisticated, in that he or she has past employment
experience in finance or accounting, requisite professional certification in
accounting, or any other comparable experience or background which results in
the individuals financial sophistication, including but not limited to being or
having been a chief executive officer, chief financial officer, other senior
officer with financial oversight responsibilities. A director who qualifies as
an audit committee financial expert under Item 407(d)(5)(ii) of Regulation S-K
. is presumed to qualify as financially sophisticated.

ITEM 407(d)(5)(ii) 0F REGULATION
S-K, DEFINITION OF FINANCIAL EXPERT

For purposes of this Item, an audit
committee financial expert means a person who has the following attributes:

| | (A) | An understanding of generally accepted accounting
      principles and financial statements;                                                        
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                     
| | (B) | The ability to assess the general application of such
      principles in connection with the accounting for estimates, accruals and
      reserves;

|                             |             | 
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|2016 Annual Information Form | P a g e| 65 | 

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| | (C) | Experience preparing, auditing, analyzing or evaluating
      financial statements that present a breadth and level of complexity of
      accounting issues that are generally comparable to the breadth and
      complexity of issues that can reasonably be expected to be raised by the
      registrants financial statements, or experience actively supervising one
      or more persons engaged in such activities;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (D) | An understanding of internal control over financial
      reporting; and                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (E) | An understanding of audit committee
  functions.                                                                                                                                                                                                                                                                                                                                                                              

A person shall have acquired such
attributes through:

| | (A) | Education and experience as a principal financial
      officer, principal accounting officer, controller, public accountant or
      auditor or experience in one or more positions that involve the
      performance of similar functions;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                              
| | (B) | Experience actively supervising a principal financial
      officer, principal accounting officer, controller, public accountant,
      auditor or person performing similar functions;                                                      
| |     |                                                                                                                                                                                                                                              
| | (C) | Experience overseeing or assessing the performance of
      companies or public accountants with respect to the preparation, auditing
      or evaluation of financial statements; or                                                        

|                             |             | 
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|2016 Annual Information Form | P a g e| 66 | 

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