---





















ANNUAL INFORMATION FORM



FOR THE YEAR ENDED DECEMBER31,2012







This annual information form (AIF) is as of March 27, 2013

---

|ITEM 1.      TABLE OF CONTENTS
|------------------------------

|                                                                                    | Page
|----------------------------------------------------------------------------------- | ----
|ITEM
      1.TABLE OF CONTENTS                                                      | 2   
|ITEM 2.PRELIMINARY NOTES                                                            | 3   
|INCORPORATION OF CONTINUOUS DISCLOSURE DOCUMENTS BY
      REFERENCE                 | 3   
|GLOSSARY                                                                            | 4   
|RESOURCE CATEGORY (CLASSIFICATION) DEFINITIONS                                      | 4   
|ITEM 3.CORPORATE STRUCTURE                                                          | 6   
|ITEM
      4.GENERAL DEVELOPMENT OF THE BUSINESS                                    | 6   
|THREE YEAR HISTORY                                                                  | 6   
|SIGNIFICANT ACQUISITIONS, DISPOSITIONS AND GROUP
      REORGANIZATION               | 7   
|ITEM 5.DESCRIPTION OF BUSINESS                                                      | 9   
|THE
      PEBBLE PROJECT                                                            | 9   
|TECHNICAL SUMMARY                                                                   | 12  
|Location, Access And Property Description                                           | 12  
|Topography And Climate                                                              | 13  
|History                                                                             | 13  
|Property Geology                                                                    | 13  
|Exploration                                                                         | 14  
|Mineralization                                                                      | 17  
|Sampling, Analysis, Security And Quality Assurance/Quality
      Control Procedures | 17  
|Mineral Resources                                                                   | 19  
|2011 Preliminary Assessment                                                         | 20  
|2011
      And 2012 Programs By The Pebble Partnership                              | 32  
|Program For 2013                                                                    | 35  
|RISK FACTORS                                                                        | 36  
|ITEM
      6.DIVIDENDS                                                              | 39  
|ITEM 7.DESCRIPTION OF CAPITAL STRUCTURE                                             | 39  
|ITEM
      8.MARKET FOR SECURITIES                                                  | 40  
|ITEM 9.ESCROWED SECURITIES                                                          | 41  
|ITEM 10DIRECTORS AND OFFICERS                                                       | 41  
|ITEM 11.PROMOTERS                                                                   | 51  
|ITEM 12.LEGAL PROCEEDINGS                                                           | 52  
|ITEM 13.INTEREST
      OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS            | 54  
|ITEM 14.TRANSFER AGENT AND REGISTRAR                                                | 54  
|ITEM 15.MATERIAL
      CONTRACTS                                                    | 55  
|ITEM 16.INTERESTS OF EXPERTS                                                        | 55  
|ITEM 17.ADDITIONAL INFORMATION                                                      | 56  
|ITEM 18.DISCLOSURE FOR COMPANIES NOT SENDING INFORMATION CIRCULARS                  | 56  
|ITEM 19.CONTROLS
      AND PROCEDURES                                               | 56  
|ITEM 20.AUDIT COMMITTEE, AUDITOR FEES, EXEMPTIONS, CODE OF ETHICS                   | 58  
|ITEM 21.OFF
      BALANCE SHEET ARRANGEMENTS                                        | 60  
|ITEM 22.TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS                               | 60  

---

| | 
      3  | Annual Information Form
| | ----------- | -----------------------

ITEM 2.     
PRELIMINARY NOTES

Unless otherwise noted, Northern Dynasty Minerals Ltd. is
solely responsible for the content of the disclosure set out herein.

This AIF will be incorporated into a filing with the
      United States Securities Exchange Commission under form 40F. It includes
      certain statements that may be deemed "forward-looking statements" within
      the meaning of Section 27A of the Securities Act of 1933and
      Section 21E of the Securities ExchangeAct of 1934. All
      statements in this AIF, other than statements of historical facts, that
      address future production, reserve potential, exploration drilling,
      exploitation activities and events or developments that the Company
      expects are forward-looking statements. Although the Company believes the
      expectations expressed in such forward-looking statements are based on
      reasonable assumptions, such statements are not guarantees of future
      performance and actual results or developments may differ materially from
      those in the forward-looking statements. Factors that could cause actual
      results to differ materially from those in forward-looking statements
      include market prices, exploitation and exploration successes, continued
      availability of capital and financing and general economic, market or
      business conditions, as well as those factors addressed in the "Risk
      Factors" section of this AIF. Investors are cautioned that any such
      statements are not guarantees of future performance and that actual
      results or developments may differ materially from those projected in the
      forward-looking statements. The Company reviews its forward looking
      statements on an ongoing basis and updates this information when
      circumstances require it.


Incorporation of Continuous Disclosure Documents by
Reference

In this Annual Information Form ("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 February 17, 2011, 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, 2012, as reported by the Bank of Canada for
the conversion of one Canadian dollar into one United States dollar ("U.S.
dollar"), was 1.0051.

The following table sets forth (i) the rate of exchange for the
Canadian dollar, expressed in U.S. dollars, in effect at the end of the periods
indicated, (ii) the average of exchange rates in effect on the last day of each
month during such periods, and (iii) the high and low exchange rates during such
periods, each based on the noon rate of exchange as reported by the Bank of
Canada for conversion of one Canadian dollar into U.S. dollars.

|                      | Year Ended December 31
|--------------------- | ----------------------
|                      | 2012                  
|Rate at end of year   | 1.0051                
|Average rate for year | 1.0004                
|High for year         | 1.0299                
|Low for year          | 0.9599                

---

| | 
      4 | Annual
      Information Form
| | ---------- | -----------------------------

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 lbs)grams/tonne
    0.029
    =
      ounces (troy)/ton


Glossary

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

|Term                                                                   |  | Meaning                                                                                                                                                                                                                                                                                                                                                                                                          
|---------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|CuEQ                                                                   |  | Copper Equivalent                                                                                                                                                                                                                                                                                                                                                                                                
|HDGI                                                                   |  | Is a reference to Hunter Dickinson Group Inc. (now
      renamed 3537137 Canada Inc.) which is the related party corporation which
      originally held the options to the Pebble Project, and which was acquired
      by the Company to become a 100% subsidiary in fiscal 2006.                                                                                                                              
|Induced Polarization ("IP") Survey                                     |  | A geophysical survey used to identify a feature that
      appears to be different from the typical or background survey results when
      tested for levels of electro- conductivity; IP detects both chargeable,
      pyrite-bearing rock and non- conductive rock that has a high content of
      quartz. It is commonly used to explore for mineralization associated with
      porphyry copper deposits.
|Mineral Symbols                                                        |  | Au - Gold; Ag - Silver; Al - Aluminum; Cu - Copper; Fe -
      Iron; Mo - Molybdenum; Na - Sodium; O - Oxygen; Pb - Lead; S - Sulphur; Zn
      - Zinc.                                                                                                                                                                                                                                                          
|National Instrument NI 43-101                                          |  | The Canadian securities rule which establishes disclosure
      standards for mineral projects by Canadian resource companies.                                                                                                                                                                                                                                                                                   
|Porphyry deposit                                                       |  | A type of mineral deposit in which ore minerals are
      widely disseminated, generally of low grade but large tonnage.                                                                                                                                                                                                                                                                                         
|Z-Axis Tipper Electromagnetic Technique
      ("ZTEM") airborne survey |  | A geophysical survey deployed from a helicopter or small
      aircraft that measures vertical electromagnetic fields in the Earth caused
      by conductivity contrasts, and can map structures at greater depth than
      ground based systems. ZTEM will detect conductive zones (zones of
      alteration with mineralization) around more resistive intrusive rocks.                                     

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 ("CIM")
2005. 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 ore "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. Reserves are similarly sub-divided by order of
confidence into probable (lowest) and proven (highest). These classifications
can be more particularly described as follows:

---

| | 
      5 | Annual
      Information Form
| | ---------- | -----------------------------

A "Mineral Resource" is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth's
crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or
interpreted from specific geological evidence and knowledge.

An "Inferred Mineral Resource" is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade
continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

An "Indicated Mineral Resource" is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application
of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit.  The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

A "Measured Mineral Resource" is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the
appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit.  The estimate is based on detailed and reliable exploration, sampling and testing information
gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

A "Mineral Reserve" is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This study must include adequate information on mining, processing, metallurgical,
economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.

A "Probable Mineral Reserve" is the economically mineable part of an Indicated and, in some circumstances, a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This study must include adequate information on
mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.

A "Proven Mineral Reserve" is the economically mineable part of a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This study must include adequate information on mining, processing, metallurgical, economic,
and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified.

---

| | 
      6  | Annual
      Information Form
| | ----------- | -----------------------------

ITEM 3.     
CORPORATE STRUCTURE

Northern Dynasty Minerals Ltd. is a mineral exploration company
incorporated on May 11, 1983 pursuant to the Company Actof the Province
of British Columbia (predecessor law to the British Columbia Corporations Actin 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 the TSX Venture Exchange and herein generally "TSX Venture") from
1984-1987, listed on the Toronto Stock Exchange from 1987-1993, and unlisted but
still in good standing with all securities commissions from 1993 to 1994, and
thereupon listed on TSX Venture from 1994 to October 30, 2007 when it began
trading on the Toronto Stock Exchange ("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, 15thfloor, 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 an Alaskan registered limited partnership, the Pebble Limited
Partnership (the "Pebble Partnership"), in which the Company owns a 50% interest
through an Alaskan general partnership, the Northern Dynasty Partnership. The
business address of the Northern Dynasty Partnership is Suite 604, 3201 C
Street, Anchorage, Alaska, USA, 99503.

In this AIF, a reference to the "Company" or "Northern Dynasty"
includes a reference to its wholly-owned subsidiaries and consolidated
interests, 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

Three Year History

Northern Dynasty is a mineral exploration company focused on
developing the Pebble Project, a copper-gold-molybdenum mineral project. The
Pebble Project is located in southwest Alaska, 19 miles (30 kilometers) from the
village of Iliamna, and approximately 200 miles (320 kilometers) southwest of
the city of Anchorage.

To December 31, 2012, approximately $710 million in exploration
expenditures have been incurred on the Pebble Project. Of this amount,
approximately $524 million (US$504 million) in funding has been provided to the
Pebble Partnership by an affiliate of Anglo American plc ("Anglo American") and
expended from 2007 to 2012. Prior to the formation of the Pebble Partnership in
2007, Northern Dynasty had spent approximately $188 million on exploration
activities and a further $106 million in acquisition costs on the Pebble
Project.

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

---

| | 
      7 | Annual
      Information Form
| | ---------- | -----------------------------

Significant Acquisitions, Dispositions and Group Reorganization

Northern Dynasty holds indirect interests in approximately 637 square miles of mineral claims in southwest Alaska, USA.  These claims are part of or in the vicinity of the Pebble Copper-Gold-Molybdenum Project (the "Pebble Project").

Interest in the Pebble Limited Partnership and Pebble Project

On July 26, 2007, the Company converted a wholly-owned general partnership that held its Pebble Project interests into a limited partnership, the Pebble Partnership.  Anglo American plc through a wholly-owned affiliate ("Anglo American") subscribed
for 50% of the Pebble Partnership's equity effective July 31, 2007.  The Company (through a wholly-owned affiliate) and Anglo American have equal rights in the Pebble Partnership.  To maintain its 50% interest in the Pebble Partnership, Anglo
American is required to commit staged cash investments into the Pebble Partnership aggregating to US$1.5 billion.

The purpose of the Pebble Partnership is to engineer, permit, construct and operate a modern, long-life mine at the Pebble Project.

The Pebble Partnership agreement provides for equal project control rights for both partners, with no operator's fees payable to either party (redacted versions of the Pebble Partnership documents are available for download under the
Company's profile at www.sedar.com). After Anglo American's staged contribution is completed, both partners will be equally responsible to fund the Pebble Partnership operations going forward.

The Pebble property consists of the Pebble deposit and 330 square miles of associated resource lands.

Option and Purchase of Interests in Other Properties in the vicinity of Pebble Property

Pebble Partnership Option to earn interests in Full Metal Minerals Properties

On January 31, 2012, the Pebble Partnership entered into a Limited Liability Company Agreement of Kaskanak Copper LLC (the "FMM Agreement") with Full Metal Minerals (USA) Inc. ("FMMUSA"), a wholly-owned subsidiary of Full Metal Minerals Corp., which
superseded and replaced the letter agreement entered into by the same parties on September 27, 2011.  Under the FMM Agreement, the Pebble Partnership can earn a 60% interest in Kaskanak Copper LLC (the "LLC"), which owns 100% of FMMUSA's South
Pebble Claims (the "FMM Properties"), by incurring exploration expenditures of at least US$3 million and making annual payments of US$50,000 to FMMUSA over a period ending on December 31, 2013.  The Pebble Partnership has been appointed as
the manager of the LLC and will continue as manager until it resigns or is deemed to resign in certain defined circumstances which include a reduction of its ownership interest in the LLC to below 50%. For the duration of the earn-in period and the
term of the Pebble Partnership's membership in the LLC, the Pebble Partnership will have an option to select and purchase claims that form part of the FMM Properties (the "Purchased Claims") at a price of US$25 per acre payable to FMMUSA,
provided that the Purchased Claims are declared or agreed to be outside of the current scope of the operations of the LLC, constitute no more than 20,000 acres, constitute a continuous block of claims and are located outside an "Exclusion Area"
specified in the FMM Agreement.

The FMM Properties total 542 claims covering approximately 135 square miles located west of the ground held 100% by the Pebble Partnership; 99 of these claims, covering an area of 24.3 square miles, form the "Exclusion Area".

---

| | 
      8 | Annual
      Information Form
| | ---------- | -----------------------------

Northern Dynasty Purchase and Option Agreement on Liberty Star Properties

On June 29, 2010, Northern Dynasty entered into an agreement with Liberty Star Uranium and Metals Corp. and its subsidiary, Big Chunk Corp. (together, "Liberty Star"), pursuant to which Liberty Star sold 23.8 square miles of claims (the "Purchased
Claims") to a US subsidiary of Northern Dynasty in consideration for both a US$1 million cash payment and a secured convertible loan from Northern Dynasty in the amount of US$3 million which accrues interest at 10% per annum compounded
monthly and which is repayable 45 days after it is called (the "Loan").  The parties agreed, through various amendments to the original agreement, to increase the principal amount of the Loan by US$730,174 (the "Additional Loan Amount"), being
the amounts expended by Northern Dynasty on annual assessment work, rental and related fees relating to the maintenance of Liberty Star's claims in Alaska. Northern Dynasty called for the repayment of the Loan in October 2012 and, after
failure by Liberty Star to make any repayment, Northern Dynasty agreed to accept transfer of 199 claims (the "Settlement Claims") covering 47.9 square miles located north of the ground held 100% by the Pebble Partnership in settlement of
the Loan. Prior to transfer of the Settlement Claims to Northern Dynasty, a third party purported to register a lien on the Settlement Claims in respect of a debt allegedly owed by Liberty Star, which Liberty Star disputes. Liberty Star has filed a
claim against the third party, who has in turn filed a counterclaim against Liberty Star and has sought to join Northern Dynasty as a party to the lawsuit. Northern Dynasty intends to tender its defense of such counterclaim to Liberty Star, which is
obligated to indemnify Northern Dynasty from any losses arising from the failure of Liberty Star to transfer clear title to the Settlement Claims.

The total area of the properties is approximately 71.7 square miles, and includes 95 Purchased Claims and 199 Settlement Claims.  All of these claims are located in the vicinity of Pebble Project.  Northern Dynasty carried out initial exploration
surveys in 2010.

---

| | 
      9 | Annual
      Information Form
| | ---------- | -----------------------------

ITEM 5.     
DESCRIPTION OF BUSINESS

The Pebble Project

The Pebble Project is Subject to Alaska
Laws

The Pebble Partnership is 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 38.05.185among 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 labour,
annual rental, 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.

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).

Historical Acquisition Agreements (2001-2006)

Pursuant to an Assignment Agreement dated October 29, 2001
between the Company and Hunter Dickinson Group Inc. ("HDGI"), a related party to
the Company, the Company was assigned an 80% interest in two options, which had
been granted by Cominco American Incorporated ("Teck Cominco", now part of "Teck
Resources Ltd") under a single agreement to HDGI in respect of Teck Comincos
"Pebble" copper/gold/molybdenum mining claims in southwestern Alaska. One option
granted the right to purchase 100% of the lands containing the then known
mineralized resource at Pebble (the Resource Lands Option) and the second
option granted the right to purchase a 50% interest in the lands surrounding the
Resource Lands (the "Exploration Lands Option") (together, the "Options"). HDGI
was a related party by virtue of (i) having certain directors in common with the
Company, and (ii) its shareholders or their associates being at the time
significant shareholders of the Company. The Assignment Agreement was ratified
by shareholders of the Company on June 28, 2002.

The Company was assigned the 80% interest together with the
right to acquire HDGIs remaining 20% contractual interests in these option
agreements in consideration of the Company reimbursing HDGIs costs of $584,655
in connection with the options, which included the staking of 134 claims to
expand the property and 30 kilometers of induced polarization surveying over the
new claims, and agreeing to pay for HDGIs 20% share of costs in respect to the
Pebble property. The Resource Lands Option was extended by one year in an
agreement dated December 19, 2002 under which the Company issued to Teck Cominco
200,000 shares for the extension. Pursuant to the Resource Lands Option the
Company had the right to purchase the 36 claims of the Resource Lands, subject
to HDGIs 20% carried interests, by paying Teck Cominco US$10 million in cash or
shares prior to November 30, 2004, which it did on November 23, 2004 by the
issuance of 1,772,775 shares to Teck Cominco (total value of $11,788,621). Teck
Cominco had the right for 180 days to elect whether to require the Company to
manage the resale of these shares ("NDM Resource Lands shares") in a manner
where Teck Cominco would be guaranteed the
US$10 million in resale proceeds net of any excess or deficiency adjustments. The actual adjusted amount was US$9,938,600.

---

| | 
      10  | Annual
      Information Form
| | ------------ | -----------------------------

Other interim option payments to Teck Cominco were made during 2001 to 2004, including US$250,000 in cash plus 500,000 two-year share purchase warrants (exercisable at $0.75) prior to December 31, 2001 and 500,000 shares and 500,000 two-year
share purchase warrants (exercisable at $1.15) prior to March 31, 2002 and a further 500,000 shares and 250,000 warrants before December 31, 2002. Pursuant to an agreement to extend the deadline to purchase the Resource Lands from November 30,
2003 to November 30, 2004, an additional 200,000 shares were issued to Teck Cominco on December 19, 2002. On May 9, 2005, Teck Cominco elected for the Company to guarantee the adjusted amount of US$9,938,600 in resale proceeds of the 1,772,775
shares.  Under the agreement, the Company was to ensure proceeds totalling US$9,938,600 by May 22, 2006. The Company completed its commitment by managing the sale of 473,700 NDM Resource Lands shares for proceeds of US$2,039,902 in 2005 and
managing the sale of 1,277,028 NDM Resource Lands shares for the balance in 2006.  The remaining 22,047 unsold NDM Resource Lands shares relating to this acquisition were returned to the Company's treasury.

At the time of the Company exercising the Resource Lands Option, the Company also exercised the Exploration Lands Option to earn a 50% interest in the adjacent Exploration Lands, subject to HDGI's carried interest, by having completed 60,000
feet of drilling on the Exploration Lands prior to November 30, 2004. As a consequence of the Company exercising the Exploration Lands Option, Teck Cominco could elect to either form a 50/50 joint venture with the Company with respect to the
Exploration Lands, or to sell its 50% interest in the Exploration Lands to the Company for US$4 million and retain a net profits interest. On February 21, 2005, Teck Cominco elected to sell its remaining 50% interest in the Exploration Lands to
the Company for the stipulated US$4 million payment, a 4% pre-payback net profits interest (after debt service), followed by a 5% after-payback net profits interest in any mine production from the Exploration Lands. The Company issued 977,795
shares of the Company at the then-prevailing market price as consideration for the required US$4 million payment but subject to Teck Cominco's right until August 24, 2005, to elect to have the proceeds guaranteed.

Teck Cominco elected on July 18, 2005 to require the Company to manage the resale of these shares ("NDM Exploration Lands shares") for the guaranteed US$4 million in resale proceeds by August 24, 2006. The Company completed its commitment to
Teck Cominco in 2006 through the sale of 654,502 shares for proceeds of approximately US$4 million.  The remaining 323,293 unsold NDM Exploration Lands shares were returned to the Company's treasury.

In total, 345,340 unsold common shares of the Company at a value of $1,772,776 were returned to the treasury of the Company.  As a consequence of the Company electing to exercise the Options, the Company was entitled under the Assignment
Agreement with HDGI to elect to acquire HDGI's 20% carried contractual interests in the Options for cash or share consideration equal to the independently appraised value of the carried interests.

On May 31, 2006, the Company acquired 100% of the outstanding common shares of HDGI for purchase price of 14,002,268 common shares of the Company.  The agreed number of shares was based on negotiations between the Company, represented by a Special
Committee of the Board of Directors, and HDGI with reference to an independent valuation of the carried interests performed by Ross Glanville & Associates Ltd in March 2005. Both parties agreed to a valuation of $6.37 per share, based upon
the issuance of 14,002,268 common shares, as representing the fair value of the 20% carried contractual interest.  The valuation report was publicly filed under the Company's profile on SEDAR at www.sedar.com. The TSX Venture Exchange and the NYSE Amex accepted the acquisition transaction. Upon completion of the acquisition of HDGI, the Company, through two 100% owned Alaska subsidiaries, owned 100% of the Pebble
Project (subject only to the Teck Cominco net profits interest in
the Exploration Lands portion of the property). From September 30, 2006 the Pebble Project interests were held by a general partnership consisting of HDGI and the Company which partnership held the claims through two Alaskan subsidiary companies.

---

| | 
      11 | Annual
      Information Form
| | ----------- | -----------------------------

2006 Equity Purchase by Rio Tinto Affiliate

In 2006, the Company issued 8,745,845 common shares in connection with a share purchase agreement with Kennecott Canada Exploration Inc. ("Kennecott", a subsidiary of Rio Tinto plc) for $10.00 per share for proceeds of approximately $87
million. In January 2007, Northern Dynasty was advised by Galahad Gold plc ("Galahad"), a significant shareholder of the Company that QIT-Fer Et Titane Inc., an affiliate of Rio Tinto, agreed to purchase 9.4 million shares of Northern Dynasty from
Galahad at a price of $10 per share. The share purchase, which closed February 1, 2007, increased Rio Tinto's indirect ownership in Northern Dynasty to approximately 19.8% .  Currently, the holding represents approximately 19.1% of
Northern Dynasty's outstanding shares.

Limited Partnership with Anglo American

On July 26, 2007, the Company converted the wholly-owned general partnership that held its Pebble Property interests into a limited partnership, the Pebble Partnership. Anglo American, through its wholly-owned affiliate, subscribed for 50% of the
Pebble Partnership's equity effective July 31, 2007.  The Company (through a wholly-owned affiliate) and Anglo American have equal rights in the Pebble Partnership.  To maintain its 50% interest in the Pebble Partnership, Anglo American is required
to commit staged cash investments into the Pebble Partnership, aggregating to US$1.5 billion, as described below.

Anglo American's staged investment requirements include an initial minimum expenditure of US$125 million (completed in 2008) towards a prefeasibility report.  The prefeasibility report is to be approved by the Board of the general partner
(Pebble Mines Corp.), and is to summarize all previous prefeasibility studies.  The Board of the general partner is also to approve the alternatives for a final Feasibility Study.  Anglo American is required, in order to retain its 50% interest in
the Pebble Partnership, to commit within 90 days of the later of the receipt of the approved prefeasibility report and the approved study alternatives, to fund further expenditures which would bring its total investment to at least US$450
million, which amount is to be expended towards producing a final feasibility study and in related activities, the completion of which is expected to take the Pebble Partnership to a production decision. Upon an affirmative decision by the Pebble
Partnership to develop a mine, Anglo American is required to commit to the remaining portion of the total investment of US$1.5 billion in order to retain its interest in the Pebble Partnership. Following completion of the US$1.5 billion
expenditure, any further expenditure will be funded by Anglo American and the Company on a 50:50 basis (subject to dilution for non-contribution). The Pebble Partnership agreement provides for equal project control rights with no operator's
fees payable to either party.

Anglo American's cash contributions to the Pebble Partnership from August 1, 2007 to December 31, 2012 amounted to $524 million (US$504 million).

Under the Pebble Partnership Agreement and applicable tax regulations, neither the Company nor its affiliated general partnership will be entitled to the benefits for tax purposes of the expenditures incurred by the Pebble Partnership from
Anglo's investment, as these benefits accrue exclusively to Anglo American under the Pebble Partnership Agreement and applicable tax regulations.

---

| | 
      12 | Annual
      Information Form
| | ----------- | -----------------------------

Technical Summary

The following disclosure (pages 14 to 32) is summarized from
the Preliminary Assessment Technical Report, Pebble Project, Southwest Alaska,
dated February 17, 2011 by Hassan Ghaffari, P.Eng, Robert Morrison, P.Geo, Andre
de Ruijter, P.Eng, Tysen Hantelmann, P.Eng, Aleksandar Zivkovic, P.Eng, Scott
Cowie, MAusIMM; and Doug Ramsey, P.R. Bio., of Wardrop Engineering Inc., a
TetraTech Company ("Wardrop"). The Technical Report is available on the
Companys website and on its profile at www.sedar.com. Disclosure which
describes project activities since the end of 2010 (pages 32 to 34) is derived
from Company files.

Location, Access and Property Description

The Pebble Project is located in southwest Alaska. It is
situated approximately 200 mi (320 km) southwest of Anchorage and 19 mi (30 km)
northwest of the village of Iliamna.

Location ofthe Pebble Project



Year round access to the Pebble Project is currently achieved
via air travel from Anchorage to the village of Iliamna which has two 5,500 ft
(1,700 m) paved runways. Travel to Iliamna is by scheduled air flights or
charter flights. The airstrip is suitable for significant freight class aircraft
such as Hercules and DC-6 aircraft, as well as small commercial jet aircraft.
Current access from Iliamna to the property is by helicopter.

The Pebble Project is located 65 mi (105 km) from tidewater.
Access to the coast from Lake Iliamna is provided by a 19 mi (30 km),
state-maintained road, which extends from Pile Bay at the eastern end of Lake
Iliamna to Williamsport near Iniskin Bay on Cook Inlet. Bulk fuel and heavy
freight can also be barged in during the summer months to Lake Iliamna via the
Kvichak River.

Northern Dynasty holds a 50% indirect interest in 2,043 mineral
claims (210,840 acres) that comprise the Pebble property. The Pebble Partnership
applies for work permits annually for its programs.

---

| | 
      13 | Annual
      Information Form
| | ----------- | -----------------------------

Topography and Climate

The climate of the Iliamna area is similar to Anchorage where
the mean daily maximum temperature in July is 63 degrees F (17 degrees C) and
the mean daily minimum temperature in January is 9 degrees F (minus13 degrees
C). Average annual precipitation is 27 inches (689 mm) most of which is rainfall
occurring from June to August. The climate, although periodically harsh, is
sufficiently moderate to allow a well-planned mineral exploration program to be
conducted year-round.

The Pebble Project lies within an area described as subarctic
tundra. It is characterized by rolling hills and absence of permafrost. Valley
bottoms are at elevations of 820 ft (250 m) above sea level. The elevation
ranges from 820 ft (250 m) to 2,760 ft (841 m) at Kaskanak Peak. Tundra plant
communities (mixtures of shrubs and herbaceous plants) cover the project area.
Willow is common only along streams and sparse patches of dense alder are
confined to better drained areas where coarse soils have developed. Poorly
drained areas support dwarf birch and grasses

History

In the mid 1980s, Cominco Alaska began reconnaissance
exploration in the Pebble region. In 1987, examination and sampling of several
prominent limonitic and hematitic alteration zones yielded anomalous gold
concentrations from the Sill prospect (recognized as a precious metal,
epithermal occurrence) and the Pebble discovery outcrop (of uncertain affinity).
The 1988 exploration program included 24 diamond drill holes at the Sill
prospect and soils sampling geological mapping and two diamond drill holes at
the Pebble target. The initial Pebble drill holes yielded only modest
encouragement. In 1989, an expanded soil sampling program, an induced
polarization survey (IP) and nine diamond drill holes were completed at the
Pebble target, 15 drill holes at Sill and 3 holes elsewhere on the property.
Although limited in scope, the IP survey at Pebble displayed response
characteristics of a large porphyry copper system. Subsequent drilling by
Cominco Ltd (Teck) intercepted significant internals of porphyry style gold,
copper and molybdenum mineralization.

When it came apparent that a significant copper-gold-molybdenum
deposit had been discovered, exploration was accelerated. In 1990 and 1991, 25
and 48 diamond drill holes, respectively were completed. In 1991, baseline
environmental and engineering studies were initiated and weather stations were
established. A preliminary economic evaluation was undertaken in 1991 and
updated in 1992 on the basis of 14 new diamond drill holes. In 1993, an IP
survey and a 4-hole diamond drill program were carried out at a target 6 km to
the south of the Pebble deposit. In 1997, Cominco performed an IP survey,
geochemical sampling, geological mapping and 20 holes of diamond drilling into
and near the Pebble Deposit.

Cominco conducted several resources estimates during the
1990s, employing block models with kriging or inverse distance weighting. The
cutoff grade used was 0.3% CuEQ based on metal process of US$1.00/lb for copper
and US$375/oz for gold. The most recent of these was in 2000; the resources
totaled 1 billion tons grading 0.30% copper and 0.01 oz/ton gold. The Company is
not treating this historical estimate as current mineral resources.

Property Geology

The Pebble property encompasses the eastern and southern
margins of the approximately 200 square km in size, Late Cretaceous (89.7 Ma) in
age, tonalite-granodiorite Kaskanak Batholith (medium to coarse grained igneous
rocks of intermediate composition, covering a large area), and the adjacent
Jurassic-Cretaceous sedimentary and interbedded volcanic rocks that the
batholith had intruded. On the east side of the batholith, a northeast-trending
structural corridor is marked by a linear cluster of multi-phased,
compositionally and texturally variable, irregular stocks, sills, dikes and
breccia bodies (igneous bodies
that are relatively small and circular, flat-lying, linear and structurally shattered, respectively) that are associated with and were formed slightly earlier than the batholith.  Numerous copper-gold mineral occurrences, including the large Pebble
copper-gold-molybdenum deposit and the Thirty-Eight porphyry copper-gold-molybdenum deposit, are related to this diverse group of intrusions (coarse grained igneous rocks).

---

| | 
      14 | Annual
      Information Form
| | ----------- | -----------------------------

The Pebble West zone is a calc-alkalic porphyry (hosted by igneous rocks with quartz and potassium feldspar), encompassing four small granodiorite-quartz monzodiorite (coarse grained igneous rocks of intermediate composition) stocks and related
sill-like intrusions.  These stocks intrude folded and previously hornfelsed (metamorphosed) volcaniclastic (eroded and re-deposited volcanic rocks) sedimentary rocks that host earlier diorite sill-like intrusions, and later intrusion breccias
(composed of angular fragments of intrusive rocks in crystalline matrix).

The Pebble East zone, discovered in 2005, occurs in a large mineralized intrusion and adjacent volcaniclastic sedimentary rocks under a cover of younger and unmineralized rocks.

Exploration

Between 2001 and 2006, the entire Pebble property was mapped for rock type, structure and alteration at a scale of 1:10,000. This work provided an important geological framework for interpretation of other exploration data and drilling programs.  A
geological map of the Pebble deposit was also constructed based on drill hole information as there is a general lack of outcrop. The content and interpretation of district and deposit scale maps have not changed materially since 2009.

Induced Polarization ("IP") surveys totaling 122 line-km were completed in 1987 and 1997, and an additional 15 line-km were completed in 2001 for Northern Dynasty by Zonge Geosciences ("Zonge"). This work defined a chargeability anomaly about 91
square km in extent within Cretaceous rocks which surround the Kaskanak batholith on its eastern to southern margins. The broader anomaly was found to contain 11 distinct centres, reflected by stronger chargeability anomalies, many of which were
later demonstrated to be coincident with extensive copper, gold and molybdenum soil geochemical anomalies. All known zones of mineralization of Cretaceous age in the Pebble district occur within the broad IP anomaly. Since the second half of 2009, a
total of 194 line-km of IP chargeability and resistivity data has been collected by Zonge for the Pebble Partnership on the southern part of the property at a line spacing of about 900 m, with the objective to the extend the area of IP coverage
completed prior to 2001.

An 18.7 line-km ground magnetometer survey was completed in 2002 by MPX Geophysics Ltd, to obtain a higher resolution of magnetic patterns than what was available from regional government magnetic maps.  The work was focused on the 37 Skarn zone in
the southern part of the Pebble property.  A helicopter borne magnetic survey, consisting of 2,344 line-km at 200 km line spacing and 2,000 km spaced tie-lines, was flown over the entire property in 2007. An area of 37.4 square km was flow at 100 m
spacing.  A further 6,452 line-km airborne EM and magnetometer (ZTEM) survey was flow by Geotech Ltd in 2010. A limited magnetotelluric survey was also completed in 2007 by GSY-USA Inc under the supervision of Northern Dynasty. Interpretation was
done by Donald Hinks of RTZ. In July 2009, Spectrum Air, an Anglo American affiliated company completed a 3,840 line-km airborne electromagnetic, magnetic and radiometric survey over the Pebble area at regional (1.5 km line spacing) and more
detailed (250 m line spacing) scales to provide geophysical constraints for structural and geological interpretation in areas of significant glacial cover.

---

| | 
      15 | Annual
      Information Form
| | ----------- | -----------------------------

Cominco collected a total of 7,337 soil samples between 1988 and 1995 at Pebble in several surveys. During the period of 2001-2003, Northern Dynasty collected an additional 1,026 soil samples at 30-76 m intervals along lines spaced at 122-129 m.
These programs outlined high contrast coincident anomalies in gold, copper, molybdenum and other metals in an area that measures 9 km north-south by up to 4 km east-west, with strong but smaller anomalies in several outlying areas. All anomalies lie within the large IP chargeability anomaly.

Extensive drilling has taken place over more than 15 years. A total of 948,638 ft (289,145 m) has been drilled in 1,158 holes on the property from 1988 to 2010. Of this, 53,636 ft (16,348 m) were drilled in 48 holes on exploration targets and a
further 3,375 ft (1,029 m) were drilled in 18 cored geotechnical holes for engineering and hydrological purposes in 2010. Programs in 2011 are described under 2011 and 2012Programs by the Pebble Partnership.

Most has been done by diamond core drills. All collars have been survey by differential GPS or total station measurements. Most post-Cominco drill hole footage has been surveyed down hole. A total of 940 holes were drilled vertically and 218 are
inclined from minus 42 to minus 85 degrees at various azimuths.

---

| | 
      16 | Annual
      Information Form
| | ----------- | -----------------------------

Drilling from 1988 to 2010 is summarized in the table below:



---

| | 
      17 | Annual
      Information Form
| | ----------- | -----------------------------

Drill hole locations from 1988 to 2010 are shown in the figure
below:



Mineralization

Mineralization within the Pebble deposit is dominated by
hypogene (primary) pyrite, chalcopyrite and molybdenite. Bornite is also an
important component in some parts of the Pebble East zone. The Pebble West zone
has a thin, volumetrically subordinate zone of supergene (enriched)
mineralization and a very minor zone of oxide (alteration of primary minerals by
reaction with water and air at surface) mineralization. The Pebble East zone
contains only hypogene mineralization.

Copper-gold-molybdenum mineralization, as currently known,
extends over an east-west elongated area of 2.8 by 1.9 miles (4.9 by 3.3 km) and
to a depth of 2,000 feet (610 m) in the Pebble West zone, and to at least 5,000
feet (1,525 m) in the Pebble East zone. Mineralization in the Pebble East zone
remains open to the east, north and south. A much larger zone of strong
alteration and low-grade mineralization extends north, south and west of the
known Pebble deposit.

Sampling, Analysis, Security and Quality
Assurance/Quality Control Procedures

Of the core drilled since 2002, 52% is 2.5 inch HQ, 38% is
1.875 inch NQ and 10% is 3.35 inch PQ diameter. Core recovery is generally very
good. As measured in 2004 on a drill run basis, it averages 98% for Cretaceous
rocks used in the mineral resource estimated. Almost 70% of Cretaceous rock
intervals have recoveries of 100%.

---

| | 
      18 | Annual
      Information Form
| | ----------- | -----------------------------

Core logging and processing are carried out in a secure
compound at the Pebble site office by or under the supervision of site
geologists and or engineers. Core processing includes recording of geological
parameters; geotechnical data; density measurements approximately every 100 ft
(30 m) and photography of each box of core.

All Cretaceous core intervals since 2002 and all Tertiary waste
rock intervals drill and recovered since 2004 have been sampled and assayed.
Sample of Cretaceous core have been sampled by sawing the core lengthwise and
typically average 10 ft (3 m) in length. Tertiary waste rock samples and some
Cretaceous samples from metallurgical drill holes have been taken by a 20% off
centre saw method. Tertiary samples generally range up to 20 ft (6.1 m) in
length. All samples are sent to independent third party laboratory ALS Group
(formerly Chemex) for preparation and analysis, except in 1997 and 2003 when
they were sent Cominco Exploration Research and SGS Minerals laboratories
respectively. The core remaining after sampling is archived in a secure compound
located near the core logging facility.

As the Pebble Project has progressed, chemical analysis
methods, quality assurance and quality control and sample security procedures
have also progressed to meet standards of the day. Drill core is boxed and
transported daily to the secure compound at the Iliamna airport. It is shipped
by air charter to Anchorage and then by commercial air freight to Fairbanks
where it is delivered and prepared. After preparation, it is shipped by air
freight to the analytical laboratory.

Since 2004 the protocol for preparation has been to dry, weigh
and crush the entire sample to 70% <10 mesh (2mm), split either a 1,000 g
(Cretaceous) or 250 g (Tertiary) sub-sample and pulverize to 95% <200 mesh
(75 microns). Similar sample preparations were employed prior to 2004. Since
2002, copper, molybdenum, silver and several additional elements have been
determined by multi-element Induced Coupled Plasma Atomic Emission
Spectroscopy/Mass Spectrometry (ICP-AES/MS) after acid digestion. Prior to 2002,
Cominco used a combination of single element Aqua Regia digestions Atomic
Absorption Spectrometry (AAS) determinations and multi-element ICP-AES. In all
cases, fire assay, with AAS or gravimetric finish, has been used for the
determination of gold.

Northern Dynasty maintained an effective quality control and
quality assurance (QA/QC) system consistent with industry best practice and this
has been continued under the Pebble Partnership during 2007-2011. This is in
addition to the QA/QC procedures used internally by the analytical laboratories.
The QA/QC program has been subject to independent review by Analytical
Laboratory Consultants (2004-2007) and Nicholson Analytical Consultants
(2008-2011). The analytical consultants provide ongoing monitoring, including
facility inspection, and timely reporting of the performance of standards,
blanks and duplicates in the drill hole sampling and analytical program. The
results of this program indicate that analytical results are of a high quality
suitable for use in detailed modeling and resource evaluation studies.

Standards are inserted into the Cretaceous sample stream at
approximately 1 for every 20 samples after sample preparation and as anonymous
consecutively number pulps. For Tertiary waste samples coarse blanks were
inserted in the field until 2008; now commercial pulp blanks are used. Random
duplicates samples are selected and tagged in the field. Some 4,541 duplicate
samples were taken since 1989 for inter-laboratory duplicate analysis. From 2004
onward, samples to be duplicated were split by ALS Laboratory in Fairbanks
Alaska and sent to Acme Laboratories in Vancouver BC for pulverization and
analysis; duplicates from 2004-2010 match well. A total of 1,091 blanks have
been inserted since 20041 to test for contamination. The majority of
results are below the detection limit. Copper, gold and molybdenum assays are monitored by internal lab and filed
inserted standards. Other elements are monitored by parallel analysis by ICP-MS
methods.

_______________________________________1 To the
end of 2010; 2011-2012 information on page 33.

---

| | 
      19 | Annual
      Information Form
| | ----------- | -----------------------------

Mineral Resources

The current mineral resource estimate for the Pebble deposit is
based on seven years of geological and geostatistical analysis to September
2009. The mineral resources are based on a February 2010 estimate prepared for
the Pebble Partnership by David Gaunt, P.Geo., Hunter Dickinson Inc., and
audited by Robert Morrison, P.Geo., of Wardrop who is independent of Northern
Dynasty and responsible for the estimate in the Preliminary Assessment. Results
are tabulated below:

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 U.S.
      Securities and Exchange Commission does not recognize them. Investors
      are cautioned not to assume that all or any part of mineraldeposits in these categories will ever be converted into reserves.


Cut-off(% CuEQ)
      CuEQ(%)
      Mt
      Cu(%)
      Au(g/t)
      Mo(ppm)
      Cu(Blb)
      Au(Moz)
      Mo(Blb)
      CuEq(Blb)Measured0.30
      0.65
      527
      0.33
      0.35
      178
      3.8
      5.9
      0.21
      7.60.40
      0.66
      508
      0.34
      0.36
      180
      3.8
      5.9
      0.20
      7.40.60
      0.77
      277
      0.40
      0.42
      203
      2.4
      3.7
      0.12
      4.71.00
      1.16
      27
      0.62
      0.62
      301
      0.4
      0.5
      0.02
      0.7Indicated0.30
      0.80
      5,414
      0.43
      0.35
      257
      51.3
      60.9
      3.07
      95.50.40
      0.85
      4,891
      0.46
      0.36
      268
      49.6
      56.6
      2.89
      91.70.60
      1.00
      3,391
      0.56
      0.41
      301
      41.9
      44.7
      2.25
      74.81.00
      1.30
      1,422
      0.77
      0.51
      342
      24.1
      23.3
      1.07
      40.7Measured + Indicated0.30
      0.78
      5,942
      0.42
      0.35
      250
      55.0
      66.9
      3.28
      102.20.40
      0.83
      5,399
      0.45
      0.36
      260
      53.6
      62.5
      3.09
      98.80.60
      0.98
      3,668
      0.55
      0.41
      293
      44.5
      48.3
      2.37
      79.21.00
      1.29
      1,449
      0.76
      0.52
      341
      24.3
      24.2
      1.09
      41.2


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 U.S. Securities and
      Exchange Commission 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 toassume that all or any
      part of an inferred resource exists, or is economically or legally
      mineable.


---

| | 
      20  | Annual
      Information Form
| | ------------ | -----------------------------

Cut-off (% CuEQ)
      CuEQ (%)
      Mt
      Cu (%)
      Au (g/t)
      Mo (ppm)
      Cu (Blb)
      Au (Moz)
      Mo (Blb)
      CuEq (Blb)Inferred0.30
      0.53
      4,835
      0.24
      0.26
      215
      25.6
      40.4
      2.29
      56.50.40
      0.66
      2,845
      0.32
      0.30
      259
      20.1
      27.4
      1.62
      41.40.60
      0.89
      1,322
      0.48
      0.37
      289
      14.0
      15.7
      0.84
      25.91.00
      1.20
      353
      0.69
      0.45
      379
      5.4
      5.1
      0.29
      9.3


The tabulated mineral resources are subject to the notes below:

|Note 1 | Copper equivalent calculations used metal prices of
      US$1.85/lb for copper, US$902/oz for gold and US$12.50/lb for molybdenum,
      and metallurgical recoveries of 85% for copper, 69.6% for gold, and 77.8%
      for molybdenum in the Pebble West area and 89.3% for copper, 76.8% for
      gold, 83.7% for molybdenum in the Pebble East area. Recovery values
      reflect average results of metallurgical testwork completed to date and
      are subject to revision pending ongoing metallurgical studies. Revenue is
      calculated for each metal based on grades, recoveries and selected metal
      prices: accumulated revenues are then divided by the revenue at 1% copper.
      Recoveries for gold and molybdenum are normalized to the copper recovery
      as show below:
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       | CuEQ (Pebble West) = Cu % + (Au g/t x 69.6%/85% x
      29.00/40.79) + (Mo % x 77.8%/85% x 275.58/40.79)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | CuEQ (Pebble East) = Cu% + (Au g/t x 76.8%/89.3% x
      29.00/40.79) + (Mo % x 83.7%/89.3% x 275.58/40.79)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Note 2 | Mineral Resources that are not Mineral Reserves do not
      have demonstrated economic viability. The mineral resources fall within a
      volume or shell defined by long-term metal price estimates of US$2.50/lb
      for copper, US$900/oz for gold and US$25/lb for molybdenum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Note 3 | For bulk underground mining, cut-offs such as 0.60% CuEQ,
      are typically used for porphyry deposit bulk underground mining operations
      at copper porphyry deposits located around the world. A 0.30% CuEQ cut-off
      is considered to be comparable to that used for porphyry deposit open pit
      mining operations in the Americas.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Note 4 | All mineral resource estimates, cut-offs and
      metallurgical recoveries are subject to a feasibility study.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

2011 Preliminary Assessment

The results of an independent Preliminary Assessment of the
Pebble Project, completed by Wardrop, were announced by Northern Dynasty in
February 2011. The 2011 Preliminary Assessment updates and substantially revises
the project economic analysis last done by Northern Dynasty in 2004.

The Preliminary Assessment is based on Wardrops comprehensive
review of recent engineering and technical studies undertaken principally by the
Pebble Partnership and by Northern Dynasty. The economic assessments and other
opinions expressed in the Preliminary Assessment are strictly those of Northern
Dynasty and Wardrop, and do not reflect the views of any other stakeholder in
the project. The Pebble Partnership continues to separately undertake detailed
engineering studies toward the completion of a prefeasibility report for the
Pebble Project, including ongoing programs to engage project stakeholders in the
planning process. As such, any project which is ultimately put forward by the
Pebble Partnership for permitting under the National Environmental Policy Act
(NEPA) may differ from those mine models presented in the Preliminary
Assessment.

The Preliminary Assessment describes and assigns potential
economic value to three mine development cases and a nominal processing rate of
200,000 tons per day. These are:

|1. | An Investment Decision Case (IDC Case), which describes
      an initial 25-year open pit mine life upon which a decision to initiate
      mine permitting, construction and operations may be based;
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                         
|2. | A Reference Case, which is based on 45 years of open pit
      mine production; and                                                                                                                     
|   |                                                                                                                                                                                                         
|3. | A Resource Case, which is based on 78 years of open pit
      mine production and seeks to assess the longer-term value of the project
      in current dollars.                                        

---

| | 
      21 | Annual
      Information Form
| | ----------- | -----------------------------

For the purposes of its Preliminary Assessment, Wardrop has
selected the 45-year Reference Case as its base case. All currency values are in
US dollars. Production rates are stated in imperial tons.

Key Findings

- For the Pebble Project, the 45-year Reference Caseyields a 14.2%
  pre-tax Internal Rate of Return (IRR), a 6.2-year payback on initial capital
  investment of $4.7 billion and a $6.1 billion pre-tax Net Present Value (NPV)
  at a 7% discount rate and long-term metal prices defined in the Preliminary
  Assessment as $2.50 per pound of copper, $1,050 per ounce of gold, $13.50 per
  pound of molybdenum and $15.00 per ounce of silver. At the prevailing metal
  prices in early 2011, defined in the Preliminary Assessment as $4.00 per pound
  of copper, $1,350 per ounce of gold, $15.00 per pound of molybdenum and $28.00
  per ounce of silver, the 45-year Reference Caseyields a 23.2% pre-tax
  IRR, a 3.2-year payback on initial capital investment and a $15.7 billion
  pre-tax NPV at a 7% discount rate.
- For Northern Dynastys 50% share of the project, the 45-year Reference
  Caseyields an 18% pre-tax and 15.4% post-tax IRR, a 4.7-year pre-tax and
  5.3-year post-tax payback on initial capital investment and a $3.6 billion
  pre-tax and $2.4 billion post-tax NPV at a 7% discount rate and long- term
  metal prices. At the prevailing metal prices in early 2011, the 45-year
  Reference Case yields a 30.2% pre-tax and 25.1% post-tax IRR, a 2.6-year
  pre-tax and 3.1-year post-tax payback on initial capital investment and a $8.3
  billion pre-tax and $5.6 billion post-tax NPV at a 7% discount rate for
  Northern Dynastys 50% interest.
- The 45-year Reference Caseproduces 31 B lb copper, 30 M oz gold,
  1.4 B lb molybdenum, 140 M oz silver, 1.2 M kg rhenium and 907,000 oz
  palladium while mining only 32% of the mineral resource.
- For the 45-year Reference Case, cash costs per payable lb of copper after
  by-product credits total minus $0.11.

The Preliminary Assessment, in part, uses Inferred mineral
resources which are considered too speculative geologically to be categorized as
mineral reserves and to have economic considerations applied to them. There can
be no assurance that the operating and financial projections contained in the
Preliminary Assessment will be realized.

Development Scenario used for the Preliminary Assessment

As described in the Preliminary Assessment, the Pebble deposit
  supports an open pit mine utilizing conventional drill, blast and truck-haul
  methods, with an initial life of 25 years and potential for mine extensions
  to 78 years and beyond. Phases of mine development beyond 25 years would require
  separate permitting and development decisions to be made in the future, based
  on prevailing conditions at the time and the accumulated experience gained from
  developing and operating the initial phase of the Pebble Project. Near-surface
  mineral resources in the western portion of the deposit would be most efficiently
  developed through open pit methods, but the potential exists for underground
  mining (in particular block caving) to emerge as the preferred mining method
  for subsequent phases of development.Given its size, structure
  and polymetallic nature, the Pebble deposit presents a great deal of flexibility
  in near-term and long-term development options.

Of the three development cases, the 25-year IDC Case is
the most comprehensively engineered. It seeks to mine near-surface resources for
rapid payback, primarily in Measured and Indicated categories but also including
a small proportion (16%) of Inferred material. This initial phase of mining
processes about two billion tons of material or less than 20% of the total
Pebble mineral resource. As such, it is not considered to be ideal for assessing
the potential long-term economic value of the Pebble Project.

---

| | 
      22 | Annual
      Information Form
| | ----------- | -----------------------------

The level of engineering applied to the 45-year Reference
Case is similar to that in the 25-year IDC Case, with the exception
of detailed engineering associated with tailings storage after year 25. This
extended phase of mining processes some 3.8 billion tons of material (or 32% of the total Pebble mineral resource), primarily in Measured and Indicated categories. Inferred resources comprise 28% of the total volume mined. Wardrop selected the 45-year
Reference Case as the base case for its Preliminary Assessment due to the enhanced level of development of the Pebble mineral resource within a timeframe that makes a significant contribution to the project's NPV. However, the 45-year
Reference Case in itself is not an optimized mine plan.

The 78-year Resource Caseis based on a continuation of mining methods, costs and assumptions that inform the 25-year IDC Case and the 45-year Reference Case. By developing some 55% of the Pebble mineral resource over eight
decades, it is intended to demonstrate the longer-term value of the Pebble Project. The 78-year Resource Case processes some 6.5 billion tons of material, primarily in Measured and Indicated categories. Inferred resources comprise 33% of the
total volume mined.

While the economic valuation of all three development cases is based on open pit mining only, a detailed description of underground block cave mine design, operations, costs and production at a mining rate of 150,000 tons per day is also provided in
the Preliminary Assessment.

The Pebble process plant, as described in the Preliminary Assessment, employs conventional crush-grind-float technology and equipment, as well as secondary gold recovery, with a nominal throughput of 200,000 tons per day and the potential to process
up to 275,000 tons per day in certain years. Annual throughput averages 219,000 tons per day for the 25-year IDC Case, and 229,000 tons per day for the 45-year Reference Case and 78-year Resource Case.

The grinding circuit comprises two 40 ft x 25 ft @ 29 megawatt semi-autogenous grinding (SAG) mills and four 26 ft x 40 ft @ 16.4 megawatt ball mills. The concentrator produces a copper-gold concentrate containing 26% copper and 18 grams gold per
dry tonne, as well as a 52% molybdenum concentrate and gold doré. It is anticipated that the Pebble Partnership would construct a molybdenum autoclave plant offshore to treat the molybdenum concentrate, thereby realizing enhanced value
through improved pricing for rhenium and additional copper recovery.

Mine schedules have been developed for the life of mine in each development case, setting out volumes of mineralized and non-mineralized material, densities, tons, dilution, grades of contained metals (copper, gold, molybdenum) and material
hardness. A key aspect of these schedules is the annual plant throughput tonnage, which is defined by the grindability of the mineralized material. The rate of production in any given year is derived by that tonnage which utilizes all available
energy for which the plant has been designed (909 GWh/a). The production limit of 275,000 tons per day is therefore determined by the SAG mill hydraulic limit. Accordingly, the annual processing rate fluctuates over the mine life as the hardness of
the mill feed varies.

Other mine-site facilities and installations include tailings storage, rock storage, a 378 megawatt combined-cycle natural gas-fired turbine plant, as well as shop, office and camp buildings.

---

| | 
      23 | Annual
      Information Form
| | ----------- | -----------------------------

A map showing a layout for the 25-year IDC Case is shown
below:



Copper-gold concentrate produced at Pebble is transported via a
slurry pipeline to a new deep-water port on Cook Inlet. There it is de-watered
and bulk shipped to offshore smelters. Other products of the process plant are
gold doré, which would be flown to market from an existing aviation facility at
Iliamna, and molybdenum concentrate, which would be bagged and trucked to the
port for shipment.

Process tailings are stored behind purpose-built embankments
during mining, and thereafter in the pit. A mine life extension beyond 25 years
would require a second tailings storage facility (TSF) to be developed;
topographical and land status conditions in the project area present a number of
nearby siting opportunities. Engineering has been undertaken to a preliminary
level for TSF sites with sufficient capacity to receive mine tailings after 25
years.

The TSF option selected for the 25-year IDC Case is Site
G, located approximately three miles west of the open pit. The TSF impoundment
would be created by three embankments. The north embankment is constructed
initially to a height of approximately 200 feet and raised each year, while the
south and east embankments would be built later in the mine life as the
impoundment fills. The ultimate height of the north embankment is approximately
685 feet, while ultimate heights for the south and east embankments are
approximately 450 feet and 100 feet, respectively.

A site-wide water surplus is forecast at the Pebble Project
over the life of the mine. All surplus water would be treated to meet prevailing
regulatory standards for water quality and the protection of aquatic life, and
released to optimize downstream flow conditions for fish and aquatic habitat.

Infrastructure

As described in the Preliminary Assessment, an 86-mile
transportation corridor would be developed to link the Pebble mine site to a new
deep-water port on Cook Inlet, 66 miles to the east, as shown on the local
infrastructure map below. The transportation corridor includes a two-lane,
all-weather permanent access road, whose primary purpose is to transport freight
by conventional highway tractors and trailers. The transportation corridor also
includes four buried, parallel pipelines, including:

- a copper-gold concentrate slurry pipeline from the mine site to the port;

---

| | 
      24 | Annual
      Information Form
| | ----------- | -----------------------------

- a return water pipeline from the port site to the mine;
- a natural gas pipeline from the port site to the mine to fuel a natural
  gas-fired generating plant at the mine site; and
- a diesel fuel pipeline from the port site to the mine.

Pebble transportation corridor and port site location



A new, permanent deep-water port developed at the entrance
to Iniskin Bay on Cook Inlet would serve as a product load-out facility, and
facilitate in-bound fuel, equipment and supply shipments. Facilities at the port
include a barge dock, deep-sea ship dock, container storage and a handling area
for containers. Infrastructure components at the port site include a power
generation plant, accommodation and maintenance facilities, offices, fuel
storage and transfer facilities.On an annual basis, the port will
accommodate shipping of 1.1 million tons of concentrate in Handymax vessels of
approximately 50,000 tons, as well as diesel fuel and container barges of
equipment and supplies.

Project planning assumes that the nearby Cook Inlet gasfield
does not currently have adequate natural gas supplies to meet project needs.
Natural gas would be sourced from other regions of Alaska and transported by
pipeline from the Kenai Peninsula across Cook Inlet via a sea-bottom line to the
port site and along the transportation corridor to the mine site. An alternative
is the importation of liquefied natural gas (LNG) directly to the port site.
Diesel fuel would be transported via pipeline from the port fuel storage
facility to the mine site. In addition to fuelling mobile mining equipment and
other rolling stock, emergency electrical generators also operate on diesel
fuel.

Project Workforce

Construction of the Pebble Project is projected to take four
years, with a peak labour force of 2,080. The operations workforce is projected
to average 1,120 over the initial 25-year life of the mine, with longer-term
labour requirements to be determined by the mine development alternatives
selected. Both construction and operations workforces would be accommodated in
project camps at the mine site and the port site, and work on a rotational
basis. The Pebble Partnership has stated its intention to maximize local and Alaskan hire at the Pebble Project, and is developing a
workforce development plan to accomplish this goal.

---

| | 
      25 | Annual
      Information Form
| | ----------- | -----------------------------

Production Profiles

The 45-year Reference Case processes 3.8 billion tons of
mineralized material, with a strip ratio of 2.1:1 and average grades of 0.46%
copper, 0.011 oz gold per ton and 214 ppm molybdenum. Metallurgical recoveries
average 87.9% for copper, 71.3% for gold and 87.9% for molybdenum. Over the life
of mine, the 45-year Reference Case produces 30.5 billion lb of copper,
30.3 million oz of gold and 1.4 billion lb of molybdenum, as well as 140 million
oz of silver, 1.2 million kg of rhenium and 907,000 oz of palladium.

Production results for all three development cases are
presented in the table below:

Item
      Unit
      IDC Case
      Reference Case
      Resource CaseMine Life
    years
    25
    45
    78Mining Method
    
    Open Pit
    Open Pit
    Open PitStrip Ratio
    waste : ore
    1.5
    2.1
    2.6Processing Rate
    M ton / yr
    80
    84
    84Total Processed
    M ton
    1,990
    3,767
    6,528% of M+I+I
      Resource
    %
    17
    32
    55Copper Eq. Grade
    %
    0.72
    0.83
    0.84Copper Grade
    %
    0.38
    0.46
    0.46Gold Grade
    oz / ton
    0.012
    0.011
    0.011Molybdenum Grade
    ppm
    182
    214
    243Copper Recovery
    %
    86.6
    87.9
    88.4Gold Recovery
    %
    71.5
    71.3
    71.2Molybdenum
      Recovery
    %
    84.8
    87.9
    89.4Copper Eq.
      Recovered
    M lb
    24,483
    54,129
    96,357Copper Recovered
    M lb
    12,944
    30,494
    53,437Gold Recovered
    000 oz
    16,391
    30,307
    50,133Molybdenum
      Recovered
    M lb
    616
    1,420
    2,835Peak Annual Copper
      Recovered
    M lb
    822
    1,157
    1,096Peak Annual Gold
      Recovered
    000 oz
    1,038
    1,127
    1,088Peak Annual Molybdenum
      Recovered
    M lb
    43
    56
    62Avg Annual Copper
      Recovered
    M lb
    518
    678
    685Avg Annual Gold
      Recovered
    000 oz
    656
    673
    643Avg Annual Molybdenum
      Recovered
    M lb
    25
    32
    3626% Cu-Au Concentrate
      Produced
    000s dmt
    22,582
    53,200
    93,22552% Mo Concentrate
      Produced
    000s dmt
    537
    1,239
    2,473


---

| | 
      26 | Annual
      Information Form
| | ----------- | -----------------------------

Capital and Operating Costs

Initial and Sustaining Capital

All three development cases presented in the Preliminary
Assessment have the same initial capital requirement of $4.7 billion. This
includes:

- direct field costs for executing the project;
- indirect costs associated with the design, construction and commissioning
  of new facilities;
- owners support costs for corporate, environmental, permitting and
  staffing; and
- capital costs to completion of construction and commissioning at the end
  of Year -1.

The capital cost estimate has been developed over a series of
project stages and is largely based on first principles estimates. Quantities
have been derived for project components for which productivity and labour rates
have been estimated for specific trades. As a result, the capital cost estimate
approaches a pre-feasibility level of accuracy.

It has been anticipated in the financial valuation that the
Pebble Partnership will enter into strategic partnerships as needed to develop,
finance and operate a number of infrastructure assets  including the
transportation corridor (port and road) and the power plant. Each financial case
also assumes that the Pebble Partnership will construct a molybdenum autoclave
plant offshore to treat the molybdenum concentrate, and thereby realize enhanced
value through improved pricing for rhenium and additional copper recovery. Other
costs include owners costs and an overall capital cost contingency of 17.7% .

The initial capital cost for all three development cases is
shown in the table below:

Area
      Cost ($M)Mining
    430.8Processing
    1,389.3Other Infrastructure
    422.0Tailings
    294.0Pipelines
    97.5Access Road *
    162.0Port Infrastructure *
    154.5Power Generation *
    534.1Indirect Costs
    1,406.8Contingency
    865.7Molybdenum Autoclave
    374.2Less: Escalation/ De-Escalation
    (121.1)Less: Outsourced Infrastructure *
    (1,315.0)Total
    4,694.8


*Outsourced infrastructure, including associated indirects
and contingencies

---

| | 
      27 | Annual
      Information Form
| | ----------- | -----------------------------

Sustaining capital requirements (in $M) for all three
development cases are shown in the table below:

Area
      IDC Case
      Reference Case
      Resource CaseOpen Pit
    2,047
    3,286
    7,225Processing
    146
    230
    517Infrastructure
    12
    165
    165Waste Management
    846
    2,211
    3,364Other
    70
    104
    180Molybdenum Autoclave
    83
    144
    276Total
    3,204
    6,140
    11,727


Operating Costs

Life of mine unit operating costs for the 45-year Reference
Case is estimated to be $11.55 per ton milled. This includes all costs
associated with open pit mining of mineralized and non-mineralized material,
processing of mill feed to a final concentrate and all services required to
support the operation. This estimate has been prepared as an annual cost for
each year of the project from plant start-up to mine closure. Operating costs
are based on estimated process plant throughput rates, which range depending on
the grindability of the material fed to the process plant.

Life of mine unit operating costs for all three development
cases are presented in the table below:

Description
      Unit
      IDC Case
      Reference Case
      Resource CaseTotal Operating
      Costs
    $M
    22,208
    43,489
    96,063Open Pit
    $ /
      ton
    3.83
    4.30
    7.19Process
    $ /
      ton
    4.50
    4.60
    4.93Transportation
    $ /
      ton
    0.97
    0.91
    0.91Environmental
    $ /
      ton
    0.30
    0.29
    0.31G&A
    $ /
      ton
    1.56
    1.45
    1.38Total Operating Costs
      per ton milled
    $ /
      ton
    11.16
    11.55
    14.72


Description
      Unit
      IDC Case
      Reference Case
      Resource CaseOffsite
      ChargesTotal Offsite
      Charges
    $ M
    4,752
    11,089
    19,938Offsite Charges per ton
      milled
    $ /
      ton
    2.39
    2.94
    3.05Cash Cost
      AnalysisOffsite Charges
    $/lb
    0.38
    0.38
    0.39Operating Costs
    $/lb
    1.79
    1.48
    1.87Copper Cash Cost
    $/lb
    2.17
    1.86
    2.26By-Product Credits
    $/lb
    -2.27
    -1.97
    -2.05C1 Copper Cost
    $/lb
    -0.10
    -0.11
    0.21


---

| | 
      28 | Annual
      Information Form
| | ----------- | -----------------------------

Financial Valuation

Pebble Project

Economic valuations for all three development cases presented
in the Preliminary Assessment are expressed in US dollars in real terms. The
valuation date for NPV, IRR and other financial results is at the commencement
of project construction.

Long-term metal prices and prevailing metal prices in early
2011 applied to the financial model for each of the development cases are
outlined in the table below:

Metal Type
      Unit
      Long Term Metal Prices
      Prevailing Metal Prices
      Early 2011Copper
    $/lb
    2.50
    4.00Gold
    $/oz
    1,050
    1,350Molybdenum
    $/lb
    13.50
    15.00Silver
    $/oz
    15.00
    28.00Rhenium
    $/kg
    3,000
    3,000Palladium
    $/oz
    490
    490


Net Smelter Return (NSR) statistics at long-term metal prices
for all three development cases are provided in the table below:

Description
      Unit
      IDC Case 25 years
      Reference Case 45 years
      Resource Case 78 yearsNSR LOM
    $ M
    54,637
    120,197
    213,970NSR Annual Average
    $ M
    2,185
    2,671
    2,743Copper
    %
    52
    55
    55Gold
    %
    29
    24
    22Molybdenum
    %
    15
    16
    18Other
    %
    4
    5
    5NSR per ton milled
    $ /
      ton
    27.45
    31.91
    32.78


Annual cash flows are calculated and subsequently discounted at
a rate of 7%. Market convention generally uses a discount rate of 8% for copper
and other base metal projects and 5% for gold and other precious metal projects.
Given the large contribution of gold to total revenues at the Pebble Project, a
7% blended discount rate has been selected. Financial results for all three
development cases are summarized below:

Item
      Unit
      IDC Case
      Reference Case
      Resource CaseMine Life
    years
    25
    45
    78Initial Capital
    $ M
    4,695
    4,695
    4,695LOM Sustaining
      Capital
    $ M
    3,204
    6,140
    11,727LOM NSR
    $ M
    54,637
    120,197
    213,970NSR Per Ton
    $ / ton
    27.45
    31.91
    32.78LOM Operating Cost
    $ M
    22,208
    43,489
    96,063Operating Cost Per
      Ton
    $ / ton
    11.16
    11.55
    14.72C1 Copper Cost
    $ / lb
    -0.10
    -0.11
    0.21


---

| | 
      29 | Annual
      Information Form
| | ----------- | -----------------------------

Item
      Unit
      IDC Case
      Reference Case
      Resource CaseLOM Pre-Tax Net Cash
      Flow
    $ M
    20,123
    55,278
    87,329Long-term Metal
      PricesPre-Tax NPV at 7%
    $ M
    3,837
    6,129
    6,812Pre-Tax IRR
    %
    13.4%
    14.2%
    14.5%Pre-Tax Payback
    years
    6.5
    6.2
    6.1Prevailing Metal
      Prices Early 2011Pre-Tax NPV at 7%
    $ M
    11,410
    15,709
    16,864Pre-Tax IRR
    %
    22.6%
    23.2%
    23.3%Pre-Tax Payback
    years
    3.2
    3.2
    3.2


Pre-tax results are before income taxes but after net
profits interest (NPI) royalty and local production taxes.

Northern Dynastys 50% Interest

Under the terms of the Pebble Limited Partnership Agreement,
Anglo American is required to elect to commit $1.5 billion in staged investments
in order to retain its 50% interest in the Pebble Project. A significant
proportion of Anglo Americans financial contribution is expected to be applied
to initial capital costs to construct the mine, thereby reducing Northern
Dynastys capital requirements.

In order to calculate an NPV and IRR estimate for Northern
Dynastys 50% interest in the Pebble Project under this scenario, it is
necessary to adjust Northern Dynastys share of initial capital costs. For the
purpose of this calculation, it was assumed that $1 billion of Anglo Americans
funding requirement will be applied to the Pebble Projects capital cost for
construction. To the end of 2010, Anglo American had invested some $325 million
to advance the Pebble Project2.

In as much as Northern Dynasty is in a position to calculate
taxes payable for its portion of profits associated with development of the
Pebble Project, financial results for Northern Dynastys 50% interest in the
project have been presented on a pre-tax and post-tax basis, and at long-term
and prevailing metal prices in early 2011, in the table below:

_______________________________________________2To the end of 2012, Anglo American has invested over $500 million (refer
Item4.).

---

| | 
      30  | Annual
      Information Form
| | ------------ | -----------------------------

Item
      Unit
      IDC Case
      Reference Case
      Resource CaseLong-term Metal PricesPre-Tax NPV at 7%
      $ M
      2,403
      3,550
      3,891Pre-Tax IRR
      %
      17.3
      18.0
      18.4Pre-Tax Payback
      years
      4.9
      4.7
      4.6Prevailing Metal Prices Early
        2011Pre-Tax NPV at 7%
      $ M
      6,190
      8,339
      8,917Pre-Tax IRR
      %
      29.5
      30.2
      30.4Pre-Tax Payback
      years
      2.7
      2.6
      2.6Long-term Metal PricesPost-Tax NPV at 7%
      $ M
      1,559
      2,358
      2,650Post-Tax IRR
      %
      14.6
      15.4
      15.8Post-Tax Payback
      years
      5.6
      5.3
      5.3Prevailing Metal Prices
        Early 2011Post-Tax NPV at 7%
      $ M
      4,141
      5,561
      6,002Post-Tax IRR
      %
      24.5
      25.1
      25.4Post-Tax Payback
      years
      3.1
      3.1
      3.0


Pre-tax results are before income taxes but after NPI
royalty and local production taxes.

The impact of various discount rates on Northern Dynastys
post-tax NPV, and the sensitivity of this post-tax NPV at a 7% discount rate to a range of copper and gold
prices (both individually and combined with other metal prices held constant) is
presented in the table below. Life of Mine cash flow is $7,535 million for the
25-year IDC Case, $19,818 million for the 45-year Reference Case
and $31,583 million for the 78-year Resource Case.

Item
      Unit
      IDC Case
      Reference Case
      Resource CaseDiscount RateNPV at 5%
      $M
      2,491
      4,164
      4,877NPV at 7%
      $M
      1,559
      2,358
      2,650NPV at 8%
      $M
      1,213
      1,774
      1,975NPV at 10%
      $M
      689
      976
      1,087Copper
        Price (Gold $1050/oz, Mo $13.50/lb)2.50
      $M
      1,559
      2,358
      2,6502.75
      $M
      1,893
      2,776
      3,0893.00
      $M
      2,226
      3,192
      3,5253.25
      $M
      2,557
      3,605
      3,9553.50
      $M
      2,874
      4,006
      4,3753.75
      $M
      3,188
      4,404
      4,7924.00
      $M
      3,499
      4,796
      5,2014.25
      $M
      3,802
      5,181
      5,605Gold Price (Copper $2.50/lb,
        Mo $13.50/lb)1050
      $M
      1,559
      2,358
      2,6501100
      $M
      1,646
      2,459
      2,7551150
      $M
      1,733
      2,560
      2,8601200
      $M
      1,820
      2,660
      2,964


---

| | 
      31 | Annual
      Information Form
| | ----------- | -----------------------------

Item
      Unit
      IDC Case
      Reference Case
      Resource Case1250
      $M
      1,906
      2,760
      3,0681300
      $M
      1,993
      2,861
      3,1721350
      $M
      2,079
      2,961
      3,2761400
      $M
      2,166
      3,061
      3,380Combined Copper and Gold
        Price (Mo $13.50/lb)2.50 / 1050
      $M
      1,559
      2,358
      2,6502.75 / 1100
      $M
      1,980
      2,876
      3,1933.00 / 1150
      $M
      2,399
      3,391
      3,7323.25 / 1200
      $M
      2,804
      3,895
      4,2553.50 / 1250
      $M
      3,200
      4,389
      4,7713.75 / 1300
      $M
      3,590
      4,873
      5,2764.00 / 1350
      $M
      3,971
      5,350
      5,7764.25 / 1400
      $M
      4,351
      5,827
      6,276


All information relating to the Preliminary Assessment,
      including but not limited to statements to the potential of the Pebble
      Project and information under the headings Key Findings, "Development
      Scenario used for the Preliminary Assessment, Production Profiles,
      Financial Valuation and Capital and Operating Costs are "forward
      looking statements" within the definition of the United States Private
      Securities Litigation Reform Act of 1995. The information relating to the
      possible construction of a port, road, power generating facilities and
      power transmission facilities also constitutes such "forward looking
      statements."The 2011 Preliminary Assessment was a financial model
      prepared to broadly quantify the Pebble project's capital and operating
      cost parameters and to provide guidance on the type and scale of future
      project engineering and development work that will be needed to ultimately
      define the project's likelihood of feasibility and optimal production
      rate. It was not prepared to be used as a valuation of the Pebble project
      nor should it be considered to be a pre-feasibility study. The studies of
      capital and operating costs are incomplete and have not been optimized, so
      the ultimate costs and project plans may vary widely from those set out in
      the Preliminary Assessment. This could materially and adversely impact the
      projected economics of the Pebble project.
    The 2011 Preliminary Assessment presents a potential development plan at  a conceptual level only for the purpose of broadly evaluating project economics  and does not include detailed plans for either the achievement of regulatory  compliance, environmental planning, or designs for the effective mitigation of  wetland/fish resource effects.  These details are being prepared by the  Pebble Partnership, and will form the basis for clearly defining project design  elements and for providing technical support to the project permitting process.The economic assessments and other opinions expressed in
      the Preliminary Assessment are strictly those of Northern Dynasty and
      Wardrop, and do not reflect the views of any other stakeholder in the
      project. The Pebble Partnership continues to separately undertake detailed
      engineering studies toward the completion of a prefeasibility report for
      the Pebble Project, including ongoing programs to engage project
      stakeholders in the planning process. As such, any project which is
      ultimately put forward by the Pebble Partnership for permitting under the
      National Environmental Policy Act may differ from those mine models
      presented in the Preliminary Assessment.The Preliminary Assessment, in part, uses inferred
      mineral resources which are considered too speculative geologically to be
      categorized as mineral reserves and to have economic considerations
      applied to them. There can be no assurance that the operating and
      financial projections contained in the Preliminary Assessment will be
      realized.The following are the principal risk factors and
      uncertainties which, in management's opinion, are likely to most directly
      affect the conclusions of the Preliminary Assessment and the ultimate
      feasibility of the Pebble project. A portion of the mineralized material
      at the Pebble Project is currently classified as an inferred resource and
      it is not a reserve. The mineralized material in the Preliminary
      Assessment is based on the measured, indicated and inferred resources
      estimated by Hunter Dickinson Inc. and audited by Wardrop. Additional
      process tests and other engineering and geologic work will be required to
      determine if the mineralized material is an economically exploitable
      reserve. There can be no assurance that this mineralized material can
      become a reserve, or the amount that may be converted to a reserve and
      grade hereof. Final feasibility work has not been done to confirm the pit
      design, mining methods, and processing methods assumed in the Preliminary
      Assessment. Final feasibility could determine that the assumed pit design,
      mining methods, and processing methods are not correct. Construction and
      operation of the mine and processing facilities depends on securing
      environmental and other permits on a timely basis.


---

| | 
      32 | Annual
      Information Form
| | ----------- | -----------------------------

No permits have been
      applied for and there can be no assurance that required permits can be
      secured or secured on a timely basis. Data is incomplete and cost
      estimates have been developed in part based on the expertise of the
      individuals participating in the preparation of the Preliminary Assessment
      and on costs at projects believed to be comparable, and not based on firm
      price quotes. Costs, including design, procurement, construction, and
      on-going operating costs and metal recoveries could be materially
      different from those contained in the Preliminary Assessment. There can be
      no assurance that mining can be conducted at the rates and grades assumed
      in the Preliminary Assessment. The project requires the development of
      port facilities, roads and electrical generating and transmission
      facilities. Although Northern Dynasty believes that the State of Alaska
      favours the development of these facilities, there can be no assurance
      that these infrastructure facilities can be developed on a timely and
      cost-effective basis. Energy risks include the potential for significant
      increases in the cost of fuel and electricity. The Preliminary Assessment
      assumes specified, long-term prices levels for gold, copper, silver and
      molybdenum. Prices for these commodities are historically volatile, and
      Northern Dynasty has no control of or influence on those prices, all of
      which are determined in international markets. There can be no assurance
      that the prices of these commodities will continue at current levels or
      that they will not decline below the prices assumed in the Preliminary
      Assessment. Prices for gold, copper, silver, and molybdenum have been
      below the price ranges assumed in Preliminary Assessment during the past
      ten years, and for extended periods of time. The project will require
      major financing, probably a combination of debt and equity financing.
      Interest rates are at historically low levels. There can be no assurance
      that debt and/or equity financing will be available on acceptable terms. A
      significant increase in costs of capital could materially and adversely
      affect the value and feasibility of constructing the project. Other
      general risks include those ordinary to very large construction projects
      including the general uncertainties inherent in engineering and
      construction cost, the need to comply with generally increasing
      environmental obligations, and accommodation of local and community
      concerns. The Company is also subject to the specific risks inherent in
    the mining business, as well as general economic and business conditions.


Programs carried out to the end of 2010 are summarized with the
results of the Preliminary Assessment above. Work since that time is described
below.

The results in the 2011 Preliminary Assessment are based on
costs originally estimated in 2009 and 2010. An assessment has not been
completed of possible adjustments to those original cost estimates and the
impact these adjustments may have on the results of the 2011 Preliminary
Assessment.

The 2011 Preliminary Assessment evaluates a development plan
based on engineering work undertaken by the Pebble Partnership and, to some
degree, on a number of assumptions and tentative conclusions based on different
studies previously conducted by Northern Dynasty. As of the date hereof a
definitive plan has not been selected by the Pebble Partnership for potential
project development or permitting, so the 2011 Preliminary Assessment as a
possible economic model represents only the views of Northern Dynasty.
Subsequent to the 2011 Preliminary Assessment, Northern Dynasty and its
technical advisors have continued to analyze other development plans and
financial models, some of which may demonstrate more robust economics than the
2011 Preliminary Assessment model. Therefore it is probable that the 2011
Preliminary Assessment will be superseded by other development plans if Northern
Dynasty concludes that they represent superior and more likely alternatives to
the 2011 Preliminary Assessment model. However readers are cautioned that unless
and until a mine model is actually approved for development by the Pebble
Partnership and also by the applicable mining regulatory authorities, these
studies remain only theoretical concepts of possible project alternatives.

---

| | 
      33 | Annual
      Information Form
| | ----------- | -----------------------------

2011 and 2012 Programs by the Pebble Partnership

Drilling

In 2011, 23,582 ft (7,188 m) were drilled in 9 holes on deposit
delineation and exploration targets. A further 27,186 ft (8,286 m) were drilled
in 76 cored geotechnical holes for engineering and hydrological purposes in
2011.A total of 35,760 feet in 81 holes were drilled in 2012, including 17 core holes (8,363 feet) for exploration purposes, 38 core holes (15,973 feet) to collect geotechnical data, and 26 sonic holes (11,424 feet) for hydrological investigations.

Northern Dynasty's qualified persons David Gaunt, PGeo, (resource) and Stephen Hodgson, PEng, (engineering) have reviewed the drilling data and in their opinions none of the results would have a material impact on the parameters described in
the 2011 Preliminary Assessment.

Pebble Partnership maintained an effective quality control and quality assurance (QA/QC) system consistent with industry best practice during 2011 and 2012. This is in addition to the QA/QC procedures used internally by the analytical laboratories.
The QA/QC program was subject to independent review by Nicholson Analytical Consultants in 2011 and 2012. The analytical consultants provide ongoing monitoring, including facility inspection, and timely reporting of the performance of standards,
blanks and duplicates in the drill hole sampling and analytical program. The results of this program indicate that analytical results are of a high quality suitable for use in detailed modeling and resource evaluation studies. All other procedures
(described under Sampling, Analysis, Security and Quality Assurance/Quality Control Procedures above) continued in 2011 and 2012.  Inter-laboratory duplicate analysis for 2011 is still in progress. To the end of 2012, a total of 1,378 blanks
have been inserted since 2004 to test for contamination. With a few minor exceptions, results are at very low background levels.

Engineering

The Pebble Partnership has assembled an experienced engineering and permitting team for the Pebble Project, consisting of more than 20 senior engineers and technical specialists (many of whom are from the Anglo American group or Northern Dynasty),
as well as engineering firms and specialized consultancies from around the world.

The 2004 site program involved collection of engineering, environmental and socioeconomic data for mine planning studies in addition to resource drilling. A program of drilling to collect geotechnical, metallurgical and hydrological data to use for
mine planning at Pebble West was initiated along with scoping level engineering studies.

Following the discovery of Pebble East in 2005, initial data collection for engineering and environmental studies was expanded to cover that area in 2006, with drilling of geotechnical and metallurgical holes, and percussion holes for groundwater
studies.  In 2007, support for the preparation of an integrated development plan for Pebble West and Pebble East was initiated and included geotechnical evaluations of potential tailings storage sites; analysis of power supply options; collection of
geotechnical and hydrogeological data to support design of a potential underground mine as well as initial evaluation of bulk underground mining options.

Since mid-2007, these programs have been geared toward support for a prefeasibility study and initiation of permitting. The engineering programs have assessed a range of options to optimize the project scale, including trade-off studies of major
project components; metallurgical studies to determine the optimal conventional processing systems and designs; and evaluations of the major infrastructure elements  to identify the optimum alternatives and designs for these project components. A
variety of assessments are ongoing, including analysis of the major infrastructure elements (access road, port and power), and alternative infrastructure options in order to identify the optimal infrastructure plans and to determine any
opportunities for cost savings and improvements to the time table for development.

---

| | 
      34 | Annual
      Information Form
| | ----------- | -----------------------------

Sustainability

The Pebble Project would be a large industrial facility located
  within a vast region of Alaska notable for its undeveloped wilderness, isolated
  and sparsely populated communities, Alaska Native culture and traditional ways
  of life, significant salmon fisheries, and other fish and wildlife
  populations.

Environmental Studies and Planning

In January 2012, the Pebble Partnership released the
Environmental Baseline Document (EBD) for the Pebble Project, characterizing
existing physical, biological and social conditions in the project area, in
anticipation of initiating project permitting. It contains more than 27,000
pages of scientific data and analyses, characterizing a broad range of
environmental and social conditions in southwest Alaska  including climate,
water quality, wetlands, fish and aquatic habitat, wildlife, land and water use,
socioeconomics and subsistence. The EBD is based primarily on research collected
between 2004 and 2008, although baseline data collecting and monitoring of these
environments continues today.

Permitting will be initiated once the Pebble Partnership
submits its Project Description and other documents to the government agencies
which, with the EBD, provide the foundation for an Environmental Impact
Statement ("EIS"). Prepared by a third-party contractor under the direction of a
lead federal agency, the EIS will assess the projects potential
environmental/socioeconomic effects and development alternatives, and will
provide the basis for federal, state and local government agencies to make
individual permitting decisions.

Comprehensive environmental and socioeconomic baseline study
programs continued at the Pebble Project site in 2012 with field programs
primarily focused on surface and groundwater hydrology, water quality and fish
resources. Objectives for 2013 include completion of fish/water mitigation and
closure plans. Similar data collection programs will continue in 2013 with a
focus on monitoring key environmental parameters to allow for comprehensive
database on pre-development conditions.

Stakeholder Relations and Outreach

Since 2004, Northern Dynasty and subsequently the Pebble
Partnership have undertaken a comprehensive stakeholder outreach program to
document the priorities and concerns of local communities and area residents,
and facilitate their participation in the process by which the Pebble Project
will be designed, permitted, built and operated.

Since that time, formal and informal meetings have been
undertaken with stakeholder groups and individuals. All meetings have been
recorded and stakeholder input documented. In certain cases, translation
services have been utilized to ensure Native elders can participate in
stakeholder consultation exercises. The Pebble Partnership stakeholder and
community relations program contains a number of other elements, including:

---

| | 
      35 | Annual
      Information Form
| | ----------- | -----------------------------

- Public education: for example in 2012, 67 tours of the Pebble Project site
  were completed with a total of 312 stakeholders attending;
- Community investment: a variety of community service and infrastructure
  investments have taken place. In 2008, the Pebble Fund was established, a US$5
  million endowment to enhance health and sustainability of local communities.
  To the end of 2012, the fund has supported 141 projects, investing US$4.7
  million and leveraging approximately US$13 million in matching funds.
- Training and workforce development: the Pebble Partnership has made an
  explicit commitment to local employment both at the exploration stage and
  during mine operations, and pursuing this goal by ensuring that local
  residents receive priority consideration for employment, based on
  qualifications and merit, and advancing training and workforce development
  initiatives. A long term workforce development strategy is being developed.
- Business development: programs to enhance the capacity of local businesses to provide goods and services to the Pebble Project and to position themselves to benefit from mine operations in the future, have been advanced since 2005. The Pebble
Partnership has developed commercial relationships with five Alaska Native Village Corporations. These partnerships have generated local employment, training and revenue for participating corporations and allowed them to develop human and financial
resources to capture additional business opportunities in the future. A comprehensive business development strategy is being developed to ensure local businesses, including Alaska Native Corporations, are aware of long-term business opportunities
and can position their organizations to benefit from mine operations.

As the Pebble Project advances toward the completion of a prefeasibility study and preparation for project permitting under NEPA, it is expected that the Pebble Partnership will initiate a broad-based stakeholder engagement program to involve
stakeholders in the process by which the project is being designed.

Program for 2013

Work continues toward completion of the prefeasibility study, with permitting under NEPA expected to begin in 2013.

The 2013 budget for a comprehensive work program is currently being finalized. The program would focus on preparations for permitting under NEPA, including finalizing of the Project Description, continuation of community engagement and workforce
development programs, and such work as might be necessary to advance the prefeasibility study for the Pebble Project.

---

| | 
      36 | Annual
      Information Form
| | ----------- | -----------------------------

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 the entire investment. The risks associated with Northern Dynasty's business include:

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".  Engineering, socioeconomic and environmental studies are ongoing. Exploration for minerals is a speculative venture necessarily involving substantial risk.  If the expenditures incurred on the
Pebble Project do not result in discovery and development of commercial quantities of ore, the value of exploration and acquisition expenditures will be totally lost and the value of Northern Dynasty stock negatively impacted.

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 resources 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 U.S. 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.

Northern Dynasty has no history of earnings and no foreseeable earnings, and may never achieve profitability or pay dividends.

Northern Dynasty has a long history of losses 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 exploration stage. If the Pebble Project is successfully developed, Northern Dynasty anticipates that it will retain future earnings and other cash resources for the future operation and
development of its business.

---

| | 
      37 | Annual
      Information Form
| | ----------- | -----------------------------

Northern Dynasty does not intend to declare or pay any cash dividends in the foreseeable future. Payment of any future dividends is solely at the discretion of Northern Dynasty's board of directors, which will take into account many factors including
Northern Dynasty's operating results, financial conditions and anticipated cash needs. For these reasons, Northern Dynasty may never achieve profitability or pay dividends.

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, 2012, Northern Dynasty had working capital of approximately $32.1 million, which
is sufficient to fund its operations in fiscal 2013.  Northern Dynasty's continuing operations and the underlying value and recoverability of the amounts shown for mineral property interests 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 mineral property interests, 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 principal mineral property interest, the failure to establish that the Pebble Project possesses commercially viable and legally mineable deposits of ore will 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, through the Pebble Partnership, Northern Dynasty's principal mineral property interest. Northern Dynasty's principal business objective is to carry out further exploration and related activities to establish
whether the Pebble Project possess 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 result in a significant decline in the trading price of Northern Dynasty's common shares. Although Anglo American was only committed to fund the Pebble Partnership
for US$125 million (completed as of 2008) to be expended towards a prefeasibility study, Anglo American is required to continue funding additional expenditures approved by the board of the general partner to maintain its interest in the Pebble
Partnership. Anglo American's cash contribution since the formation of the Pebble Partnership on July 31, 2007 to December 31, 2012 amounts to $524 million (US$504 million). However, there is no certainty that Anglo will continue
funding the Pebble Partnership if Anglo is not satisfied with the outlook for the Pebble Project, economically or politically. 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.

The Pebble Project, like many major mining projects, has opponents.  The opponents of the Pebble Project are well organized and are trying to bring public and political pressure against the Pebble Project. If successful, the opponents could delay or
prevent the development of the Pebble Project even if it is found to be economically viable and technically legally permittable.

If prices for copper, gold and molybdenum decline, Northern Dynasty may not be able to raise the additional financing required to fund its portion of expenditures for the Pebble Project.

The ability of Northern Dynasty to raise financing to fund its part of the exploration activities and, if warranted, development of the Pebble Project, will be significantly affected by changes in the market price of the metals it mines or for which
it explores.

---

| | 
      38 | Annual
      Information Form
| | ----------- | -----------------------------

The prices of copper, gold and molybdenum 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 and molybdenum 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 and molybdenum have fluctuated in recent
years, and future significant price declines could cause investors to be unprepared to finance exploration of copper, gold and molybdenum, with the result that Northern Dynasty may not have sufficient financing with which to funds its exploration
activities

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 large resources and changes to these requirements could significantly increase the costs 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.

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. Refer to further discussion in Item 12 -  Legal Proceedings.

---

| | 
      40  | Annual
      Information Form
| | ------------ | -----------------------------

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 such risks 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.

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 seeks liquidity and needs to sell
Northern Dynasty shares.

If Northern Dynasty loses the services of the 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 various opportunities; however the Company does not have
the right to require HDSI to bring to the Company all corporate opportunities
that come to HDSI's attention.

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 94,999,764 common shares without par value were issued and
outstanding as fully paid and non-assessable as of December 31, 2012.

---

| | 
      41 | Annual
      Information Form
| | ----------- | -----------------------------

As of March 27, 2013, there were 94,999,764 common shares issued and
outstanding as fully paid and non-assessable. The audited consolidated financial
statements provide share issuances effected by Northern Dynasty and the weighted
average issue price for shares since January 1, 2012.

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.

ITEM 8.     
MARKET FOR SECURITIES

The following table shows the progression in high and low
trading prices of the common shares of Northern Dynasty on the Toronto Stock
Exchange (TSX) and NYSE MKT for the periods listed.

Toronto
        Stock Exchange
      NYSE MKTAverage
      
      
      AverageDaily
      
      
      DailyHigh
      Low
      Trading
      High
      Low
      TradingMonthly
      ($)
      ($)
      Volume
      (US$)
      (US$)
      VolumeDecember 2012
      3.60
      3.06
      63,500
      3.65
      3.08
      187,100November 2012
      4.28
      3.20
      73,400
      4.23
      3.20
      210,900October 2012
      4.70
      3.41
      103,800
      4.80
      3.51
      275,800September 2012
      5.28
      2.82
      273,900
      5.40
      2.84
      783,200August 2012
      2.94
      2.23
      72,300
      2.98
      2.20
      318,800July 2012
      2.99
      2.28
      80,200
      2.94
      2.27
      171,600June 2012
      2.90
      2.29
      284,000
      2.76
      2.20
      311,600May 2012
      5.77
      2.34
      218,400
      5.87
      2.25
      419,200April 2012
      6.15
      5.26
      62,200
      6.17
      5.31
      146,600March 2012
      7.01
      5.68
      80,600
      7.13
      5.70
      164,700February 2012
      8.13
      6.76
      97,100
      8.19
      6.80
      206,800January 2012
      8.00
      6.19
      69,300
      8.00
      6.11
      228,600


Northern Dynasty share trading information is also available
through free internet search services (for example, refer to www.yahoo.com, enter NDM.TO (for TSX) or NAK (for NYSE
MKT)).

---

| | 
      41 | Annual
      Information Form
| | ----------- | -----------------------------

ITEM 9.     
ESCROWED SECURITIES

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. The number of common shares of the Company beneficially owned by each, directly or
indirectly, or over which each exercised control or direction, as at March 27, 2013 are shown in the following table:

---

| | 
      42 | Annual
      Information Form
| | ----------- | -----------------------------

Name, Position and Country of Residence
    Period as a Director or
      Officer of the Company
    Securities Beneficially Owned or
      Controlled(1)Scott D. Cousens Director Vancouver, British
      Columbia, Canada
    Since June 1996
    1,084,133 Common Shares 295,000 OptionsRobert A. Dickinson Chairman of the Board and Director
      Lions Bay, British Columbia, Canada
    Since June 1995
    3,420,083 Common Shares 459,000 OptionsGordon J. Fretwell Director West Vancouver, British
      Columbia, Canada
    Since July 2004
    Nil Common Shares 242,000 OptionsRussell E. Hallbauer Director West Vancouver,
      British Columbia, Canada
    Since April 2008
    106,600 Common Shares 232,500 OptionsWayne Kirk Director Orcas Island, Washington, USA
    Since July 2004
    30,000 Common Shares 450,000 OptionsPeter Mitchell Director West Vancouver, British
      Columbia, Canada
    Since May 2011
    Nil Common Shares 125,000 OptionsStephen Scott Director West Vancouver, British
      Columbia, Canada
    Since November 2007
    NilMarchand Snyman Chief Financial Officer and Director
      North Vancouver, British Columbia, Canada
    Since August 2008
    40,000 Common Shares 311,000 OptionsRonald W. Thiessen President, CEO and Director West
      Vancouver, British Columbia, Canada
    Since November 1995
    2,108,878 Common Shares 481,500 OptionsTrevor Thomas Secretary Vancouver, British
      Columbia, Canada
    Since February 2008
    Nil Common Shares 162,000 OptionsBruce Jenkins Senior VP, Corporate Development
      Vancouver, British Columbia, Canada
    Since June 2004
    10,000 Common Shares 226,000 OptionsSteve Hodgson VP Engineering Vancouver, British
      Columbia, Canada
    Since March 2005
    90,000 Common Shares 277,000 OptionsSean Magee VP Public Affairs North Vancouver,
      British Columbia, Canada
    Since October 2006
    Nil Common Shares 226,000 OptionsDoug Allen VP Corporate Communications Vancouver,
      British Columbia, Canada
    Since June 2012
    Nil Common Shares 100,000 Options


---

| | 
      43 | Annual
      Information Form
| | ----------- | -----------------------------

Notes:     1. Information was
derived from insider reporting filings available at www.sedi.ca.

At the annual general meeting of the Company held on June 21,
2012, directors listed above were reelected to a one-year term of office
expiring at the next annual general meeting of Northern Dynasty, which is
currently scheduled for June 19, 2013. Several of the directors serve together
on a number of boards of other publicly listed companies.

Although the directors oversee the management of the Companys
affairs, a cost sharing arrangement exists between a number of the public
resource companies on which several of the directors serve pursuant to
administrative and geological service agreements with Hunter Dickinson Services
Inc. ("HDSI"), a wholly owned subsidiary of Hunter Dickinson Inc. ("HDI"), a
private company. HDI through HDSI provides executive, engineering, geological
and administrative services to, and incurs costs on behalf of, the Company and
its subsidiaries at annually set rates pursuant to an agreement dated July 2,
2010. All officers have a term of office lasting until their removal or
replacement by the Board of Directors.

Based on insider reports filed on www.sedi.ca, as at March 27, 2013, the above directors
and officers beneficially owned, directly or indirectly, or exercised control or
direction over 6,889,694 common shares of the Company (7.3%), or 10,476,694
common shares on a fully diluted basis (10.2%) .

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

Committee
    MembershipAudit Committee
    Gordon Fretwell Wayne Kirk Peter
      Mitchell (Chair)Compensation Committee
    Gordon Fretwell (Chair) Wayne Kirk
      Peter MitchellNominating and Governance Committee
    Gordon Fretwell Wayne Kirk (Chair)
      Peter MitchellPebble Limited Partnership Oversight Committee
    Wayne Kirk


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.

---

| | 
      44 | Annual
      Information Form
| | ----------- | -----------------------------

Principal Occupation and Other Companies Served by Current
  Directors of Northern Dynasty

Scott D. Cousens  Director

Scott Cousens provides management, technical and financial
services to a number of publicly traded companies. Mr. Cousens focus since 1991
has been the development of relationships within the international investment
community. Through substantial financings and subsequent corporate success, Mr.
Cousens has established strong ties with North American, European and Asian
investors. Mr. Cousens is a director of HDI and HDSI.

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

Company
      Positions Held
      Name of Market
      From
      ToNorthern Dynasty Minerals Ltd.
      Director
      TSX, NYSE MKT
      June 1996
      PresentAmarc Resources Ltd.
      Director
      TSX-V, OTCBB
      September 1995
      PresentAtlatsa Resources Corporation
      Director
      TSX-V, JSE, NYSE MKT
      September 1996
      June 2009Continental Minerals Corporation
      Director
      TSX-V, OTCBB
      June 1994
      April 2011Heatherdale Resources Ltd.
      Director and Chairman
      TSX-V
      November 2009
      PresentNorthcliff Resources Ltd.
      Director
      TSX
      June 2011
      February 2012Director
      May 2012
      PresentQuartz Mountain Resources Ltd.
      Director and Chairman
      TSX-V, OTCBB
      November 2012
      PresentRathdowney Resources Ltd.
      Director
      TSX-V
      March 2011
      PresentRockwell Diamonds Inc.
      Director
      TSX-V, OTCBB, JSE
      November 2000
      November 2008Taseko Mines Limited
      Director
      TSX, NYSE MKT
      October 1992
      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 40 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 BC Mining 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:

Company
    Positions
      Held
    Name of
      Market
    From
    ToNorthern Dynasty
      Minerals Ltd.
    Director
    TSX,
      NYSE MKT
    June 1994
    PresentChairman
    April 2004
    PresentAmarc Resources Ltd.
    Director
    TSX-V,
      OTCBB
    April 1993
    PresentChairman
    April 2004
    PresentAtlatsa Resources Corporation
    Director
    TSX-V, JSE, NYSE MKT
    October 2004
  June 2009Co-Chairman
    October 2004
    June 2009


---

| | 
      45 | Annual
      Information Form
| | ----------- | -----------------------------

Company
      Positions Held
      Name of Market
      From
      ToContinental Minerals
      Corporation
      Director
      TSX-V, OTCBB
      June 2004
      April 2011Curis Resources Ltd.
      Director
      TSX
      November 2010
      November 2012Chairman
      November 2010
      December 2010Detour Gold Corporation
      Director
      TSX
      August 2006
      February 2009Heatherdale Resources Ltd.
      Director
      TSX-V
      November 2009
      PresentNorthcliff Resources
      Ltd.
      Director
      TSX
      June 2011
      PresentChairman
      June 2011
      January 2013Rathdowney Resources Ltd.
      Director and 
        Chairman
      TSX-V
      March 2011
      December 2011Quartz Mountain
      Resources Ltd.
      Director
      TSX-V
      December 2011
      PresentChairman
      December 2011
      November 2012Taseko Mines Limited
      Director
      TSX,
      January 1991
      Present


Gordon J. Fretwell, B.Comm. LLB.  Director

Gordon Fretwell holds a Bachelor of Commerce degree and
graduated from the University of British Columbia in 1979 with his Bachelor of
Law degree. Formerly a partner in a large Vancouver law firm, Mr. Fretwell has,
since 1991, been a self-employed solicitor (Gordon J. Fretwell Law Corporation)
in Vancouver practicing primarily in the areas of corporate and securities law.

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

Company
      Positions Held
      Name of Market
      From
      ToBell Copper
      Corporation
      Secretary
      TSX-V
      December 2008
      May 2011Director
      June 2001
      April 2011Benton Resources
      Corp.
      Director
      TSX-V
      July 2003
      PresentSecretary
      December 2003
      PresentContinental Minerals
      Corporation
      Director
      TSX-V, OTCBB
      February 2001
      April 2011Copper Ridge Explorations Inc.
      Director/Secretary
      TSX-V
      September 1999
      August 2009Curis Resources Ltd.
      Director
      TSX
      January 2011
      PresentCoro Mining Corporation
      Director
      TSX
      June 2009
      PresentFrontera Copper Corporation
      Director
      TSX
      February 2009
      June 2009Grandcru Resources Corp.
      Director
      TSX-V
      December 2002
      May 2009Golden Dory Resources Corp.
      Secretary
      TSX-V
      August 2008
      Present


---

| | 
      46 | Annual
      Information Form
| | ----------- | -----------------------------

Company
    Positions Held
    Name of Market
    From
    ToICN Resources Ltd.
    Secretary
    TSX-V
    March 2009
    August 2010Director
    July 2004
    August 2010International Royalty
      Corporation
    Director
    TSX, NYSE MKTJune 2003
    February 2010Asanko Gold Inc. (formerly
      Keegan Resources Inc.)
    Director
    TSX, NYSE MKT
    February 2004
    PresentLignol Energy Corporation
    Director
    TSX-V
    January 2007
    PresentMeritus Minerals Ltd.
    Director
    TSX-V
    June 2007
    PresentNorthern Dynasty Minerals Ltd.
    Director
    TSX, NYSE MKT
    June 2004
    PresentQuartz Mountain
      Resources Ltd.
    Director
    TSX-V, OTCBB
    January 2003
    PresentSecretary
    January 2003
    December 2011Rare Earth Metals Inc.
    Secretary
    TSX-V
    December 2009
    PresentRockwell Diamonds Inc.
    Secretary
    TSX-V, OTCBB, JSE
    September 2012
    Present


Russell E. Hallbauer, P.Eng.  Director

Mr. Hallbauer graduated from the Colorado School of Mines with
a B.Sc. in Mining Engineering in 1979. He is a Registered Professional Engineer
with the Association of Professional Engineers of British Columbia. He has been
a member of the Canadian Institute of Mining and Metallurgy since 1975 and is a
director and former chairman of the Mining Association of B.C.

In 1983, he joined Teck Corporations Bullmoose mine, advancing
through Engineering and Supervisory positions to become Mine Superintendent in
1987, and in 1992, became General Manager of Quintette. In 1995, he assumed new
responsibilities in Vancouver when he was appointed General Manager, Coal
Operations, overseeing Tecks three operating coal mines in British Columbia. In
2002, he was appointed General Manager, Base Metal Joint Ventures, responsible
for Teck Comincos interests in Highland Valley Copper, Antamina in Peru, and
Louvicourt in Quebec. Mr. Hallbauer is a director of HDI and HDSI.

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

Company
    Positions Held
    Name of Market
    From
    ToNorthern Dynasty Minerals Ltd.
    Director
    TSX, NYSE MKT
    April 2008
    PresentCuris Resources Ltd.
    Director
    TSX
    November 2010
    PresentChairman
    December 2010
    September 2012Co-Chairman
    September 2012
    PresentTaseko Mines Limited
    Director, President and
      Chief Executive Officer
    TSX, NYSE MKT
    July 2005
    Present


---

| | 
      47 | Annual
      Information Form
| | ----------- | -----------------------------

Wayne Kirk, LLB  Director

Wayne Kirk is a retired attorney and consultant. With over 35
years of professional experience, Mr. Kirk also has over 9 years of senior
executive experience in the mining industry.

Mr. Kirk is a citizen of the United States and is a resident of
the state of Washington. A Harvard University graduate, Mr. Kirk received his
law degree in 1968. From 1992 to 2001 Mr. Kirk was the Vice President, General
Counsel and Corporate Secretary of Homestake Mining Company. Prior to his
retirement in June 2004 he spent two years as Special Counsel for the law firm,
Thelen Reid & Priest, in San Francisco.

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

Company
      Positions Held
      Name of Market
      From
      ToNorthern Dynasty Minerals Ltd.
      Director
      TSX, 
        NYSE MKT
      July 2004
      PresentAtlatsa Resources Corporation
      Director
      TSX-V, 
        NYSE MKT, JSE
      July 2005
      September 2011Gabriel Resources Ltd.
      Director
      TSX
      June 2008
      PresentGreat Basin Gold Ltd.
      Director
      TSX, 
        NYSE MKT, JSE
      July 2004
      January 2012Luna Gold Corp.
      Director
      TSX, OTCQX
      May 2012
      PresentTaseko Mines Limited
      Director
      TSX, 
        NYSE MKT
      July 2004
      Present


Peter Mitchell, CA  Director

Peter Mitchell is a Chartered Accountant with degrees in
Economics (BA) from the University of Western Ontario and Business
Administration (MBA) from the University of British Columbia. He has extensive
senior financial and operating experience with private equity portfolio
companies in the manufacturing and service sector. He has also worked in
treasury for Teck Corporation early in his career. Mr. Mitchell is a member of
the Institute of Chartered Accountants of Ontario.

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

Company
      Positions Held
      Name of Market
      From
      ToNorthern Dynasty Minerals Ltd.
      Director
      TSX, 
        NYSE MKT
      May 2011
      PresentNorthcliff Resources Ltd.
      Director
      TSX
      June 2011
      PresentTaseko Mines Limited
      Chief Financial Officer
      TSX, 
        NYSE MKT
      September 2008
      Present


Stephen V. Scott, CPA  Director

Mr. Scott has over 20 years of experience in the mining
industry, encompassing both international and domestic assignments. He is
currently General Manager Commercial, Rio Tinto Exploration, Project Generation
Group, a position that he has held since 2005. Between 2000 and 2005, he held
other senior managerial positions within the Rio Tinto plc group. Rio Tinto plc
owns, or controls indirectly through affiliates, approximately 19.1% of Northern
Dynasty's outstanding shares. Mr. Scott is not an officer and/or director of any
other public companies.

---

| | 
      48 | Annual
      Information Form
| | ----------- | -----------------------------

Marchand Snyman, CA (SA), CA (Aus)  Director, Chief
Financial Officer

With over 14 years of progressive 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. 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. He is a director and Chief
Operating Officer of HDI and a director of HDSI.

Mr. Snyman is a member of the Institute of Chartered
Accountants in Australia and of the South African Institute of Chartered
Accountants.

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

Company
      Positions Held
      Name of Market
      From
      ToNorthern Dynasty Minerals Ltd.
      Director
      TSX, 
        NYSE MKT
      August 2008
      PresentChief Financial Officer
      August 2008
      PresentContinental Minerals Corporation
      Chief Financial Officer
      TSX-V, 
        OTCBB
      January 2008
      April 2011Heatherdale Resources Ltd.
      Chief Financial Officer
      TSX-V
      November 2009
      April 2012Northcliff Resources Ltd.
      Director and Chairman
      TSX
      January 2013
      Present


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

Ronald Thiessen is a Chartered 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 Hunter
Dickinson Inc. (HDI) and its wholly owned subsidiary, Hunter Dickinson
Services Inc. (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
    Positions Held
    Name of Market
    From
    ToNorthern Dynasty
      Minerals Ltd.
    Director
    TSX, NYSE MKT
    November 1995
    PresentPresident and Chief
      Executive OfficerNovember 2001
    PresentAmarc Resources Ltd.
    Director
    TSX-V, OTCBB
    September 1995
    PresentPresident and Chief
      Executive OfficerSeptember 2000
    Present


---

| | 
      49 | Annual
      Information Form
| | ----------- | -----------------------------

Company
      Positions Held
      Name of Market
      From
      ToAtlatsa Resources Corporation
      Director
      TSX-V, JSE NYSE MKT
      April 1996
      June 2011Continental Minerals
      Corporation
      Director
      TSX-V, OTCBB
      November 1995
      April 2011Co-Chairman
      January 2006
      April 2011Detour Gold
      Corporation
      Director
      TSX
      July 2006
      May 2012Chairman
      July 2006
      March 2009Farallon Mining Ltd.
      Director
      TSX
      August 1994
      January 2011Chairman
      December 2005
      January 2011Great Basin Gold Ltd.
      Director
      TSX,
      October 1993
      PresentChairman
      NYSE MKT, JSE
      November 2006
      PresentQuartz Mountain Resources Ltd.
      President, CEO and Director
      TSX-V
      December 2011
      PresentTaseko Mines Limited
      Director
      TSX, NYSE MKT
      October 1993
      PresentChairman
      May 2006
      Present


OTHER OFFICERS

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 Hunter Dickinson Inc. Prior to joining Hunter Dickinson
Inc., 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
      Positions Held
      Name of Market
      From
      ToNorthern Dynasty Minerals Ltd.
      Secretary
      TSX, NYSE MKT
      February 2008
      PresentAmarc Resources Ltd.
      Secretary
      TSX-V, OTCBB
      February 2008
      PresentAtlatsa Resources Corporation
      Assistant Secretary
      TSX-V, JSE, NYSE MKT
      November 2007
      March 2011Continental Minerals
      Corporation
      Secretary
      TSX-V, OTCBB
      February 2008
      April 2011Farallon Mining Ltd.
      Secretary
      TSX
      December 2007
      January 2011Heatherdale Resources Ltd.
      Secretary
      TSX-V
      November 2009
      September 2010Northcliff Resources Ltd.
      Secretary
      TSX
      June 2011
      PresentRathdowney Resources Ltd.
      Secretary
      TSX-V
      March 2011
      PresentRockwell Diamonds Inc.
      Secretary
      TSX, OTCBB, JSE
      February 2008
      September 2012Taseko Mines Limited
      Secretary
      TSX, NYSE MKT
      July 2008
      Present


---

| | 
      50  | Annual
      Information Form
| | ------------ | -----------------------------

Bruce Jenkins -  Senior Vice President, Corporate Development

Bruce Jenkins is an environmental and government relations executive with more than 30 years of experience in project and corporate management. He supports the Pebble Partnership and helps guide environmental 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 30 years of experience in mine operations, mine development and project engineering. He is Director of Engineering for the Pebble Partnership and Executive Vice President of Engineering for Hunter
Dickinson Inc.

Sean Magee -  Vice President, Public Affairs

Sean Magee is a former journalist and speech writer with more than 15 years of natural resource industry communications experience. Formerly Director of Public Affairs for the Pebble Partnership, Mr. Magee has had a working relationship with Hunter
Dickinson Inc. for more than 12 years and is the Company'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 31 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.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

No director or officer of Northern Dynasty is, as of the date of this AIF, or has been within the 10 years before the date of this AIF, 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.

In September, 2012, Great Basin Gold Ltd. ("GBG"), a company for which Mr. Thiessen is a director and Mr. Kirk previously was a director, filed for creditor protection under the Companies' Creditors Arrangement Act ("CCAA") in Canada and
GBG's principal South African subsidiary, Southgold Exploration (Pty) Ltd. ("Southgold"), filed for protection under the South African Companies Act business rescue procedures. The two insolvency proceedings were primarily caused by production
ramp-up shortfalls at GBG's newly opened Burnstone Mine due to unforeseen ground faulting and water control problems, combined with gold production shortfalls at GBG's Nevada Hollister trial mine. These production shortfalls caused a
cash-flow deficiency which caused GBG and Southgold to default under certain term loan agreements with an aggregate value of approximately $200 million.  The default of these term loan agreements in turn caused GBG to default under the terms of
a class of listed debentures with an aggregate value of approximately $126 million in principal.  The outcome of the insolvency proceedings insofar as the potential for financial recovery by creditors and shareholders of GBG is not yet
ascertainable.

---

| | 
      51 | Annual
      Information Form
| | ----------- | -----------------------------

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.

---

| | 
      52 | Annual
      Information Form
| | ----------- | -----------------------------

ITEM 12.    
 LEGAL PROCEEDINGS

12.1      Legal Matters

In October 2011, a lawsuit filed in July 2009 by the Trustees
for Alaska (an environmental law firm) on behalf of Nunamta Aulukestai  an
organization established and funded to oppose development of the Pebble Project
- was rejected by the Anchorage Superior Court. The lawsuit alleged that the
Alaska Department of Natural Resources ("DNR") had violated the state
constitution by granting exploration and temporary water use permits to the
Pebble Partnership, and exploration activities had caused harm to vegetation,
water, fish and wildlife. The Pebble Partnership actively participated in the
trial proceedings after being granted intervener status. Superior Court Judge
Aarseth denied each of the allegations made by Nunamta Aulukestai, and ruled
that no evidence of environmental harm was presented. The plaintiffs have filed
an appeal that is now pending before the Alaska Supreme Court.

In November 2011, by a narrow 280  246 (53%  47%) margin,
voters in Southwest Alaskas Lake & Peninsula Borough supported a ballot
measure sponsored by anti-Pebble activists that, if upheld by the courts, might
restrict future development that affects more than one square mile of land
within the 31,000 square mile borough.

The initiative was opposed by a broad spectrum of Alaska
interests, including a group of four Alaska Native village corporations
representing seven Lake & Peninsula Borough communities whose private land
holdings would be affected by the ordinance, the State of Alaska and the Pebble
Partnership. It was also opposed by the Resource Development Council for Alaska,
the Alaska State Chamber of Commerce, the Alaska Miners Association, Council of
Alaska Producers, the Alaska Oil and Gas Association and the Alaska Industry
Support Alliance, among others.

The Pebble Partnership and the State of Alaska view the
initiative as unconstitutional and unenforceable because it seeks to restrict
development of state-owned resources on state lands through a municipal
ordinance. The State of Alaska and the Pebble Partnership have filed legal
challenges in the Alaska Superior Court, which will hear summary judgment
motions from both parties in April 2013. A trial on the issue is scheduled for
December 2013.

12.2      Contingencies

On February 23, 2011, the Company issued a news release
announcing that it was in receipt of a new independent Preliminary Assessment of
the Pebble Project, which is based on the information generated and provided by
the Pebble Partnership and Northern Dynasty. The information provided by the
Pebble Partnership and the Preliminary Assessment constitute a material change
in the affairs of the Company because it changed the technical parameters and
estimated net present value of the property by billions of dollars from the last
such assessment done in 2004. Anglo American, the other 50% partner in the
Pebble Partnership, has alleged that that the news release contained
confidential information which is the property of the Pebble Partnership and was
not authorized to be released, and Anglo American reserves all rights to claim
that the release has damaged Anglo American and/or the Pebble Partnership. The
Company has received legal advice that the news release was a permitted
disclosure under the various agreements with Anglo American, and its issuance
was a mandatory requirement under Canadian and US regulatory requirements. The
Company does not believe that Anglo Americans allegations have any merit;
however, it cannot give assurances about future events or actions by Anglo
American.

---

| | 
      53 | Annual
      Information Form
| | ----------- | -----------------------------

Bristol Bay Watershed Assessment

In February 2011, the US Environmental Protection Agency
  ("EPA") announced it would undertake a Bristol Bay Watershed Assessment study
  focusing on the potential effects of large-scale mine development in all of the Bristol Bay area, subsequently
  narrowed to the Nushagak and Kvichak drainages. This process was 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
  Clean Water Act to prohibit discharges of dredged or fill material in waters of
  the US within these drainages. Rather than acceding to this request, the EPA
  embarked on a scientific study to assess potential impacts of hard rock mining
  in the two drainages.

The EPAs draft Bristol Bay Watershed Assessment ("BBWA")
report was released on May 18, 2012. The draft report is a fundamentally flawed
document. By the EPAs own admission, it has evaluated the effects of a
hypothetical project  a project that has not been defined or proposed  and
for which key environmental mitigation strategies are not known. The assessment
was rushed  it is based on studies conducted over only one year in an area of
20,000 square miles. In comparison, the Pebble Partnership has studied the
ecological and social environment surrounding Pebble for more than eight years.
The EPA also failed to fully consider the data that the Pebble Partnership
provided as part of its 27,000-page Environmental Baseline Document.

The EPA called for public comment on the quality and
sufficiency of scientific information presented in the draft BBWA report. In
response, Northern Dynasty made a presentation highlighting these shortcomings
at the 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 has called upon the EPA to cease action on the watershed assessment
until such time as the Pebble Partnership submits a definitive proposal for the
development of the Pebble deposit. Additional information on Northern Dynastys
submission to the EPA and the Companys critique of the BBWA report see http://www.northerndynastyminerals.com/ndm/BristolBay.asp.

Concerns about the reasonableness of the basis of risk
assessment in the draft EPA report were stated by many independent experts on
the peer review panel assembled to review the BBWA in a report entitled
'External Peer Review of EPA's Draft Document: An Assessment of Potential
Mining Impacts on Salmon Ecosystems of Bristol Bay, Alaska"released in
November 2012. In a wide-ranging critique of the draft report's methodology and
findings, many peer review panelists 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". The full peer review
report can be found at: http://www.epa.gov/ncea/pdfs/bristolbay/Final-Peer-Review-Report-Bristol-Bay.pdf.

"The authors have attempted to develop a hypothetical mine and
attempted to assess possible environmental effects associated with mine
development, operation, and closure," said Dr. William Stubblefield, a senior
professor at Oregon State University and an expert in environmental toxicology.
"Although interesting, the potential reality of the assessment is somewhat
questionable. It is also unclear why EPA undertook this evaluation, given that a
more realistic assessment could probably have been conducted once an actual mine
was proposed and greater detail about operational parameters available."

The EPA states it is now working to complete a revised draft
BBWA by spring 2013 for an additional round of public comment and review by the
original peer review panel, to be followed by report completion toward the end
of 2013.

---

| | 
      54 | Annual
      Information Form
| | ----------- | -----------------------------

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.

Hunter Dickinson Services Inc. ("HDSI") is a wholly owned
subsidiary of Hunter Dickinson Inc. ("HDI"), a private company. HDSI has certain
directors in common with the Company and provides geological, corporate
development, administrative and management services to, and incurs third party
costs on behalf of, the Company and its subsidiaries pursuant to annually set
rates. During the year ended December 31, 2012, the Company paid HDSI
approximately $3.5 million (2011  $3.5 million) for services rendered by HDSI
and reimbursed HDSI approximately $1.1 million (2011  $1.1 million) for third
party costs incurred on the Companys behalf. Certain members of the companys
senior management are employed by HDSI rather than by Northern Dynasty
directly.

To the knowledge of management, the following parties own more
than 10% of the Companys outstanding voting securities as of the date of this
AIF:

Rio Tinto

In 2006, the Company issued 8,745,845 common shares in
connection with a share purchase agreement with Kennecott Canada Exploration
Inc. ("Kennecott") for $10.00 per share for proceeds of approximately $87
million. In January 2007, Northern Dynasty was advised by Galahad Gold plc
("Galahad"), a significant shareholder of the Company that QIT-Fer Et Titane
Inc., an affiliate of Rio Tinto, agreed to purchase 9.4 million shares of
Northern Dynasty from Galahad at a price of $10 per share. The share purchase,
which closed February 1, 2007, increased Rio Tintos indirect ownership in
Northern Dynasty to approximately 19.79% at that time. Currently, the holding
represents approximately 19.1% .

ITEM 14.     
TRANSFER AGENT AND REGISTRAR

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

---

| | 
      55 | Annual
      Information Form
| | ----------- | -----------------------------

ITEM 15.     
MATERIAL CONTRACTS

The Company has the following material contracts that are in
effect during the fiscal year ended December 31, 2012:

| | 1) | Pebble Limited Partnership Agreement between Pebble Mines
      Corp., Anglo American US (Pebble) LLC, and Northern Dynasty Partnership,
      dated for reference July 31, 2007, originally filed under the Companys
      profile on SEDAR on March 26, 2008, and re-filed on March 31, 2010. The
      particulars of this material contract are described under Item 5. Description of Business  Limited Partnership with
      Anglo American.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 2) | Stockholders Agreement by and among Anglo American US
      (Pebble) LLC, Northern Dynasty Partnership, and Pebble Mines Corp, dated
      for reference July 31, 2007, originally filed under the Companys profile
      on SEDAR on March 26, 2008, and re-filed on March 31, 2010. The
      particulars of this material contract are described under Item 5. Description of Business Limited Partnership with
      Anglo American.          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 3) | Corporate Services Agreement between Hunter Dickinson
      Services Inc. and Northern Dynasty Minerals, dated for reference July 2,
      2010, filed on SEDAR on March 29, 2011. The particulars of this material
      contract are described under Item 13. Interest
      of Management and Others in Material
  Transactions.                                                                                                                  

ITEM 16.    
 INTERESTS OF EXPERTS

Stephen Hodgson, PEng., David Gaunt, P.Geo., Hassan Ghaffari,
P.Eng, Robert Morrison, P.Geo, Andre de Ruijter, P.Eng, Tysen Hantelmann, P.Eng,
Aleksandar Zivkovic, P.Eng, Scott Cowie, MAusIMM, and Doug Ramsey, P.R. Bio.,
are each persons

|(a) | who are named as having prepared, or co-prepared, 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
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                       
|(b) | whose profession or business gives authority to the
      report made by him.                                                                                                                                                                                         

Messrs. Hodgson and Gaunt monitor programs on Pebble on behalf
of Northern Dynasty.

Mr. Hodgson and Mr. Gaunt hold interests in the common shares
of the Company, directly or indirectly, or through stock options, representing
less than 1% of the Company's outstanding share capital.

None of Messrs. Ghaffari, Morrison, de Ruijter, Hantelmann,
Zivkovic, Cowie, and Ramsey hold common shares of the Company.

Deloitte LLP are the Independent Registered Chartered
Accountants of the Company and is independent within the meaning of the Rules of
Professional Conduct of the Institute of Chartered Accountants of British
Columbia and has complied with the SECs rules on auditor independence.

---

| | 
      56 | Annual
      Information Form
| | ----------- | -----------------------------

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 U.S. Securities and Exchange Commissions (the SEC)
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:

|(i)   | this AIF, together with any document incorporated herein
      by reference;                                                                                                                                                                                    
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                 
|(ii)  | the Annual Report of the Company and any 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
|      |                                                                                                                                                                                                                                                                 
|(iii) | 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.     
CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Companys management, with the participation of its Chief
Executive Officer ("CEO") and Chief Financial Officer ("CFO"), have evaluated
the effectiveness of the Companys disclosure controls and procedures. Based on
that evaluation, the Companys CEO and CFO have concluded that, as of the end of
the period covered by this report, the Companys disclosure controls and
procedures were effective to provide reasonable assurance that the information
required to be disclosed by the Company in reports it files is recorded,
processed, summarized and reported, within the appropriate time periods and is
accumulated and communicated to management, including the CEO and CFO, as
appropriate to allow timely decisions regarding required disclosure.

Managements Report on Internal Control over Financial
Reporting

The Company's management, including the CEO and the CFO, is
responsible for establishing and maintaining adequate internal control over
financial reporting. Internal control over financial reporting ("ICFR") is a
process designed by, or under the supervision of the Company's principal
executive and principal financial officers and effected by the Company's Board
of Directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
consolidated financial statements for external purposes in accordance with
International Financial Reporting Standards as issued by the International
Accounting Standards Board ("IFRS"). The Company's ICFR includes those policies
and procedures that:

---

| | 
      57 | Annual
      Information Form
| | ----------- | -----------------------------

- pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
- provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of the Company are being made only in accordance with authorizations
of management and directors of the Company; and
- provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the consolidated financial statements.

The Company's management assessed the effectiveness of the Company's ICFR as of December 31, 2012.  In making the assessment, it used the criteria set forth in the Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission ("COSO"). Based on their assessment, management has concluded that, as of December 31, 2012, the Company's ICFR was effective based on those criteria.

The Company's ICFR as of December 31, 2012, has been audited by Deloitte LLP, Independent Registered Chartered Accountants who also audited the Company's consolidated financial statements for the year ended December 31, 2012. Deloitte
LLP as stated in their report that immediately precedes the Company's audited consolidated financial statements for the year ended December 31, 2012, expressed an unqualified opinion on the effectiveness of the Company's internal control over
financial reporting.

Changes in Internal Control over Financial Reporting

There has been no change in the design of the Company's ICFR that has materially affected, or is reasonably likely to materially affect, the Company's ICFR during the period covered by this Annual Information Form.

Limitations of Controls and Procedures

The Company's management, including its CEO and CFO, believe that any system of disclosure controls and procedures or internal control over financial reporting, no matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Furthermore, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.
Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent limitations include the
realities that judgments in decision-making can be faulty and breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by
unauthorized override of controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions.  Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.

---

| | 
      58 | Annual
      Information Form
| | ----------- | -----------------------------

ITEM 20.     
AUDIT COMMITTEE, AUDITOR FEES, EXEMPTIONS, CODE OF ETHICS

20.1      Audit Committee and
Relationship with Auditor

National Instrument 52-110 of the Canadian Securities
Administrators ("NI 52-110") requires the Company to disclose annually in its
Information Circular certain information concerning the constitution of its
Audit Committee and its relationship with its independent auditor, as set forth
in the following:

Audit and Risk Committee Charter

The Audit and Risk Committees charter sets out the Audit and
Risk Committees mandate and responsibilities. The charter is contained in the
Corporate Governance Policies and Procedures Manual in Appendix 6 which is
available for download from the Companys website under Corporate Governance at
www.northerndynastyminerals.comand a copy is
attached hereto as Schedule A.

Composition of the Audit Committee

The Audit Committee currently consists of Peter Mitchell, Wayne
Kirk, and Gordon Fretwell. Mr. Mitchell 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. Both Mr. Kirk and Mr. Fretwell are experienced securities
lawyers. Mr. Mitchell, the Audit Committee Chairman is a chartered accountant
and is regarded as 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. Directors and Officers 
PrincipalOccupation and Other
Companies Served by Current Directors of Northern Dynasty.

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.

---

| | 
      59 | Annual
      Information Form
| | ----------- | -----------------------------

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 US Securities and Exchange
Commission, and whether the services requested and the fees related to such
services could impair the independence of the auditors.

External Auditor Service Fees

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.

Nature of Services
    Year ended December 31,
      2012
    Year ended December 31,
      2011Audit Fees (1)Audit-Related
      Fees (2)Tax Fees (3)All Other Fees
      (4)
    $ 175,000   
    $ 203,000   Total
    $ 175,000
    $ 203,000


Notes:

|1. | "Audit Fees" are 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.                                                                                           
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | "Audit-Related Fees" include services that are
      traditionally performed by the auditor. These audit-related services
      include employee benefit audits, due diligence assistance, accounting
      consultations on proposed transactions, internal control reviews and audit
      or attest services not required by legislation or regulation.                                                                 
|3. | "Tax 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.
|4. | "All Other Fees" include all other non-audit
    services.                                                                                                                                                                                                                                                                                                                                                                 

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 US Securities and Exchange Commission, and
whether the non-audit services requested and the fees related to such services
could impair the independence of the auditors.

---

| | 
      60  | Annual
      Information Form
| | ------------ | -----------------------------

20.2      Code of Ethics

The Company has adopted a code of ethics that applies to all
personnel of the Company. A copy of the Code of Ethics was attached as an
exhibit to the Company's Annual Report on Form 20-F filed in June 2005. The Code
of Ethics was updated in 2007, 2009 and again in 2012 and is publicly available
on the Companys website at www.northerndynastyminerals.comand under the Companys
profile on SEDAR at www.sedar.com.

ITEM 21.    
 OFF BALANCE SHEET ARRANGEMENTS

None.

ITEM 22.     
TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

Contractual obligation
    Nil
    Nil
    Nil
    Nil
    NilLong term debt obligations
    Nil
    Nil
    Nil
    Nil
    NilOperating lease obligations
    Nil
    Nil
    Nil
    Nil
    NilPurchase obligations
    Nil
    Nil
    Nil
    Nil
    NilOther
    Nil
    Nil
    Nil
    Nil
    NilTotal
    Nil
    Nil
    Nil
    Nil
    Nil


The term purchase obligation means an agreement to purchase
goods or services that is enforceable and legally binding on the registrant that
specifies all significant terms, including: fixed or minimum quantities to be
purchased; fixed, minimum or variable price provisions; and the approximate
timing of the transaction.

---