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ANNUAL INFORMATION FORM

FOR THE YEAR ENDED DECEMBER 31, 2011

This annual information form (AIF) is as of March 28,
2012

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|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                                | 5                                                                    
|ITEM
      3.                                                                       | CORPORATE
      STRUCTURE                                             | 7   
|ITEM
      4.                                                                       | GENERAL
      DEVELOPMENT OF THE BUSINESS                             | 7   
|THREE
      YEAR HISTORY                                                            | 7                                                                    
|SIGNIFICANT
      ACQUISITIONS, DISPOSITIONS AND GROUP REORGANIZATION               | 8                                                                    
|ITEM
      5.                                                                       | DESCRIPTION
      OF BUSINESS                                         | 10  
|THE
      PEBBLE PROJECT                                                            | 10                                                                   
|TECHNICAL
      SUMMARY                                                             | 13                                                                   
|Location,
      Access and Property Description                                     | 13                                                                   
|Topography
      and Climate                                                        | 14                                                                   
|History                                                                             |                                                                       | 14  
|Property
      Geology                                                              | 15                                                                   
|Exploration                                                                         | 15                                                                   
|Mineralization                                                                      | 18                                                                   
|Sampling,
      Analysis, Security and Quality Assurance/Quality Control Procedures | 18                                                                   
|Mineral
      Resources                                                             | 20                                                                   
|2011
      Preliminary Assessment                                                   | 21                                                                   
|Ongoing
      Work by the Pebble Partnership                                        | 33                                                                   
|Program
      for 2012                                                              | 36                                                                   
|RISK
      FACTORS                                                                  | 37                                                                   
|ITEM
      6.                                                                       | DIVIDENDS                                                             | 41  
|ITEM
      7.                                                                       | DESCRIPTION
      OF CAPITAL STRUCTURE                                | 41  
|ITEM
      8.                                                                       | MARKET
      FOR SECURITIES                                           | 42  
|ITEM
      9.                                                                       | ESCROWED
      SECURITIES                                             | 42  
|ITEM
      10                                                                       | DIRECTORS
      AND OFFICERS                                          | 43  
|ITEM
      11.                                                                      | PROMOTERS                                                             | 52  
|ITEM
      12.                                                                      | LEGAL
      PROCEEDINGS                                               | 53  
|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, CODE OF ETHICS, ACCOUNTANT FEES AND EXEMPTIONS | 58  
|ITEM
      21.                                                                      | OFF
      BALANCE SHEET ARRANGEMENTS                                  | 59  
|ITEM
      22.                                                                      | TABULAR
      DISCLOSURE OF CONTRACTUAL OBLIGATIONS                   | 59  

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| |  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 Exchange Act 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 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, 2011, as reported by the Bank of Canada for
the conversion of one Canadian dollar into one United States dollar (U.S.
dollar), was 0.9833.

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.

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

|                      |  | Year Ended December 31 | 
|--------------------- |  | ---------------------- | 
|                      |  | 2011                   | 
|Rate at end of year   |  | 0.9833                 | 
|Average rate for year |  | 1.0110                 | 
|High for year         |  | 1.0583                 | 
|Low for year          |  | 0.9430                 | 

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:

|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                            | A geophysical survey deployed from a helicopter or small
      aircraft that                                                                                                                                                                                                                                                                                                                                   

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

|Electromagnetic Technique
      (ZTEM) airborne survey | 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 subdivided 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:

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 Resourcefor 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.

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

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.

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| |  7  | 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 Amex.

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 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, 2011, approximately $606 million in exploration
expenditures have been made on the Pebble Project. Of this amount, approximately
$418 million (US$398 million) in funding has been provided to the Pebble
Partnership by an affiliate of Anglo American plc (Anglo American) and
expended from 2007 to 2011. 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.

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

Significant Acquisitions, Dispositions and Group
Reorganization

Northern Dynasty holds indirect interests in 650 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 Limited Partnership (Pebble Partnership). Anglo American plc
(Anglo American) through a 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.

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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 350
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.

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

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".

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 calculated monthly (the "Loan"). The parties agreed with effect
from November 14, 2011, to increase the principal amount of the Loan by
US$730,174 (the Additional Loan Amount), being the amounts expended by
Northern Dynasty to date on annual assessment work, rental and related fees
relating to Liberty Stars claims in Alaska. The Loan is repayable, in cash on
demand or convertible into Liberty Star shares, after Northern Dynasty has spent
at least a minimum amount (the Minimum Expenditure) earning into a joint
venture (which has not yet been formed  see the discussion below). The Minimum
Expenditure was originally set at US$1 million, but the parties subsequently
agreed on November 14, 2011 to reduce the Minimum Expenditure by the Additional
Loan Amount plus interest incurred thereon, with the result that the Minimum
Expenditure has been reduced to US$271,900. The Pebble Partnership had the right
to acquire the Purchased Claims for a limited period but declined to exercise
that right.

In addition, subject to negotiating and signing a definitive
earn-in option and joint venture agreement, Northern Dynasty will be able to
earn a 60% interest in Liberty Stars remaining Big Chunk properties in Alaska
by spending US$10 million on those properties over six years. The Loan may be
applied as part of the earn-in requirements, at Northern Dynastys discretion.
As of the date of this AIF, Northern Dynasty and Liberty Star have not entered
into a joint venture agreement. On September 8, 2011, the parties agreed to
exclude the 56 Bonanza Hills claims (14 square miles) from any future joint
venture between them.

The total area of the properties is 172.7 square miles, and
includes the 95 Purchased Claims; 428 Big Chunk South claims (102.9 square
miles) and 184 Big Chunk North claims (46 square miles). All are located in the
vicinity of the Pebble property.

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| |  10  | 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 38.05.185 among others establishes the rights to
mining claims and mineral leases on lands owned by the State of Alaska and open
to mineral entry. This group of statutes also covers annual 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

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

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.

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

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

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 nominee title companies.

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% .

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, 2011 amounted to $418 million (US$398
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

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

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.

Technical Summary

The following disclosure is derived from Company files and
pages 14 to 33 are 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.

Location, Access andProperty 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 of the 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.

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

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.

Topography and Climate

The climate of the Iliamna area is similar to Anchorage where
the mean daily maximum temperature in July is degrees 63 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.

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

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).

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)

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

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.

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 Ongoing Work by the Pebble Partnership - 2011
Drilling.

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.

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

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

BY
      OPERATOR
    BY TYPEOperator
    # Holes
    Feet
    Metres
    Purpose
    # Holes
    Feet
    MetresCominco 1
    164
    75,741.0
    23,086
    Core 1, 5
    936
    929,922.6
    283,440NDM
    576
    494,778.0
    150,808
    Percussion6
    222
    18,715.6
    5,704PLP 2
    411
    372,669.3
    113,590
    TOTAL
    1,158
    948,638.2
    289,145FMM
    7
    5,450.0
    1,661
    BY AREATOTAL
    1,158
    948,638.3
    289,145BY YEARArea
    # Holes
    Feet
    MetresEast
    110
    435,613.5
    132,775Year
    # Holes
    Feet
    Metres
    West
    404
    316,337.1
    96,4201988 1
    26
    7,601.5
    2,317
    Main 7
    85
    8,568.2
    2,6121989 1
    27
    7,422.0
    2,262
    NW
    157
    32,235.4
    9,8251990
    25
    10,021.0
    3,054
    North
    40
    22,630.5
    6,8981991
    48
    28,129.0
    8,574
    NE
    10
    1,097.0
    3341992
    14
    6,609.0
    2,014
    South
    69
    29,129.9
    8,8791993
    4
    1,263.0
    385
    25 Zone
    8
    4,047.0
    1,2341997
    20
    14,695.5
    4,479
    37 Zone
    7
    4,252.0
    1,2962002
    68
    37,236.8
    11,350
    38 Zone
    20
    14,221.5
    4,3352003
    67
    71,226.6
    21,710
    52 Zone
    5
    2,534.0
    7722004
    266
    165,481.2
    50,439
    308 Zone
    1
    879.0
    2682005
    114
    81,978.5
    24,987
    Eastern
    5
    621.5
    1892006 3
    47
    72,621.9
    22,135
    Southern
    155
    59,073.4
    18,0062007 4
    92
    167,666.9
    51,105
    SW
    43
    6,952.8
    2,1192008 5
    241
    184,726.4
    56,305
    Sill
    39
    10,445.5
    3,1842009
    33
    34,947.6
    10,652
    TOTAL
    1,158
    948,638.3
    289,1452010
    66
    57,011.3
    17,377TOTAL
    1,158
    948,638.3
    289,145
    1. Includes holes drilled on the Sill prospect.2. Holes started by NDM and finished by PLP
      are included as PLP.3. Drill holes counted
      in the year in which they were completed.4. Wedged holes are counted as a single hole including full
      length of all wedges drilled.5. Includes
      Full Metal Minerals (FMM) drill holes. Data acquired in 2010.6. Shallow (<15 ft) augur holes not
      included.7. Comprised of holes drilled
      entirely in Tertiary cover rocks within the Pebble West and Pebble East
      areas.BY
      PURPOSEPurpose
    # Holes
    Feet
    MetresExploration 1,5
    623
    801,908.8
    244,422Geotechnical
    245
    65,152.1
    19,858Metallurgical
    60
    56,023.0
    17,076Environmental
    230
    25,554.4
    7,789


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| |  18  | 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%.

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| |  19  | 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 2004 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.

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| |  20  | 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 Resources                                                                                                                                                                                                                                                                                                                                      
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|This 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 orany part of mineral
      deposits 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 Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|This 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 to assume that all or any part of an
      inferred resourceexists, or is economically or legally mineable.

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| |  21  | 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                                                               
|Note 2                                                               
|Note 3                                                               
|Note 4                                                               

2011 Preliminary Assessment

The positive 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.                                        

---

| |  22  | 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 US$4.7 billion and a US$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 US$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 US$3.6 billion
  pre-tax and US$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
  US$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 US$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 Caseis
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

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

resource. As such, it is not considered to be ideal for
assessing the potential long-term economic value of the Pebble Project.

The level of engineering applied to the 45-year Reference
Caseis 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 Caseas 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 Casein 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 Caseand 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 Caseprocesses 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 Caseand 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.

---

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

A map showing the proposed mine-site layout for the 25-year
IDC Caseis 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 Caseis 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

---

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

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;
- 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,

---

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

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.

Production Profiles

The 45-year Reference Caseprocesses 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 Caseproduces 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


---

| |  27  | 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

---

| |  28  | 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


Costs of ocean freight for the transportation of final
concentrate to off-shore smelters, as well as all smelter and other offsite
charges, are summarized in the table below:

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


---

| |  29  | 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:

---

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

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
    0.21LOM 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 is 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 2011, Anglo American has invested some $398.5
million to advance the Pebble Project.

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:

---

| |  31  | 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 Caseand $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
    2,860


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

Item
    Unit
    IDC
      Case
    Reference Case
    Resource Case1200
    $M
    1,820
    2,660
    2,9641250
    $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 Preliminary Assessment was 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. Although based on a
      comprehensive technical review of recent engineering and technical studies
      undertaken by the Pebble Partnership and Northern Dynasty, the studies of
      capital and operating costs are incomplete and have not been optimized, so
      the ultimate costs may vary widely from the amounts set out in the
      Preliminary Assessment. This could materially and adversely impact the
      projected economics of the Pebble project.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|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                                                                                                                                                                                                                                                                    

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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. 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.

Ongoing Work by the Pebble Partnership

Comprehensive environmental, social and engineering studies at
Pebble began in 2004. Since mid-2007, these programs have been carried out by
the Pebble Partnership.

2011 Drilling

In 2011, 23,582 ft (7,188 m) were drilled in 9 holes on deposit
delineation and exploration targets and a further 27,186 ft (8,286 m) were
drilled in 76 cored geotechnical holes for engineering and hydrological purposes
in 2011. 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. This is in addition to the QA/QC procedures used internally by the
analytical laboratories. The QA/QC program continued to be subject to
independent review by Nicholson Analytical Consultants in 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

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

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 Proceduresabove) continued in 2011.
Inter-laboratory duplicate analysis for 2011 is still in progress. To the end of
2011, a total of 1,271 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.

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

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

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.

Work continues toward completion of the prefeasibility study,
with permitting under NEPA expected to begin toward the end of 2012.

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, more than 4,000 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:

- Public education: for example, some 434 tours to the Pebble Project site
  and operating and reclaimed mine sites involving over 2400 stakeholders have
  taken place;
- 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 2011, the fund has supported 105 projects, investing US$3.5
  million and leveraging over US$15 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-

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

based public consultation program to involve stakeholders in
the process by which the project is being designed. This consultative process is
currently expected to begin in the spring of 2012.

Program for 2012

Work continues toward completion of the prefeasibility study,
with permitting under NEPA expected to begin toward the end of 2012.

The 2012 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 or complete the prefeasibility study for the Pebble
Project.

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| |  37  | 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.

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

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. 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, 2011, Northern Dynasty had working capital of approximately $42.5
million, which is sufficient to fund its operations in fiscal 2012. 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 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, 2011
amounts to $418.1 million (US$398.5 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

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| |  39  | Annual Information Form
| | ------ | -----------------------

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. 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.

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

Changes in government regulations 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.

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

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

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 94,978,764 common shares without par value were issued and
outstanding as fully paid and non-assessable as of December 31, 2011. As of
March 28, 2012, there were 94,995,764 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, 2011.

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.

---

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

|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 Amex for the periods listed.

|               |  | Toronto Stock Exchange |  |  | NYSE Amex | 
|-------------- |  | ---------------------- |  |  | --------- | 
|               |  |                        |  |  |           | 
|               |  |                        |  |  |           | 
|               |  | High                   |  |  | Low       | 
|Monthly        |  | ($)                    |  |  | ($)       | 
|December 2011  |  | 7.77                   |  |  | 5.63      | 
|November 2011  |  | 8.64                   |  |  | 6.34      | 
|October 2011   |  | 8.74                   |  |  | 5.16      | 
|September 2011 |  | 10.30                  |  |  | 5.58      | 
|August 2011    |  | 10.61                  |  |  | 7.82      | 
|July 2011      |  | 11.20                  |  |  | 9.49      | 
|June 2011      |  | 12.22                  |  |  | 8.26      | 
|May 2011       |  | 13.68                  |  |  | 10.63     | 
|April 2011     |  | 15.79                  |  |  | 12.15     | 
|March 2011     |  | 18.09                  |  |  | 12.95     | 
|February 2011  |  | 21.50                  |  |  | 16.75     | 
|January 2011   |  | 18.45                  |  |  | 18.12     | 

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 Amex)).

|ITEM 9. | ESCROWED SECURITIES
|------- | -------------------

There are no shares of Northern Dynasty held in escrow.

---

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

|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 28, 2012.

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
      385,000 OptionsRobert A. Dickinson Chairman of the Board and Director
      Lions Bay, British Columbia. Canada
    Since June 1995
    3,420,083 Common Shares
      660,000 OptionsGordon J. Fretwell Director West Vancouver, British
      Columbia, Canada
    Since July 2004
    Nil Common Shares 332,000
      OptionsRussell E. Hallbauer Director West Vancouver,
      British Columbia, Canada
    Since April 2008
    106,600 Common Shares
      322,500 OptionsWayne Kirk Director Orcas Island, Washington, USA
    Since July 2004
    30,000 Common Shares 540,000
      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 461,000
      OptionsRonald W. Thiessen President, CEO and Director West
      Vancouver, British Columbia, Canada
    Since November 1995
    2,094,928 Common Shares
      631,500 OptionsTrevor Thomas Secretary Vancouver, British
      Columbia, Canada
    Since February 2008
    Nil Common Shares 110,560
      OptionsBruce Jenkins Senior VP, Corporate Development
      Vancouver, British Columbia, Canada
    Since June 2004
    3,700 Common Shares 244,500
      Options


---

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

Name, Position and Country of Residence
    Period as a Director
      or Officer of the Company
    Securities
      Beneficially Owned or Controlled(1)Steve Hodgson VP Engineering Vancouver, British
      Columbia, Canada
    Since March 2005
    90,000 Common Shares 384,500
      OptionsSean Magee VP Public Affairs North Vancouver,
      British Columbia, Canada
    Since October 2006
    Nil Common Shares 168,836
      Options


| | 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,
2011, directors listed above were re-elected to a one-year term of office
expiring at the next annual general meeting of Northern Dynasty, which is
currently scheduled for June 2012. 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 28, 2012, the above directors and officers beneficially owned, directly or
indirectly, or exercised control or direction over 6,869,444 common shares of
the Company (7.2%), or 11,234,840 common shares on a fully diluted basis (11.3%)
..

---

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

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.

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 Amex
    June 1996
    PresentAmarc Resources Ltd.
    Director
    TSX-V, OTCBB
    September 1995
    PresentAnooraq Resources Corporation
    Director
    TSX-V, JSE, NYSE Amex
    September 1996
    June 2009Continental Minerals Corporation
    Director
    TSX-V, OTCBB
    June 1994
    April 2011Detour Gold Corporation
    Director
    TSX
    August 2006
    January 2007Farallon Mining Ltd.
    Director
    TSX
    December 1995
    April 2007Heatherdale Resources Ltd.
    Director and Chairman
    TSX-V
    November 2009
    PresentNorthcliff Resources Ltd.
    Director
    
    June 2011
    February 2012Director of Capital Markets
    TSX
    February 2012
    Present


---

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

Company
    Positions Held
    Name of Market
    From
    ToRathdowney Resources Ltd.
    Director
    TSX-V
    March 2011
    PresentRockwell Diamonds Inc.
    Director
    TSX-V, OTCBB, JSE
    November 2000
    November 2008Taseko Mines Limited
    Director
    TSX, NYSE Amex
    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 Amex
    June 1994
    PresentChairman
    April 2004
    PresentAmarc Resources Ltd.
    Director
    TSX-V, OTCBB
    April 1993
    PresentChairman
    April 2004
    PresentAnooraq Resources Corporation
    Director
    TSX-V, JSE, NYSE Amex
    October 2004
    June 2009Co-Chairman
    October 2004
    June 2009Continental Minerals Corporation
    Director
    TSX-V, OTCBB
    June 2004
    April 2011Curis Resources Ltd.
    Director
    TSX
    November 2010
    PresentChairman
    November 2010
    December 2010Detour Gold Corporation
    Director
    TSX
    August 2006
    February 2009Farallon Mining Ltd.
    Director
    TSX
    July 1991
    April 2007Heatherdale Resources Ltd.
    Director
    TSX-V
    November 2009
    PresentNorthcliff Resources Ltd.
    Director and Chairman
    TSX
    June 2011
    PresentRathdowney Resources Ltd.
    Director and Chairman
    TSX-V
    March 2011
    December 2011Quartz Mountain Resources Ltd.
    Director and Chairman
    TSX-V
    December 2011
    PresentTaseko Mines Limited
    Director
    
    January 1991
    Present


---

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

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
    March 2005
    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 2008ICN Resources Ltd. (formerly Icon
      Industries Ltd.)
    Secretary
    TSX-V
    March 2009
    August 2010Director
    July 2004
    March 2009International Royalty Corporation
    Director
    TSX, NYSE Amex
    February 2005
    February 2010Keegan Resources Inc.
    Director
    TSX, NYSE Amex
    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 Amex
    June 2004
    PresentPine Valley Mining Corp.
    Director
    OTCBB
    August 2003
    September 2007Quartz Mountain Resources Ltd.
    Director
    TSX-V, OTCBB
    January 2003
    PresentSecretary
    January 2003
    December 2011Rockwell Diamonds Inc.
    Secretary
    TSX-V, OTCBB, JSE
    March 1998
    November 2007


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

---

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

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 Amex
    April 2008
    PresentCuris Resources Ltd.
    Director
    TSX
    November 2010
    PresentChairman
    December 2010
    PresentTaseko Mines Limited
    Director, President and Chief Executive
      Officer
    TSX, NYSE Amex
    July 2005
    Present


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 Amex
    July 2004
    PresentAnooraq Resources Corporation
    Director
    TSX-V, OTCBB, JSE
    July 2005
    September 2011Gabriel Resources Ltd.
    Director
    TSX
    June 2008
    PresentGreat Basin Gold Ltd.
    Director
    TSX, NYSE Amex, JSE
    July 2004
    January 2012Taseko Mines Limited
    Director
    TSX, NYSE Amex
    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

---

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

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 Amex
    May 2011
    PresentNorthcliff Resources Ltd.
    Director
    TSX
    June 2011
    PresentTaseko Mines Limited
    Chief Financial Officer
    TSX, NYSE Amex
    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.

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 Amex
    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
    Present


---

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

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 Amex
    November 1995
    PresentPresident and Chief Executive Officer
    November 2001
    PresentAmarc Resources Ltd.
    Director
    TSX-V, OTCBB
    September 1995
    PresentPresident and Chief Executive Officer
    September 2000
    PresentCorporation Anooraq Resources
    Director
    TSX-V, NYSE Amex, JSE
    April 1996
    June 2011President and Chief Executive Officer
    September 2000
    August 2007Continental Minerals Corporation
    Director
    TSX-V, OTCBB
    November 1995
    April 2011Co-Chairman
    January 2006
    April 2011Detour Gold Corporation
    Director
    TSX
    July 2006
    PresentChairman
    July 2006
    March 2009Farallon Mining Ltd.
    Director
    TSX
    August 1994
    January 2011Chairman
    December 2005
    January 2011Great Basin Gold Ltd.
    Director
    TSX, NYSE Amex, JSE
    October 1993
    PresentChairman
    November 2006
    PresentQuartz Mountain Resources Ltd.
    President, Chief Executive Officer and
      Director
    TSX-V
    December 2011
    PresentRockwell Diamonds Inc.
    Director
    TSX, OTCBB, JSE
    November 2000
    September 2007Chairman
    September 2006
    September 2007Taseko Mines Limited
    Director
    TSX, NYSE Amex
    October 1993
    PresentChairman
    May 2006
    Present


---

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

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 Amex
    February 2008
    PresentAmarc Resources Ltd.
    Secretary
    TSX-V, OTCBB
    February 2008
    PresentAnooraq Resources Corporation
    Assistant Secretary
    TSX-V, JSE, NYSE Amex
    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
    PresentTaseko Mines Limited
    Secretary
    
    July 2008
    Present


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

---

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

years and is the company's Executive Vice President of
Strategic Communications and Public Affairs.

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.

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.

---

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

|ITEM 12. | LEGAL PROCEEDINGS
|-------- | -----------------

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.

In February 2011, the U.S. 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 the
Nushagak and Kvichak drainages. This process was initiated in response to calls
from tribes in opposition to the Pebble Project for the EPA to pre-emptively use
its powers under Section 404c 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 has embarked on a scientific study to assess
potential impacts of hard rock mining and other resource development in the
region. The Bristol Bay Watershed Assessment process is expected to conclude in
late 2012 to early 2013.

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.

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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.

|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, 2011, the Company paid HDSI
approximately $3.5 million (2010 $2.8 million) for services rendered by HDSI
and reimbursed HDSI approximately $1.1 million (2010  $0.7 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.

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|ITEM 15. | MATERIAL CONTRACTS
|-------- | ------------------

The Company has the following material contracts that are in
effect during the fiscal year ended December 31, 2011:

| | 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 & Touche 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.

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|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 and Chief Financial Officer, have evaluated the effectiveness
of the Companys disclosure controls and procedures. Based on that evaluation,
the Companys Chief Executive Officer and Chief Financial Officer 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 Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosure.

Managements Report on Internal Control over Financial
Reporting

The Company's management, including the Chief Executive Officer
and the Chief Financial Officer, 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

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external purposes in accordance with IFRS. The Company's
internal control over financial reporting includes those policies and procedures
that:

- 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 internal control over financial reporting as of December 31, 2011. 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, 2011, the Companys internal control over
financial reporting was effective based on those criteria.

The Companys internal control over financial reporting as of
December 31, 2011, has been audited by Deloitte & Touche LLP, Independent
Registered Chartered Accountants who also audited the Companys consolidated
financial statements for the year ended December 31, 2011. Deloitte & Touche
LLP as stated in their report that immediately precedes the Company's audited
consolidated financial statements for the year ended December 31, 2011,
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
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Companys internal control over
financial reporting during the period covered by this Annual Information
Form.

Limitations of Controls and Procedures

The Companys management, including its Chief Executive Officer
and Chief Financial Officer, 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.

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|ITEM 20. | AUDIT COMMITTEE, CODE OF
      ETHICS, ACCOUNTANT FEES AND EXEMPTIONS
|-------- | ---------------------------------------------------------------------

|A. | AUDIT COMMITTEE FINANCIAL
EXPERT
|-- | --------------------------------

The board of directors has determined that Mr. Peter Mitchell
is a member of the audit committee of the Company who qualifies as an audit
committee "financial expert" based on his education and experience. Mr. Mitchell
is "independent", as that term is defined by the rules of Canadian National
Instrument 58-101 and the rules of the NYSE Amex. Mr. Mitchell is an accredited
Chartered Accountant in Canada.

|B. | 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 and again in 2009 and is publicly available on the
Companys website at www.northerndynastyminerals.com.

|C. | PRINCIPAL ACCOUNTANT FEES AND
  SERVICES
|-- | ----------------------------------------

The following table discloses the aggregate fees billed for
each of the last two fiscal years for professional services rendered by the
Company's audit firm for various services.

Year ended
    
    
    Year endedDecember 31
    
    
    December 31Services:
    
    2011
    
    
    2010Audit Fees(1)
    $
    203,000
    
    $
    122,000Audit-RelatedFees(2)
    
    
    
    
    Tax Fees
    
    
    
    
    All Other Fees
    
    
    
    
    $
    203,000
    
    $
    122,000


|Note: |     |                                                                                                                                                                                                                                                                                                                                                            
|----- | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | (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.

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.

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|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.

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