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ANNUAL INFORMATION FORM

FOR THE YEAR ENDED DECEMBER31,2010





This annual information form (AIF) is as of March 29, 2011

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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                                          | 8   
|THREE YEAR HISTORY                                                                  | 8   
|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                                                                    | 14  
|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 2011                                                                    | 35  
|RISK FACTORS                                                                        | 36  
|ITEM 6.DIVIDENDS                                                                    | 39  
|ITEM 7.DESCRIPTION OF
      CAPITAL STRUCTURE                                       | 39  
|ITEM 8.MARKET FOR SECURITIES                                                        | 40  
|ITEM 9.ESCROWED SECURITIES                                                          | 40  
|ITEM 10.DIRECTORS AND OFFICERS                                                      | 41  
|ITEM 11.PROMOTERS                                                                   | 51  
|ITEM 12.LEGAL PROCEEDINGS                                                           | 51  
|ITEM 13.INTEREST OF MANAGEMENT AND
      OTHERS IN MATERIAL TRANSACTIONS            | 51  
|ITEM 14.TRANSFER AGENT AND REGISTRAR                                                | 52  
|ITEM 15.MATERIAL CONTRACTS                                                          | 52  
|ITEM 16.INTERESTS OF EXPERTS                                                        | 52  
|ITEM 17.ADDITIONAL INFORMATION                                                      | 53  
|ITEM 18.DISCLOSURE FOR COMPANIES
      NOT SENDING INFORMATION CIRCULARS            | 53  
|ITEM 19.CONTROLS AND PROCEDURES                                                     | 53  
|ITEM 20.AUDIT COMMITTEE, CODE OF
      ETHICS, ACCOUNTANT FEES AND EXEMPTIONS       | 55  
|ITEM 21.OFF BALANCE SHEET ARRANGEMENTS                                              | 56  
|ITEM 22.TABULAR DISCLOSURE OF CONTRACTUAL
      OBLIGATIONS                         | 56  

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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 ExchangeAct of 1934. All
      statements in this AIF, other than statements of historical facts, that
      address future production, reserve potential, exploration drilling,
      exploitation activities and events or developments that the Company
      expects are forward-looking statements. Although the Company believes the
      expectations expressed in such forward-looking statements are based on
      reasonable assumptions, such statements are not guarantees of future
      performance and actual results or developments may differ materially from
      those in the forward-looking statements. Factors that could cause actual
      results to differ materially from those in forward-looking statements
      include market prices, exploitation and exploration successes, continued
      availability of capital and financing and general economic, market or
      business conditions, as well as those factors addressed in the Risk
      Factors section of this AIF. Investors are cautioned that any such
      statements are not guarantees of future performance and that actual
      results or developments may differ materially from those projected in the
      forward-looking statements. The Company reviews its forward looking
      statements on an ongoing basis and updates this information when
circumstances require it.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Incorporation of Continuous Disclosure Documents by
Reference

In this Annual Information Form (AIF), the Company or
Northern Dynasty refers to Northern Dynasty Minerals Ltd. and all its
subsidiaries and affiliated partnerships together unless the context states
otherwise.

The AIF incorporates by reference a technical report prepared
pursuant to 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, 2010, as reported by the Bank of Canada for
the conversion of one Canadian dollar into one United States dollar (U.S.
dollar), was 1.0054.

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

|                      |        | Year Ended December 31 |       
|--------------------- | ------ | ---------------------- | ------
|                      | 2010   | 2009                   | 2008  
|Rate at end of year   | 1.0054 | 0.9515                 | 0.8210
|                      |        |                        |       
|Average rate for year | 0.9708 | 0.8760                 | 0.9371
|                      |        |                        |       
|High for year         | 1.0054 | 0.9716                 | 1.0289
|                      |        |                        |       
|Low for year          | 0.9278 | 0.7692                 | 0.7711

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| |  4  | Annual Information Form
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For ease of reference, the following factors for converting
metric measurements into Imperial equivalents are as follows:

|Metric Units | Multiply by | Imperial Units            
|------------ | ----------- | --------------------------
|Hectares     | 2.471       | = acres                   
|Metres       | 3.281       | = feet                    
|Kilometres   | 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 Electromagnetic Technique
      (ZTEM) airborne survey | A geophysical survey deployed from a helicopter or small
      aircraft that measures vertical electromagnetic fields in the Earth caused
      by conductivity contrasts, and can map structures at greater depth than
      ground based systems. ZTEM will detect conductive zones (zones of
      alteration with mineralization) around more resistive intrusive rocks.                                     

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| |  5  | Annual Information Form
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Resource Category (Classification) Definitions

The discussion of mineral deposit classifications in this AIF adheres to the mineral resource and mineral reserve definitions and classification criteria developed by the Canadian Institute of Mining (" CIM" ) 2005. Estimated mineral
resources fall into two broad categories dependent on whether the economic viability of them has been established and these are namely " resources"  (potential for economic viability) and ore " reserves"  (viable economic
production is feasible). Resources are sub-divided into categories depending on the confidence level of the estimate based on level of detail of sampling and geological understanding of the deposit. The categories, from lowest confidence to highest
confidence, are inferred resource, indicated resource and measured resource.  Reserves are similarly sub-divided by order of confidence into probable (lowest) and proven (highest). These classifications can be more particularly described as follows:

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

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

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

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

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

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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 Suite 1020,
800 West Pender Street, Vancouver, British Columbia, Canada V6C 2V6, 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.

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

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, 2010, approximately $521 million in exploration
expenditures have been made on the Pebble Project. Of this amount, approximately
$340 million (US$320 million) in funding has been provided to the Pebble
Partnership by an affiliate of Anglo American plc (Anglo American) and
expended from 2007 to 2010. 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.

Significant Acquisitions, Dispositions and Group
Reorganization

Interest in the Pebble Limited Partnership and Pebble
Property

On July 26, 2007, the Company converted a wholly-owned general
partnership formed in 2006 to hold its Pebble Property interests into the Pebble
Limited Partnership (Pebble Partnership), so that an indirect wholly-owned
subsidiary of Anglo American could subscribe for 50% of the Pebble Partnership's
equity effective July 31, 2007. Each of the Company and Anglo American
effectively has equal rights in the Pebble Partnership through wholly-owned
affiliates. The Pebble Partnership's assets include the shares of two Alaskan
subsidiaries which hold registered title to the Pebble mining claims. To
maintain its 50% interest in the Pebble Partnership, Anglo American will be
required to make staged cash investments into the Pebble Partnership aggregating
to US$1.425 billion 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 at 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 329.8
square miles of associated resource lands.

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

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 September 10, 2010, the Pebble Partnership entered into a
  letter agreement, (the "FMM Agreement") with Full Metal Minerals Corp. and its
  subsidiary Full Metal Minerals (USA) Inc. (together, "FMM"), which is subject to
  due diligence by the Pebble Partnership. In the event that any issues uncovered
  by the Pebble Partnership during its due diligence review are satisfactorily
  resolved and the FMM Agreement becomes binding, the Pebble Partnership can earn a 60% interest in FMM' 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 FMM over a
  period ending on December 31, 2013.  The venture between FMM and the Pebble Partnership will be in the form of a limited liability company ("LLC") operated by the Pebble Partnership.

For the duration of the earn-in period and the term of 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, provided that
the Purchased Claims are declared or agreed to be outside of the current scope of the LLC, constitute no more than 20,000 acres, constitute a continuous block of claims and are located outside an "Exclusion Area" specified in the FMM Agreement.

The FMM Properties total 542 claims covering approximately 135 square miles and located west and northwest 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 Loan is repayable in cash or convertible into Liberty Star shares, after Northern Dynasty has spent at least US$1 million earning into the joint venture.

In addition, subject to negotiating and signing a definitive earn-in option and joint venture agreement, Northern Dynasty can earn a 60% interest in Liberty Star' s remaining Big Chunk and Bonanza Hills projects 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.

The Pebble Partnership had the right for a limited period to acquire the Purchased Claims but has declined to exercise that right.

The total area of the properties is 186.7 square miles, and includes 95 Purchased Claims; 428 Big Chunk South claims (102.9 square miles); 184 Big Chunk North claims (46 square miles); and 56 Bonanza Hills claims (14 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 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.

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

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

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

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

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

On May 31, 2006, the Company acquired 100% of the outstanding common shares of HDGI for purchase price of 14,002,268 common shares of the Company.  The agreed number of shares was based on negotiations between the Company, represented by a Special
Committee of the Board of Directors, and HDGI with reference to an independent valuation of the carried interests performed by Ross Glanville & Associates Ltd in March 2005. Both parties agreed to a valuation of $6.37 per share, based upon
the issuance of 14,002,268 common shares, as representing the fair value of the 20% carried contractual interest.  The valuation report was publicly filed 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.

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

2006 Equity Purchase by Rio Tinto Affiliate

In 2006, the Company issued 8,745,845 common shares in connection with a share purchase agreement with Kennecott Canada Exploration Inc. (" Kennecott" , a subsidiary of Rio Tinto plc) for $10.00 per share for proceeds of approximately
$87 million. Kennecott received a right of first refusal to participate in up to 50% of future share placements by the Company, subject to customary exceptions, until Kennecott reaches 19.9% of the Company' s outstanding share capital. 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% .  Currently, the holding represents approximately 19.15%

Limited Partnership with Anglo American

On July 26, 2007, the Company converted the wholly-owned general partnership formed in 2006 to hold its Pebble Property interests into the Pebble Partnership, so that an indirect wholly-owned subsidiary of Anglo could subscribe for 50% of the Pebble
Partnership's equity effective July 31, 2007. Each of the Company and Anglo effectively has equal rights in the Pebble Partnership through wholly-owned affiliates.  The Pebble Partnership's assets include the shares of two Alaska subsidiaries which
hold registered title to the claims.  To maintain its 50% interest in the Pebble Partnership, Anglo will be required to make staged cash investments into the Pebble Partnership, aggregating US$1.425 billion to US$1.5 billion, as described
below.  The purpose of the Pebble Partnership is to engineer, permit, construct and operate a modern, long-life mine at the Pebble Project.

Anglo' 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 and provide approved alternatives for a Final Feasibility Study.  After approval of a receipt of the approved Prefeasibility Report, Anglo is required, in order to retain its 50%
interest in the Pebble Partnership, to elect to commit within 60 days to further expenditures which bring its total investment to 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. The final feasibility study may require more than the cumulative US$450 million of expenditures. Upon an affirmative decision by the Pebble
Partnership to develop a mine, Anglo is required to commit to the remainder of the total investment of US$1.425 billion in order to retain its interest in the Pebble Partnership.  If the feasibility study is completed after 2011, Anglo' s
overall funding requirement increases from US$1.425 billion to US$1.5 billion. Following completion of the Anglo required expenditures, any further expenditure will be funded by Anglo and Northern Dynasty 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' s cash contributions to the Pebble Partnership from August 1, 2007 to
December 31, 2010 amounted to $340 million (US$320 million). Under the Pebble Partnership Agreement and applicable tax regulations, neither the Company nor its affiliated general partnership will be entitled to the benefits for tax purposes
of the expenditures incurred by the Pebble Partnership from Anglo' s investment, as these benefits accrue exclusively to Anglo under the Pebble Partnership Agreement and applicable tax regulations.

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

Technical Summary

The following disclosure is derived from Company files and 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 and Property Description

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

Location ofthe Pebble Project



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

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

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

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

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 form 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 base 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.  Historical estimates should not be relied upon for investment purposes.

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| |  15  | Annual Information Form
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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) 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.

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

Cominco collected a total of 7,337 soil samples between 1988 and 1995 at Pebble in several surveys. During the period of 2001-2003, Northern Dynasty collected an additional 1.026 soil samples at 30-76 m intervals along lines spaced at 122-129 m.
These programs outlined high contrast coincident anomalies in gold, copper, molybdenum and other metals in an area that measures 9 km north-south by up to 4 km east-west, with strong but smaller anomalies in several outlying areas. All anomalies lie within the large IP chargeability anomaly.

Extensive drilling has taken place over 15 separate 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) in 18 cored geotechnical holes for engineering and hydrological purposes were drilled in 2010.

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

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

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

|BY
      OPERATOR | BY TYPE      
|----------------- | -------------
|Operator          | #
      Holes
|Cominco 1         | 164          
|NDM               | 576          
|PLP 2             | 411          
|FMM               | 7            
|TOTAL             | 1,158        
|BY YEAR          
|Area              | # Holes      
|East              | 110          
|Year              | # Holes      
|1988 1            | 26           
|1989 1            | 27           
|1990              | 25           
|1991              | 48           
|1992              | 14           
|1993              | 4            
|1997              | 20           
|2002              | 68           
|2003              | 67           
|2004              | 266          
|2005              | 114          
|2006 3            | 47           
|2007 4            | 92           
|2008 5            | 241          
|2009              | 33           
|2010              | 66           
|TOTAL             | 1,158        
|BY PURPOSE       
|Purpose           | # Holes      
|Exploration 1,5   | 623          
|Geotechnical      | 245          
|Metallurgical     | 60           
|Environmental     | 230          
|TOTAL             | 1,158        

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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 Mineral (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 2007-2010. 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 (2008-2010). 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 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 any part or all of mineraldeposits in these categories will ever be converted into reserves.

|Cut-off(% CuEQ)      | CuEQ(%) | Mt    | Cu(%) | Au(g/t) | Mo(ppm) | Cu(Blb) | Au(Moz) | Mo(Blb) | CuEq(Blb)
|-------------------- | ------- | ----- | ----- | ------- | ------- | ------- | ------- | ------- | ---------
|Measured            
|0.30                 | 0.65    | 527   | 0.33  | 0.35    | 178     | 3.8     | 5.9     | 0.21    | 7.6      
|0.40                 | 0.66    | 508   | 0.34  | 0.36    | 180     | 3.8     | 5.9     | 0.20    | 7.4      
|0.60                 | 0.77    | 277   | 0.40  | 0.42    | 203     | 2.4     | 3.7     | 0.12    | 4.7      
|1.00                 | 1.16    | 27    | 0.62  | 0.62    | 301     | 0.4     | 0.5     | 0.02    | 0.7      
|Indicated           
|0.30                 | 0.80    | 5,414 | 0.43  | 0.35    | 257     | 51.3    | 60.9    | 3.07    | 95.5     
|0.40                 | 0.85    | 4,891 | 0.46  | 0.36    | 268     | 49.6    | 56.6    | 2.89    | 91.7     
|0.60                 | 1.00    | 3,391 | 0.56  | 0.41    | 301     | 41.9    | 44.7    | 2.25    | 74.8     
|1.00                 | 1.30    | 1,422 | 0.77  | 0.51    | 342     | 24.1    | 23.3    | 1.07    | 40.7     
|Measured + Indicated
|0.30                 | 0.78    | 5,942 | 0.42  | 0.35    | 250     | 55.0    | 66.9    | 3.28    | 102.2    
|0.40                 | 0.83    | 5,399 | 0.45  | 0.36    | 260     | 53.6    | 62.5    | 3.09    | 98.8     
|0.60                 | 0.98    | 3,668 | 0.55  | 0.41    | 293     | 44.5    | 48.3    | 2.37    | 79.2     
|1.00                 | 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 any part or all of an
      inferred resource exists, or is economically or legallymineable.

|Cut-off(% CuEQ) | CuEQ(%) | Mt    | Cu(%) | Au(g/t) | Mo(ppm) | Cu(Blb) | Au(Moz) | Mo(Blb) | CuEq(Blb)
|--------------- | ------- | ----- | ----- | ------- | ------- | ------- | ------- | ------- | ---------
|Inferred       
|0.30            | 0.53    | 4,835 | 0.24  | 0.26    | 215     | 25.6    | 40.4    | 2.29    | 56.5     
|0.40            | 0.66    | 2,845 | 0.32  | 0.30    | 259     | 20.1    | 27.4    | 1.62    | 41.4     
|0.60            | 0.89    | 1,322 | 0.48  | 0.37    | 289     | 14.0    | 15.7    | 0.84    | 25.9     
|1.00            | 1.20    | 353   | 0.69  | 0.45    | 379     | 5.4     | 5.1     | 0.29    | 9.3      

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

The tabulated mineral resources are subject to the notes below:

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

2011 Preliminary Assessment

The 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.                                        

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 of 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 current
  prevailing metal prices, 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.

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

- 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 current prevailing metal prices, 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 minusUS$0.11.

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

Development Scenario used for the Preliminary Assessment

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

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

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

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

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

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

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

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

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

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

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

A map showing the proposed mine-site layout for the 25-year
IDC Case is shown below:



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

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

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

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

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

Infrastructure

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

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

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

Project Workforce

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

Production Profiles

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

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

|Item                                   | Unit        | IDC Case | Reference Case | Resource Case
|-------------------------------------- | ----------- | -------- | -------------- | -------------
|Mine Life                              | years       | 25       | 45             | 78           
|Mining Method                          |             | Open Pit | Open Pit       | Open Pit     
|Strip Ratio                            | waste : ore | 1.5      | 2.1            | 2.6          
|Processing Rate                        | M ton / yr  | 80       | 84             | 84           
|Total Processed                        | M ton       | 1,990    | 3,767          | 6,528        
|% of M+I+I
      Resource              | %           | 17       | 32             | 55           
|Copper Eq. Grade                       | %           | 0.72     | 0.83           | 0.84         
|Copper Grade                           | %           | 0.38     | 0.46           | 0.46         
|Gold Grade                             | oz / ton    | 0.012    | 0.011          | 0.011        
|Molybdenum Grade                       | ppm         | 182      | 214            | 243          
|Copper Recovery                        | %           | 86.6     | 87.9           | 88.4         
|Gold Recovery                          | %           | 71.5     | 71.3           | 71.2         
|Molybdenum
      Recovery              | %           | 84.8     | 87.9           | 89.4         
|Copper Eq.
      Recovered             | M lb        | 24,483   | 54,129         | 96,357       
|Copper Recovered                       | M lb        | 12,944   | 30,494         | 53,437       
|Gold Recovered                         | 000 oz      | 16,391   | 30,307         | 50,133       
|Molybdenum
      Recovered             | M lb        | 616      | 1,420          | 2,835        
|Peak Annual Copper
      Recovered     | M lb        | 822      | 1,157          | 1,096        
|Peak Annual Gold
      Recovered       | 000 oz      | 1,038    | 1,127          | 1,088        
|Peak Annual Molybdenum
      Recovered | M lb        | 43       | 56             | 62           
|Avg Annual Copper
      Recovered      | M lb        | 518      | 678            | 685          
|Avg Annual Gold
      Recovered        | 000 oz      | 656      | 673            | 643          
|Avg Annual Molybdenum
      Recovered  | M lb        | 25       | 32             | 36           
|26% Cu-Au Concentrate
      Produced   | 000s dmt   | 22,582   | 53,200         | 93,225       
|52% Mo Concentrate
      Produced      | 000s dmt   | 537      | 1,239          | 2,473        

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

*Outsourced infrastructure, including associated indirects
and contingencies

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| |  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
    Case
|-------------------- | -------- | ------------------ | -----------------
|Open Pit             | 2,047    | 3,286              | 7,225            
|Processing           | 146      | 230                | 517              
|Infrastructure       | 12       | 165                | 165              
|Waste Management     | 846      | 2,211              | 3,364            
|Other                | 70       | 104                | 180              
|Molybdenum Autoclave | 83       | 144                | 276              
|Total                | 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 Case
|------------------------------------------ | ------------- | ------------ | -------------- | -------------
|Total Operating
      Costs                | $M            | 22,208       | 43,489         | 96,063       
|Open Pit                                   | $ /
      ton | 3.83         | 4.30           | 7.19         
|Process                                    | $ /
      ton | 4.50         | 4.60           | 4.93         
|Transportation                             | $ /
      ton | 0.97         | 0.91           | 0.91         
|Environmental                              | $ /
      ton | 0.30         | 0.29           | 0.31         
|G&A                                        | $ /
      ton | 1.56         | 1.45           | 1.38         
|Total 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 Case
|------------------------------------ | ------------- | ------------ | -------------- | -------------
|Offsite
      Charges                |               |              |                |              
|Total Offsite
      Charges          | $ M           | 4,752        | 11,089         | 19,938       
|Offsite Charges per ton
      milled | $ /
      ton | 2.39         | 2.94           | 3.05         
|Cash Cost
      Analysis             |               |              |                |              
|Offsite Charges                      | $/lb          | 0.38         | 0.38           | 0.39         
|Operating Costs                      | $/lb          | 1.79         | 1.48           | 1.87         
|Copper Cash Cost                     | $/lb          | 2.17         | 1.86           | 2.26         
|By-Product Credits                   | $/lb          | -2.27        | -1.97          | -2.05        
|C1 Copper Cost                       | $/lb          | -0.10        | -0.11          | 0.21         

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| |  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 and current prevailing metal prices applied to the
financial model for each of the development cases are outlined in the table
below:

|Metal Type | Unit | Long
    Term Metal Prices | Current Prevailing Metal Prices
|---------- | ---- | -------------------------- | -------------------------------
|Copper     | $/lb | 2.50                       | 4.00                           
|Gold       | $/oz | 1,050                      | 1,350                          
|Molybdenum | $/lb | 13.50                      | 15.00                          
|Silver     | $/oz | 15.00                      | 28.00                          
|Rhenium    | $/kg | 3,000                      | 3,000                          
|Palladium  | $/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 years
|------------------ | ------------- | --------------------- | ----------------------- | ----------------------
|NSR LOM            | $ M           | 54,637                | 120,197                 | 213,970               
|NSR Annual Average | $ M           | 2,185                 | 2,671                   | 2,743                 
|Copper             | %             | 52                    | 55                      | 55                    
|Gold               | %             | 29                    | 24                      | 22                    
|Molybdenum         | %             | 15                    | 16                      | 18                    
|Other              | %             | 4                     | 5                       | 5                     
|NSR 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:

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

|Item                                  | Unit          | IDC
    Case | Reference Case | Resource Case
|------------------------------------- | ------------- | ------------ | -------------- | -------------
|Mine Life                             | years         | 25           | 45             | 78           
|Initial Capital                       | $ M           | 4,695        | 4,695          | 4,695        
|LOM Sustaining
      Capital          | $ M           | 3,204        | 6,140          | 11,727       
|LOM NSR                               | $ M           | 54,637       | 120,197        | 213,970      
|NSR Per Ton                           | $ /
      ton | 27.45        | 31.91          | 32.78        
|LOM Operating Cost                    | $ M           | 22,208       | 43,489         | 96,063       
|Operating Cost Per
      Ton          | $ /
      ton | 11.16        | 11.55          | 14.72        
|C1 Copper Cost                        | $ /
      lb  | -0.10        | -0.11          | 0.21         
|LOM Pre-Tax Net Cash
      Flow       | $ M           | 20,123       | 55,278         | 87,329       
|Long-term Metal
      Prices          |               |              |                |              
|Pre-Tax NPV at 7%                     | $ M           | 3,837        | 6,129          | 6,812        
|Pre-Tax IRR                           | %             | 13.4%        | 14.2%          | 14.5%        
|Pre-Tax Payback                       | years         | 6.5          | 6.2            | 6.1          
|Current Prevailing
      Metal Prices |               |              |                |              
|Pre-Tax NPV at 7%                     | $ M           | 11,410       | 15,709         | 16,864       
|Pre-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 $1.425 to $1.5 billion in staged
investments in order to retain its 50% interest in the Pebble Project. If a
feasibility study for the project is completed after 2011, Anglo Americans
overall funding requirement increases from $1.425 billion to $1.5 billion. 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 2010, Anglo American has invested some $325 million
to advance the Pebble Project.

Inasmuch 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 current prevailing metal prices, in the table below:

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

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

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

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

78-year Resource Case.

|Item                                               | Unit | IDC
        Case | Reference Case | Resource Case
|-------------------------------------------------- | ---- | ---------------- | -------------- | -------------
|Discount Rate                                      |      |                  |                |              
|NPV at 5%                                          | $M   | 2,491            | 4,164          | 4,877        
|NPV at 7%                                          | $M   | 1,559            | 2,358          | 2,650        
|NPV at 8%                                          | $M   | 1,213            | 1,774          | 1,975        
|NPV at 10%                                         | $M   | 689              | 976            | 1,087        
|Copper Price (Gold $1050/oz,
        Mo $13.50/lb)
|2.50                                               | $M   | 1,559            | 2,358          | 2,650        
|2.75                                               | $M   | 1,893            | 2,776          | 3,089        
|3.00                                               | $M   | 2,226            | 3,192          | 3,525        
|3.25                                               | $M   | 2,557            | 3,605          | 3,955        
|3.50                                               | $M   | 2,874            | 4,006          | 4,375        
|3.75                                               | $M   | 3,188            | 4,404          | 4,792        
|4.00                                               | $M   | 3,499            | 4,796          | 5,201        
|4.25                                               | $M   | 3,802            | 5,181          | 5,605        
|Gold
      Price (Copper $2.50/lb, Mo $13.50/lb)  
|1050                                               | $M   | 1,559            | 2,358          | 2,650        
|1100                                               | $M   | 1,646            | 2,459          | 2,755        
|1150                                               | $M   | 1,733            | 2,560          | 2,860        
|1200                                               | $M   | 1,820            | 2,660          | 2,964        
|1250                                               | $M   | 1,906            | 2,760          | 3,068        

---

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

|Item                                                  | Unit | IDC
      Case | Reference Case | Resource Case
|----------------------------------------------------- | ---- | -------------- | -------------- | -------------
|1300                                                  | $M   | 1,993          | 2,861          | 3,172        
|1350                                                  | $M   | 2,079          | 2,961          | 3,276        
|1400                                                  | $M   | 2,166          | 3,061          | 3,380        
|Combined Copper and Gold
        Price (Mo $13.50/lb)
|2.50 / 1050                                           | $M   | 1,559          | 2,358          | 2,650        
|2.75 / 1100                                           | $M   | 1,980          | 2,876          | 3,193        
|3.00 / 1150                                           | $M   | 2,399          | 3,391          | 3,732        
|3.25 / 1200                                           | $M   | 2,804          | 3,895          | 4,255        
|3.50 / 1250                                           | $M   | 3,200          | 4,389          | 4,771        
|3.75 / 1300                                           | $M   | 3,590          | 4,873          | 5,276        
|4.00 / 1350                                           | $M   | 3,971          | 5,350          | 5,776        
|4.25 / 1400                                           | $M   | 4,351          | 5,827          | 6,276        

|All information relating to the Preliminary Assessment,
      including but not limited to statements of the Pebble Project's potential
      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 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.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|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.

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 (described under exploration above). 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.

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

Since mid-2007, these programs have been geared toward support
for a prefeasibility study, and once completed, 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.

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 350 tours to site and operating and
  reclaimed mine sites involving 2,000 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 2010, the fund has supported 65 projects, investing $2.4 million
  and leveraging $12 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.

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

Environmental Studies and Planning

Extensive baseline studies have been undertaken to characterize
  the physical, chemical, biological and social environment of the project area.
  These studies have resulted in a superior database, which  in characterizing
  the climate, surface and groundwater hydrology, wetlands, terrestrial wildlife
  habitat, fish and aquatic habitat, and marine habitat  has guided all aspects
  of project planning. The findings of these exhaustive studies will be compiled in an Environmental Baseline Document planned to be publicly released in early 2011.

The Pebble Partnership continues to advance engineering and project design initiatives for the Pebble Project. This effort will be informed by input received from project stakeholders through public consultation forums undertaken in Alaska prior to
the completion of a Prefeasibility Study and the submission of permit applications. At this time, it is expected that the Pebble Partnership will complete a Prefeasibility Study for the Pebble Project in early 2012, prior to initiating permitting
under NEPA.

Permitting will be initiated when the Pebble Partnership submits its Project Description and Environmental Baseline Document. These documents will provide the basis for an Environmental Impact Statement (EIS) to be prepared. The EIS will be prepared
by a third-party contractor under the direction of a lead federal agency. The Pebble EIS will be the focal point for project permitting. It will determine whether sufficient evaluation of the project' s environmental effects and development
alternatives has been undertaken, and provide the basis for federal, state and local government agencies to make individual permitting decisions.

Program for 2011

The 2011 program for the Pebble Project involves site activities, engineering, environmental work, public affairs efforts and administrative activities with a total expenditure of US$91 million.

Site work in 2011 will be focused on drilling for engineering studies, and support for environmental field work. The drilling programs are designed to collect information around planned infrastructure, to complete condemnation studies and
metallurgical testwork, and to further test groundwater conditions and overburden characteristics in the pit area. Further assessment of the resource model is planned between the East and West zones.

Engineering studies are focused on advancing the prefeasibility study toward completion in mid-2012. Resource studies include final definition of geo-metallurgical domains and finalizing and integrating the results of variability studies into the
resource model.  Planned mining studies include oversight and integration of data from site engineering programs, trade-off studies related to the results from metallurgical and other programs, an assessment of labor productivity and a variety of
programs related to design and operations in the open pit. Plant design work will include flotation circuit studies and process flow simulations, as well as energy trade-off and efficiency assessments.  Infrastructure studies will integrate new data
from site investigations. Off-site infrastructure will also be a focus of work in 2011, and include power (transmission and plant) studies and geotechnical assessments of the road and port areas.

Environmental work will include planning related to the prefeasibility level design, as well as ongoing site monitoring, and providing support for consultation with communities and agencies.

Public affairs will focus on meeting with stakeholders regarding the planned project update. Additional tours to the site and to operating mines in western North America are planned as these tours provide useful background for stakeholder
discussions. A variety of business development, community investments and capacity building projects are planned.

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

Risk Factors

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

The Pebble Partnership' s mineral property interests
  do not contain any ore reserves or any known body of economic mineralization.

Although there are known bodies of mineralization on the Pebble Project, and the Pebble Partnership has completed core drilling programs within, and adjacent to, the deposits to determine measured and indicated resources, there are currently no
known reserves or body of commercially viable ore and the Pebble Project must be considered an exploration prospect only. Extensive additional work is required before Northern Dynasty or the Pebble Partnership can ascertain if any mineralization may
be economic and hence constitute " ore" .  Engineering, socioeconomic and environmental studies are ongoing. Exploration for minerals is a speculative venture necessarily involving substantial risk.  If the expenditures incurred on the
Pebble Project do not result in discovery and development of commercial quantities of ore, the value of exploration and acquisition expenditures will be totally lost and the value of Northern Dynasty stock negatively impacted.

Mineral Resources disclosed by Northern Dynasty or the Pebble Partnership for the Pebble Project are estimates only.

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

All amounts of mineral resources are estimates only, and Northern Dynasty cannot be certain that any specified level of recovery of metals from the mineralized material will in fact be realized or that the Pebble Project or any other identified
mineral deposit will ever qualify as a commercially mineable (or viable) ore body that can be economically exploited. Mineralized material which is not mineral reserves does not have demonstrated economic viability. In addition, the quantity of
mineral reserves and mineral resources may vary depending on, among other things, metal prices and actual results of mining.

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

Northern Dynasty has a long history of losses and there can be no assurance that Northern Dynasty will ever be profitable. Northern Dynasty has paid no dividends on its shares since incorporation. Northern Dynasty presently has no ability to
generate earnings as its mineral properties are in the exploration stage. If the Pebble Project is successfully developed, Northern Dynasty anticipates that it will retain future earnings and other cash resources for the future operation and
development of its business. 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.

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

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, 2010, Northern Dynasty had working capital of approximately $43 million, which is
sufficient to fund its operations in fiscal 2011.  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 has funded a further US$195 million for a total of US$320 million to date; however, there is no certainty that Anglo will continue funding the Pebble Partnership if Anglo is not satisfied with the outlook for the Pebble Project,
economically or politically. Furthermore, Northern Dynasty anticipates that its ability to raise additional financing to fund exploration of a new property or the acquisition of a new property or project would be impaired as a result of the failure
to establish commercial viability of the Pebble Project.

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

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

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

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

Northern Dynasty competes with larger, better capitalized
competitors in the mining industry.

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

Compliance with environmental requirements will take
large resources and changes to these requirements could significantly increase
the costs developing the Pebble Project and could delay these activities.

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

Changes in government regulations 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.

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.

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

The market price of Northern Dynastys common shares is
subject to high volatility and could cause investor loss.

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

If Northern Dynasty loses the services of the key
personnel that it engages to undertake its activities, then Northern Dynastys
plan of operations may be delayed or be more expensive to undertake than
anticipated.

Northern Dynastys success depends to a significant extent on
the performance and continued service of certain independent contractors,
including Hunter Dickinson Services Inc (HDSI). The Company has access to the
full resources of HDSI, an experienced exploration and development firm with
in-house geologists, engineers and environmental specialists, to assist in its
technical review of the various opportunities; however the Company does not have
the right to require HDSI to bring to the Company all corporate opportunities
that come to HDSI's attention.

ITEM 6.    
DIVIDENDS

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

ITEM 7.    
DESCRIPTION OF CAPITAL STRUCTURE

Northern Dynastys share capital consists of one class only,
namely common shares without par value, of which an unlimited number of shares
are authorized and 94,177,066 common shares without par value were issued and
outstanding as fully paid and non-assessable as of December 31, 2010. As of
March 28, 2011, there were 94,744,129 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 total issue price
for shares since January 1, 2010.

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.

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

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

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

ITEM 8.     MARKET
FOR SECURITIES

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

|               | Toronto
      Stock Exchange | NYSE
      Amex
|-------------- | ---------------------------- | ---------------
|               |                              |                
|               |                              |                
|               | High                         | Low            
|               | (Cdn$)                       | (Cdn$)         
|Monthly        |                              |                
|December 2010  | 14.45                        | 9.37           
|November 2010  | 10.05                        | 8.63           
|October 2010   | 9.37                         | 8.44           
|September 2010 | 9.00                         | 7.17           
|August 2010    | 7.49                         | 6.80           
|July 2010      | 7.39                         | 6.50           
|June 2010      | 7.87                         | 6.85           
|May 2010       | 9.69                         | 6.85           
|April 2010     | 10.38                        | 9.45           
|March 2010     | 10.28                        | 8.82           
|February 2010  | 10.00                        | 8.27           
|January 2010   | 9.90                         | 8.07           

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.

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| |  41  | 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 29, 2011.

|Name, Position and Country of Residence                                                      | Period a Director ofNorthern Dynasty | Securities Beneficially Ownedor
      Controlled(11)
|-------------------------------------------------------------------------------------------- | ------------------------------------ | ----------------------------------------------------
|Scott D. Cousens Director Vancouver, British
      Columbia                                  | Since June 1996                      | 1,084,133 Common Shares 385,000 Options
      (1)   
|Robert A. Dickinson Chairman of the Board and Director
      Lions Bay, British Columbia     | Since June 1995                      | 3,420,083 Common Shares(10)660,000 Options (2)      
|David Elliott Director Vancouver, British Columbia                                           | Since July 2004                      | 13,000 Common Shares 405,000 Options
      (1)(3)   
|Gordon J. Fretwell Director West Vancouver, British
      Columbia                           | Since July 2004                      | Nil Common Shares 332,000 Options (9)               
|Russell E. Hallbauer Director West Vancouver,
      British Columbia                         | Since April 2008                     | 106,600 Common Shares 322,500 Options
      (3)(4)  
|Wayne Kirk Director Orcas Island, Washington                                                 | Since July 2004                      | 20,000 Common Shares 550,000 Options
      (5)      
|Stephen Scott Director West Vancouver, British
      Columbia                                | Since November 2007                  | Nil                                                 
|Marchand Snyman Chief Financial Officer and Director
      North Vancouver, British Columbia | Since August 2008                    | 40,000 Common Shares 461,000
      Options(6)       
|Ronald W. Thiessen President, CEO and Director West
      Vancouver, British Columbia        | Since November 1995                  | 2,095,838 Common Shares 631,500 Options
      (7)   
|Trevor Thomas Secretary Vancouver, British Columbia                                          | Since February 2008                  | Nil Common Shares 112,260 Options (8)               

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

Notes:

| | 1.  | Messrs. Cousens and Elliott each hold options to purchase
      220,000 Common Shares at $5.00 per share expiring on February 2, 2014,
      75,000 Common Shares at $7.59 expiring on May 27, 2015 and 90,000 Common
      Shares at $15.44 expiring on March 15, 2016.                                                                                                                                                                                                   
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 2.  | Mr. Dickinson holds options to purchase 309,000 Common
      Shares at an exercise price of $5.00 per share expiring on February 2,
      2014, 150,000 Common Shares at $7.59 expiring on May 27, 2015 and 201,000
      Common Shares at $15.44 expiring on March 15, 2016.                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 3.  | Messrs. Elliott and Hallbauer each hold options to
      purchase 20,000 Common Shares at an exercise price of $3.00 per share
      expiring on October 27, 2013.                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 4.  | Mr. Hallbauer holds options to purchase 137,500 Common
      Shares at $5.00 per share expiring on February 2, 2014, 75,000 Common
      Shares at $7.59 expiring on May 27, 2015 and 90,000 Common shares at
      $15.44 expiring on March 15, 2016.                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 5.  | Mr. Kirk holds options to purchase 40,000 Common Shares
      at an exercise price of $5.35 per share expiring on August 22, 2013,
      10,000 Common Shares at an exercise price of $3.00 per share expiring
      October 27, 2013, 260,000 Common Shares at an exercise price of $5.00 per
      share expiring on February 2, 2014, 150,000 Common Shares at $7.59
      expiring on May 27, 2015 and 90,000 Common Shares at $15.44 expiring on
      March 15, 2016.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 6.  | Mr. Snyman holds options to purchase 50,000 Common Shares
      at an exercise price of $3.00 per share expiring on October 27, 2013,
      135,000 Common Shares at an exercise price of $5.00 per share expiring on
      February 2, 2014, 126,000 Common Shares at $7.59 expiring on May 27, 2015
      and 150,000 Common Shares at $15.44 expiring on March 15, 2016.                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 7.  | Mr. Thiessen holds options to purchase 331,500 Common
      Shares at an exercise price of $5.00 per share expiring on February 2,
      2014, 150,000 Common Shares at $7.59 expiring on May 27, 2015 and 150,000
      Common Shares at $15.44 expiring on March 15, 2016.                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 8.  | Mr. Thomas holds options to purchase 1,760 Common Shares
      at an exercise price of $3.00 per share expiring on October 27, 2011,
      23,500 Common Shares at an exercise price of $5.00 per share expiring on
      February 2, 2012, 42,000 Common Shares at $7.59 expiring on May 27, 2013
      and 45,000 Common Shares expiring on March 15, 2016.                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 9.  | Mr. Fretwell holds options to purchase 7,000 Common
      shares at an exercise price of $3.00 per share expiring on October 27,
      2013, 160,000 Common Shares at an exercise price of $5.00 per share
      expiring on February 2, 2014, 75,000 Common Shares at $7.59 expiring on
      May 27, 2015 and 90,000 Common Shares at $15.44 expiring on March 15,
      2016.                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 10. | Certain of these shares are held by United Mineral
      Services, a private company that is wholly owned by Mr.
  Dickinson.                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 11. | Information was derived from insider reporting filings
      available at www.sedi.ca.                                                                                                                                                                                                                                                                                                                                                                                     

At the annual general meeting of the Company held on June 10,
2010, directors listed above were reelected to a one-year term of office
expiring at the next annual general meeting of Northern Dynasty, which is
currently scheduled for June 2011. 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. HDSI was until recently owned equally by several public
companies, one of which was Northern Dynasty. HDI through HDSI provides
executive, engineering, geological and administrative services to, and incurs
costs on behalf of, these companies and allocates the full costs to them. 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 23, 2011, the above directors
and officers beneficially owned, directly or indirectly, or exercised control or
direction over 6,779,654 common shares of the Company (7.2%), or 10,638,914
common shares on a fully diluted basis (10.3%) .

---

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

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

|Committee                                      | Membership                                    
|---------------------------------------------- | ----------------------------------------------
|Audit Committee                                | David Elliott Gordon Fretwell Wayne
      Kirk
|Compensation Committee                         | David Elliott Gordon Fretwell Wayne
      Kirk
|Nominating and Governance Committee            | David Elliott Gordon Fretwell Wayne
      Kirk
|Pebble 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. Substantial financings and subsequent corporate success has
established strong ties with North American, European and Asian investors. He is
also a director of Hunter Dickinson Inc.

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

|Company                          | Positions Held        | From           | To           
|-------------------------------- | --------------------- | -------------- | -------------
|Northern Dynasty Minerals Ltd.   | Director              | June 1996      | Present      
|Amarc Resources Ltd.             | Director              | September 1995 | Present      
|Anooraq Resources Corporation    | Director              | September 1996 | June 2009    
|Continental Minerals Corporation | Director              | June 1994      | Present      
|Farallon Mining Ltd.             | Director              | December 1995  | April 2007   
|Great Basin Gold Ltd.            | Director              | March 1993     | November 2006
|Heatherdale Resources Ltd.       | Director and Chairman | November 2009  | Present      
|Rockwell Diamonds Inc.           | Director              | November 2000  | November 2008
|Taseko Mines Limited             | Director              | October 1992   | Present      

---

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

ROBERT A. DICKINSON, B.Sc., M.Sc.  Chairman of the Board
and Director

Robert Dickinson is an economic geologist who serves as a
member of management of several mineral exploration companies, primarily those
for whom Hunter Dickinson Inc. provides services. He holds a Bachelor of Science
degree (Hons. Geology) and a Master of Science degree (Business Administration -
Finance) from the University of British Columbia. Mr. Dickinson has also been
active in mineral exploration over 40 years. He is a director of Hunter
Dickinson Inc. He is also President and Director of United Mineral Services
Ltd., a private resource company.

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

|Company                          | Positions Held        | From           | To            
|-------------------------------- | --------------------- | -------------- | --------------
|Northern Dynasty Minerals Ltd.   | Director              | June 1994      | Present       
|Chairman                         | April 2004            | Present       
|Amarc Resources Ltd.             | Director              | April 1993     | Present       
|Chairman                         | April 2004            | Present       
|Anooraq Resources Corporation    | Director              | October 2004   | June 2009     
|Co-Chairman                      | October 2004          | June 2009     
|Continental Minerals Corporation | Director              | June 2004      | Present       
|Chairman                         | June 2004             | January 2006  
|Co-Chairman                      | January 2006          | December 2006 
|Curis Resources Ltd.             | Director              | November 2010  | Present       
|Chairman                         | November 2010         | December 2010 
|Detour Gold Corporation          | Director              | August 2006    | February 2009 
|Farallon Mining Ltd.             | Director              | July 1991      | April 2007    
|Co-Chairman                      | September 2004        | April 2006    
|Great Basin Gold Ltd.            | Director              | May 1986       | November 2006 
|Chairman                         | April 2004            | December 2005 
|Co-Chairman                      | December 2005         | November 2006 
|Heatherdale Resources Ltd.       | Director              | November 2009  | Present       
|Rathdowney Resources Ltd.        | Director and Chairman | March 2011     | Present       
|Rockwell Diamonds Inc.           | Director              | November 2000  | September 2006
|Chairman                         | November 2000         | September 2006

---

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

|Company              | Positions Held | From         | To     
|-------------------- | -------------- | ------------ | -------
|Taseko Mines Limited | Director       | January 1991 | Present
|Chairman             | April 2004     | July 2005   
|Co-Chairman          | July 2005      | May 2006    

DAVID ELLIOTT, B. Comm., ICD.D. FCA  Director

David Elliott graduated from the University of British Columbia
with a Bachelor of Commerce degree and then acquired a Chartered Accountant
designation. In 2006, he became a certified director with the Institute of
Corporate Directors. Mr. Elliott joined BC Sugar Company in 1976, working in a
number of senior positions before becoming President and Chief Operating Officer
of the operating subsidiary, Rogers Sugar. In 1997, he joined Lantic Sugar in
Toronto as Executive Vice President. He also served as Chairman of the Canadian
Sugar Institute. He became President and Chief Operating Officer of the
International Group based in St Louis, Missouri in 1999, a company involved with
food distribution as well as manufacturing and distribution of pet and animal
feed. For several years, he worked with companies developing e-mail and data
management services.

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

|Company                        | Positions Held | From       | To       
|------------------------------ | -------------- | ---------- | ---------
|Northern Dynasty Minerals Ltd. | Director       | July 2004  | Present  
|Anooraq Resources Corporation  | Director       | April 2005 | June 2009
|Great Basin Gold Ltd.          | Director       | July 2004  | Present  
|Taseko Mines Limited           | Director       | July 2004  | Present  

GORDON J. FRETWELL, B.Comm. LLB.  Director

Gordon Fretwell holds a B.Comm. 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 | From       | To     
|------------------------------ | -------------- | ---------- | -------
|Northern Dynasty Minerals Ltd. | Director       | June 2004  | Present
|Bell Copper Corporation        | Director       | June 2001  | Present
|Secretary                      | December 2008  | Present   
|Benton Resources Corp.         | Director       | March 2005 | Present

---

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

|Company                                                     | Positions Held         | From           | To            
|----------------------------------------------------------- | ---------------------- | -------------- | --------------
|Continental Minerals Corporation                            | Director               | February 2001  | Present       
|Copper Ridge Explorations Inc.                              | Director and Secretary | September 1999 | Present       
|Curis Resources Ltd.                                        | Director               | January 2011   | Present       
|Fronterra Copper Corporation                                | Director               | February 2009  | June 2009     
|Grandcru Resources Corp.                                    | Director               | December 2002  | May 2008      
|ICN Resources Ltd. (formerly Icon Industries
      Limited) | VP of Legal Services   | December 2000  | March 2009    
|Director                                                    | July 2004              | March 2009    
|Secretary                                                   | March 2009             | Present       
|International Royalty Corporation                           | Director               | February 2005  | Present       
|Keegan Resources Inc.                                       | Director               | February 2004  | Present       
|Lignol Energy Corporation                                   | Director               | January 2007   | Present       
|Meritus Minerals Ltd.                                       | Director               | June 2007      | Present       
|Pine Valley Mining Corp.                                    | Director               | August 2003    | September 2007
|Quartz Mountain Resources Ltd.                              | Director and Secretary | January 2003   | Present       
|Quadro Resources Ltd. (formerly Tri- Gold Resources Corp.)  | CFO                    | November 2005  | January 2006  
|Rockwell Diamonds Inc.                                      | Secretary              | March 1998     | November 2007 
|Director                                                    | March 1998             | September 2006

RUSSELL E. HALLBAUER, P.Eng.  Director

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

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

---

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

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

|Company                        | Positions Held                                        | From       | To     
|------------------------------ | ----------------------------------------------------- | ---------- | -------
|Northern Dynasty Minerals Ltd. | Director                                              | April 2008 | Present
|Curis Resources Ltd.           | Director                                              | November   | Present
|Chairman                       | December 2010                                         | Present   
|Taseko Mines Limited           | Director, President and Chief
      Executive Officer | 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, an officer
and/or director of the following public companies:

|Company                        | Positions Held | From      | To     
|------------------------------ | -------------- | --------- | -------
|Northern Dynasty Minerals Ltd. | Director       | July 2004 | Present
|Anooraq Resources Corporation  | Director       | July 2005 | Present
|Gabriel Resources Ltd.         | Director       | June 2008 | Present
|Great Basin Gold Ltd.          | Director       | July 2004 | Present
|Taseko Mines Limited           | Director       | July 2004 | Present

---

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

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 19.15% 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 Hunter Dickinson Inc.

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          | From          | To     
|-------------------------------- | ----------------------- | ------------- | -------
|Northern Dynasty Minerals Ltd.   | Director                | August 2008   | Present
|Chief Financial Officer          | August 2008             | Present      
|Continental Minerals Corporation | Chief Financial Officer | January 2008  | Present
|Heatherdale Resources Ltd.       | Chief Financial Officer | November 2009 | Present

RONALD W. THIESSEN, CA  Director, President and Chief
Executive Officer

Ronald Thiessen is a Chartered Accountant with professional
experience in finance, taxation, mergers, acquisitions and re-organizations.
Since 1986, Mr. Thiessen has been involved in the acquisition and financing of
mining and mineral exploration companies. Mr. Thiessen is a director of Hunter
Dickinson Services Inc. (HDSI), a company providing management and
administrative services to several publicly-traded companies (including Northern
Dynasty) and focuses on directing corporate development and financing
activities. He is also a director and Chief Executive Officer of Hunter
Dickinson Inc., the parent company to HDSI.

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

|Company                               | Positions Held | From          | To     
|------------------------------------- | -------------- | ------------- | -------
|Northern Dynasty Minerals Ltd.        | Director       | November 1995 | Present
|President and Chief Executive Officer | November 2001  | Present      

---

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

|Amarc Resources Ltd.                        | Director       | September 1995 | Present       
|------------------------------------------- | -------------- | -------------- | --------------
|President and Chief Executive
      Officer | September 2000 | Present       
|Anooraq Resources Corporation               | Director       | April 1996     | Present       
|President and Chief Executive
      Officer | September 2000 | August 2007   
|Continental Minerals Corporation            | Director       | November 1995  | Present       
|President and Chief Executive
      Officer | September 2000 | January 2006  
|Co-Chairman                                 | January 2006   | Present       
|Detour Gold Corporation                     | Director       | July 2006      | Present       
|Chairman                                    | July 2006      | March 2009    
|Farallon Mining Ltd.                        | Director       | August 1994    | January 2011  
|Co-Chairman                                 | September 2004 | December 2005 
|Chairman                                    | December 2005  | January 2011  
|Great Basin Gold Ltd.                       | Director       | October 1993   | Present       
|President and Chief Executive
      Officer | September 2000 | December 2005 
|Co-Chairman                                 | December 2005  | November 2006 
|Chairman                                    | November 2006  | Present       
|Rockwell Diamonds Inc.                      | Director       | November 2000  | September 2007
|President and Chief Executive
      Officer | November 2000  | September 2006
|Chairman                                    | September 2006 | September 2007

---

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

|Taseko Mines Limited                                      | Director       | October 1993 | Present      
|--------------------------------------------------------- | -------------- | ------------ | -------------
|President and Chief Executive
      Officer               | September 2000 | July 2005   
|Co-Chairman                                               | July 2005      | May 2006    
|Chairman                                                  | May 2006       | Present     
|Quadro Resources Ltd. (formerly Tri- Gold Resources Corp. | Director       | July 1992    | December 2006

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      | From          | To            
|-------------------------------- | ------------------- | ------------- | --------------
|Northern Dynasty Minerals Ltd.   | Secretary           | February 2008 | Present       
|Amarc Resources Ltd.             | Secretary           | February 2008 | Present       
|Anooraq Resources Corporation    | Assistant Secretary | November 2007 | March 2011    
|Continental Minerals Corporation | Secretary           | February 2008 | Present       
|Farallon Mining Ltd.             | Secretary           | December 2007 | January 2011  
|Heatherdale Resources Ltd.       | Secretary           | November 2009 | September 2010
|Rathdowney Resources Ltd.        | Secretary           | March 2011    | Present       
|Rockwell Diamonds Inc.           | Secretary           | February 2008 | Present       
|Taseko Mines Limited             | Secretary           | July 2008     | Present       

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.

---

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

Potential Conflicts of Interest

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

ITEM 11.   PROMOTERS

Not applicable.

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.

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 was, until
recently, owned equally by several public companies, one of which was Northern
Dynasty. During the year, Northern Dynasty sold its interest in HDSI for nominal
value. 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, 2010, the
Company paid HDSI approximately $2.7 million (2009  $1.6 million) for services
rendered by HDSI and reimbursed HDSI approximately $0.7 million (2009  $0.6
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.

---

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

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. Kennecott received a right of first refusal to participate in up to 50%
  of future share placements by the Company, subject to customary exceptions,
  until Kennecott reaches 19.9% of the Companys outstanding share capital. 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 the time. Currently, the holding represents
  approximately 19.15% .

ITEM 14.   TRANSFER AGENT AND
REGISTRAR

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

ITEM 15.   MATERIAL CONTRACTS

The Company has the following material contracts that are in
effect during the fiscal year ended December 31, 2010:

| | 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 on 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 on 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

Mark Rebagliati, P.Eng., James Lang, P.Geo., Eric Titley,
P.Geo., David Gaunt, P.Geo., Lawrence Melis, P.Eng., Derek Barratt, P.Eng.,
Stephen Hodgson, P.Eng., 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.                                                                                                                                                                                         

---

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

Each of Messrs. Rebagliati, Lang, Titley, Gaunt, and Hodgson
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. Melis, Barratt, 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 are
independent within the meaning of the Rules of Professional Conduct of the
Institute of Chartered Accountants of British Columbia and have complied with the
SECs rules on auditor independence.

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 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.                                                                                                                                                                                         

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.

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

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 financial statements for 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 financial statements.

The Companys management, including its Chief Executive Officer
and Chief Financial Officer, believe that any system of 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
decisions-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.

The Companys management assessed the effectiveness of the
Companys internal control over financial reporting as of December 31, 2010. 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, 2010, 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, 2010 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, 2010. Deloitte & Touche
LLP as stated in their report, that immediately precedes the Company's audited
consolidated financial statements for the year ended December 31, 2010,
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.

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

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

A. AUDIT COMMITTEE FINANCIAL EXPERT

The board of directors has determined that Mr. David Elliott 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. Elliott
is "independent", as that term is defined by the rules of Canadian National
Instrument 58-101 the rules of the NYSE Amex. Mr. Elliott 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 ended              | 
|--------------------- | - | ----------------------- |  | - | ----------------------- | 
|Services:             |   | December 31,
      2010 |  |   | December 31,
      2009 | 
|Audit Fees(1)         | $ | 122,000                 |  | $ | 226,000                 | 
|Audit-Related Fees(2) |   |                        |  |   |                        | 
|Tax Fees              |   |                        |  |   |                        | 
|All Other Fees        |   |                        |  |   |                        | 
|                      | $ | 122,000                 |  | $ | 226,000                 | 

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.

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

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.

ITEM 21.   OFF BALANCE SHEET
    ARRANGEMENTS

None.

ITEM 22.   TABULAR DISCLOSURE
    OF CONTRACTUAL OBLIGATIONS

|Contractual obligation      | Nil | Nil | Nil | Nil | Nil
|--------------------------- | --- | --- | --- | --- | ---
|Long term debt obligations  | Nil | Nil | Nil | Nil | Nil
|Operating lease obligations | Nil | Nil | Nil | Nil | Nil
|Purchase obligations        | Nil | Nil | Nil | Nil | Nil
|Other                       | Nil | Nil | Nil | Nil | Nil
|Total                       | 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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