---



ANNUAL INFORMATION
FORM

FOR THE YEAR
ENDED DECEMBER 31, 2013

This annual information
form ("AIF") is as
of March 25, 2014



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|ITEM1. | TABLEOFCONTENTS
|------ | ---------------

|                                                                               |                                                      | Page
|------------------------------------------------------------------------------ | ---------------------------------------------------- | ----
|ITEM1.                                                                         | TABLEOFCONTENTS                                      | 2   
|ITEM2.                                                                         | PRELIMINARYNOTES                                     | 3   
|INCORPORATION
      OF CONTINUOUS DISCLOSURE DOCUMENTS BY REFERENCE            | 3                                                   
|GLOSSARY                                                                       | 4                                                   
|RESOURCE
      CATEGORY (CLASSIFICATION) DEFINITIONS                           | 4                                                   
|ITEM3.                                                                         | CORPORATESTRUCTURE                                   | 6   
|ITEM4.                                                                         | GENERALDEVELOPMENTOFTHEBUSINESS                      | 6   
|THREE
      YEAR HISTORY                                                       | 6                                                   
|SIGNIFICANT
      ACQUISITIONS, DISPOSITIONS AND GROUP REORGANIZATION          | 7                                                   
|ITEM5.                                                                         | DESCRIPTIONOFBUSINESS                                | 9   
|THE
      PEBBLE PROJECT                                                       | 9                                                   
|TECHNICAL
      SUMMARY                                                        | 11                                                  
|Location
      and Property Description                                        | 11                                                  
|Accessibility,
      Climate, Local Resources, Infrastructure and Physiography | 12                                                  
|History                                                                        | 13                                                  
|Property
      Geology                                                         | 13                                                  
|Exploration                                                                    | 14                                                  
|Mineralization                                                                 | 17                                                  
|Sampling,
      Analysis and Security of Samples                               | 17                                                  
|Mineral
      Resources                                                        | 19                                                  
|Exploration
      and Development                                              | 20                                                  
|RISK
      FACTORS                                                             | 23                                                  
|ITEM6.                                                                         | DIVIDENDS                                            | 27  
|ITEM7.                                                                         | DESCRIPTIONOFCAPITALSTRUCTURE                        | 27  
|ITEM8.                                                                         | MARKETFORSECURITIES                                  | 27  
|ITEM9.                                                                         | ESCROWEDSECURITIES                                   | 28  
|ITEM10                                                                         | DIRECTORSANDOFFICERS                                 | 28  
|ITEM11.                                                                        | PROMOTERS                                            | 38  
|ITEM12.                                                                        | LEGALPROCEEDINGS                                     | 38  
|ITEM13.                                                                        | INTERESTOFMANAGEMENTANDOTHERSINMATERIALTRANSACTIONS  | 40  
|ITEM14.                                                                        | TRANSFERAGENTANDREGISTRAR                            | 41  
|ITEM15.                                                                        | MATERIALCONTRACTS                                    | 41  
|ITEM16.                                                                        | INTERESTSOFEXPERTS                                   | 41  
|ITEM17.                                                                        | ADDITIONALINFORMATION                                | 41  
|ITEM18.                                                                        | DISCLOSUREFORCOMPANIESNOTSENDINGINFORMATIONCIRCULARS | 42  
|ITEM19.AUDITANDRISKCOMMITTEE,AUDITORFEES,EXEMPTIONS,CODEOFETHICS               | 42                                                  
|APPENDIXA                                                                      | 45                                                  
|AUDIT
      AND RISK COMMITTEE CHARTER                                         | 45                                                  

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

|ITEM2. | PRELIMINARYNOTES
|------ | ----------------

This AIF will be incorporated into a filing with the
      United States Securities Exchange Commission (the "SEC") under Form 40-F.
      It includes certain statements that may be deemed "forward- looking
      statements" within the meaning of Section 27A of the SecuritiesActof1933and Section 21E
      of the SecuritiesExchangeActof1934. 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.


IncorporationofContinuousDisclosureDocumentsbyReference

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

The AIF incorporates
by reference a technical report prepared pursuant to National Instrument 43-101,
Standards of Disclosure for Mineral Projects (NI 43-101) dated February 17,
2011, copies of which are available on request from the offices of Northern
Dynasty or by downloading from the SEDAR website under the Companys profile at
www.sedar.com.

CurrencyandMetricEquivalents

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, 2013, as reported by the Bank of Canada for
the conversion of one Canadian dollar into one United States dollar ("U.S.
dollar"), was 0.9402.

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.

|                      | YearEndedDecember31
|--------------------- | -------------------
|                      | 2013               
|Rate at end of year   | 0.9402             
|Average rate for year | 0.9711             
|High for year         | 1.0165             
|Low for year          | 0.9342             

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

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

|MetricUnits | Multiplyby | ImperialUnits                   
|----------- | ---------- | --------------------------------
|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:

|Term                                                       | Meaning                                                                                                                                                                                                                                                                                                                                                                                                        
|---------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|CuEQ                                                       | Copper
      Equivalent                                                                                                                                                                                                                                                                                                                                                                                        
|HDGI                                                       | Is a reference to Hunter Dickinson Group Inc. (now
      renamed 3537137 Canada Inc.) which is the related party corporation which
      originally held the options to the Pebble Project, and which was acquired
      by the Company to become a 100% subsidiary in fiscal 2006.                                                                                                                            
|InducedPolarization("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.
|MineralSymbols                                             | Au - Gold; Ag - Silver; Al - Aluminum; Cu - Copper; Fe -
      Iron; Mo - Molybdenum; Na - Sodium; O - Oxygen; Pb - Lead; S - Sulphur; Zn
      - Zinc.                                                                                                                                                                                                                                                        
|NationalInstrumentNI43-101                                 | The Canadian securities rule which establishes disclosure
      standards for mineral projects by Canadian resource companies.                                                                                                                                                                                                                                                                                 
|Porphyrydeposit                                            | A type of mineral deposit in which ore minerals are
      widely disseminated, generally of low grade but large tonnage.                                                                                                                                                                                                                                                                                       
|Z-AxisTipperElectromagneticTechnique("ZTEM")airbornesurvey | 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.                                   

ResourceCategory(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:

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



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

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

A "ProbableMineralReserve"
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 "ProvenMineralReserve"
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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| |  6  | Annual Information Form
| | ----- | -----------------------

|ITEM3. | CORPORATESTRUCTURE
|------ | ------------------

Northern Dynasty Minerals Ltd. is a mineral exploration company
incorporated on May 11, 1983 pursuant to the CompanyAct of
the Province of British Columbia (predecessor statute  to the BritishColumbiaCorporationsActin 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 continued
to comply with its continuous disclosure obligations from 1993 to 1994, and
thereupon listed on TSX Venture from 1994 to October 30, 2007 when it began
trading on the Toronto Stock Exchange ("TSX"). In November 2004, the common
shares of Northern Dynasty were also listed on the American Stock Exchange
("AMEX"). AMEX was purchased by the New York Stock Exchange ("NYSE") and the
Company now trades on the NYSE MKT Exchange ("NYSE MKT").

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

The Companys Alaska mineral resource exploration business is
operated through an Alaskan registered limited partnership, the Pebble Limited
Partnership (the "Pebble Partnership" or "PLP"), in which the Company again
(since December 2013) owns a 100% interest through an Alaskan general
partnership, the Northern Dynasty Partnership. A 100% subsidiary of the Company,
Pebble Mines Corp. is the general partner of the Pebble Partnership and
responsible for its day-to-day operations. The business address of the Northern
Dynasty Partnership is Suite 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 other consolidated
interests and entities, unless the context clearly indicates otherwise. Certain
terms used herein are defined in the text and others are included in the
glossary of this AIF.

|ITEM4. | GENERALDEVELOPMENTOFTHEBUSINESS
|------ | -------------------------------

ThreeYearHistory

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

To December 31, 2013, approximately $783 million in exploration
expenditures have been incurred on the Pebble Project. Of this amount,
approximately $595 million (US$573 million) in funding has been provided to the
Pebble Partnership by an affiliate of Anglo American plc ("Anglo American") and
expended from 2007 to December 10, 2013 when Northern Dynasty re-acquired Anglo
Americans 50% ownership interest in the Pebble Partnership on the latters
withdrawal. 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.

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

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

SignificantAcquisitions,DispositionsandGroupReorganization

Northern Dynasty via 100% owned subsidiaries and other entities
holds indirect interests in mineral claims on State land in southwest Alaska,
USA. These claims (including certain area claims) form what is referred to as
the Pebble Copper-Gold-Molybdenum Project (the "Pebble Project").

PebbleLimitedPartnershipandPebbleProject

On July 26, 2007, the Company converted a wholly-owned general
partnership that held its Pebble Project interests into a limited partnership,
the Pebble Partnership. The purpose of the Pebble Partnership is to engineer,
permit, construct and operate a modern, long-life mine at the Pebble Project.
Anglo American through a wholly-owned affiliate subscribed for 50% of the Pebble
Partnership's equity effective July 31, 2007. To maintain its 50% interest in
the Pebble Partnership, Anglo American was required to commit staged cash
investments into the Pebble Partnership aggregating to US$1.5 billion.

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 Americans investment, as these benefits accrue
exclusively to Anglo American under the Pebble Partnership Agreement and
applicable tax regulations.

On September 15, 2013, Anglo American gave notice to the
Company of its withdrawal from the Pebble Partnership. In December 2013, the
Company exercised its right to acquire Anglo Americans 50% interest to retain
100% interest in the Pebble Partnership and Pebble Mines Corp., which
administers the Pebble Project.

The Pebble property consists of 1,940 mineral claims covering
the Pebble deposit and associated resource lands.

2006EquityInvestmentbyRioTintoAffiliate

In 2006, the Company issued 8,745,845 common shares in
connection with a share purchase agreement with Kennecott Canada Exploration
Inc. ("Kennecott", a subsidiary of Rio Tinto plc) for $10.00 per share for
proceeds of approximately $87 million. In January 2007, Northern Dynasty was
advised by Galahad Gold plc ("Galahad"), a significant shareholder of the
Company that QIT-Fer Et Titane Inc., an affiliate of Rio Tinto, agreed to
purchase 9.4 million shares of Northern Dynasty from Galahad at a price of
$10.00 per share. The share purchase, which closed February 1, 2007, increased
Rio Tintos indirect ownership in Northern Dynasty to approximately 19.8% .
Currently, the holding represents approximately 19.1% of Northern Dynastys
outstanding and issued common shares. Rio Tinto plc announced on December 23,
2013 that it will undertake a strategic review of its investment in Northern
Dynasty, the results of which has not been communicated to Northern Dynasty as
of the date of the AIF.

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

Purchase of Interests
in Mining Claims in
the vicinity of the
Pebble Property

PebblePartnershipInterestintheKaskanakProperty

On January 31, 2012, the Pebble Partnership entered into a
Limited Liability Company Agreement of Kaskanak Copper LLC (the "LLC") with Full
Metal Minerals (USA) Inc. ("FMMUSA"), a wholly-owned subsidiary of Full Metal
Minerals Corp., whereby the Pebble Partnership could earn an interest in the
LLC, which indirectly owned 100% of FMMUSAs South Pebble Claims (the "FMM
Properties"). On May 8, 2013, the Pebble Partnership purchased FMMUSAs interest
in the LLC for a cash consideration of US$750,000. As a result, the Pebble
Partnership is the indirect owner of a 100% interest in the FMM Properties,
which total 542 mining claims located west of the Pebble property.

NorthernDynastyInterestinLibertyStarMiningClaims

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 95 mining claims
(the "Purchased Claims") to a US subsidiary of Northern Dynasty (U5 Resources
Inc.) in consideration for both a US$1 million cash payment and a secured
convertible loan from Northern Dynasty in the amount of US$3 million which
accrues interest at 10% per annum compounded monthly and which was repayable 45
days after it was called (the "Loan"). The parties agreed, through various
amendments to the original agreement, to increase the principal amount of the
Loan by US$730,174 (the "Additional Loan Amount"), being the amounts expended by
Northern Dynasty on annual assessment work, rental and related fees relating to
the maintenance of Liberty Stars claims in Alaska. Northern Dynasty carried out
initial exploration surveys in 2010.

Northern Dynasty called for the repayment of the Loan in October 2012 and,
after failure by Liberty Star to make any repayment, Northern Dynasty agreed to
accept transfer of 199 claims (the "Settlement Claims") located north of the
ground held 100% by the Pebble Partnership in settlement of the Loan. Prior to
transfer of the Settlement Claims to Northern Dynasty, a third party purported
to register a lien on the Settlement Claims in respect of a debt allegedly owed
by Liberty Star, which Liberty Star disputes. Liberty Star has filed a claim
against the third party, who has in turn filed a counterclaim against Liberty
Star and has sought to join Northern Dynasty as a party to the lawsuit. Each of
U5 Resources Inc. and Northern Dynasty has tendered its defense of the
counterclaim to Liberty Star, which is obligated to indemnify Northern Dynasty
and U5 Resources Inc. from any losses arising from the failure of Liberty Star
to transfer clear title to the Settlement Claims.



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

|ITEM5. | DESCRIPTIONOFBUSINESS
|------ | ---------------------

ThePebbleProject

TheCompanysbusinessistheexplorationandadvancementtowardsfeasibility,permittingandultimatelydevelopmentofacoppergoldmolybdenummineralresourceinAlaska,USAknownasthe"PebbleProject".

The
  Pebble
  Project
  is
  Subject t
o State
and
Federal
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.

AlaskaStatute38.05.185
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 Title11oftheAlaskaAdministrativeCode, Chapter86,
Section800. 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 AlaskaStatute46.08 (which prohibits release of oil and
hazardous substances), AlaskaStatute46.03.060 (which sets water quality standards), and AlaskaStatute46.14 (which sets air quality standards).

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

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

Under the U.S.CleanWaterAct,Section404(c),
the Administrator of the Environmental Protection Agency ("EPA") is given the
right to disallow the specification (including the withdrawal of specification)
of any defined area as a disposal site whenever he or she determines that the
release of such material will have an unacceptable adverse effect on municipal
water supplies, local wildlife, spawning and breeding areas of fisheries, shellfish
beds, and/or recreational areas. Such decisions made by the Administrator
require notice and opportunity for public hearings, and consultation with the
Secretary. The Administrator shall set forth in writing and make public his or
her findings and reasons for making any determination under this subsection.

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

HistoricalPebbleProjectAcquisitionAgreements(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.

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.

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

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.

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

TechnicalSummary

LocationandPropertyDescription

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.

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

Location of the Pebble Project



Northern Dynasty holds a 100% indirect interest via
subsidiaries in 1,940 mineral claims (194,360 acres) that comprise the Pebble
property, 542 Kaskanak mineral claims (86,720 acres) and 95 mineral claims
(15,200 acres) held by U5 Resources, which are subject to annual renewal. No
surface rights are currently held. The Pebble Partnership applies for work
permits annually for its programs.

Accessibility,Climate,LocalResources,InfrastructureandPhysiography

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

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

The climate of the Iliamna area is similar to Anchorage where
the mean daily maximum temperature in July is 63 degrees F (17 degrees C) and
the mean daily minimum temperature in January is 9 degrees F (minus 13 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.

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

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

History

In the mid 1980s, Cominco Alaska began reconnaissance
exploration in the Pebble region. In 1987, examination and sampling of several
prominent limonitic and hematitic alteration zones yielded anomalous gold
concentrations from the Sill prospect (recognized as a precious metal,
epithermal occurrence) and the Pebble discovery outcrop (of uncertain affinity).
The 1988 exploration program included 24 diamond drill holes at the Sill
prospect and soil 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 an important porphyry copper system. Subsequent drilling by
Cominco Ltd. (now Teck) intercepted significant intervals of porphyry-style
gold, copper and molybdenum mineralization.

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

PropertyGeology

The Pebble property spans the eastern and southern margins of
the Late Cretaceous (89.7 Ma) tonalite-granodiorite Kaskanak Batholith (medium
to coarse grained igneous rocks of intermediate composition that cover a large
area) that covers an area of approximately 200 square km, 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±molybdenum mineral occurrences, including the large Pebble
copper-gold-molybdenum deposit and the Thirty-Eight porphyry
copper-gold-molybdenum deposit, are related to granodiorite intrusions that are
very similar in composition and age to the Kaskanak batholith.

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

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

The Pebble East zone, discovered in 2005, occurs in a
mineralized intrusion and adjacent volcaniclastic sedimentary rocks under a
cover of younger, 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 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 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 m line spacing and
2,000 m 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
electromagnetic 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.

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 noted above.

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

Drilling

Extensive drilling has taken place over more than 19 years. A
total of approximately 1,041,927 ft (317,579 m) has been drilled in 1,353 holes
on the property from 1988 to 2013. Of this, 53,636 ft (16,348 m) were drilled in
48 holes on exploration targets and a further 3,375 ft (1,029 m) were drilled in
18 cored geotechnical holes for engineering and hydrological purposes in 2010;
23,582 ft (7,188 m) were drilled in 9 holes on deposit delineation and
exploration targets and 27,186 ft (8,286 m) were drilled in 76 cored
geotechnical holes for engineering and hydrological purposes in 2011; 17 core
holes (8,363 ft/2,549 m) were drilled for exploration purposes, 38 core holes
(15,973 ft/4,868 m) to collect geotechnical data, and 26 sonic holes (11,424
ft/3,482 m) for hydrological investigations in 2012; and 29 core holes, totaling
6,195 ft (1,887 m), were drilled to collect geotechnical data in 2013.

Most of the work has been done by diamond core drills. All
collars have been survey by differential GPS or total station measurements. Most
post-Cominco drill hole footage has been surveyed down hole. A total of 1,117
holes were drilled vertically and 236 are inclined from minus 42 to minus 85
degrees at various azimuths.

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

Drilling from 1988 to 2013 is summarized in the table below:

BYOPERATOR
    BYTYPEOperator
    # Holes
    Feet
    Metres
    Purpose
    # Holes
    Feet
    MetresCominco 1
    164
    75,741.0
    23,086
    Core 1, 5
    1,131
    1,023,211.1
    311,875NDM
    576
    494,778.0
    150,808
    Percussion6
    222
    18,715.6
    5,704PLP 2
    606
    465,957.7
    142,024
    TOTAL
    1,353
    1,041,926.7
    317,579FMM
    7
    5,450.0
    1,661
    BYAREATOTAL
    1,1353
    1,041,926.7
    317,579BYYEAR
    Area
    # Holes
    Feet
    MetresEast
    141
    446,379.3
    136,056Year
    # Holes
    Feet
    Metres
    West
    443
    351,986.7
    107,2861988 1
    26
    7,601.5
    2,317
    Main 7
    101
    10,674.7
    3,2541989 1
    27
    7,422.0
    2,262
    NW
    202
    45,743.4
    13,9431990
    25
    10,021.0
    3,054
    North
    46
    25,695.9
    7,8321991
    48
    28,129.0
    8,574
    NE
    10
    1,097.0
    3341992
    14
    6,609.0
    2,014
    South
    98
    50,262.5
    15,3201993
    4
    1,263.0
    385
    25 Zone
    8
    4,047.0
    1,2341997
    20
    14,695.5
    4,479
    37 Zone
    7
    4,252.0
    1,2962002
    68
    37,236.8
    11,350
    38 Zone
    20
    14,221.5
    4,3352003
    67
    71,226.6
    21,710
    52 Zone
    5
    2,534.0
    7722004
    266
    165,481.2
    50,439
    308 Zone
    1
    879.0
    2682005
    114
    81,978.5
    24,987
    Eastern
    21
    3,105.0
    9462006 3
    47
    72,621.9
    22,135
    Southern
    152
    60,355.9
    18,3962007 4
    92
    167,666.9
    51,105
    SW
    51
    9,337.8
    2,8462008 5
    241
    184,726.4
    56,305
    Sill
    39
    10,445.5
    3,184Cook Inlet
    8
    909.5
    2772009 2010 2011 2012
      2013
    33 66 85
      81 29
    34,947.6
      57,011.3 50,767.7 35,760.2 6,190.0
    10,652 17,377
      15,474 10,900 1,887
    TOTAL
    1,353
    1,041,926.7
    317,5791. Includes holes drilled on the Sill prospect.2. Holes started by NDM and finished
      by PLP are included as PLP.3. Drill holes
      counted in the year in which they were completed.4. Wedged holes are counted as a single hole including full
      length of all wedges drilled.5. Includes
      Full Metal Minerals (FMM) drill holes on Kaskanak mineral claims. Data
      acquired in 2010.6. Shallow (<15 ft)
      augur holes not included.7. Comprised of
      holes drilled entirely in Tertiary cover rocks within the Pebble West and
      Pebble East areas.Some numbers may not sum
      exactly due to rounding.TOTAL
    1,353
    1,041,926.7
    317,579BYPURPOSEPurpose
    # Holes
    Feet
    MetresExploration 1, 5
    654
    856,039.3
    260,921Geotechnical
    380
    86,294.2
    26,302Metallurgical
    61
    60,835.0
    18,543Environmental
    258
    38,758.3
    11,814


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

Drill hole locations from 1988 to 2013 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 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,AnalysisandSecurityofSamples

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

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

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

As the Pebble Project has progressed, chemical analysis
methods, quality assurance and quality control and sample security procedures
have also progressed to meet standards of the day. Drill core is boxed and
transported daily to the secure compound at the Iliamna airport for sampling. It
is then 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, ICP 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 2007-2013. 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
(2008-2012). The analytical consultants provide ongoing monitoring, including
facility inspection, and timely reporting of the performance of standards,
blanks and duplicates in the drill hole sampling and analytical program.

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 5,929 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 2004-2013 match well. From 2004 to the end of 2013, a
total of 1,362 blanks have been inserted to test for contamination. With a few
minor exceptions, results are at very low background levels. Copper, gold and
molybdenum assays have been monitored by internal lab and field inserted
standards and other elements by parallel analysis by ICP-MS methods.

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

MineralResources

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 an estimate prepared for the Pebble Partnership by David Gaunt, P.Geo., Hunter Dickinson Services Inc.  Mr. Gaunt is a “qualified person” as contemplated by NI 43-101 who has reviewed the disclosure.  He is not independent of the Company.  Results are tabulated below:

|CautionaryNotetoInvestorsConcerningEstimatesofMeasuredandIndicatedResources                                                                                                                                                                                                                                                                                                                                                  
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 (the "SEC") does not recognize them.
      Investorsarecautionednottoassumethatalloranypartofmineraldepositsinthesecategorieswillever<
      /B>beconvertedintoreserves.

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


|CautionaryNotetoInvestorsConcerningEstimatesofInferredResources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 SEC does not
      recognize it. "Inferred mineral resources" have a great amount of
      uncertainty as to their existence, and great uncertainty as to their
      economic and legal feasibility. It cannot be assumed that all or any part
      of a mineral resource will ever be upgraded to a higher category. Under
      Canadian rules, estimates of Inferred Mineral Resources may not form the
      basis of economic studies, except in rare cases. Investorsarecautionednottoassumethatalloranypartofaninferredresourceexists,oriseconomicallyorlegallymineable.

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


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| |  20  | 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 | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

ExplorationandDevelopment

Engineering

Northern Dynasty began comprehensive site programs, involving
collection of engineering, environmental and socioeconomic data for mine
planning studies in addition to resource drilling in 2004. Initially, drilling
was carried out to collect geotechnical, metallurgical and hydrological data to
use for mine planning at Pebble West along with scoping level engineering
studies.

Following the discovery of Pebble East by exploration drilling
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.

In February 2011, Northern Dynasty announced the results of an independent Preliminary Assessment ("2011 PA") of the Pebble Project by Wardrop, a Tetra Tech Company.  The 2011 PA analyzed the economics of three successive mine development models comprising 25, 45 and 78 years of open pit mining each at a nominal processing rate of 200,000 tons per day.  The results of the 2011 PA indicated the potential for positive returns on invested capital in a mine.

The phase of engineering work which began in 2011 has included
additional analysis of various mine and process plant designs, and alternative
associated infrastructure options, along with the study of potential designs for
a variety of potential transportation infrastructure and power supply options.

Although additional engineering, environmental and socioeconomic studies and data collection programs designed to advance a planned prefeasibility study for the Pebble Project continued from 2011 through early 2013, this work was not sufficiently comprehensive or material to obviate the 2011 PA analyses and conclusions.  However, since the withdrawal of Anglo American from the Pebble Partnership in late 2013 and in light of more recent stakeholder and regulatory feedback, Northern Dynasty has initiated a comprehensive review of previous analyses of the Pebble project, including the 2011 PA and various project components.  Current studies of the Pebble project investigate new infrastructure plans as well as lower throughput rates in a revised project development concept.  As well, the cost and revenue inputs require complete updating given the nearly 4 years which have passed since the 2011 PA work was done.  For these reasons, any project at Pebble which is ultimately put forward for permitting will almost certainly be different from the economic assessment model examined in the 2011 PA.  Therefore the conclusions in the 2011 PA study have very limited going-forward relevance at this time and, accordingly, its conclusions have not been repeated in this AIF.  There can be no assurances given by Northern Dynasty that the economics of the new alternative mine models being assessed will demonstrate economics similar to those projected in the 2011 PA.

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

EnvironmentalandSocioeconomic

Environmental Studies

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

Comprehensive environmental and socioeconomic baseline study
programs have continued at the Pebble Project site since that time. Field
programs in 2013 were primarily focused on surface and groundwater hydrology,
water quality and fish resources.

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

Cultural Resource Studies

Cultural resource studies have been carried out by the Pebble
Partnership on all areas that might be affected by the Pebble Project, with the
exception of possible locations of transportation infrastructure options.
Examination of the potential transportation infrastructure sites will be
undertaken once a decision is made regarding the exact location of these project
features.

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.

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:

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

- Public education: stakeholder tours to the Pebble Project site and to
  operating mines in the United States and Canada 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 regional fisheries
  and the communities they support. Grants are awarded based on criteria and
  selections made by an independent advisory board of citizens from communities
  throughout the Bristol Bay region, and administered by the Alaska Community
  Foundation. To the end of 2013, the Pebble Fund has supported 160 community-
  led projects in 25 communities throughout the Bristol Bay region of southwest
  Alaska, directly investing some US$5.25 million while leveraging nearly US$16
  million more in matching funds from other organizations.
- 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 six 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.

Plansfor2014

The Company’s priority goals in 2014 are to address the EPA’s recently announced 404(c) process under the Clean Water Act, to move forward with environmental planning and project design work and to seek one or more potential joint venture or other partners to join the Pebble Project.  Northern Dynasty has consolidated all of the technical data, engineering work and permitting documentation related to the Pebble Project into a data room to facilitate due diligence reviews by interested parties.  The Company will also continue its review of the project and advance engineering and environmental studies, as well as regulatory documentation, to prepare for federal and state permitting under the NEPA.  A final decision on formal permit application timing depends on factors such as completion of technical assessments and interaction with regulatory agencies, and will be made by the Northern Dynasty and Pebble Mines Corp. Boards.



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

RiskFactors

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:

ThePebbleProjectisSubjecttoPoliticalandEnvironmentalRegulatoryOpposition

As is typical for a large scale mining project, the Pebble
Project faces concerted opposition from many individuals and organizations who
particularly fear its possible impact on the Bristol Bay Watershed ("BBW"). The
BBW is an important wildlife habitat and salmon spawning area. The United States
Environmental Protection Agency has gone so far as to suggest that it may
peremptorily prevent the Pebble Project from proceeding even before a mine
permitting application is filed based on the EPAs concerns over the impact of a
large mine on the BBW. Accordingly the greatest risk to the Pebble Project is
seen to be political/permitting risk which may ultimately preclude construction
of a mine at Pebble. (See Contingencies in section 12.2 below)

NorthernDynastywillrequireadditionalfundingtomeetthedevelopmentobjectivesofthePebbleProject.

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

ThePebblePartnership smineralpropertyinterestsdonotcontainanyorereservesoranyknownbodyofeconomicmineralization.

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".

MineralResourcesdisclosedbyNorthernDynastyorthePebblePartnership forthePebbleProjectareestimatesonly.

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. Investorsarecautionednottoassumethatanypartorallofmineraldepositsclassifiedas"measuredresources"or"indicatedresources"willeverbeconvertedintoorereserves.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.

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

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

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

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

Northern Dynasty
s consolidated
financial statements
have been
prepared assuming
Northern Dynasty
will continue
on a
going concern
basis.

Northern Dynastys consolidated financial statements have been
prepared on the basis that Northern Dynasty will continue as a going concern. At
December 31, 2013, Northern Dynasty had working capital of approximately $29.7
million, which is sufficient to fund its operations in fiscal 2014. Northern
Dynastys continuing operations and the underlying value and recoverability of
the amounts shown for mineral property interest are entirely dependent upon the
existence of economically recoverable mineral reserves at the Pebble Project,
the ability of the Company to finance the completion of the exploration and
development of the Pebble Project, the Pebble Partnership obtaining the
necessary permits to mine, and on future profitable production at the Pebble
Project. Furthermore, failure to continue as a going concern would require that
Northern Dynasty's assets and liabilities be restated on a liquidation basis
which would likely differ significantly from their going concern assumption
carrying values.

As the
  Pebble Project
  is Northern
  Dynasty s principal
  mineral property
  interest, the
  failure to
  establish that
  the Pebble
  Project possesses
  commercially viable and
  legally mineable
  deposits of
  ore will
  cause a
  significant decline
  in the
  trading price
  of Northern
  Dynasty s common
  shares and
  reduce its
  ability to
  obtain new
financing.

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

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

Ifpricesforcopper,goldandmolybdenumdecline,NorthernDynastymaynotbeabletoraisetheadditionalfinancingrequiredtofundexpendituresforthePebbleProject.

The ability of Northern Dynasty to raise financing to fund the
Pebble Project, will be significantly affected by changes in the market price of
the metals 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

NorthernDynastycompeteswithlarger,bettercapitalizedcompetitorsintheminingindustry.

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

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

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

Changes in government regulations or the application thereof and the presence of unknown environmental hazards on Northern Dynastys mineral properties may result in significant unanticipated compliance and reclamationcosts.

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

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

NorthernDynastyissubjecttomanyriskshatarenotinsurableand,asaresult,NorthernDynastywillnotbeabletorecoverloss esthroughinsuranceshouldsuchrisksoccur.

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

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

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

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

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



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

|ITEM6. | 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 95,009,864 common shares without par value were issued and
outstanding as fully paid and non-assessable as of December 31, 2013. As of
March 24, 2014, there were 95,009,864 common shares issued and outstanding as
fully paid and non-assessable. The audited consolidated financial statements
provide share issuances effected by Northern Dynasty and the weighted average
issue price for shares since January 1, 2013.

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

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

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

|ITEM 8. | MARKET FOR SECURITIES
|------- | ---------------------

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

|                   | TorontoStockExchange | NYSEMKT
|------------------ | -------------------- | -------
|                   |                      |        
|                   |                      |        
|                   | High                 | Low    
|Monthly            | ($)                  | ($)    
|December 2013      | 1.78                 | 1.07   
|November 2013      | 1.46                 | 1.11   
|October 2013       | 1.98                 | 1.40   
|September 2013     | 2.45                 | 1.35   
|August 2013        | 2.45                 | 2.00   
|July 2013          | 2.84                 | 2.06   
|June 2013          | 2.78                 | 1.94   
|May 2013           | 2.90                 | 2.25   
|April 2013         | 3.28                 | 2.33   
|March 2013         | 3.66                 | 2.75   
|February 2013      | 3.79                 | 3.24   
|January
      2013 | 4.19                 | 3.19   

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

---

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

|ITEM9. | ESCROWEDSECURITIES
|------ | ------------------

There are no shares of Northern Dynasty held in escrow.

|ITEM 10 | DIRECTORS AND OFFICERS
|------- | ----------------------

The names and municipalities of residence of the directors and
  officers of the Company, their principal occupations during the past five years,
  and the period of time they have served as directors or officers of Northern
  Dynasty are presented in the table below. Except where indicated, each director
  and senior officer of Northern Dynasty has held the same or similar principal
  occupation with the organization indicated or a predecessor thereof for the last
  five years. The number of common shares of the Company beneficially owned by
  each, directly or indirectly, or over which each exercised control or direction,
as at March 25, 2014 are shown in the following table:

Name,PositionandCountryofResidence
      PeriodasaDirectororOfficeroftheCompany
      SecuritiesBeneficiallyOwnedorControlled(1)Scott D. Cousens Director Vancouver, British
      Columbia, Canada
      Since June 1996
      6,000 Common Shares210,000
      OptionsRobert A. Dickinson Chairman of the Board and Director
      Lions Bay, British Columbia, Canada
      Since June 1995
      3,420,083 Common Shares480,000
      OptionsGordon J. Fretwell Director West Vancouver, British
      Columbia, Canada
      Since July 2004
      Nil Common Shares 150,000 OptionsRussell E. Hallbauer Director West Vancouver,
      British Columbia, Canada
      Since April 2008
      106,600 Common Shares 210,000 OptionsWayne Kirk Director Orcas Island, Washington, USA
      Since July 2004
      30,000 Common Shares 270,000 OptionsPeter Mitchell Director Chicago, Illinois, USA
      Since May 2011
      Nil Common Shares 150,000 OptionsKen Pickering Director Chemainus, British Columbia,
      Canada
      Since September 2013
      Nil Common Shares 150,000 OptionsMarchand Snyman Chief Financial Officer and Director
      West Vancouver, British Columbia, Canada
      Since August 2008
      40,000 Common Shares 480,000 OptionsRonald W. Thiessen President, CEO and Director West
      Vancouver, British Columbia, Canada
      Since November 1995
      2,108,878 Common Shares480,000
      Options


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

Name,PositionandCountryofResidence
      PeriodasaDirectororOfficeroftheCompany
      SecuritiesBeneficiallyOwnedorControlled(1)Trevor Thomas Secretary Vancouver, British
      Columbia, Canada
      Since February 2008
      Nil Common Shares 145,000 OptionsBruce Jenkins Senior VP, Corporate Development
      Vancouver, British Columbia, Canada
      Since June 2004
      10,000 Common Shares 200,000 OptionsStephen Hodgson VP Engineering Vancouver, British
      Columbia, Canada
      Since March 2005
      90,000 Common Shares 200,000 OptionsSean Magee VP Public Affairs North Vancouver,
      British Columbia, Canada
      Since October 2006
      Nil Common Shares 200,000 OptionsDoug Allen VP Corporate Communications Vancouver,
      British Columbia, Canada
      Since June 2012
      Nil Common Shares 200,000 Options


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

The directors listed above, except for Ken Pickering, were
re-elected at the annual general meeting of the Company held on June 19, 2013,
for a one-year term of office expiring at the next annual general meeting of
Northern Dynasty, which is currently scheduled for June 19, 2014. Mr. Pickering
was appointed a director of Northern Dynasty in September 2013. Several of the
directors serve together on a number of boards of other publicly listed
companies.

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

Based on insider reports filed on www.sedi.ca, as at
March 25, 2014, the above directors and officers beneficially owned, directly or
indirectly, or exercised control or direction over 5,811,561 common shares of
the Company (6.1%), or 9,336,561 common shares on a fully diluted basis (9.5%) .

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

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

Committee
    MembershipAudit and Risk Committee
      Gordon Fretwell Wayne Kirk Peter
      Mitchell (Chair)Compensation Committee
      Gordon Fretwell (Chair) Ken Pickering
      Peter MitchellNominating and Governance Committee
      Gordon Fretwell Wayne Kirk (Chair) Ken
      PickeringPebble Limited Partnership Oversight Committee
    Wayne Kirk


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

Principal Occupation and Other Companies Served by Current Directors of Northern Dynasty Scott D. Cousens  Director

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

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

Company
      PositionsHeld
      NameofMarket
      From
    ToNorthern Dynasty Minerals Ltd.
      Director
      TSX, NYSE MKT
      June 1996
    PresentAmarc Resources Ltd.
      Director
      TSX-V, OTCBB
      September 1995
    PresentAtlatsa Resources Corporation
      Director
      TSX-V, JSE, NYSE MKT
      September 1996
    June 2009Continental Minerals Corporation
      Director
      TSX-V, OTCBB
      June 1994
    April 2011Heatherdale Resources Ltd.
      Director and Chairman
      TSX-V
      November 2009
    PresentNorthcliff Resources Ltd.
      Director
      TSX
      June 2011
    February 2012Director
      May 2012
    PresentQuartz Mountain Resources Ltd.
      Director and Chairman
      TSX-V, OTCBB
      November 2012
    PresentRathdowney Resources Ltd.
      Director
      TSX-V
      March 2011
    PresentTaseko Mines Limited
      Director
      TSX, NYSE MKT
      October 1992
    Present


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

RobertA.Dickinson,B.Sc.,M.Sc.ChairmanoftheBoardandDirector

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

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

Company
    PositionsHeld
    NameofMarket
    From
    ToNorthern Dynasty Minerals Ltd.
    Director
    TSX, NYSE MKT
    June 1994
    PresentChairman
    April 2004
    PresentAmarc Resources Ltd.
    Director
    TSX-V, OTCBB
    April 1993
    PresentChairman
    April 2004
    PresentAtlatsa Resources Corporation
    Director
    TSX-V, JSE, NYSE MKT
    October 2004
    June 2009Co-Chairman
    October 2004
    June 2009Continental Minerals Corporation
    Director
    TSX-V, OTCBB
    June 2004
    April 2011Curis Resources Ltd.
    Director
    TSX
    November 2010
    November 2012Chairman
    November 2010
    December 2010Heatherdale Resources Ltd.
    Director
    TSX-V
    November 2009
    PresentNorthcliff Resources Ltd.
    Director
    TSX
    June 2011
    PresentChairman
    June 2011
    January 2013Rathdowney Resources Ltd.
    Director and Chairman
    TSX-V
    March 2011
    December 2011Quartz Mountain Resources Ltd.
    Director
    TSX-V
    December 2011
    PresentChairman
    December 2011
    November 2012Taseko Mines Limited
    Director
    TSX, NYSE MKT
    January 1991
    Present


GordonJ.Fretwell,B.Comm.LLB.Director

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

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

Company
      PositionsHeld
      NameofMarket
      From
    ToBell Copper Corporation
      Secretary
      TSX-V
      December 2008
    May 2011Director
      June 2001
    April 2011


---

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

Company
      PositionsHeld
      NameofMarket
      From
    ToBenton Resources Corp.
      Director
      TSX-V
      July 2003
    PresentSecretary
      December 2003
    PresentContinental Minerals Corporation
      Director
      TSX-V, OTCBB
      February 2001
    April 2011Copper Ridge Explorations Inc.
      Director/Secretary
      TSX-V
      September 1999
    August 2009Curis Resources Ltd.
      Director
      TSX
      January 2011
    PresentCoro Mining Corporation
      Director
      TSX
      June 2009
    PresentFrontera Copper Corporation
      Director
      TSX
      February 2009
    June 2009Grandcru Resources Corp.
      Director
      TSX-V
      December 2002
    May 2009Golden Dory Resources Corp.
      Secretary
      TSX-V
      August 2008
    PresentICN Resources Ltd.
      Secretary
      TSX-V
      March 2009
    August 2010Director
      July 2004
    August 2010International Royalty Corporation
      Director
      TSX, NYSE MKT
      June 2003
    February 2010Asanko Gold Inc. (formerly Keegan Resources Inc.)
      Director
      TSX, NYSE MKT
      February 2004
    PresentLignol Energy Corporation
      Director
      TSX-V
      January 2007
    PresentMeritus Minerals Ltd.
      Director
      TSX-V
      June 2007
    PresentNorthern Dynasty Minerals Ltd.
      Director
      TSX, NYSE MKT
      June 2004
    PresentQuartz Mountain Resources Ltd.
      Director
      TSX-V, OTCBB
      January 2003
    PresentSecretary
      January 2003
    December 2011Rare Earth Metals Inc.
      Secretary
      TSX-V
      December 2009
    PresentRockwell Diamonds Inc.
      Secretary
      TSX-V, OTCBB, JSE
      September 2012
    Present


RussellE.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. Mr. Hallbauer is
currently the President and Chief Executive Officer of Taseko Mines Limited.

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

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

---

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

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


WayneKirk,LLBDirector

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

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

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

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


Peter Mitchell, CA  Director

Mr. Mitchell is currently the Senior Vice
President and Chief Financial Officer of Coeur Mining, Inc. in Chicago,
Illinois. He is a graduate of the University of Western Ontario with a Bachelor
of Arts in Economics as well as a graduate of the MBA program of the University
of British Columbia. Mr. Mitchell is a Chartered Accountant and worked most
recently as the Chief Financial Officer of Taseko Mines Limited. Prior to that
he held senior roles in three private equity portfolio companies including
President of Florida Career College based in Fort Lauderdale, Florida, President
and CEO of Vatterott Education Centers in St Louis, Missouri and Vice Chairman
and CFO of Von Hoffmann Corporation, also based in St Louis, Missouri.

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

---

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

Company
      PositionsHeld
      NameofMarket
      From
    ToNorthern Dynasty Minerals Ltd.
      Director
      TSX, NYSE MKT
      May 2011
    PresentCoeur Mining, Inc.
      Senior Vice President and Chief
      Financial Officer
      NYSE, TSX
      June 2013
    PresentNorthcliff Resources Ltd.
      Director
      TSX
      June 2011
    PresentTaseko Mines Limited
      Chief Financial Officer
      TSX, NYSE MKT
      September 2008
    May 2013


KenPickeringDirector

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

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

Company
    Positions Held
    Name ofMarket
    From
    ToNorthern Dynasty Minerals Ltd.
    Director
    TSX, NYSE MKT
    September 2013
    PresentEndeavour Silver Corp.
    Director
    TSX, NYSE
    August 2012
    PresentTHEMAC Resources Group Limited
    Director
    TSX-V
    March 2011
    Present


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

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

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.

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

---

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

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


RonaldW.Thiessen,CADirector,PresidentandChiefExecutiveOfficer

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 HDI and
HDSI, a company providing management and administrative services to several
publicly-traded companies and focuses on directing corporate development and
financing activities.

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

Company
      PositionsHeld
      NameofMarket
      From
    ToNorthern Dynasty Minerals Ltd.
      Director
      TSX, NYSE MKT
      November 1995
    PresentPresident and Chief Executive
      Officer
      November 2001
    PresentAmarc Resources Ltd.
      Director
      TSX-V, OTCBB
      September 1995
    PresentPresident and Chief Executive
      Officer
      September 2000
    PresentAtlatsa Resources Corporation
      Director
      TSX-V, JSE NYSE MKT
      April 1996
    June 2011Continental Minerals Corporation
      Director
      TSX-V, OTCBB
      November 1995
    April 2011Co-Chairman
      January 2006
    April 2011Detour Gold Corporation
      Director
      TSX
      July 2006
    May 2012Chairman
      July 2006
    March 2009Farallon Mining Ltd.
      Director
      TSX
      August 1994
    January 2011Chairman
      December 2005
    January 2011Great Basin Gold Ltd.
      Director
      TSX, NYSE MKT, JSE
      October 1993
    June 2013Chairman
      November 2006
    June 2013Quartz Mountain Resources Ltd.
      President, CEO and Director
      TSX-V
      December 2011
    Present


---

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

Company
      PositionsHeld
      NameofMarket
      From
    ToTaseko Mines Limited
      Director
      TSX, NYSE MKT
      October 1993
    PresentChairman
      May 2006
    Present


OTHEROFFICERS

TrevorThomas,LLBSecretary

Trevor Thomas has practiced in the areas of corporate
commercial, corporate finance, securities and mining law since 1995, both in
private practice environment as well as in house positions and is currently
general counsel for HDI. HDI, he served as in-house legal counsel with Placer
Dome Inc.

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

Company
    PositionsHeld
    NameofMarket
    From
    ToNorthern Dynasty Minerals Ltd.
    Secretary
    TSX, NYSE MKT
    February 2008
    PresentAmarc Resources Ltd.
    Secretary
    TSX-V, OTCBB
    February 2008
    PresentAtlatsa Resources Corporation
    Assistant Secretary
    TSX-V, JSE, NYSE MKT
    November 2007
    March 2011Continental Minerals Corporation
    Secretary
    TSX-V, OTCBB
    February 2008
    April 2011Curis Resources Ltd.
    Secretary
    TSX
    June 2013
    PresentFarallon Mining Ltd.
    Secretary
    TSX
    December 2007
    January 2011Heatherdale Resources Ltd.
    Secretary
    TSX-V
    November 2009
    September 2010June 2013
    PresentNorthcliff Resources Ltd.
    Secretary
    TSX
    June 2011
    PresentQuartz Mountain Resources Ltd.
    Secretary
    TSX-V
    June 2013
    PresentRathdowney Resources Ltd.
    Secretary
    TSX-V
    March 2011
    PresentRockwell Diamonds Inc.
    Secretary
    TSX, OTCBB, JSE
    February 2008
    September 2012Taseko Mines Limited
    Secretary
    TSX, NYSE MKT
    July 2008
    Present


BruceJenkinsSeniorVicePresident,CorporateDevelopment

Bruce Jenkins is an environmental and government relations
executive with more than 30 years of experience in project and corporate
management. He supports the Pebble Partnership and helps guide environmental and
permitting activities. Mr. Jenkins is also Executive Vice President of
Environment and Sustainability for Hunter Dickinson Inc.

Stephen Hodgson  Vice President, Engineering

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

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

---

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

Company
      PositionsHeld
      Name ofMarket
      From
    ToRathdowney Resources Ltd.
      Director
      TSX-V
      December 2011
    Present


Sean Magee  Vice President, Public Affairs

Sean Magee is a former journalist and speech writer with more
than 15 years of natural resource industry communications experience. Mr. Magee
has had a working relationship with Hunter Dickinson Inc. for more than 12 years
and is currently HDI's Executive Vice President of Strategic Communications and
Public Affairs.

Doug Allen  Vice President, Corporate Communications

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

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.

As publicly
disclosed at www.sedar.com, in September, 2012, Great Basin Gold Ltd.
("GBG"), a company for which Ronald W. Thiessen was at the time a director, and
for which Mr. Wayne Kirk was at that time a former director having resigned as a
director in January 2012, filed for creditor protection under the Companies
Creditors Arrangement Act ("CCAA") in Canada, and as well, GBGs principal South
African subsidiary Southgold Exploration (Pty) Ltd. ("Southgold"), filed for
protection under the South African Companies Act business rescue procedures.
These companies continued to be subject to the insolvency proceedings at the
time that Mr. Thiessen resigned.

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.

---

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

|ITEM11. | PROMOTERS
|------- | ---------

Not applicable.

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

|12.1 | Legal Matters
|---- | -------------

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

In November 2011, by a narrow 280  246 (53%  47%) margin,
voters in Southwest Alaskas Lake & Peninsula Borough supported a ballot
measure sponsored by anti-Pebble activists that proposed to restrict future
development that affects more than one square mile of land within the 31,000
square mile borough. The initiative was opposed by a broad spectrum of Alaska
interests, including a group of four Alaska Native village corporations
representing seven Lake & Peninsula Borough communities whose private land
holdings would be affected by the ordinance, the State of Alaska and the Pebble
Partnership. It was also opposed by the Resource Development Council for Alaska,
the Alaska State Chamber of Commerce, the Alaska Miners Association, Council of
Alaska Producers, the Alaska Oil and Gas Association and the Alaska Industry
Support Alliance, among others.

The Pebble Partnership and the State of Alaska filed legal
challenges to the ballot initiative in the Alaska Superior Court, and on March
19, 2014 the court issued a permanent injunction barring the law from going into
effect. The court ruled in favor of the Pebble Partnership, agreeing that the
Alaska constitution and Alaska statutes preempted local governments from
interfering with resource development on State lands.

An environmental group, Renewable Resources Coalition ("RRC"),
has filed a lawsuit against the Pebble Partnership and others in superior court
in California. The lawsuit follows a complaint that Pebble Partnership filed
with the Alaska Public Offices Commission in 2009 which alleged that RRC and
others had engaged in illegal conduct during the course of a ballot initiative
campaign in 2008. The commission investigated and issued a report finding RRC
and others had violated Alaska law, and subsequently RRC and others entered into
a consent decree and paid a settlement fine. RRC then filed a lawsuit against
the Pebble Partnership, asserting that the Pebble Partnership violated RRC's
rights by acquiring documents and information which the Pebble Partnership had
attached to its complaint to the Alaska Public Offices Commission. The trial
court dismissed the lawsuit, finding that it was an improper retaliatory lawsuit
and barred by California's Anti-SLAPP (Strategic Lawsuits against Public
Participation) statute. An appellate court recently reversed that dismissal and
remanded the case back to the trial court. A status hearing is set for April
2014. The Pebble Partnership maintains that its conduct in reporting illegal
conduct to the proper law enforcement authority was appropriate and proper in all respects, and it
will again ask the trial court to dismiss the lawsuit for lack of merit.

---

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

|12.2 | Contingencies
|---- | -------------

Bristol Bay Watershed Assessment

In February 2011, the US Environmental Protection Agency
("EPA") announced it would undertake a Bristol Bay Watershed Assessment study
focusing on the potential effects of large-scale mine development in all of the
Bristol Bay area, subsequently narrowed to the Nushagak and Kvichak drainages.
This process was initiated in response to calls from persons and groups opposing
the Pebble Project for the EPA to pre-emptively use its asserted authority under
Section 404(c) of the Clean Water Act to prohibit discharges of dredged or fill
material in waters of the US within these drainages. Rather than acceding to
this request, the EPA embarked on a scientific study to assess potential impacts
of hard rock mining in the two drainages.

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

The EPA called for public comment on the quality and
sufficiency of scientific information presented in the draft BBWA report. In
response, Northern Dynasty made a presentation highlighting these shortcomings
at the public hearings held in Seattle, Washington, on May 31, 2012 and in
Anchorage, Alaska, on August 7, 2012. In July 2012, the Company also submitted a
635-page critique of the draft report in response to the EPAs call for public
comment, and has called upon the EPA to cease action on the watershed assessment
until such time as a definitive proposal for the development of the Pebble
deposit is submitted into the NEPA process.

Concerns about the reasonableness of the basis of risk
assessment in the draft EPA report were stated by many independent experts on
the peer review panel assembled to review the BBWA in a report entitled 'External Peer Review of EPA's Draft Document: An Assessment of Potential Min
ing Impacts on Salmon Ecosystems of Bristol Bay, Alaska" released in November 2012. In a
wide-ranging critique of the draft report's methodology and findings, many peer
review panelists called the EPA's effort to evaluate the effects of a
'hypothetical mining scenario' on the water, fish, wildlife and cultural
resources of Southwest Alaska "inadequate", "premature", "unreasonable", "suspect" and "misleading". The full peer review report can be found
at:
http://www.epa.gov/ncea/pdfs/bristolbay/Final-Peer-Review-Report-Bristol-Bay.pdf.

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

On April 26, 2013,
  the EPA released a revised draft of the BBWA report and announced another public
  comment and Peer Review period. The Pebble Partnership and Northern Dynasty made
  submissions on the revised draft. In late May 2013, Northern Dynasty filed a
  205-page submission which describes the same major shortcomings as the original
  report published in May 2012. For additional information on Northern Dynastys
  submission to the EPA and the Companys critique of the BBWA report, see
  http://www.northerndynastyminerals.com/ndm/BristolBay.asp.

In mid-January
  2014, the EPA released the final version of its BBWA. It does not include any
  recommendations or regulatory actions that will affect future development of the
  Pebble Project. The report still reflects many of the same fundamental
  shortcomings as previous drafts. The Peer Review report emphasizes that
  important information about the potential effects of mine development on the
  natural resources of Bristol Bay is not presented in the final BBWA report, and
  these issues should be examined during the more rigorous and comprehensive
  process to be undertaken under the NEPA once the Pebble Partnership has applied
  for permits. In its response, EPA states that the BBWA is not intended to be an
  environmental impact assessment, and is not intended to duplicate or replace a
  regulatory process.

On February 28, 2014, the EPA announced that it is initiating a process under the Clean Water Act to investigate potential impacts on aquatic habitat and fisheries associated with mine development in southwest Alaska.  The EPA process, which is a continuation of the BBWA study initiated in 2011, will include consultation with the U.S. Army Corps of Engineers and the Pebble Partnership.  Based on input the EPA receives during any one of these steps, the agency has stated it could decide to take action under Section 404(c) of the Clean Water Act or decide that that further review is not necessary.  Northern Dynasty management continues to be of the opinion that any final decisions about Pebble should be made by federal and state regulators working within the NEPA permitting process based on an actual permit application, and not unilaterally and pre-emptively by the EPA.

---

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

|**ITEM 13.** | INTERESTOFMANAGEMENTANDOTHERSINMATERIALTRANSACTIONS
|------------ | ---------------------------------------------------

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

Certain directors of a private company, HDSI, a wholly owned
subsidiary of HDI (refer Item 10  Directors and Officers) are also
directors of the Company. Pursuant to a management services agreement with HDSI,
HDSI provides geological, corporate development, administrative and management
services to, and incurs third party costs on behalf of, the Company and its
subsidiaries at annually set rates. During the year ended December 31, 2013, the
Company paid HDSI approximately $4.2 million (2012  $3.5 million) for services
rendered by HDSI and reimbursed HDSI approximately $0.8 million (2012  $1.1
million) for third party costs incurred on the Companys behalf. Certain members
of the companys senior management are employed by HDSI rather than by Northern
Dynasty directly.

---

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

|ITEM14. | TRANSFERAGENTANDREGISTRAR
|------- | -------------------------

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

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

Other than the management services agreement with HDSI as set out in Item 13, the Company has no contracts that can be considered to be material which are still in effect as of the end of the fiscal year ended December 31, 2013.

|ITEM 16. | INTERESTS OF EXPERTS
|-------- | --------------------

David Gaunt, P.Geo., is a person

|(a) | who is named as in a report described in a filing, or
      referred to in a filing, made under National Instrument 51-102 by the
      Company during, or relating to, the Companys most recently completed
      financial year; and
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                        
|(b) | whose profession or business gives authority to
      the report made by him.                                                                                                                                                          

Mr. Gaunt holds an interest in the common shares of the
Company, directly or indirectly, or through share purchase options, representing
less than 1% of the Company's outstanding share capital.

Deloitte LLP 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 has 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 under the
Companys profile on SEDAR at www.sedar.com and from the U.S. Securities
and Exchange Commissions (the "SEC") Electronic Document Gathering and
Retrieval System ("EDGAR") at www.sec.gov.

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

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

---

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

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

|ITEM 18. | DISCLOSURE FOR COMPANIES NOT SENDING INFORMATION CIRCULARS
|-------- | ----------------------------------------------------------

Not applicable.

|**ITEM 19.** | AUDIT and RISK COMMITTEE, AUDITOR FEES, EXEMPTIONS, CODE OF ETHICS
|------------ | ------------------------------------------------------------------

Audit and Risk Committee ("Audit Committee") Charter

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

Composition of the Audit Committee

The Audit Committee currently consists of Peter Mitchell, Wayne
Kirk, and Gordon Fretwell. Mr. Mitchell is the Chairman of the Audit Committee.
The Committee reviews all financial statements of the Company prior to their
publication, reviews audits performed, considers the adequacy of audit
procedures, recommends the appointment of independent auditors, reviews and
approves the professional services to be rendered by them and reviews fees for
audit services. The Audit Committee Charter has set criteria for membership
which all members of the Audit Committee are required to meet consistent with
National Instrument 52-110 and other applicable regulatory requirements. The
Audit Committee, as needed, meets separately (without management present) with
the Companys auditors to discuss the various aspects of the Companys financial
statements and the independent audit. Each Audit Committee member is an
independent director and is financially literate. Both Mr. Kirk and Mr. Fretwell
are experienced securities lawyers. Mr. Mitchell, the Audit Committee Chairman
is a Chartered Accountant and is a financial expert.

Relevant Education and Experience

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

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

See disclosure regarding biographical information in Item 10. Directors and Officers  Principal Occupation and Other Companies Served by Current Directors of Northern Dynasty.

Reliance on Certain Exemptions available in NI 52-110

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

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

Pre-ApprovalPoliciesandProcedures

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

Principal Accountant Fees and Services

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

Nature of Services
      Year ended
      December 31, 2013
    Year endedDecember 31, 2012Audit Fees(1)Audit-Related Fees(2)Tax Fees(3)All Other Fees(4)
      $ 199,500   
    $ 175,000   Total
      $ 199,500
    $ 175,000


|Notes:
|------
|1.    
|2.    
|3.    
|4.    

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



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

CodeofEthics

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

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

APPENDIX A

Audit and Risk Committee Charter

|1. | Purpose: Responsibilities and Authority
|-- | ---------------------------------------

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

|(a) | RelationshipwithIndependentAuditor.
|--- | -----------------------------------

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

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

| | (C) | any steps taken to deal with any such issues; and                       
| | --- | ------------------------------------------------------------------------
| |     |                                                                         
| | (D) | all relationships between the independent auditor and the
      Company.

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

|(b) | FinancialStatementandDisclosureReview.
|--- | --------------------------------------

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

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

| | (A) | all critical accounting policies and practices used by
      the Company;                                                                                                                                                                                                                                                                                                                                          
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (B) | all alternative accounting treatments of financial
      information that have been discussed with management since the prior
      report, ramifications of the use of such alternative disclosures and
      treatments, the treatment preferred by the independent auditor, and an
      explanation of why the independent auditors preferred method was not
      adopted; and.                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (C) | other material written communications between the
      independent auditor and management since the prior report, such as any
      management letter or schedule of unadjusted differences, the development,
      selection and disclosure of critical accounting estimates, and analyses of
      the effect of alternative assumptions, estimates or GAAP methods on the
      Companys financial statements.

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

|(c) | ConductoftheAnnualAudit.
|--- | ------------------------

The Committee shall oversee the annual
  audit, and in the course of such oversight the Committee shall have the
  following responsibilities and authority:

| | (i)   | The Committee shall meet with the independent auditor
      prior to the audit to discuss the planning and conduct of the annual
      audit, and shall meet with the independent auditor as may be necessary or
      appropriate in connection with the audit.                                                                                                                                                                                                                                                                                                                                                                                                          
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (ii)  | The Committee shall ascertain that the independent
      auditor is registered and in good standing with the Canadian Public
      Accounting Board and the Public Company Accounting Oversight Board and
      that the independent auditor satisfies all applicable Canadian
      independence standards, Independence Standards Board Standard No. 1, and
      SEC Regulation S-X, Section 2-01. The Committee shall obtain from the
      auditor a written statement delineating all relationships between the
      auditor and the Company as per ISB Standard 1, and review relationships
      that may impact the objectivity and independence of the auditor.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (iii) | The Committee shall discuss with the independent auditor
      the matters required to be discussed by Statement on Auditing Standards
      No. 61 relating to the conduct of the audit, including                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |       | (A)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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

| | (B) | the management letter provided by the independent auditor
      and the Companys response to that letter; and                                                                                                        
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                       
| | (C) | any difficulties encountered in the course of the audit
      work, including any restrictions on the scope of activities or access to
      requested information, and any significant disagreements with management.

| | (iv) | The Committee shall obtain from the independent auditor
      assurance that the audit was conducted in a manner consistent with Section
      10A of the Securities Exchange Act of 1934 and that, in the course of
      conducting the audit, the independent auditor has not become aware of
      information indicating that an illegal act has or may have occurred or, if
      such an act may have occurred, that the independent auditor has taken all
      action required by Section 10A(b) of the Securities Exchange Act of 1934.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (v)  | The Committee shall make such inquiries to the management
      and the independent auditor as the Committee members deem necessary or
      appropriate to satisfy themselves regarding the efficacy of the Companys
      financial and internal controls and procedures and the auditing process.                                                                                                                                                                                                                                            

|(d) | ComplianceandOversight.
|--- | -----------------------

| | (i)   | The Committee shall meet periodically with management and
      the independent auditor in separate executive sessions. The Committee may
      also, to the extent it deems necessary or appropriate, meet with the
      Companys investment bankers and financial analysts who follow the
      Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (ii)  | The Committee shall discuss with management and the
      independent auditor the effect of regulatory and accounting initiatives as
      well as off-balance sheet structures on the Companys financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (iii) | The Committee shall discuss with management the Companys
      major financial risk exposures and the steps management has taken to
      monitor and control such exposures, including the Companys risk
      assessment and risk management policies, and regularly review the top
      risks identified by management and the policies and practices adopted by
      the Company to manage those risks..                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (iv)  | At least annually and prior to the filing of the
      AIF/Annual Report to the SEC, the Committee shall review with management
      and the independent auditor the disclosure controls and procedures and
      confirm that the Company (with CEO and CFO participation) has evaluated
      the effectiveness of the design and operation of the controls within 90
      days prior to the date of filing of the AIF/Annual Report to the SEC. The
      Committee also shall review with management and the independent auditor
      any deficiencies in the design and operation of internal controls and
      significant deficiencies or material weaknesses therein and any fraud
      involving management or other employees who have a significant role in the
      Companys internal controls. As a part of that review, the Committee shall
      review the process followed in preparing and verifying the accuracy of the
      CEO and CFO annual certifications required to be included in the
      AIF/Annual Report to the SEC.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (v)   | At least annually and prior to the filing of the
      AIF/Annual Report to the SEC, the Committee shall review with management
      and the independent auditor                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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

| |        | managements internal control report and assessment of
      the internal controls and procedures, and the independent auditors report
      on and assessment of the internal controls and procedures.                                                                                                                                          
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                                                                                                                   
| | (vi)   | The Committee shall establish procedures for the receipt,
      retention and treatment of complaints received by the Company regarding
      accounting, internal accounting controls or auditing matters, and the
      confidential, anonymous submission by employees of concerns regarding
      questionable accounting or auditing matters.
| |        |                                                                                                                                                                                                                                                                                                                                                   
| | (vii)  | The Committee shall discuss with management and the
      independent auditor any correspondence with regulators or governmental
      agencies and any employee complaints or reports which raise material
      issues regarding the Companys financial statements or accounting
      policies.                                               
| |        |                                                                                                                                                                                                                                                                                                                                                   
| | (viii) | At least annually, the Committee shall meet with the
      Companys legal counsel and discuss any legal matters that may have a
      material impact on the financial statements or the Companys compliance
      policies.                                                                                                                    
| |        |                                                                                                                                                                                                                                                                                                                                                   
| | (ix)   | The Committee shall oversee the preparation of all
      reports relating to the Committee required under applicable laws,
      regulations and stock exchange requirements.                                                                                                                                                                     
| |        |                                                                                                                                                                                                                                                                                                                                                   
| | (x)    | The Committee shall exercise oversight with respect to
      anti-fraud programs and controls.                                                                                                                                                                                                                                                    

|(e) | RelatedPartyTransactions.
|--- | -------------------------

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

|(f) | Additionalduties.
|--- | -----------------

The Committee shall perform the
  following additional duties:

| | (i)  | The Committee shall review and recommend hedging and
      dividend policies.                         
| | ---- | ------------------------------------------------------------------------------------------------------
| |      |                                                                                                       
| | (ii) | The Committee shall oversee the Companys insurance
      program and approve insurance policy limits.

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

| | (iii) | The Committee shall review the appointment of senior
      financial personnel and make recommendations to the Board of Directors
      regarding the appointment of the Chief Financial Officer.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                  
| | (iv)  | The Committee shall recommend to the Nominating and
      Governance Committee the qualifications and criteria for membership on the
      Committee.                                            

|2. | StructureandMembership
|-- | ----------------------

|(g) | Numberandqualification.                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Committee shall consist of three persons unless the
      Board should from time to time otherwise determine. All members of the
      Committee shall meet the experience and financial literacy requirements of
      National Instrument NI 52-110 and the rules of the Toronto Stock Exchange
      and the NYSE MKT. At least one member of the Committee shall be a
      "financial expert" as defined in Item 407 of SEC Regulation S-K.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(h) | SelectionandRemoval.                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Members of the Committee shall be appointed by the Board,
      upon the recommendation of the Nominating and Governance Committee. The
      Board may remove members of the Committee at any time with or without
      cause.                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(i) | Independence.                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | All of the members of the Committee shall be
      independent as required for audit committees by National Instrument NI
      52-110, the rules of the Toronto Stock Exchange and the NYSE MKT, and SEC
      Rule 10A-3.                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(j) | Chair.                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Unless the Board elects a Chair of the Committee, the
      Committee shall elect a Chair by majority vote.                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(k) | Compensation.                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The compensation of the Committee shall be as determined
      by the Board.                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(l) | Term.                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Members of the Committee shall be appointed for one-year
      terms. Each member shall serve until his or her replacement is appointed,
      or until he or she resigns or is removed from the Board or the Committee.                                                                                                                                                                                                                            

|3. | ProceduresandAdministration
|-- | ---------------------------

|(m) | Meetings.                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                 
|    | The Committee shall meet as often as it deems necessary
      in order to perform its responsibilities, but not less than quarterly. The
      Committee shall keep minutes of its meetings and any other records as it
      deems appropriate.

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

|(n) | Subcommittees.                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The Committee may form and delegate authority to one or
      more subcommittees, consisting of at least one member, as it deems
      appropriate from time to time under the circumstances.                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|(o) | ReportstotheBoard.                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The Committee shall regularly report to the Board with
      respect to such matters as are relevant to the Committees discharge of
      its responsibilities, and shall report in writing on request of the
      Chairman of the Board.                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|(p) | Charter.                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The Committee shall, at least annually, review and
      reassess the adequacy of this Charter and recommend any proposed changes
      to the Board for approval.                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|(q) | IndependentAdvisors.                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The Committee shall have the authority to engage such
      independent legal and other advisors as it deems necessary or appropriate
      to carry out its responsibilities. Such independent advisors may be
      regular advisors to the Company. The Committee is empowered, without
      further action by the Board, to cause the Company to pay appropriate
      compensation to advisors engaged by the Committee.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|(r) | Investigations.                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The Committee shall have the authority to conduct or
      authorize investigations into any matters within the scope of its
      responsibilities as it deems appropriate, including the authority to
      request any Officer or other person to meet with the Committee and to
      access all Company records.                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|(s) | AnnualSelf-Evaluation.                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The Committee shall evaluate its own performance at least
      annually.                                                                                                                                                                                                                                                                                                                                                     

|4. | AdditionalPowers
|-- | ----------------

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

|5. | Limitation of Committees Role
|-- | ------------------------------

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



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

|6. | CommitteeMemberIndependence,FinancialLiteracyandFinancialExpertRequirements        
|-- | -----------------------------------------------------------------------------------
|   |                                                                                    
|A. | Independence                                                                       
|   |                                                                                    
|   | See Appendix 2 of the Companys Corporate
      Governance Overview and Guidelines.
|   |                                                                                    
|B. | FinancialLiteracyandFinancialExpertRequirements                                    

NI52-110

Section 3.1(4) states that each audit committee member must be
financially literate.

Section 1.6 defines the meaning of financial literacy as
follows:

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

NYSEMKTSection803(B)(2)(a)(iii)

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

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

ITEM407(d)(5)(ii)0FREGULATIONS-K,DEFINITIONOFFINANCIALEXPERT

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

|(A) | An understanding of generally accepted
      accounting principles and financial statements;                                                                                                                                                                                                                                                                                                                                             
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(B) | The ability to assess the general application of such
      principles in connection with the accounting for estimates, accruals and
      reserves;                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(C) | Experience preparing, auditing, analyzing or evaluating
      financial statements that present a breadth and level of complexity of
      accounting issues that are generally comparable to the breadth and
      complexity of issues that can reasonably be expected to be raised by the
      small business issuers financial statements, or experience actively
      supervising one or more persons engaged in such activities;
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(D) | An understanding of internal control over
      financial reporting; and                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(E) | An understanding of audit committee functions.                                                                                                                                                                                                                                                                                                                                                                                           

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

A person shall have acquired such attributes through:

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

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