---













ANNUAL INFORMATION FORM

FOR THE YEAR ENDED DECEMBER31,2006





This annual information form (AIF) is as of March 30, 2007

---

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

|                                                                              |                                                               | Page
|----------------------------------------------------------------------------- | ------------------------------------------------------------- | ----
|                                                                              |                                                               |     
|ITEM 1.TABLE OF CONTENTS                                                      | 2                                                            
|                                                                              |                                                               |     
|ITEM 2.PRELIMINARY NOTES                                                      | 3                                                            
|                                                                              |                                                               |     
|                                                                              | INCORPORATION OF CONTINUOUS DISCLOSURE DOCUMENTS BY REFERENCE | 3   
|                                                                              |                                                               |     
|                                                                              | GLOSSARY                                                      | 4   
|                                                                              |                                                               |     
|                                                                              | RESOURCE CATEGORY (CLASSIFICATION) DEFINITIONS                | 5   
|                                                                              |                                                               |     
|ITEM 3.CORPORATE STRUCTURE                                                    | 6                                                            
|                                                                              |                                                               |     
|ITEM 4.GENERAL DEVELOPMENT OF THE BUSINESS                                    | 6                                                            
|                                                                              |                                                               |     
|                                                                              | THREE YEAR HISTORY                                            | 6   
|                                                                              |                                                               |     
|                                                                              | SIGNIFICANT ACQUISITIONS AND SIGNIFICANT DISPOSITIONS         | 7   
|                                                                              |                                                               |     
|ITEM 5.DESCRIPTION OF BUSINESS                                                | 7                                                            
|                                                                              |                                                               |     
|                                                                              | THE PEBBLE PROJECT                                            | 7   
|                                                                              |                                                               |     
|ITEM 6.DIVIDENDS                                                              | 24                                                           
|                                                                              |                                                               |     
|ITEM 7.DESCRIPTION OF CAPITAL STRUCTURE                                       | 24                                                           
|                                                                              |                                                               |     
|ITEM 8.MARKET FOR SECURITIES                                                  | 25                                                           
|                                                                              |                                                               |     
|ITEM 9.ESCROWED SECURITIES                                                    | 25                                                           
|                                                                              |                                                               |     
|ITEM 10.DIRECTORS AND OFFICERS                                                | 25                                                           
|                                                                              |                                                               |     
|ITEM 11.PROMOTERS                                                             | 34                                                           
|                                                                              |                                                               |     
|ITEM 12.LEGAL PROCEEDINGS                                                     | 34                                                           
|                                                                              |                                                               |     
|ITEM 13.INTEREST OF MANAGEMENT AND OTHERS IN
      MATERIAL TRANSACTIONS      | 35                                                           
|                                                                              |                                                               |     
|ITEM 14.TRANSFER AGENT AND REGISTRAR                                          | 35                                                           
|                                                                              |                                                               |     
|ITEM 15.MATERIAL CONTRACTS                                                    | 35                                                           
|                                                                              |                                                               |     
|ITEM 16.INTERESTS OF EXPERTS                                                  | 35                                                           
|                                                                              |                                                               |     
|ITEM 17.ADDITIONAL INFORMATION                                                | 36                                                           
|                                                                              |                                                               |     
|ITEM 18.DISCLOSURE FOR COMPANIES NOT SENDING
      INFORMATION CIRCULARS      | 36                                                           
|                                                                              |                                                               |     
|ITEM 19.CONTROLS AND PROCEDURES                                               | 36                                                           
|                                                                              |                                                               |     
|ITEM 20.AUDIT COMMITTEE, CODE OF ETHICS, ACCOUNTANT
      FEES AND EXEMPTIONS | 37                                                           
|                                                                              |                                                               |     
|ITEM 21.OFF BALANCE SHEET ARRANGEMENTS                                        | 38                                                           
|                                                                              |                                                               |     
|ITEM 22.TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS                         | 38                                                           

---

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

**ITEM 2.          
  PRELIMINARY NOTES**

This AIF includes certain statements that may be deemed
      "forward-looking statements" within the meaning of Section 27A of the
      Securities Act of 1933and Section 21E of the Securities
      Exchange Act of 1934. All statements in this AIF, other than
      statements of historical facts, that address future production, reserve
      potential, exploration drilling, exploitation activities and events or
      developments that the Company expects are forward-looking statements.
      Although the Company believes the expectations expressed in such
      forward-looking statements are based on reasonable assumptions, such
      statements are not guarantees of future performance and actual results or
      developments may differ materially from those in the forward-looking
      statements. Factors that could cause actual results to differ materially
      from those in forward-looking statements include market prices,
      exploitation and exploration successes, continued availability of capital
      and financing and general economic, market or business conditions, as well
      as those factors addressed in the Risk Factors section of this AIF.
      Investors are cautioned that any such statements are not guarantees of
      future performance and that actual results or developments may differ
      materially from those projected in the forward-looking statements.


Incorporation of Continuous Disclosure Documents by
Reference

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

Incorporated by reference into this AIF are the comparative
audited consolidated financial statements and Managements Discussion and
Analysis for Northern Dynasty for the fiscal year ended December 31, 2006
together with the auditors report thereon. These documents are available for
review on the SEDAR website located at www.sedar.com. All financial information in this AIF is
prepared in accordance with Canadian generally accepted accounting principles
(Canadian GAAP).

Documents incorporated by reference in this AIF include all
audited and interim financial statements, proxy circulars, news releases and
other continuous disclosure documents filed by Northern Dynasty, copies of which
are available on request from the offices of Northern Dynasty or on the SEDAR
web site (indicated above).

Cautionary Note to Investors Concerning Estimates of
Measured, Indicated and Inferred Resources

This AIF uses the terms measured resources, indicated
resources and inferred resources. Northern Dynasty advises the investors that
while these terms are recognized and required by Canadian regulations (under
National Instrument 43-101 Standards of Disclosure for Mineral Projects), the
United States Securities and Exchange Commission does not recognize them.
Investors are cautioned not to assume that any part or all of the mineral
deposits in these categories will ever be converted to reserves.In
addition, 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 regulations, estimates of Inferred Mineral Resources
may not form the basis of Feasibility or Pre-Feasibility Studies, or economic
studies except for a Preliminary Assessment as defined under 43-101.
Investors are cautioned not to assume that part or all of an inferred
resource exists, or is economically or legally mineable.

Currency and Metric Equivalents

All dollar amounts are expressed in Canadian dollars unless
otherwise indicated. The Companys accounts are maintained in Canadian dollars.
The business activities of the Company, carried out through its subsidiary in
Alaska, U.S.A. are conducted primarily with United States dollars. The rate of
exchange

---

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

on December 31, 2006 as reported by the Bank of Canada, for the
conversion of one United States dollar into one Canadian dollar was 1.1654.

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 Canadian dollars into U.S. dollars.

|                        |        | Year Ended December 31 |       
|----------------------- | ------ | ---------------------- | ------
|                        | 2006   | 2005                   | 2004  
|Rate at end of period   | 0.8581 | 0.8577                 | 0.8308
|Average rate for period | 0.8816 | 0.8255                 | 0.7685
|High for period         | 0.9099 | 0.8690                 | 0.8493
|Low for period          | 0.8528 | 0.7872                 | 0.7159

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

Metric Units
    Multiply by
    Imperial UnitsHectares
    2.471
    = acresMetres
    3.281
    = feetKilometres
    0.621
    = miles (5,280 feet)Grams
    0.032
    = ounces (troy)Tonnes
    1.102
    = tons (short) (2,000 lbs)grams/tonne
    0.029
    = ounces (troy)/ton


Glossary

In this Annual Information Form (AIF) the following terms
have the meanings set forth herein:

|National Instrument NI 43-101 | The Canadian securities rule which establishes disclosure
      standards for mineral projects by Canadian resource companies.                                                                                                                                                     
|----------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                              |                                                                                                                                                                                                                                                                                    
|Composite Hydrothermal System | Created by hydrothermal process or processes in which
      there is evidence of more than one centre or source of hydrothermal
      fluids, and potentially more than one mineral deposit.                                                                                       
|                              |                                                                                                                                                                                                                                                                                    
|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.
|                              |                                                                                                                                                                                                                                                                                    
|Hydrothermal Alteration       | Alteration of rocks or minerals by the reaction of hot,
      or hydrothermal, water with pre-existing (or host) rocks or minerals. The
      products of this reaction may also be a hydrothermal mineral deposit, that
      is, gangue and ore minerals that                    

---

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

|                                   | have been deposited in fractures, faults, breccia
      openings, etc., by replacement or open-space filling from watery fluids of
      50-700 degrees C temperature and of 1-3 kilobars pressure.                                                                                                                                                                                                              
|---------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                  
|Induced Polarization (IP) Survey | A geophysical survey used to identify a feature that
      appears to be different from the typical or background survey results when
      tested for levels of electro- conductivity; IP detects both chargeable,
      pyrite-bearing rock and non- conductive rock that has a high content of
      quartz. It is commonly used to explore for mineralization associated with
      porphyry copper deposits.
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                  
|Mineral Symbols                    | Au - Gold; Ag - Silver; Al - Aluminum; Cu - Copper; Fe -
      Iron; Mo - Molybdenum; Na - Sodium; O - Oxygen; Pb - Lead; S - Sulphur; Zn
      - Zinc.                                                                                                                                                                                                                                                          
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                  
|Porphyry deposit                   | A type of mineral deposit in which ore minerals are
      widely disseminated, generally of low grade but large tonnage.                                                                                                                                                                                                                                                                                         

Resource Category (Classification) Definitions

The discussion of mineral deposit classifications in this AIF
adheres to the resource/reserve definitions and classification criteria
developed in 2000 by the Canadian Institute of Mining. 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:

Mineral Resource means a deposit or concentration of
natural, solid, inorganic or fossilized organic substance in such quantity and
at such greater quality that extraction of the material at a profit is currently
or potentially possible. Inferred Resource means the estimated quantity
and grade of a deposit, or a part thereof, that is determined on the basis of
limited sampling, but for which there is sufficient geological information and a
reasonable understanding of the continuity and distribution of metals values to
outline a deposit of potential economic merit. Indicated Resource means
the estimated quantity and grade of a part of a deposit for which the continuity
of grade, together with the extent and shape, are so well-established that a
reliable grade and tonnage estimate can be made. Measured Resource
means the estimated quantity and grade of that part of a deposit for which the
size, configuration and grade have been very well established by observation and
sampling of outcrops, drill holes, trenches and mine workings.

Mineral Reserve is that part of a resource which can
be mined legally and at a profit under economic conditions that are specified
and which are generally accepted as reasonable. Economic viability must be
demonstrated by at least a preliminary feasibility study based on Indicated and
Measured Resources.

Probable Reserve means the estimated quantity and
grade of that part of an Indicated Resource for which the economic viability has
been demonstrated by adequate information and engineering, operating, economic
and legal factors, at a confidence level that will allow positive decisions on
major expenditures.

Proven reserve is the estimated quantity and grade of
that part of a Measured Resource for which the size, grade and distribution of
values, together with technical and economic factors, are so well-

---

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

established that there is the highest degree of confidence in
the estimate. The term should be restricted to that part of a deposit being
mined, or being developed and for which there is a mining plan.

ITEM
3.           CORPORATE
STRUCTURE

Northern Dynasty Minerals Ltd. is a mineral exploration company
incorporated on May 11, 1983 pursuant to the Company Actof the Province
of British Columbia (predecessor to the British Columbia Corporations Actin force since 2004), under the name Dynasty Resources Inc.. On November
30, 1983 the Company changed its name to Northern Dynasty Explorations Ltd.
and subsequently, on October 11, 1997, changed its name to Northern Dynasty
Minerals Ltd. Northern Dynasty became a reporting company in the Province of
British Columbia on April 10, 1984 and was listed on the Vancouver Stock
Exchange (now the TSX Venture Exchange and herein generally TSX Venture) from
1984-1987, listed on the Toronto Stock Exchange from 1987-1993, and unlisted but
still in good standing with all securities commissions from 1993 to 1994, and
thereupon listed on TSX Venture from 1994 to present. In November 2004, the
common shares of Northern Dynasty were also listed on the American Stock
Exchange (AMEX).

The head office of Northern Dynasty is located at Suite 1020,
800 West Pender Street, Vancouver, British Columbia, Canada V6C 2V6, telephone
(604) 684-6365, facsimile (604) 684-8092. The Companys legal registered office
is in care of its Canadian attorneys Lang Michener, Barristers & Solicitors,
at Suite 1500, 1055 West Georgia Street, Vancouver, British Columbia, Canada V6E
4N7, telephone (604) 689-9111, facsimile (604) 685-7084. Its wholly owned
Alaskan operating subsidiary, Northern Dynasty Mines Inc., is located at 3201 C
Street, Suite 604, Anchorage, Alaska, USA 99503 as is the Companys Alaskan
mining claim title holding subsidiary, Northern Dynasty Holdings Inc.

In this Annual Information Form, a reference to the Company
or Northern Dynasty includes a reference to its wholly-owned subsidiaries,
unless the context clearly indicates otherwise. Certain terms used herein are
defined in the text and others are included in the glossary of this Annual
Information Form.

ITEM
4.           GENERAL
DEVELOPMENT OF THE BUSINESS

Three Year History

Northern Dynasty is a mineral exploration company focused on
  developing the Pebble Project a copper-gold-molybdenum mineral project. The
  Pebble Project is located in Alaska, 17 miles (27 kilometers) from the village
  of Iliamna, and approximately 200 miles (320 kilometers) southwest of the city
  of Anchorage.

To December 31, 2006, Northern Dynastys aggregate exploration
expenditures on the Pebble Project total approximately $137 million with
acquisition costs of approximately $168 million, bringing the total invested in
the property to approximately $305 million. Northern Dynasty does not have any
operating revenue, although historically it has had annual interest revenue as a
consequence of investing surplus funds pending the completion of exploration
programs. During fiscal 2007, Northern Dynasty plans to continue its exploration
and development of the Pebble Project.

---

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

Significant Acquisitions and Significant Dispositions

During the year ended December 31, 2006, the Company completed
  the acquisition of Hunter Dickinson Group Inc. (more particularly described
  herein) which held a 20% carried interest in the Pebble Project for consideration
  14,002,268 common shares. Northern Dynasty thus owns a 100% working interest
  in the Pebble project subject to a net profits royalty held by a predecessor-in-interest
  on a portion of the Pebble Project lands..

ITEM
5.           DESCRIPTION OF
BUSINESS

The Pebble Project

The following is a description of the Pebble Project at
December 31, 2006.

Original Option and Acquisition Agreements Overview

Pursuant to an Assignment Agreement dated October 29, 2001
between Northern Dynasty and Hunter Dickinson Group Inc., (HDGI), a related
party to the Company, the Company was assigned an 80% interest in two separate
options, which had been granted by Teck Cominco American Incorporated (Teck
Cominco) under a single agreement to HDGI in respect of mining claims
comprising the Pebble Project. The mining claims were known to hosts a large
copper-gold-molybdenum porphyry deposit on state land in southwestern area of
the State of Alaska, near Cook inlet..

The first of the two options permitted Northern Dynasty to
purchase 80% of the previously drilled (by Teck Cominco) portions of the Pebble
Project on which the majority of the known copper and gold mineralization was
known to exist (the Resource Lands).A 20% carried interest in the resource
lands option was retained by HDGI. The Resource Lands option required the
payment of cash or shares during the three year term of the option (as extended
by one year) and a balloon option payment at the end of the third year of
approximately US$10 million (prior to November 30, 2004), at which time Northern
Dynasty would own 80% of the Resource Lands (and HDGI, a 20% carried interest).

The second part of the Teck Cominco option permitted Northern
Dynasty to earn a 50% (and up to 100%, subject to HDGIs retained carried
interest of 20%) in Northern Dynastys interest in the remainder of the Pebble
Project which was the area outside of the known mineralization (the Exploration
Lands) by doing 60,000 feet of exploration drilling by November 30, 2004.

In November 2004, Northern Dynasty had completed its option
requirements and had exercised the option to acquire 80% of the Resource Lands
and by February 2005, 80% of the Exploration Lands was acquired by exercise of
the second option. During 2006, Northern Dynasty acquired the remaining 20%
working interest in the Pebble Project with the purchase of 100% of HDGI.
Northern Dynasty thus owns a 100% working interest in the Pebble project subject
only to a nets profits royalty (4% of net profits, becoming 5% after project
debt payback) held by Teck Cominco on the Exploration Lands.

Recent Operations

As a consequence of work done by Northern Dynasty between 2002
and 2006, two primary areas of mineralization have been identified at the Pebble
Project and are referred to as the Pebble West Deposit (the original Resource
Lands) and Pebble East Deposit (the original Exploration Lands). Northern
Dynastys work program in fiscal 2006 involved exploration drilling of the
Pebble East Deposit on the eastern flank of the Pebble West , and the continued
collection of environmental and socioeconomic data

---

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

and ongoing engineering studies towards a feasibility study and
  initiation of the permitting process.The 2006 program was focused on assessing
  the Pebble East Deposit through drilling and engineering studies to integrate
  it into the overall mine plan for the project. The drilling component of the
  program consisted of 100,000 ft (30,500 m). Comprehensive engineering, environmental,
  and socioeconomic programs, designed to collect input for a feasibility study
  for a long life mining operation, will continue in parallel with the drilling
  program. Work on an integrated development plan (IDP) for the overall
  project commenced in 2006 and will extend through 2007.

Alaska Statutes

Northern Dynasty is required to strictly comply with all Alaska
statutes in connection with the Pebble Project. These statutes govern titles,
operations, environmental, development, operating and generally all aspects of
exploration and development of a mine in Alaska.

Alaska Statutes 38.05.185 and the following statutes establish
the rights to mining claim 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 11 Alaska Administrative Code
86.800. This regulation generally provides that the State Division of Mining can
be the lead agency in coordinating the comments of all agencies, which must
consent to the issuance of a plan of operations, and sets the requirements for
the approval of a plan of operations.

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

2006 Equity Purchase by Rio Tinto Affiliate

During the year, the Company issued 8,745,845 common shares in
connection with a share purchase agreement with Kennecott Canada Exploration
Inc. (Kennecott) for $10.00 per share for proceeds of approximately $87
million. Kennecott received a right of first refusal to participate in up to 50%
of future share placements by the Company, subject to customary exceptions,
until Kennecott reaches 19.9% of the Companys outstanding share capital. As
described following, Kennecott has since acquired a number of shares from an
existing holder which essentially takes Kennecott to this figure so the right
continues as a 19.9% right until Kennecott either fails to take up any offered
allotment or the fifth anniversary of the agreement, whichever occurs first. In
January 2007, Northern Dynasty was advised by Galahad Gold plc (Galahad), a
significant shareholder of the Company, that QIT-Fer Et Titane Inc., an
affiliate of Rio Tinto, agreed to purchase 9.4 million shares of Northern
Dynasty from Galahad at a price of $10 per share. The share purchase, which
closed February 1, 2007, increased Rio Tintos indirect ownership in Northern
Dynasty to approximately 19.79% .

At December 31, 2006, the Company had working capital of $90.3
  million and approximately 2.9 million in-the-money share purchase options (exercisable
  at an average weighted price of $5.05). However, it will likely have to raise
  additional funds to carry out the planned 2007 exploration program. If the equity
  markets for resource issuers are not receptive to additional financings, Northern
  Dynasty would likely have to reduce the planned expenditures.

Property Agreements Further Particulars

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%

---

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

interest in two options, which had been granted by Teck Cominco American Incorporated (Teck Cominco) under a single agreement to HDGI in respect of Teck Comincos Pebble copper/gold/molybdenum property 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 remaining 20% contractual interests in these option agreements from HDGI 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. At December 31, 2005, 473,700 of the 1,772,775 NDM Resource Lands shares had been sold for proceeds of US$2,039,902. During the year ended December 31, 2006, the Company managed the sale of an additional 1,277,028 NDM Resource Lands shares
for proceeds paid to Teck Cominco of US$7,898,698, thereby completing its commitment regarding the resale of the NDM Resource Lands shares. The remaining 22,047 unsold NDM Resource Lands shares relating to this acquisition were then returned to
the Companys treasury.

At the time of the Company exercising the Resource Lands Option, the Company also exercised the Exploration Lands Option to earn a 50% interest in the adjacent Exploration Lands, subject to HDGIs carried interest, by having completed 60,000
feet of drilling on the Exploration Lands prior to November 30, 2004.

As a consequence of the Company exercising the Exploration Lands Option, Teck Cominco could elect to either form a 50/50 joint venture with the Company with respect to the Exploration Lands, or to sell its 50% interest in the Exploration Lands to
the Company for US$4 million and retain a net profits interest. On February 21, 2005, Teck Cominco elected to sell its remaining 50% interest in the Exploration Lands to the Company for the stipulated US$4 million payment, a 4% pre-payback
net profits interest (after debt

---

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

service), and 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 to elect to have the proceeds guaranteed.

Teck Cominco had the right, until August 24, 2005, to elect whether to require the Company to manage the resale of these shares (NDM Exploration Lands shares) in a manner where Teck Cominco would be guaranteed US$4 million in resale
proceeds by August 24, 2006.  On July 18, 2005, Teck Cominco elected for the Company to guarantee the US$4 million in resale proceeds. During the year ended December 31, 2006, the Company managed the sale of 654,502 NDM Exploration Lands shares
for proceeds paid to Teck Cominco of approximately US$4,000,000, thereby completing its commitment regarding the resale of the NDM Exploration Lands shares. During 2006, the remaining 323,293 unsold NDM Exploration Lands shares relating to this
acquisition were then returned to the Companys treasury.

In total, 345,340 common shares of the Company, at a value of $1,772,776, unsold after the Companys obligations to Teck Cominco had been met, were returned to the treasury of the Company.

HDGI 20% Carried Interest

As a consequence of the Company electing to exercise the Options, the Company was entitled under the Assignment Agreement with HDGI to elect to acquire HDGIs 20% carried contractual interests in the Options for cash or share consideration
equal to the independently appraised value of the carried interests.

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

Upon completion of the acquisition of HDGI, the Company, together with one or more 100% owned subsidiaries, owns a 100% right, title and interest in the entire Pebble Project (subject only to the Teck Cominco net profits interest in the Exploration
Lands portion of the property).

Location, Access and Property Description

The Pebble Project is located in the Iliamna region of southwestern Alaska. It is approximately 200 mi (320 km) southwest of Anchorage and 17 mi (27 km) northwest of the village of Iliamna (Figure 1).

Access to the Pebble Project is via fixed wing aircraft to Iliamna. Iliamna has a state-operated airport with two 5,500 ft (1,700 m) paved runways. It is serviced by several passenger and cargo flights daily from Anchorage, using Convair, Hercules
and DC-6 aircraft, as well as smaller charter aircraft. Current access from Iliamna to the property is by helicopter.

The Pebble Project is located 60 mi (95 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

---

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

barged in during the summer months to Lake Iliamna via the
Kvichak River. There is currently no road from Iliamna northwest to the Pebble
Project.

The property forms a continuous block consisting of 1,335
located Alaska State mineral claims totaling 39,900 hectares (98,600 acres).

Figure 1 Location

Topography and Climate

The climate of the Iliamna area is similar to Anchorage with
summer daytime high temperatures ranging from 10 to 17 degrees Celsius, and low
temperatures varying from -10 to -13 degrees Celsius from December to March.
Average annual precipitation is 69 cm. The climate, although periodically harsh,
is sufficiently moderate to allow a well-planned mineral exploration program to
be conducted year-round.

The Pebble Project lies within an area of rolling hills and low
mountains. Valley bottoms are at elevations of 820 ft (250 m) above sea level.
The highest point on the property is Kaskanak Peak, at an elevation of 2,760 ft
(841 m). The Pebble West and Pebble East mineralized deposits are situated at
the 1,065 ft (325 m) elevation. Vegetation consists of sparse patches of alder
trees separated by expanses of tundra and grass. The area was recently glaciated
and glacial soil deposits and hummocky terrain abound. There are streams and
small, shallow ponds in the vicinity of the project, which provide water for
exploration drilling.

Exploration History

From the mid 1980s to 1994, Teck Cominco conducted exploration
in the Pebble region, including prospecting, geological mapping, geochemical
sampling, geophysical surveys and drilling of what is now known as the Pebble
West Deposit and adjacent areas. The Pebble West discovery outcrop was
identified in 1987, but the potential of the system was not fully realized until
after an Induced Polarization (IP) geophysical survey was completed in 1989.
Although limited in scope, the IP survey at Pebble displayed

---

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

a response characteristic of a large, porphyry-copper system.
This interpretation was validated through subsequent drilling by Teck Cominco
that intercepted significant intervals of porphyry-style copper, gold and
molybdenum mineralization. Engineering and metallurgical studies were carried
out concurrently with drilling from 1991-1994. HDGI entered into options
agreements with Teck Cominco to acquire the Pebble Project in November 2001.

In 2001, HDGI staked the additional claims to cover ground
where Teck Cominco had detected a multi-element, soil-geochemical and
geophysical (high IP chargeability) anomalies on two, widely spaced,
reconnaissance lines. HDGI collected and analyzed 601 soil samples and did
30-line km of IP/resistivity surveying.

During 2002, Northern Dynasty drilled 68 holes totaling 37,090
ft (11,306 m) exploring for additional porphyry deposits within which to define
higher-grade resources. Four new mineral zones were discovered. One of these,
the Thirty-Eight Zone, is a till-covered copper-gold porphyry deposit located 12
km south-southwest of the Pebble West deposit. Some 86% of Teck Comincos drill
core from the Pebble West deposit was relogged and a sectional geological model
was completed. Based on this model, the Pebble West Deposit resource was
estimated. Surface work included an 18.5 -line-km ground magnetometer survey; a
328-sample soil geochemical survey and a few man-days of geological
traverses.

An independent mineral resource estimate of the Inferred
resources in the Pebble West deposit at that time were 1.0 billion tonnes
grading 0.30% copper, 0.40 g/t gold, and 0.015% molybdenum (0.61%
copper-equivalent) above a cut-off grade of 0.30% copper-equivalent, and 271
million tonnes of 0.43% copper, 0.59 g/t gold, and 0.018% molybdenum (0.86%
copper-equivalent) above a cut-off grade of 0.70% copper equivalent.

In 2003, Northern Dynasty drilled 58 holes totaling 64,730 ft
(19,730 m) to define higher-grade portions in the Pebble West Deposit and 9
holes totaling 6,520 ft (1,990 m) to test four other prospective zones on the
Property, as well as limited surface exploration. The 2003 drilling continued to
indicate the presence of substantial porphyry mineralization at the 38 Porphyry
Deposit. Drilling at the 37 Skarn intersected moderate gold and copper values;
further work is necessary to fully determine the potential of the skarn
mineralization. A new independent estimate of the Pebble West Deposit was done
in February 2004, increasing the inferred mineral resources to 2.74 billion
tonnes grading 0.55% copper-equivalent1 (0.27% copper 0.30 g/t gold,
and 0.015% molybdenum above a cut-off grade of 0.30%
copper-equivalent1.

In November 2004, a preliminary economic assessment of the Pebble
  Project was done based on the early 2004 resource estimate for the Pebble Deposit,
  now know as the Pebble West Deposit. The technical report, entitled “Preliminary
  Assessment of the Pebble Gold-Copper-Molybdenum Project, Iliamna Area, Alaska,
  USA” was completed in November 2004 by Qualified Persons Derek J. Barratt,
  P.Eng., and Peter G. Beaudoin, P.Eng., and is filed on www.sedar.com.
  The Preliminary Assessment was prepared in order to provide guidance for the
  ongoing engineering work.

The 2004 program involved collection of engineering, environmental
  and socioeconomic data required for the completion of feasibility studies. The
  program encompassed approximately 130,000 ft (40,000 m) of drilling, including
  holes to establish measured and indicated resources in the Pebble West Deposit
  and others to collect geotechnical, metallurgical and hydrological data to use
  for mine planning. Some exploratory drilling for new zones and unexplored targets
  was also done and enabled the Company to complete the 60,000 ft of drilling
  required to exercise its option on the Exploration Lands.

____________________________________________-
  1 Copper equivalent calculations use metal prices of US$0.80/lb for copper,
  US$350/oz for gold, and US$4.50/lb for molybdenum. The contained gold and copper
  represent estimated contained metal in the ground and have not been adjusted
  for metallurgical recoveries. Adjustment factors to account for differences
  in relative metallurgical recoveries for copper, gold and molybdenum will depend
  upon the completion of definitive metallurgical testing. CuEQ = Cu % + (Au g/t
  x 11.25/17.64) + (Mo % x 99.23/17.64)

---

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

and unexplored targets was also done and enabled the Company to
complete the 60,000 ft of drilling required to exercise its option on the
Exploration Lands.

In 2005, Northern Dynasty completed surface mapping of the
Exploration Lands at a scale of 1:10,000, and drilled 128,970 feet of core in
the Pebble Resource Lands and 33,531 feet of core in the Exploration Lands
(23,540 feet of in 15 holes adjacent to the Pebble Resource Lands, 9,112 feet in
53 engineering holes, and 879 feet in Hole 5308 in the southwestern part of the
Exploration Lands). This drilling lead to the discovery of a significant, new
porphyry centre on the eastern side of the Pebble West Deposit beneath a cover
of Tertiary rocks that apparently thickens to the east, and further drilling
expanded and deepened the Pebble East deposit. The furthest east hole (5333)
intersected a long interval of Tertiary rocks and did not reach the
Tertiary-Cretaceous contact, suggesting the presence of a northeast-trending
graben along the southeastern side of the Pebble East deposit. An initial
estimate of the inferred mineral resource in Pebble East in early 2006 was 1.82
billion tonnes grading 0.60% copper, 0.37 g/t gold and 0.038% molybdenum at a
0.60% copper-equivalent cut-off.

Property Geology

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

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

The Pebble East Deposit, discovered in 2005, occurs in a large
mineralized intrusion under a cover of younger and unmineralized rocks. The
dimensions of Pebble East Deposit are not yet fully defined, but drill results
to the end of 2006 indicate the deposit extends over a north-south strike length
exceeding 7,000 ft (2,100 m), and over a width exceeding 4,000 ft (1,220 m).
Grades consistently exceed 1% copper equivalent. The deposit remains open for
expansion to the north and to the south.

Mineralization

Mineralization, consisting principally of pyrite, chalcopyrite
  and molybdenite, occurs in zones of strong potassium-silicate alteration in
  and disseminated adjacent to quartz-vein stockworks in all rock types. It is
  strongest in and near the upper parts of the granodiorite stocks, especially
  in diorite sills, and in a major granodiorite sill. In the Pebble West Deposit,
  the copper/gold ratio is about 1% copper to 1.2 g/t gold. The copper/molybdenum
  ratio is about 20/1. In the Pebble East Deposit, the gold/copper ratio is more
  variable, generally being between 0.5 and 1.0 with some zones much lower than
  this and a few 10-ft (3-m) intervals with gold values from 30-65 g/t and copper
  values less than 1%. The copper/molybdenum ratio ranges widely and decreases
  strongly below 3000 ft (915 m) beneath the surface.

---

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

At Pebble, copper-gold-molybdenum mineralization extends over
  a known 3.9km by 2.9km area (2.4mi by 1.4mi) and to a depth of 610m (2,000ft)
  in the Pebble West Deposit and to a depth of 1,525m (5,000ft) in the Pebble
  East Deposit.

Significant amounts of high-grade copper minerals
(predominantly bornite) were intersected in the four northernmost holes drilled
in 2006 and also in four holes near the southernmost area drilled. The presence
of significant bornite mineralization in these holes indicates their proximity
to mineralizing centers which are open to extension and appear to be
strengthening to the north and to the south.

Estimates of Mineralization

Cautionary Note to Investors
      Concerning Estimates of Measured and Indicated ResourcesThis section use the terms measured resources and
      indicated resources. The Company advises investors that while those
      terms are recognized and required by Canadian regulations, the U.S.
      Securities and Exchange Commission does not recognize them. Investors
      are cautioned not to assume that any part or all of mineral deposits in
      these categories will ever be convertedinto reserves.


Detailed drilling on the Pebble West Deposit in 2004 led to an
updated resource estimate that was announced in March 2005. In February 2007, an
updated estimate of the mineral resource in the Pebble East deposit was
announced based on 132 holes drilled in the Pebble East area.

Pebble West Deposit  Measured
        Plus Indicated Mineral Resources2March 2005Cut-Off
      Size
      Grade
      Contained MetalCuEQC%
      MillionTonnes
      Copper%
      Goldg/t
      Molybdenum%
      CuEQD%
      CopperB lb
      GoldM oz
      MolybdenumM lb0.30
      3,026
      0.28
      0.32
      0.015
      0.56
      18.8
      31.3
      9930.50
      1,628
      0.35
      0.39
      0.018
      0.69
      12.7
      20.5
      6290.70
      569
      0.46
      0.50
      0.021
      0.88
      5.8
      9.1
      265


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


Pebble West Deposit  Inferred Mineral
        Resources2 A,BMarch 2005Cut-Off
      Size
      Grade
      Contained MetalCuEQC%
      MillionTonnes
      Copper%
      Goldg/t
      Molybdenum%
      CuEQD%
      CopperB lb
      GoldM oz
      MolybdenumM lb0.30
      1,133
      0.24
      0.30
      0.014
      0.50
      5.9
      10.8
      3610.50
      417
      0.31
      0.42
      0.018
      0.67
      2.9
      5.6
      1680.70
      143
      0.40
      0.56
      0.020
      0.85
      1.3
      2.6
      63


_____________________________________
  2The resource estimate was completed under the direction of David W.
  Rennie, P. Eng. of Scott Wilson Roscoe Postle Associates Inc., and R. Mohan
  Srivastava, M.Sc., P.Geo., of FSS Canada Consultants Inc., independent Qualified
  Persons as defined by Canadian regulatory policy NI 43-101. 3Prepared by the technical staff of Northern Dynasty and audited
  by consultants at Scott WilsonRoscoe Postle Associates Inc., under the direction
  of David W. Rennie, P. Eng., an independent Qualified Person as defined by National
  Instrument 43-101.

---

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

Pebble East Deposit 
        Inferred Mineral Resources3,A,BFebruary
        2007Cut-Off
      Size
      Grade
      Contained MetalCuEQC%
      MillionTonnes
      Copper%
      Goldg/t
      Molybdenum%
      CuEQD%
      CopperB lb
      GoldM oz
      MolybdenumM lb0.60
      3,379
      0.57
      0.36
      0.036
      1.00
      42.9
      39.6
      2.70.70
      2,835
      0.62
      0.38
      0.037
      1.06
      38.8
      34.9
      2.30.80
      2,312
      0.67
      0.40
      0.038
      1.14
      34.3
      30.1
      1.90.90
      1,841
      0.73
      0.43
      0.038
      1.21
      29.6
      25.4
      1.51.00
      1,421
      0.79
      0.46
      0.039
      1.29
      24.6
      20.9
      1.21.10
      1,057
      0.85
      0.49
      0.039
      1.37
      19.8
      16.6
      0.9


|Note A | By prescribed definition, Mineral Resources do not have
      demonstrated economic viability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note B | An Inferred Mineral Resource is that part of a mineral
      resource for which quantity and grade can be estimated on the basis of
      geological evidence and limited sampling and reasonably assumed, but not
      verified, geological and grade continuity.                                                                                                                                                                                                                                                                                                
|Note C | A 0.30% CuEQ cut-off is considered to be comparable to
      that used for porphyry deposit operations in the Americas, but is subject
      to completion of a feasibility study. For bulk underground mining, higher
      cut-offs such as 0.60% CuEQ are typically used.                                                                                                                                                                                                                                                                                       
|Note D | Copper equivalent calculations use metal prices of
      US$1.00/lb for copper, US$400/oz for gold, and US$6.00/lb for molybdenum.
      The contained gold and copper represent estimated contained metal in the
      ground and have not been adjusted for metallurgical recoveries. Adjustment
      factors to account for differences in relative metallurgical recoveries
      for copper, gold and molybdenum will depend upon the completion of
      definitive metallurgical testing. CuEQ = Cu % + (Au g/t x 11.25/17.64) +
      (Mo % x 99.23/17.64)

Pebble West Deposit (Open Pit scenario) as used in the
November 2004 Preliminary Assessment

Breakeven operating costs:

Mining
    $0.87/tonne minedProcessing
    $2.51/tonne mineralizationG&A, Maintenence, Environmental etc
    $0.79/tonne mineralizationOPERATING COST
    $4.17/tonne mineralizationRealization Costs (~$165/t conc)
    $1.65/tonne mineralizationTOTAL OPERATING COST
    $5.82/tonne mineralization


The CuEQ grade for resource estimation represents the
equivalent amount of copper in the ground, irrespective of the metallurgical
recoveries of the component metals utilized in the calculation. The following is
the suggested copper equivalent calculation for the open pit scenario for Pebble
West:

| | CuEQ% = Cu% + (Au g/t * Au$/g / Cu$/%) + (Mo% *
      Mo$/% / Cu$/%)
| | --------------------------------------------------------------------
| | where:                                                              
| |                                                                     
| |                                                                     

Note that the above simple CuEQ calculation is intended for
resource estimations only. Mine planning and reserve estimates will be based on
Net Smelter Return (NSR) values for the metals rather than metal price. The
breakeven cut-off grade (BEGrade), be it copper or copper equivalent, must
equate to an NSR that meets (or exceeds) the operating cost. As can be seen from
the equation below, the cut-off grade for which the recovered value matches the
operating + realization costs of $5.82/tonne is 0.30% Cu.

BEGrade * Recovery * lbs/tonne *
copper price = operating cost BEGrade = 5.82 / (0.88 * 22.046 * 1.00)
EGrade = 0.29% Cu

The above operating costs and economic analysis were derived
from the preliminary economic assessment on the Pebble West Deposit. The
preliminary economic assessment is based partially on inferred resources that
are considered too speculative geologically to have economic considerations
applied to them that would enable them to be categorized as mineral reserves,
therefore there is no certainty that the results predicted by the preliminary
economic assessment will be realized. Investors are cautioned that the United
States Securities and Exchange Commission does not permit U.S. mining companies
to disclose economic results from a preliminary economic assessment based on
inferred resources.

Pebble East (Underground Bulk Mining Scenario)

Replacing the mining cost above for open pit ($0.87/tonne
mined) with costs that have been quoted by companies with block caving
experience ($2.50/tonne mined), then the total costs (including realization
costs) are $7.45/tonne, giving a value of 0.4% CuEq. A more conservative value
of 0.6% CuEq has been used.

---

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

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

For details on the sampling and analytical procedures at
Pebble, please refer to Northern Dynastys 2004 Annual Information Form .

For all Northern Dynasty drilling programs, core is boxed at
the drill rig and transported daily by helicopter to the secure core logging
facility in Iliamna, Alaska, where it is geologically logged and digital
photographs of each box of core taken prior to sampling. These images are
archived on electronic data storage disk, and provide an indication and record
of the core recovery and rock quality. Sampling is performed by mechanically
splitting the core in half lengthwise. The remaining half core is returned to
the core boxes and is stored at a secure Iliamna warehouse. Samples are placed
in bags and stored in a locked aircraft hangar prior to shipping via
twice-weekly scheduled air service to Anchorage. From Anchorage, the samples are
taken by commercial surface transport to sample preparation laboratories at
Fairbanks, Alaska.

Drilling, sampling and QAQC are supervised by qualified persons
employed by Northern Dynasty. Core samples are logged and identified in the
field with consecutively numbered sample tags, on which the analytical QAQC
designations for standards and duplicates are pre-marked.

Recent Exploration  2006 Program

Drilling

The 2006 program consisted of holes drilled for exploration,
engineering and environmental purposes in the area of the Pebble East deposit,
as tabulated below:

# of Drill holes
      Footage
      Meterage
      Purpose
      Type19
    73,721
    22,470
    Exploration
    Core17
    3,176
    968
    Geotechnical
    Core14
    1,611
    491
    Monitoring wells
    Percussion50
    78,508
    23,929


Core drilling to explore and define the Pebble East deposit was
completed in 19 holes, expanding the deposit to a north-south strike length
exceeding 7000 ft (2100 m), and over a width exceeding 4000 ft (1220 m). Grades
consistently exceed 1% copper equivalent. The deposit remains open for expansion
to the north and to the south.

Integrated Development Plan (IDP)

The engineering effort in 2006 was reduced from the previous
year, pending the delineation of the Pebble East deposit. The work that was
completed was focused on collection of data to support the preparation of the
IDP, in particular, some key preliminary data for Pebble East. The main areas in
which analysis continued during the year were:

- Geotechnical evaluations of the surface soil deposits in the vicinity of
  potential tailings storage sites;
- Analysis of power supply options,
- Collection of geotechnical and hydrogeological data to support design of a
  potential underground mine at Pebble East;

---

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

- Initial evaluation of bulk underground mining options for Pebble East, with
  a focus on determining potential mining rates and development scenarios; and
- Initial scoping-level metallurgy on Pebble East and collection of samples
  for a pre-feasibility level metallurgy program in 2007.

Geotechnical Data

Pebble East

A major program was initiated to collect geotechnical data
specifically intended to support design of a major underground mine at Pebble
East. A major independent consulting firm with significant expertise in defining
underground mining parameters was engaged. Their personnel oriented and logged 4
holes as they were drilled and also re-logged 4 holes drilled in 2005. In
addition, a number of holes drilled in 2006 were tested with an acoustic logger.
Work to correlate the geotechnical and acoustic logs was initiated in the third
quarter.

All these data are currently being assessed and a similar
program will be conducted in 2007.

In addition to collecting rock quality parameters, a deep
groundwater monitoring system was installed in one of the exploration holes. The
data will be used to assess the hydrogeological parameters of Pebble East.

Surface

Seventeen holes, with depths ranging between 90 and 400 ft,
were drilled to further understand the characteristics of the surface soil
properties on the site. Most of these holes were drilled in the vicinity of one
of the possible tailings sites. Others were drilled over top of Pebble East to
assess the quality of the soils.

Mine Engineering

In the third quarter, Northern Dynasty engaged an independent
consulting firm with significant experience in the evaluation of large-scale
underground mines to commence a scoping-level assessment of Pebble East. This
study demonstrated that an underground mine on Pebble East could produce as much
as 110,000 tonnes per day over a 50 year or longer period. The results of this
work are currently being updated to incorporate the latest resource model based
on the 2006 drilling. These results will then be used to assess the preferred
development strategy for the IDP.

Metallurgy

Preliminary scoping tests were completed at SGS Lakefield
Research in April 2006 on samples from a 200 ft intersection of drill hole 5327
in the Pebble East Deposit. The samples were composited into a single overall
sample and into four samples representing 50 foot down-hole lengths. The work
demonstrated that the Pebble East Deposit mineralization that was tested is
amenable to treatment with a flowsheet encompassing a simplified suite of
reagents, incorporating rougher/scavenger flotation at natural pH and a
combination of regrinding of bulk rougher concentrate and bulk scavenger cleaner
concentrate, copper/pyrite separation and final cleaning. Excellent concentrate
grades were achieved with simple pH control using lime.

Projected overall recoveries for the composite tested, based on
lock cycle test results, are 98% for copper, 78% for gold and 73% for molybdenum
(to copper flotation concentrate) from a calculated feed grade of 0.75% Cu, 0.38
g Au/t and 0.012% Mo.

---

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

Sample collection for detailed metallurgical studies of Pebble East commenced in the third quarter of 2006.  Quarter core samples were collected on site from holes drilled in 2005 and the first four holes drilled in 2006 and forwarded to SGS
Lakefield Research. Composite preparation was started by year end; a total of 134 composites were prepared.  The planned program, including comminution tests, flotation test and environmental data generation, is scheduled for completion in the first
half of 2007.

Infrastructure

Although a base case for the project infrastructure has been developed, previous studies had shown that some alternatives for the port site and road may offer opportunities. Investigations continued during the latter half of 2006.  Homer Electric
Association is continuing its analysis of power generation and transmission alternatives to optimize project design, cost, and schedule factors.

Environmental, Cultural and Socio-Economic Studies

Northern Dynastys comprehensive environmental and socioeconomic study programs continued in 2006, along with its efforts to engage local communities, and other project stakeholders in an informed dialogue on the deposit geology, project design
alternatives and the environmental studies.  Over the past 12 months, more than 350 meetings have been facilitated with project stakeholders throughout the State of Alaska and the Company also continued its local hire/recruiting, workforce training,
and local business development initiatives.

The Company has now completed three consecutive years of environmental and socio-economic baseline data studies. This work was undertaken by over 45 independent consulting firms, and expanded the geographic scope of its investigations to support
Pebble East planning. Water rights applications were submitted to the Alaska Department of Natural Resources in July 2006 to maintain Northern Dynastys priority status. These applications will be processed during project permitting, which is
planned to commence when the optimized project is designed.

The majority of chapters are now completed and under review by the senior technical reviewers. Consultants are now analyzing the 2006 data.

Stakeholder Engagement

Northern Dynasty continues to focus on developing positive working relationships with many local native and community institutions, while supporting skills training, workforce and business development, local scholarships, search and rescue efforts,
and other community initiatives.

The Company has employed more than 100 local people from more than 20 small Bristol Bay communities in each of the last two years, and made significant expenditures on local goods, services and salaries. The Company spent over $3 million in the
local regions in 2006, an increase from $2.8 million in 2005. It also entered into 14 different goods and service contracts with Bristol Bay companies. On-site training programs have enabled Northern Dynasty to hire more local people and to
advance workers to positions requiring more skill and responsibility.  The Company is also investing in the future, by providing financial support to introduce mining and natural resources career education in schools in the local region.

Notwithstanding the information campaign against mining in
  Bristol Bay by what Company management perceives to be a minority of special
  interests, the Companys management believes there is growing support for
  the responsible development of the Pebble Project subject to adherence to due
  process in project permitting in the state. This is evidenced by the successful
  October 2006 re-election of the incumbent mayor and key council members of the
  Lake and Peninsula Borough and the November

---

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

2007 state election of a another Republican governor whose
campaign position was in support of mining and advocated due process for
permitting of Pebble. In a recent (March 2007) public opinion poll commissioned
by the Alaska Legislature, the following question was posed: "Do you favour or
oppose going forward with the environmental impact studies for the proposed
Pebble mine to determine whether or not the mine could be developed in a
responsible manner." A total of 79% of Alaskans favoured such a process.

Plan of Operation  Fiscal 2007

A comprehensive program is planned for 2007, encompassing
drilling, engineering, and on-going environmental data collection and community
engagement programs.

Exploration and Resource Drilling

Drilling re-commenced at the Pebble Project site in the first
  half of February 2007. There are currently five rigs in operations, with plans
  to increase up to eight rigs by late April.

The 2007 program will focus on Pebble East and consist of two
  components: delineation drilling and infill drilling. Delineation drilling in
  the order of 100,000 ft (30,400 m) will focus on extending the Pebble East deposit
  to the north and the south and to define its eastern and western limits. Infill
  drilling will comprise approximately 150,000 ft (45,720 m) and focus on upgrading
  the resource classification of the highest grade 1 billion tonnes of the deposit.

Other Drilling

Drilling is also planned for the collection of additional
surface soils and groundwater data throughout the site.

Engineering

To achieve the 2007 objectives, the key engineering tasks that
have been identified are to:

- Collect additional site and underground geotechnical data to support
  ongoing mine design work;
- Complete pre-feasibility level metallurgical testwork on Pebble East to
  optimize conventional processing systems and designs;
- Continue to assess the major infrastructure elements (access road, port and
  power) in order to establish the optimum alternatives and designs for these
  Project components; and
- Develop the best overall Project mine plan from the extensive mineral
  resources available.

Environmental and Socioeconomic

Northern Dynasty's comprehensive environmental and socioeconomic
  study programs will continue in 2007 with the objectives of collecting data
  in the expanded Pebble East deposit area and to compare annual variability.
  This data provides a foundation for the sound environmental design of the project
  and preparation of state and federal permit applications in future years. The
  primary focus of 2007 programs will be in the areas of water, wetlands, aquatic/fish,
  terrestrial/wildlife, wetlands, and subsistence/traditional use. As well, the
  penultimate draft of the Pebble Project Environmental Baseline Document will
  be worked on in 2007.

---

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

Community outreach and stakeholder communication initiatives
will continue and expand in 2007 with the hiring of local community associates
within some of the area villages. In addition, there will be an expanded
interaction with and briefings of industry associations such as the Alaska
Miners Association and the Resource Development Council and with grassroots
movements such as Truth About Pebble.

Recommended work program and Interim Budget

The following budget has been approved by the Board for the
period of January 1 to June 30 2007. The drilling portion is phase one of a
two-phase program proposed for 2007 in a technical report 2006 Summary Report
on the Pebble Copper-Gold-Molybdenum Project by C.M. Rebagliati and J.G. Payne.

Activity
    CDN$Drilling
    30,000,000Engineering
    6,000,000Environmental
    12,000,000Public/Community Affairs
    3,600,000Management, Permitting, Legal
    700,000Anchorage Office
    700,000Head Office
    2,000,000Total
    55,000,000


Risk Factors

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

Northern Dynastys mineral properties do not contain
  any ore reserves or any known body of economic mineralization

Although there are known bodies of mineralization on the Pebble
Project, and Northern Dynasty has completed a 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 can ascertain if any
mineralization may be economic and hence constitute ore. Engineering,
socioeconomic and environmental studies are ongoing. Additional drilling is
planned to further define the Pebble East Deposit. Exploration for minerals is a
speculative venture necessarily involving substantial risk. If the expenditures
Northern Dynasty makes on the Pebble Project do not result in discovery and
development of commercial quantities of ore, the value of exploration and
acquisition expenditures will be totally lost and the value of Northern Dynasty
stock negatively impacted.

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

Northern Dynasty has included mineral resource estimates that
have been made in accordance with National Instrument 43-101. These resources
estimates are classified as measured resources, indicated resources and
inferred resources. Northern Dynasty advises investors that while these terms
are

---

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

mandated by Canadian securities administrators, the U.S.
Securities and Exchange Commission does not recognize these terms. Investors
are cautioned not to assume that any part or all of mineral deposits classified
as measured resources or indicated resources will ever be converted into ore
reserves.

Further, inferred resources have a great amount of
uncertainty as to their existence, and economic and legal feasibility. It cannot
be assumed that all or any part of an inferred mineral resource will ever be
upgraded to a higher category. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of feasibility or pre-feasibility
studies, except in rare cases. Investors are cautioned not to assume that
part or all of an inferred resource exists, or is economically or legally
mineable.

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

Northern Dynasty will require significant additional
financing in order to continue its exploration activities and its assessment of
the commercial viability of the Pebble Project.

Northern Dynasty will need to raise additional financing to
continue exploration and complete feasibility studies for the Pebble Project. If
the costs of Northern Dynastys planned exploration programs are greater than
anticipated, Northern Dynasty may have to seek additional funds through public
and private share offerings, arrangements with corporate partners, or debt
financing. There can be no assurance that Northern Dynasty will be successful in
its efforts to raise these required funds, or that it will be able to raise the
funds on terms that do not result in high levels of dilution to shareholders.
The continued exploration of the Pebble Project and the development of Northern
Dynastys business will depend upon Northern Dynastys ability to establish the
commercial viability of the Pebble Project and to ultimately develop its cash
flow from operations and reach profitable operations. Northern Dynasty is
currently in the exploration stage and has no revenue from operations and is
experiencing significant negative cash flow. Accordingly, the only other sources
of funds presently available to Northern Dynasty are through the sale of equity
and debt capital. Alternatively, Northern Dynasty may finance its business by
offering an interest in its mineral properties to be earned by another party or
parties carrying out further exploration and development thereof or to obtain
project or operating financing from financial institutions. If Northern Dynasty
is unable to obtain this additional financing, Northern Dynasty will not be able
to continue its activities and its assessment of the commercial viability of the
Pebble Project.

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

Northern Dynasty has a long history of losses and there can be
no assurance that Northern Dynasty will ever be profitable. Northern Dynasty has
paid no dividends on its shares since incorporation. Northern Dynasty presently
has no ability to generate earnings as its mineral properties are in the
exploration stage. If Northern Dynasty is successful in developing the Pebble
Project, Northern Dynasty anticipates that it will retain future earnings and
other cash resources for the future operation and development of its business.
Northern Dynasty does not intend to declare or pay any cash dividends in the
foreseeable future. Payment of any future dividends is solely at the discretion
of Northern Dynastys board of directors, which will take into account many
factors including Northern Dynastys operating results, financial conditions and
anticipated cash needs. For these reasons, Northern Dynasty may never achieve
profitability or pay dividends.

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

---

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

Northern Dynastys consolidated financial statements have been
prepared on the basis that Northern Dynasty will continue as a going concern. At
December 31, 2006, Northern Dynasty had working capital of approximately $90.3
million. Management recognizes that Northern Dynasty will need to generate
additional financial resources in order to meet its planned business objectives.
There can be no assurances that Northern Dynasty will continue to obtain
additional financial resources and/or achieve profitability or positive cash
flows. If Northern Dynasty is unable to obtain adequate additional financing,
Northern Dynasty will be required to curtail operations and exploration
activities. 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, the failure of Northern Dynasty to establish that the Pebble
Project possesses commercially viable 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 Northern Dynastys principal mineral
property. Northern Dynastys principal business objective is to carry out
further exploration activities to establish whether the Pebble Project possess
commercially viable deposits of ore. If Northern Dynasty in not successful in
its plan of operations, Northern Dynasty may have to seek a new mineral property
to explore or acquire an interest in a new mineral property or project. Northern
Dynasty anticipates that such an outcome would result in a significant decline
in the trading price of Northern Dynastys common shares. 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.

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

The ability of Northern Dynasty to raise financing to fund its
exploration activities and, if warranted, development of the Pebble Project,
will be significantly affected by changes in the market price of the metals it
mines or for which it explores for. 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. In this event,
Northern Dynasty may not be able to carry out planned exploration activities
and, if warranted, development of the Pebble Project with the result that
Northern Dynasty may not be able to continue its plan of operations.

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

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

---

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

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 to Northern Dynasty of developing the Pebble Project and could delay these activities.

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
Northern Dynasty 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 Northern Dynastys exploration and, if
warranted, development activities.

Changes in government regulations and the presence of unknown environmental hazards on Northern Dynastys mineral properties may result in significant unanticipated compliance and reclamation costs

Government regulations relating to mineral rights tenure, permission to disturb areas and the right to operate can adversely affect Northern Dynasty. Northern Dynasty may not be able to obtain all necessary licenses and permits that may be required
to carry out exploration at our projects. Environmental hazards may exist on the properties in which Northern Dynasty holds interests which are unknown to Northern Dynasty at present and which have been caused by previous or existing owners or
operators of the properties. The presence of such environmental hazards may result in Northern Dynasty being required to comply with environmental reclamation, closure and other requirements that may involve significant costs and other liabilities.
Any changes in regulations or shift in political attitude are beyond the control of Northern Dynasty and may adversely affect its business.

Northern Dynasty is subject to many risks that are not insurable and, as a result, Northern Dynasty will not be able to recover losses through insurance should such risks occur.

Hazards such as unusual or unexpected geological formations and other conditions are involved in mineral exploration and development. Northern Dynasty may become subject to liability for pollution, cave-ins or hazards against which it cannot insure.
The payment of such liabilities could result in increase in Northern Dynastys operating expenses which could, in turn, have a material adverse effect on Northern Dynastys financial position and its results of operations. Although
Northern Dynasty maintains liability insurance in an amount which it considers 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 might not elect 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
market for resource stocks, the strength of the economy generally, the availability and attractiveness of alternative investments, and the breadth of the public market 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

---

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

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 exploration, 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 Inc (HDI). The Company has access to the full
resources of HDI, 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 HDI to bring to the Company all corporate opportunities that come to
HDI's attention. Northern Dynasty has contracted the services of professional
drillers and other contractors for exploration, environmental, construction and
engineering services. Poor performance by such contractors or the loss of such
services could result in the exploration activities planned to be undertaken by
Northern Dynasty being delayed or being more expensive to undertake than
anticipated.

ITEM
6.           DIVIDENDS

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

ITEM
7.           DESCRIPTION OF
CAPITAL STRUCTURE

Northern Dynastys share capital consists of one class only,
namely common shares without par value, of which an unlimited number of shares
are authorized and 91,685,519 common shares without par value were issued and
outstanding as fully paid and non-assessable as of December 31, 2006. As of
March 19, 2007, there were 91,860,119 common shares issued and outstanding as
fully paid and non-assessable. The accompanying audited consolidated financial
statements provide details of all share issuances effected by Northern Dynasty
in the issue price per share since January 1, 2003.

There are approximately 3.6 million shares of Northern Dynasty
which are held by or on behalf of non-Canadians.

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 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.

---

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

ITEM
8.           MARKET FOR
SECURITIES

The following table shows the progression in high and low
trading prices of the common shares of Northern Dynasty on the TSX Venture
Exchange and AMEX for the periods listed.

TSX Venture
      
      
      AMEXAverage
    
    
    AverageDaily
    
    
    DailyHigh
    Low
    Trading
    High
    Low
    Trading(Cdn$)
    (Cdn$)
    Volume
    (US$)
    (US$)
    VolumeMonthlyDecember 2006
    10.53
    9.09
    112,400
    9.20
    7.81
    142,500November 2006
    9.78
    6.61
    255,100
    8.58
    5.94
    195,200October 2006
    7.72
    6.25
    61,900
    6.85
    5.56
    111,800September 2006
    9.55
    6.50
    84,400
    8.62
    5.76
    200,700August 2006
    9.60
    8.46
    52,100
    8.49
    7.49
    114,700July 2006
    10.00
    8.25
    69,200
    8.99
    7.17
    171,400June 2006
    10.49
    8.10
    175,300
    9.24
    7.31
    278,800May 2006
    9.75
    7.42
    233,200
    8.81
    6.53
    316,100April 2006
    8.80
    7.19
    190,800
    7.80
    6.29
    268,100March 2006
    7.70
    6.15
    160,500
    6.65
    5.32
    205,800February 2006
    7.95
    6.25
    243,400
    6.98
    5.50
    298,400January 2006
    8.33
    5.97
    263,900
    7.30
    5.15
    355,600


Northern Dynasty share trading information is also available
through free internet search services (for example, see Yahoo.com, enter NDM.V
or NAK)

ITEM
9.           ESCROWED
SECURITIES

There are no shares of Northern Dynasty held in escrow.

ITEM
10.         DIRECTORS AND OFFICERS

The names and municipalities of residence of the directors and
officers of the Company, their principal occupations during the past five years,
and the period of time they have served as directors or officers of Northern
Dynasty are as follows. 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 30,
2007.

Name, Position and Country of Residence
    Period a Director ofNorthern Dynasty
    Securities Beneficially Ownedor
      ControlledDavid J. Copeland Director Vancouver, British
      Columbia
    Since June 1996
    2,171,783 Common Shares 165,000 Options
      (1)


---

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

Name, Position and Country of Residence
    Period a Director of
      Northern Dynasty
    Securities Beneficially Owned or
      ControlledScott D. Cousens Director Vancouver, British
      Columbia
    Since June 1996
    1,984,133 Common Shares 165,000 Options
      (1)Robert A. Dickinson Chairman of the Board and Director
      Lions Bay, British Columbia
    Since June 1995
    3,263,583 Common Shares(4)204,000 Options (2)David Elliott Director Vancouver, British Columbia
    Since July 2004
    13,000 Common Shares 165,000 Options
      (1)Gordon J. Fretwell Director West Vancouver, British
      Columbia
    Since July 2004
    Nil Common Shares 165,000 Options
      (1)Wayne Kirk Director San Rafael, California
    Since July 2004
    20,000 Common Shares 165,000 Options
      (1)Jeffrey R. Mason Secretary, Chief Financial Officer and
      Director Vancouver, British Columbia
    Since June 1996
    1,829,889 Common Shares 165,000 Options
      (1)Walter T. Segsworth Director West Vancouver,
      British Columbia
    Since September 2004
    Nil Common Shares 165,000 Options
      (1)Ronald W. Thiessen President, CEO and Director West
      Vancouver, British Columbia
    Since November 1995
    2,095,838 Common Shares 249,000 Options
      (3)


Notes:

|1. | Mr. Copeland, Mr. Cousens, Mr. Elliott, Mr. Fretwell, and
      Mr. Kirk, Mr. Mason, and Mr. Segsworth each hold options to purchase
      90,000 common shares at $7.25 per share expiring on April 30, 2011 and
      75,000 common shares at $10.95 per share expiring on February 20,
    2012.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                    
|2. | Mr. Dickinson holds options to purchase 90,000 Common
      Shares at an exercise price of $7.25 per share expiring on April 30, 2011
      and 114,000 Common Shares at $10.95 expiring on February 20,
  2012.                                                                                   
|   |                                                                                                                                                                                                                                                                                                    
|3. | Mr. Thiessen holds options to purchase 135,000 Common
      Shares at an exercise price of $7.25 per share expiring on April 30, 2011
      and 114,000 Common Shares at $10.95 expiring on February 20,
  2012.                                                                                   
|   |                                                                                                                                                                                                                                                                                                    
|4. | Certain of these shares are held by United Mineral
      Services, a private company that is wholly owned by Mr.
  Dickinson.                                                                                                                                                                      

At the annual general meeting of the Company held in June 20,
2006, directors listed were re-elected to a one-year term of office expiring at
the next annual general meeting of Northern Dynasty, which is expected to be
held in June 2007. Several of the directors serve together on a number of boards
of directors of other publicly listed companies. A cost sharing arrangement
exists between a number of these companies pursuant to administrative and
geological service agreements with Hunter Dickinson Inc. (HDI), a private
company owned equally by nine public companies, one of which is Northern
Dynasty. HDI provides extensive engineering, geological and administrative
services to, and incurs costs on behalf of, these companies and allocates the
full costs to them. All officers have a term of office lasting until their
removal or replacement by the Board of Directors.

Based on insider reports filed on www.sedi.ca, as at
March 28, 2006, the above directors and officers beneficially owned, directly or
indirectly, or exercised control or direction over 15,230,006 common shares of
the Company (14.8%), or 16,693,006 common shares on a fully diluted basis
(16.4%) .

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

---

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

Committee
      MembershipAudit Committee
      David Elliott 
        Gordon Fretwell 
        Wayne KirkCompensation Committee
      David Elliott 
        Gordon Fretwell 
        Wayne Kirk 
        Jeffrey MasonNominating and Corporate Governance Committee
      David Elliott 
        Gordon Fretwell 
        Wayne Kirk


The mandate of each of these committees is more particularly
described in Northern Dynastys management information circular filed on
www.SEDAR.com on May 26, 2006.

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

DAVID J. COPELAND, P.Eng. - Director

David J. Copeland is a geological engineer who graduated in
economic geology from the University of British Columbia. With over 30 years of
experience, Mr. Copeland has undertaken assignments in a variety of capacities
in mine exploration, discovery and development throughout the South Pacific,
Africa, South America and North America. His principal occupation is President
and Director of CEC Engineering Ltd., a consulting engineering firm that directs
and co-ordinates advanced technical programs for exploration on behalf companies
for which Hunter Dickinson Inc., a private company with certain directors in
common with the Company, provides consulting services. He is also a director of
Hunter Dickinson Inc.

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

Company
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    Director
    June 1996
    PresentAmarc Resources Ltd.
    Director
    September 1995
    PresentAnooraq Resources Corporation
    Director
    September 1996
    September 2004Continental Minerals Corporation
    Director
    November 1995
    PresentFarallon Resources Ltd.
    Director
    December 1995
    PresentGreat Basin Gold Ltd.
    Director
    February 1994
    PresentRockwell Ventures Inc.
    Director & CEO
    September 2006
    PresentTaseko Mines Limited
    Director
    March 1994
    Present


SCOTT D. COUSENS - Director

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

---

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

initiatives he also oversees the corporate communications
programs for the public companies to which Hunter Dickinson Inc. provides
services.

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

Company
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    Director
    June 1996
    PresentAmarc Resources Ltd.
    Director
    September 1995
    PresentAnooraq Resources Corporation
    Director
    September 1996
    PresentContinental Minerals Corporation
    Director
    June 1994
    PresentFarallon Resources Ltd.
    Director
    December 1995
    PresentGreat Basin Gold Ltd.
    Director
    March 1993
    November 2006Rockwell Ventures Inc.
    Director
    November 2000
    PresentTaseko Mines Limited
    Director
    October 1992
    Present


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

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

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

Company
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    Director
    June 1994
    PresentCo-Chairman
    November 2001
    April 2004Chairman
    April 2004
    PresentAmarc Resources Ltd.
    Director
    April 1993
    PresentCo-Chairman
    September 2000
    April 2004Chairman
    April 2004
    PresentAnooraq Resources Corporation
    Director
    November 1990
    September 2004Director
    October 2004
    PresentChairman
    April 2004
    September 2004Co-Chairman
    October 2004
    PresentContinental Minerals Corporation
    Director
    June 2004
    PresentChairman
    June 2004
    January 2006Co-Chairman
    January 2006
    December 2006


---

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

Company
    Positions Held
    From
    ToDetour Gold Corporation
    Director
    January 2007
    PresentFarallon Resources Ltd.
    Director
    July 1991
    PresentChairman
    April 2004
    September 2004Co-Chairman
    September 2004
    April 2006Great Basin Gold Ltd.
    Director
    May 1986
    November 2006Co-Chairman
    September 2000
    April 2004Chairman
    April 2004
    December 2005Co-Chairman
    December 2005
    November 2006Rockwell Ventures Inc.
    Director and Chairman
    November 2000
    September 2006Taseko Mines Limited
    Director
    January 1991
    PresentChairman
    April 2004
    July 2005Co-Chairman
    July 2005
    May 2006


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

David Elliott graduated from the University of British Columbia
with a Bachelor of Commerce degree and then acquired a Chartered Accountant
designation. In 2006, he became a certified director with the Institute of
Corporate Directors. Mr. Elliott joined BC Sugar Company in 1976, working in a
number of senior positions before becoming President and Chief Operating Officer
of the operating subsidiary, Rogers Sugar. In 1997, he joined Lantic Sugar in
Toronto as Executive Vice President. He also served as Chairman of the Canadian
Sugar Institute. He became President and Chief Operating Officer of the
International Group based in St Louis, Missouri in 1999, a company involved with
food distribution as well as manufacturing and distribution of pet and animal
feed. For several years, he worked with companies developing e-mail and data
management services. Mr. Elliott has also served on the boards of the BC Cancer
Foundation and the University of BC Alumni Association. Currently, Mr. Elliott
is a director and audit committee chairman of Northern Dynasty Minerals Ltd.,
Taseko Mines Limited, Anooraq Resources Corporation and Great Basin Gold
Ltd.

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

Company
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    Director
    July 2004
    PresentAnooraq Resources Corporation
    Director
    July 2005
    PresentGreat Basin Gold Ltd.
    Director
    July 2004
    PresentTaseko Mines Limited
    Director
    July 2004
    PresentStorageFlow Systems Corp.
    Director
    May 2002
    June 2004President & COO
    May 2002
    June 2003


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

Gordon J. Fretwell holds a B.Comm, degree and graduated from
the University of British Columbia in 1979 with his Bachelor of Law degree.
Formerly a partner in a large Vancouver law firm, Mr. Fretwell

---

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

has, since 1991, been a self-employed solicitor (Gordon
Fretwell Law Corporation) in Vancouver practicing primarily in the areas of
corporate and securities law.

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

Company
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    Director
    June 2004
    PresentContinental Minerals Corporation
    Director
    February 2001
    PresentRockwell Ventures Inc.
    Secretary
    March 1998
    PresentDirector
    March 1998
    September 2006Antarex Metals Ltd.
    Director
    December 2000
    September 2002Bell Resources Corporation
    Director
    June 2001
    PresentBenton Resources Corp.
    Director
    March 2005
    PresentCopper Ridge Explorations Inc.
    Director and Secretary
    September 1999
    PresentGrandcru Resources Corp.
    Director
    December 2002
    PresentIcon Industries Limited
    VP of Legal Services
    December 2000
    PresentDirector
    July 2004
    PresentInternational Royalty corporation
    Director
    February 2005
    PresentKeegan Resources Inc.
    Director
    February 2004
    PresentPine Valley Mining Corp.
    Director
    August 2003
    PresentQuartz Mountain Resources Ltd.
    Director
    January 2003
    PresentTri-Gold Resources Corp.
    Director
    July 2001
    October 2003Secretary
    July 2001
    September 2003CFO
    November 2005
    January 2006


WAYNE KIRK, LLB - Director

Wayne Kirk is a retired California State Attorney and
Professional Consultant. With over 35 years professional experience Mr. Kirk
also has over 9 years senior executive experience in the mining industry.

Mr. Kirk is a citizen of the United States and is a resident of
California. 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.

---

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

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

Company
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    Director
    July 2004
    PresentAnooraq Resources Corporation
    Director
    July 2005
    PresentGreat Basin Gold Ltd.
    Director
    July 2004
    PresentTaseko Mines Limited
    Director
    July 2004
    Present


JEFFREY R. MASON, B.Comm., CA  Director, Chief Financial
Officer and Secretary

Jeffrey R. Mason holds a Bachelor of Commerce degree from the
University of British Columbia and obtained his Chartered Accountant designation
while specializing in the mining, forestry and transportation sectors at the
international accounting firm of Deloitte & Touche. Following
comptrollership positions at an international commodity mercantilist and
Homestake Mining Group of companies, including responsibility for North American
Metals Corp. and the Eskay Creek Project, Mr. Mason has spent the last several
years as a corporate officer and director to a number of publicly-traded mineral
exploration companies. Mr. Mason is also employed as Chief Financial Officer of
Hunter Dickinson Inc. and his principal occupation is the financial
administration of the public companies to which Hunter Dickinson Inc. provides
services.

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

Company
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    Director
    June 1996
    PresentSecretary
    June 1996
    PresentChief Financial Officer
    June 1998
    PresentAmarc Resources Ltd.
    Director
    September 1995
    PresentSecretary
    September 1995
    PresentChief Financial Officer
    September 1998
    PresentAnooraq Resources Corporation
    Director
    April 1996
    September 2004Secretary
    September 1996
    PresentChief Financial Officer
    February 1999
    PresentCoastal Contacts Inc.
    Director
    October 2006
    PresentContinental Minerals Corporation
    Director
    June 1995
    PresentSecretary
    November 1995
    PresentChief Financial Officer
    June 1998
    PresentDetour Gold Corporation
    Director
    January 2007
    PresentChief Financial Officer
    January 2007
    Present


---

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

Company
    Positions Held
    From
    ToFarallon Resources Ltd.
    Director
    August 1994
    PresentSecretary
    December 1995
    PresentChief Financial Officer
    December 1997
    PresentGreat Basin Gold Ltd.
    Director
    February 1994
    November 2006Secretary
    February 1994
    November 2006Chief Financial Officer
    June 1998
    November 2006Quartz Mountain Resources Ltd.
    Principal Accounting Officer
    January 2005
    PresentRockwell Ventures Inc.
    Director
    November 2000
    PresentChief Financial Officer
    November 2000
    PresentTaseko Mines Limited
    Director
    February 1994
    PresentSecretary
    February 1994
    PresentChief Financial Officer
    November 1998
    Present


WALTER T. SEGSWORTH, P.Eng.  Director

Walter T. Segsworth has been an active and respected member of
the international mining industry for over 30 years. He has an excellent track
record in employee safety, environmental excellence and turn around production
situations. During Mr. Segsworths tenure as President, Chief Operating Officer
and Director at Homestake Mining Company, the Company set a 125 year gold
production record and its operating costs reached 25 year lows. Mr. Segsworth is
a past Director and Chairman of the Mining Associations of Canada and British
Columbia, and was voted British Columbia Mining Industry Person of the Year in
1996. He is a member of the Canadian Institute of Mining, Metallurgy and
Petroleum and until recently, was part of the Mining Curriculum Advisory Board
of the Michigan Technological University, from which he earned his degree in
Mining Engineering.

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

Company
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    Director
    September 2004
    PresentAnooraq Resources Corporation
    Director
    March 2004
    PresentGreat Basin Gold Ltd.
    Director
    January 2003
    PresentCumberland Resources
    Director
    May 2002
    PresentExpatriate Resources Ltd.
    Director
    February 2001
    PresentNovagold Resources Inc.
    Director
    May 2002
    November 2002UEX Corporation
    Director
    March 2002
    Present


---

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

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

Ronald W. 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 employed by Hunter
Dickinson Inc., a company providing management and administrative services to
several publicly-traded companies and focuses on directing corporate development
and financing activities. He is also a director of Hunter Dickinson Inc.

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

Company
    Positions Held
    From
    ToAmarc Resources Ltd.
    Director
    September 1995
    PresentPresident and Chief Executive Officer
    September 2000
    PresentAnooraq Resources Corporation
    Director
    April 1996
    PresentPresident and Chief Executive Officer
    September 2000
    PresentCasamiro Resource Corp.
    Director and President
    February 1990
    August 2002Continental Minerals Corporation
    Director
    November 1995
    PresentPresident and Chief Executive Officer
    September 2000
    January 2006Co-Chairman
    January 2006
    PresentDetour Gold Corporation
    Director
    January 2007
    PresentFarallon Resources Ltd.
    Director
    August 1994
    PresentPresident and Chief Executive Officer
    December 1999
    September 2004Co-Chairman
    September 2004
    December 2005Chairman
    December 2005
    PresentGreat Basin Gold Ltd.
    Director
    October 1993
    PresentPresident and Chief Executive Officer
    September 2000
    December 2005Co-Chairman
    December 2005
    November 2006Chairman
    November 2006
    PresentNorthern Dynasty Minerals Ltd.
    Director
    November 1995
    PresentPresident and Chief Executive Officer
    November 2001
    PresentRockwell Ventures Inc.
    Director
    November 2000
    PresentPresident and CEO
    November 2000
    September 2006Chairman
    September 2006
    Present


---

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

Other Officers

BRUCE JENKINS - Chief Operating Officer

Bruce Jenkins is a corporate and government relations executive
with over 30 years of experience in project and corporate management. He is COO
of US subsidiary Northern Dynasty Mines Inc. and directs Northern Dynasty's
environment, government, community relations and permitting activities.

STEPHEN HODGSON - Vice President, Engineering

Stephen Hodgson is a professional engineer with 30 years of
experience in mine operations, mine development and project engineering. He is
Vice President of US subsidiary Northern Dynasty Mines Inc., Vice President of
Engineering for Hunter Dickinson Inc. and Feasibility Study Director for the
Pebble Project.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

No director or officer of Northern Dynasty is, as of the date
of this AIF, or has been within the 10 years before the date of this AIF, a
director or officer of any company that while that person was acting in that
capacity, was the subject of a cease trade order, penalties, sanctions or
bankruptcy, during the time the individual was a director or within a one year
period thereafter, or was a director or officer of a company during the time in
which an event occurred which led to a cease trade order, penalties, sanctions
or bankruptcy subsequent to the individual ceasing to act as a director or
officer. This information has been provided by each director or officer, as the
Company is unable to verify these statements independently.

Potential Conflicts of Interest

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

ITEM
11.           PROMOTERS

Not applicable.

ITEM
12.           LEGAL
PROCEEDINGS

Nil

---

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

ITEM
13.           INTEREST OF
MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

As more particularly described in Item 5 under heading
Property Agreements Further Particular, the Company acquired 100% of the
outstanding common shares of Hunter Dickinson Group Inc. (HDGI) for purchase
price of 14,002,268 common shares of the Company. HDGI held the 20% carried
contractual interests in the Pebble Project and is a related party by virtue of
(i) having certain directors in common with the Company, and (ii) its
shareholders or their associates being significant shareholders 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 at www.sedar.com. The TSX Venture Exchange and the
American Stock Exchange has accepted the acquisition transaction. .The
insiders who owned HDGI and the number received common shares of the Company
each received as a consequence of its acquisition are as follows: Robert A
Dickinson (2,015,289), Jeffrey R. Mason (2,015,289),Ronald W. Thiessen
(2,015,293) Scott D. Cousens (2,015,289) and David. J Copeland ( 2,015,289).

ITEM
14.           TRANSFER AGENT
AND REGISTRAR

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

ITEM
15.           MATERIAL
CONTRACTS

Other than those already described in this Annual Information
Form, the Company did not enter into any material contracts during the fiscal
year ended December 31, 2006.

ITEM
16.           INTERESTS OF
EXPERTS

David Rennie, P.Eng., Mark Rebagliati, P.Eng., and John Payne,
  Ph.D., P.Geo., are each persons

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

Each of Messrs. Rennie, Rebagliati and Payne interests in the
  common shares of the Company, directly or indirectly, or through stock options,
  represent less than 1% of the Company's outstanding share capital.

---

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

ITEM
17.           ADDITIONAL
INFORMATION

Additional information, including directors' and officers'
remuneration, indebtedness of officers, executive stock options and interests of
management and others in material transactions, where applicable, is contained
in annual financial statements, proxy circulars and interim financial statements
of available at the SEDAR internet web site (www.sedar.com).

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

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

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

ITEM
18.           DISCLOSURE FOR
COMPANIES NOT SENDING INFORMATION CIRCULARS

Not applicable.

ITEM
19.           CONTROLS AND
PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

As of the end of the period covered by this report, our
management carried out an evaluation, with the participation of our Chief
Executive Officer and Chief Financial Officer, of the effectiveness of our
disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934(the Exchange Act)). Based
upon that evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that, as of the end of the period covered by this report, our
disclosure controls and procedures were effective in recording, processing,
summarizing and reporting, on a timely basis, information required to be
disclosed by us in reports that we file or submit under the Exchange Act.

It should be noted that while our Chief Executive Officer and
our Chief Financial Officer believe that our disclosure controls and procedures
provide a reasonable level of assurance that they are effective, they do not
expect that our disclosure controls and procedures or internal control over
financial reporting will prevent all errors and fraud. A control system, no
matter how well conceived or operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system will be met.

There were no changes in our internal control over financial
reporting during the fiscal year ended December 31, 2006 that materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act).

---

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

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting for the Company. With the
participation of the Chief Executive Officer and the Chief Financial Officer,
our management conducted an evaluation of the effectiveness of our internal
control over financial reporting based on the framework and criteria established
in Internal Control - Integrated Framework, issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based on this evaluation,
our management has concluded that our internal control over financial reporting
was effective as of December 31, 2006. Because of its inherent limitations,
internal controls over financial reporting may not prevent or detect
misstatements. Also, projections, of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with policies or
procedures may deteriorate.

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

A. AUDIT COMMITTEE FINANCIAL EXPERT

The board of directors has determined that Mr. David Elliott is
a member of the audit committee of the Company who qualifies as an audit
committee "financial expert" based on his education and experience. Mr. Elliott
is "independent", as that term is defined by the rules of the American Stock
Exchange. Mr. Elliott is an accredited Chartered Accountant in Canada.

B. CODE OF ETHICS

The Company has adopted a code of ethics that applies to all
personnel of the Company. A copy of the Code of Ethics was attached as an
exhibit to the Company's Annual Report on Form 20-F filed in June 2005.

C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

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

Year ended
    
    
      Year endedDecember 31
    
    
      December 31Services:
    
      2006
    
    
      2005Audit Fees
    $
      40,000
    
    $
      27,000Audit-Related Fees(1)
    
      
    
    
      Tax Fees
    
      nil
    
    
      1,000All
      Other Fees
    
      
    
    
      $
      40,000
    
    $
      28,000


Note:

|(1) | "AuditRelated Fees" include services that are
      traditionally performed by the auditor. These audit-related services
      include employee benefit audits, due diligence assistance, accounting
      consultations on proposed transactions, internal control reviews and audit
      or attest services not required by legislation or
  regulation.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

From time to time, management of the Company recommends to and
requests approval from the audit committee for non-audit services to be provided
by the Company's auditors. The audit committee

---

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

routinely considers such requests at committee meetings, and if
acceptable to a majority of the audit committee members, pre-approves such
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 services requested would be
considered "prohibited services" as contemplated by 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.

ITEM
21.           OFF BALANCE
SHEET ARRANGEMENTS

None.

ITEM
22.           TABULAR
DISCLOSURE OF CONTRACTUAL OBLIGATIONS

Payments due by periodLess than
      
      
      More than 5Total
      one year
      1 to 3 years
      3-5 years
      yearsContractual obligation
      Nil
      Nil
      Nil
      Nil
      NilLong term debt obligations
      Nil
      Nil
      Nil
      Nil
      NilOperating lease obligations
      Nil
      Nil
      Nil
      Nil
      NilPurchase obligations
      Nil
      Nil
      Nil
      Nil
      NilOther
      Nil
      Nil
      Nil
      Nil
      NilTotal
      Nil
      Nil
      Nil
      Nil
      Nil


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

---