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Duluth Metals Limited – Polymetallic Projects in Minnesota

Duluth Metals Limited

OVERVIEW

Duluth Metals Limited (TSX:DM) is a Canadian company focused on developing the Twin Metals Minnesota copper-nickel-cobalt-platinum-palladium-gold-silver Project. The project is owned through a joint venture with Antofagasta plc under the joint venture company Twin Metals Minnesota LLC, where Antofagasta owns 40 percent interest and Duluth owns 60 percent. Duluth is also exploring for similar deposits in Minnesota.

The Twin Metals Minnesota Project is a large Copper-Nickel-Platinum-Palladium polymetallic sulphide deposit with contained metals of Measured and Indicated 14.7 billion pounds copper, 4.7 billion pounds nickel, and 22.2 million ounces palladium-platinum-gold and Inferred 12.3 billion pounds copper, 4.2 billion pounds nickel, and 13.4 million ounces palladium-platinum-gold.

INVESTMENT HIGHLIGHTS

  • Excellent location on the northern edge of Minnesota’s Iron range near major international ports, well developed infrastructure and a local labour force
  • Existing mine infrastructure from previous taconite operations ready to be evolved into a PGM camp
  • Good upside due to favourable N1 43-101 compliant resource estimates at the Twin Metals project as well as promising albeit presently non-N1 43-101 compliant inferred resources elsewhere within the Duluth Complex.
  • Beneficial funding partnership with major miner Antafogasta plc
  • Excellent project potential makes Duluth Metals a prime target for further mergers and acquisitions.

KEY PROJECT

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Twin Metals – Minnesota

The Twin Metals project is located on the northern edge of Minnesota’s iron range, roughly 10 miles west of Babbitt, Minnesota and roughly 15 miles west of the town of Ely. The property is part of the Duluth Complex, a well known geological formation that extends nearly 240 km northeast from Duluth Minnesota to the Canadian border.

Twin Metals consists of approximately 40,000 acres of property interests within the area, which contains the Maturi, Maturi Southwest, Birch Lake and Spruce Road deposits, which all have NI 43-101 compliant mineral resource estimates. Overall, the Twin Metals Minnesota project constitutes the largest base and precious metal land position in Minnesota.

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The Twin Metals project is a joint venture between Duluth Metals and Antofagasta plc which is being advanced by the joint venture company, Twin Metals. Antofagasta currently owns 40 percent interest in the company, while Duluth owns 60 percent interest and acts as operator for the project.

Since 2005 when Duluth commenced its extensive exploration program for a mineralization within the Duluth Complex, Duluth has completed significant drilling, a number of resource estimates and preliminary economic assessments in the area. The Twin Metals project had its position in the Duluth Complex consolidated in March 2011 when joint venture partners Duluth and Antofagasta acquired the three historic NI 43-101 compliant resource estimates Birch Lake, “old” Maturi and Spruce Road by way of an agreement with Franconia Minerals Corporation.

In April 2014, Duluth filed an updated NI 43-101 Technical Report on the consolidated mineral resources for Twin Metals. The updated report confirmed very large tonnages and contained metal on the first 13% of the Twin Metals contiguous property block while defining a new Maturi Southwest Deposit. Furthermore, a significant upside to the Twin Metals deposit was confirmed through contiguous exploration target areas, and there was a significant conversion of 295 million tonnes of Indicated resources to measured resource classification.

Notably, the study highlighted a contained nickel resource of 4.7 billion pounds, measured and indicated, as well as 4.2 billion pounds of inferred resources.

Overall, Using a base case 0.3 percent copper cut-off, AMEC estimated a measured mineral resource of 295 million tons, an indicated mineral resource of 977 million tons , and an inferred mineral resource of 1.313 billion tons on the four deposits Maturi, Maturi Southwest, Birch Lake and Spruce Road occurring on approximately 13 percent of the footprint of the prospective portion of the polymetallic property block.

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Duluth is currently in the pre-feasibility stage with the Twin Metals project, slated for completion mid-2014. Also scheduled for the middle of 2014 is the completion of a new comprehensive NI 43-101 compliant technical report on the pre-feasibility study. Furthermore, Duluth plans to finish an NI 43-101 compliant technical report on an updated resource for the project this spring.

Based on nearby PolyMet Mining Corp.’s success with permitting progress regarding its Duluth Complex based project and the similarity of that project to Twin Metals, Duluth Metals is confident that its own permitting process should move forward smoothly. Minnesota has permitted seven major mining projects within the last ten years, indicating that the state presents a largely amenable political environment for major mining projects.

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Furthermore, the Twin Metals project has existing infrastructure that was built to support various taconite mines in the area, six of which are still in operation. Some examples of significant available infrastructure include the existence of two bulk commodity ports on the western side of Lake Superior, two coal fired power stations with additional power sources under consideration as well as major and localized railroads.

Duluth is also aiming to develop an environmentally responsible mine project with Twin Metals that exceeds state and federal environmental requirements. So far, plans to reach this goal include advanced mine design for decreased noise and surface impact, modern water treatment technologies to exceed water quality standards and speedy reclamation of mining drill sites to their natural state.

The Duluth Complex

Hosting the largest undeveloped repositories of copper, nickel and platinum group metals, the Duluth Complex boasts the third largest accumulation of nickel sulphides and the second largest accumulation of polymetallic copper and platinum group metals in the world. The Duluth Complex and associated intrusions of the Midcontinent Rift System in northeastern Minnesota constitute one of the largest, semi-continuous, mafic intrusive complexes in the world. It is second only to the Bushveld Complex of South Africa.

Exploration Properties

In addition to the Twin Metals project, Duluth holds 100 percent interest in over 40,000 acres of land/mineral interests within the Duluth Complex. Duluth plans to concentrate on Maturi-style copper-nickel-PGM-rich disseminated sulphides, magma conduit-hosted massive nickel rich massive sulphides, and other platinum and palladium targets in its ongoing exploration within these additional properties.

SUMMARY

Duluth Metals is focussed on advancing its Twin Metals polymetalic copper-nickel-cobalt-platinum-palladium-gold-silver project within the Duluth Complex, geological formation comparable to South Africa’s Bushveld Complex that hosts the third largest accumulation of nickel sulphides as well as the second largest accumulation of polymetallic copper and platinum group metals in the world.

Backed by major miner Antofagasta and located in the mining friendly state of Minnesota near key ports and existing roads and power infrastructure, Twin Metals is poised to take advantage of increasingly favourable nickel prices by becoming a significant producer of nickel within the United States.

MANAGEMENT

Christopher C. Dundas, B.Comm., MBA – Chairman & Director

Christopher Dundas is currently Chairman & CEO, and Director of Duluth Metals Limited. Having received a B.Commerce (Honours) at Queen’s in 1972 and an M.B.A.from the University of California at Berkeley in 1973, he joined Murray & Company in 1973 to open up their Montreal office. Since that time, he was involved in major debt and equity financings in both the domestic and international markets. In addition to real estate finance, he helped to diversify Murray & Company into other areas of corporate financing including manufacturing, infrastructure and privatizations. In 1978, he became the President of Murray & Company’s Quebec subsidiary and in 1985 he became a Director of the national company and a member of the management committee. Mr.Dundas has been instrumental in the start-up, organization, development and financing of Duluth. In the mining industry, Mr. Dundas was a Director of Wallbridge Mining Company Limited from 2003 to 2009. Mr. Dundas is a Director of Twin Metals Minnesota LLC.

Kelly J. Osborne, Mining Eng. – President & CEO

Kelly Osborne is a mining executive with over twenty-eight years of industry experience in the United States and Indonesia with major US based mining companies including Freeport-McMoRan, Vulcan Materials and Stillwater Mining Company. Prior to his appointment to Duluth Metals, Mr. Osborne was Senior Vice-President, Underground Operations (Indonesia) with Freeport-McMoRan Copper & Gold, and prior to that from 2006 to 2010, Vice-President, Underground Operations (Indonesia).

Marvin E. Dee, CPA – CFO

Marvin Dee is a highly experienced Minnesota financial executive well versed in domestic and international finance, treasury and tax, SEC/SOX accounting with a background in an operating multi-plant, multi-national manufacturing TQM environment. Prior to joining Duluth Metals, Mr. Dee was CFO and COO with Spectrum Plastics Group in Minneapolis, Minnesota. Mr. Dee has over 30 years of experience in Minnesota, previously with Hawkins Inc., Nath Companies, Tricord Systems Inc., Nordic Track Inc., Illbruck/USA Inc., as well as Ernst& Young and McGladrey & Pullen. Mr. Dee graduated from St. Cloud State University in Minnesota and is a member of the American Institute of Certified Public Accountants and the Minnesota Society of Certified Public Accountants.

H. James Blake, Q. C., LL.M – Corporate Secretary

Jim Blake is a senior law partner of McLean & Kerr LLP and received his LL.M. in Business Law from Osgoode Hall Law School, York University in 1970. Jim Blake was appointed Queen’s Counsel in 1980. Mr. Blake’s principal focus of practice is corporate and commercial transactions, mergers and acquisitions, and securities and corporate finance predominantly within the mining industry. Mr. Blake has written and lectured on directors’ and officers’ liability, legal and fiduciary duties of corporate directors, officers and corporate managers, Limited Liability Companies, Interest Act compliance, secured lending transactions, letters of credit and developments in corporate law. He is a past Chair of the Business Law Section of the Ontario Bar Association and a member of the Corporate Law Subcommittee thereof, is past Chair of the Natural Resources & Energy Section of the Ontario Bar Association and chaired the Ontario Bar Association Committee on modernization of Ontario’s Mining Act. Mr. Blake has been the Corporate Secretary of the Corporation since January 2006.

Dean Peterson, Ph.D. Geology – Senior Vice President, Exploration

Dr. Peterson is a pre-eminent authority on Duluth Complex mineralization as he was Senior Research Associate at the Natural Resources Research Insitute of the University of Minnesota Duluth’s (“UMD”) and co-director of the recently formed Precambrian Research Center at UMD. He has over 20 years’ experience in mineral exploration, geological consulting, and developing economic geology research programs. As an industry geologist and consultant, he has experience with a variety of deposit types including; Archean lode Au deposits; epithermal Au; VMS deposits; Duluth Complex Cu-Ni-PGE deposits; high-grade Cu-PGE veins beneath the Sudbury Igneous Complex; and Cu-Au-Mo porphyry deposits. His research interests include economic geology, geological mapping, Precambrian geology, mineral potential modeling, and three-dimensional modeling of ore systems. Dr. Peterson has worked extensively in the National Science Foundation’s initiative to develop a Deep Underground Science and Engineering Laboratory (DUSEL) in the United States, first as a Principal Investigator for the University of Minnesota’s proposal for the Soudan Mine, and then collaborating with the DUSEL teams associated with the Homestake and Henderson mines.

Mark A. Cowan, B.A., J.D. – Director

Mark D. Cowan is the principal of Cowan Strategies, a Washington based firm concentrating in public policy, global business and trade. Prior to that, he was Senior Executive Vice-President, International Business, at Cassidy & Associates, a Washington based international government relations and consulting firm and prior to that he was a partner at the Washington based law firm, Patton Boggs LLP.. He served as president of Columbus Public Affairs and as Chief Executive Officer of Newmyer Associates, a public affairs and strategic intelligence firm. He was vice chairman of Cassidy & Associates and a founder and Chief Executive Officer of The Jefferson Group. Mr. Cowan also served at Gray & Company and Hill & Knowlton Public Relations, counseling numerous domestic and international clients. In addition, Mr. Cowan has held presidential and political appointments in Ronald W. Reagan, George H. W. Bush and George W. Bush administrations. Mr. Cowan serves as a director of Suntrak Solar, is a trustee of The Catholic University of America, Columbus School of Law, and is a director or advisor to a number of institutions and other organizations.

James J. Jackson, C.A., C.P.A. – Director

James J. Jackson, a retired executive and resident of the USA, joined the Board on March 22, 2007. Mr. Jackson was previously Senior Vice-President and Chief Financial Officer of MobiFon S.A., a leading cellular telephone provider in Romania and a wholly-owned subsidiary of Vodafone Group PLC. On May 31, 2005, Vodafone Group plc purchased MobiFon from Telesystem Wireless International Inc. Mr. Jackson served in numerous senior financial roles from 1997, including MobiFon’s Senior Vice-President and Chief Financial Officer. From 1995 to 1997, Mr. Jackson was Vice-Chairman, Finance, for Quadrant Amroq Bottling Co. Ltd., a venture capital firm holding the franchise for Pepsi Cola in Romania. Prior to that, he worked for fifteen years at Alcan Aluminium Ltd. Mr. Jackson is currently a member of the supervisory council of Bite Lithuania, a mobile telephone company and a director of Molycorp Inc., a manufacturer of custom engineered rare earth and rare metal products. In June 2012, Molycorp Inc. purchased Neo Materials Technologies Inc. Mr. Jackson was previously a Director, Vice-Chairman and Audit Committee Chair of Neo Materials Technologies Inc. Mr. Jackson is also a director of Miocene Metals Limited (a mineral exploration company). Mr. Jackson is a member of the Institute of Chartered Accountants of Ontario and is a registered Certified Public Accountant in the United States. He is a certified director as a graduate of the Institute of Corporate Directors and currently serves as Chairman of the Audit Committee and lead independent Director on the Duluth Board and is a member of the Board of Directors of Twin Metals.

Lieutenant General John Sattler (USMC Ret.) – Director

General Sattler brings 37 plus years of Marine Corps experience in leadership, command and staff positions, interagency coordination, strategic planning, congressional liaison, strategic communication and team building to Duluth Metals. General Sattler served as the Director of Strategic Plans and Policy (J5) to the U.S. Joint Chiefs of Staff from September 2006 until his retirement in August 2008. Prior to this, from 2004 to 2006, he was the Commanding General of the First Marine Expeditionary Force and Commander, Marine Corps Forces Central Command. During this period, he commanded all forces in Iraq within the Al Anbar Provence. During 2003-04, he commanded the initial Combined Joint Task Force-Horn of Africa and established the Headquarters in the Country of Djibouti. In addition, General Sattler has served three years as an acquisition officer and four years as the Marine Corps Congressional Liaison Officer to the House of Representatives. General Sattler has a B.Sc. Degree in Economics from the United States Naval Academy in 1971 and also graduated from the Marine Corps Amphibious Warfare School, the Marine Corps Command and Staff College, and the Industrial College of the Armed Forces.

Thomas F. Pugsley, M.Sc. Mining Eng. – Director

Thomas Pugsley held senior management positions with Falconbridge Limited from 1977 onwards and retired from Falconbridge in 2004. Mr. Pugsley managed Falconbridge’s interest in the US$1.8 billion Collahuasi Copper Project in Chile. He was also responsible for the implementation of Falconbridge’s $600 million Raglan Project located in Nunavik Quebec as well as the design, planning and development of Falconbridge’s US$3 billion Koniambo Ferronickel Project in New Caledonia. Prior to Falconbridge, Mr. Pugsley was Senior Mining Engineer and Mine Superintendent for Cominco’s Black Angel Mine in Greenland. Mr. Pugsley and the Falconbridge team were awarded the PDAC Developers Award in 2000 for development of the Raglan and Collahuasi mines.

Barry Simmons, B.Sc., P. Eng. - Director

Barry D. Simmons is a geological consultant and independent director with over 45 years of senior management responsibility in the mining industry. He has been Regional Vice President for Teck Cominco Limited, a former Director and past Chairman of the Exploration Division of Camiro (a national research organization sponsored by the Canadian mining industry) and a former Director and past Chairman of the Education Committee of the Prospectors and Developers Association of Canada (PDAC). In addition, Mr. Simmons was a member of the Minister’s Advisory Board for the Ontario Geological Survey. He is a Professional Engineer and a graduate of Carleton University with an Honours B.Sc. in Geology. He has served as an independent director and/or advisory board member with three TSX-listed companies (including Duluth) as well as Vismand Exploration Inc., a privately funded mining company. Mr. Simmons has been recognized as an expert on mining issues by the Supreme Court of British Columbia as well as the Superior Court of Justice – Ontario.

Alar Soever, B.Sc., P.Geo – Director

Alar Soever is a Professional Geologist (Ontario) with over 30 years experience in the mining industry. He has been involved in a wide range of projects both in Canada and overseas. Mr. Soever was the President of Wallbridge from 2003 until September 19, 2011 and CEO until April 25, 2012 and is the Executive Chairman and a director of Wallbridge. He was involved on the Minnesota property as a consultant to Wallbridge during 2001-2002 during the initial evaluation of the Maturi Extension Project and played a key role in the spin-out of this property to Duluth. Before joining Wallbridge, he worked both as an independent consultant and then subsequently as Senior Geologist with the consulting firm of Watts, Griffis, and McOuat Limited. Mr. Soever is also a director and the Executive Chairman of Miocene Metals Limited (a mineral exploration company).