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LIQUIDITY AND CAPITAL RESOURCES

At the end of the quarter the Company had a cash position (cash, equivalents and restricted cash) of $24,631,840, down from approximately $44,584,458 at the end of July 2008. As a result of a $19 million flow-through financing completed in early December 2008, the Company continues to have a strong cash position but Noront is dependent on future financing alternatives to fund a high level of exploration activity.

Working capital at the end of the quarter was approximately $20.3 million, down from about $44.6 million at the end of July 2008. This drawdown of working capital in the 3-month period is related to capitalized project expenditures (about -$19.4 million), general corporate expenses as recorded on the income statement (about -$4.0 million), a change in the marked-to-market value of marketable securities (about -$2.4 million), an increase in pre-paid expenses related to fuel purchases and drilling advances (about -$3.1 million) and movements in payables and receivables (about $5.9 million).

In addition to the equity financing of its operations during fiscal 2008, the Company has also chosen to enter into a number of joint venture agreements in relation to its properties. These option agreements provide additional financial resources and provide the benefit of adding the resources of other entities to the overall exploration effort.

The Company has financed a portion of its exploration activities through the issue of flow-through shares, which transfer the tax deductibility of exploration expenditures to the investor. Proceeds received from the issue of such shares have been credited to capital stock and the related exploration costs have been charged to mining and resource properties. Proceeds raised are being used for continued exploration of Noront’s properties. Resource expenditure deductions for income tax purposes related to exploration and development activities funded by flow-through share arrangements are renounced to investors in accordance with income tax legislation. When these expenditures are made, temporary taxable differences created by the renunciation will reduce share capital.

Noront has no credit facilities with financial institutions, so its financial instruments consist of cash, marketable securities, accounts receivable and accounts payable and accrued liabilities. Unless otherwise noted, the Company does not expect to be exposed to significant interest, currency or credit risks arising from these financial instruments. Noront estimates that the fair value of cash and cash equivalents, accounts receivable, accounts payable and taxes payable approximate the carrying values.

Although the Company has sufficient capital resources to meet its current obligations, the Company will need to raise additional funding to finance future exploration programs. The timing and ability to do so will depend on the liquidity of the financial markets as well as the acceptance of investors to finance resource based junior companies, in addition to the results of the Company’s exploration programs and the acquisition of additional projects. At this time, the Company is not anticipating an ongoing profit from operations, therefore it will rely on its ability to obtain equity or debt financing for growth.

The Company has received the Technical Report, which has identified a resource estimate for the Eagle One discovery of 1,834,000 tonnes of indicated resources and 1,087,000 tonnes of inferred resources of high grade nickel, copper and platinum group metals. The recoverability of the carrying values of exploration properties is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development and future profitable production there from or alternatively upon the Company's ability to dispose of its interests on an advantageous basis. Changes in future conditions could require material write downs of the carrying values.

Management is confident that it will be able to raise sufficient capital to further explore and develop its properties and projects in the coming year. The ability of the Company to develop its existing assets into commercial and profitable operations, however, will require participation by outside parties for capital or will require additional financing from other outside sources. There can be no guarantee that the Company will be able to secure any required financing.

SUMMARY OF FINANCIAL RESULTS

Noront’s net loss for the period was ($3,742,181) or ($0.03) per share. This operating loss was net of $224,011 in interest income earned. Approximately $1,908,608 of this loss was directly associated with Consulting, Professional fees and head office overhead in the quarter. In addition, $896,762 expensed in the quarter was related to the Company’s Annual General Meeting and Dissident Proxy mailings and associated legal and professional fees.

A total of $19,390,622 was spent in the quarter on Mining Properties and deferred exploration expenditures. Continued drilling and exploration both at the McFaulds Lake Project and in the Ring of Fire area increased the Company’s use of cash over the previous quarter. A total of $13,664,809 was spent on the McFaulds Lake Project in the quarter. This spending trend is expected to stabilize, as the rate of expenditure decreases with a more focused approach to exploration of known targets.

The Company has completed Phase 1 of the underground exploration program at Windfall Lake. This project has been placed on care and maintenance with all work at the site halted for the winter. Results from the Phase 1 underground exploration program were inconclusive and given the liquidity preservation strategy of the Company at this time no further exploration is merited. The Company continues to examine alternatives at Windfall and how it can best benefit Noront. A total of $5,141,467 was spent at Windfall Lake in the quarter. At the end of October 2008, the Windfall Lake carrying value reflected $16,964,317 in capitalized expenditures.

In order to accelerate exploration of Noront’s large land holdings in the Ring of Fire area the company has optioned some of its claims to third parties. All of these transactions are at arm’s length. Noront remains the operator of these projects and will, even upon successful earn-in by these third parties, hold at least a 50% interest.

At the end of the quarter the Company had a cash position (cash, equivalents and restricted cash) of approximately $24.6 million, down from approximately $44 million at the end of July 2008. As a result of a $19 million flow-through financing completed in early December 2008, the Company continues to have a strong cash position but Noront is dependent on future financing alternatives to fund a high level of exploration activity.

Working capital at the end of the quarter was approximately $20.3 million, down from about $44.6 million at the end of July 2008. This drawdown of working capital in the 3-month period is related to capitalized project expenditures (about -$19.4 million), general corporate expenses as recorded on the income statement (about -$4.0 million), a change in the marked-to-market value of marketable securities (about -$2.4 million), an increase in pre-paid expenses related to fuel purchases and drilling advances (about -$3.1 million) and movements in payables and receivables (about $5.9 million).

OVERVIEW OF PROPERTIES AND PROJECTS

MCFAULDS LAKE PROJECT (RING OF FIRE AREA -MCFAULDS LAKE, JAMES BAY LOWLANDS, ONTARIO)

Noront controls land claims, held directly or indirectly, through joint ventures, optioned claims and earn-in programs consisting of 178 claims for a total of approximately 41,700 hectares in the Double Eagle Property. This includes 100% interest in two claims consisting of 8 units adjoining the Company’s Double Eagle project that were earned from Condor Diamond Corp. (“Condor”) and Greenstone Exploration Company Ltd (“Greenstone”) during the year. These two claims are subject to 1% net smelter royalty (“NSR”), payable to Condor and Greenstone, which may be purchased by the Company at any time upon payment of $500,000 and/or at the Company’s option, issuance of an equivalent value in number of common shares of the Company.

In total Noront controls land claims, held directly or indirectly an area of approximately 120,000 hectares (300,000 acres) in the Ring of Fire area located in the James Bay Lowlands in Northeastern Ontario.

Eagle One Deposit (Nickel-Copper-PGM discovery)

Noront announced the filing of a Technical Report and resource estimate on the Eagle One Deposit, Double Eagle Property, McFaulds Lake Area, James Bay Lowlands Ontario in August of 2007. The Technical Report was prepared by P&E Mining Consultants Inc., who are independent “qualified persons” within the meaning of NI 43-101. The Technical Report outlines a resource as discussed above in the overview of Activities.

The Technical Report identifies that the Eagle One Deposit remains open along strike and down dip for further expansion. These potential extensions will be the subject of further exploration.

The Eagle One Deposit resource model contained in the Technical Report was derived from delineation drilling conducted during 2007/2008 that outlined a mantle derived, ultramafic intrusion (the “Ring of Fire Intrusion”) hosting an elongated, steeply dipping lens of dominantly disseminated sulphides which encapsulate a smaller lens of high grade massive sulphides.

Within the report, it is explained that significant sulphide mineralization was outlined on nominal 50-metre spaced sections over dip lengths of up to 225 metres that can be projected to 200 metres of strike length. Twenty-three (23) drill holes that intersected mineralization on these five sections form the basis of the resource estimate while an additional six (6) holes were incorporated to build the total geological model. Inverse distance squared grade interpolation was utilized to determine block model grades.

The identification of significant high grade massive and disseminated sulphide resources at the Eagle One Deposit indicates that the systematic exploration of the many other targets in the Ring of Fire area will be the most significant creator of value for Noront.

The discovery of the Eagle One Deposit, just seven metres below the surface along with the high grade of the massive sulphides, averaging over 6% Ni, 3% Cu, 2 g/t Pt, 12 g/t Pd and 9 g/t Ag, provides Noront the opportunity to ship the massive sulphides directly to a mill/smelter complex without further processing.

With these new mineral resources identified at Eagle One in the McFaulds Lake area, Noront now has achieved the first milestone in the potential development of this discovery. Noront is entering the pre-production phase for this occurrence and plans having completed a scoping study to assess the economic viability of developing the Eagle One Deposit that may lead to a feasibility study.

The Eagle One Deposit was Noront’s first discovery at McFaulds Lake. Subsequent discoveries at Eagle Two (Nickel-Copper) occurrence, the adjacent large chromite deposit, Blackbird One, and a second chromite occurrence, Blackbird Two, discussed in detail below, have led to the formulation of a geological model indicating that the Ring of Fire area is a very rich mineralized zone with a number of concentrated deposits and targets existing in close proximity to each other that may be part of a large system of deposits extending along the structural horizon that has been designated as the Ring of Fire. As a result, this mineralized area will continue to be the centre of a highly focused exploration program by Noront.

Preliminary Economic Assessment (“PEA”)of Eagle One

The Company commissioned and released the results of the PEA as discussed above in the Overview of Activities. The PEA of the Eagle One Deposit is based largely on assumptions and related factors. Under the development scenario proposed during the PEA study, the Eagle One deposit would be accessed by a proposed all weather road from the northern Ontario community of Nakina which would take approximately 21 months to complete and cost an estimated $62.3 million. This cost is 50% of the full estimate for the road construction with the Ontario Government assumed to share the infrastructure costs. Major river crossings at the Albany and Attawapiskat were assumed to be accomplished with barge/ferries rather than bridges. A gravel airstrip would be constructed in the first year to service the project construction phase and subsequently be utilized for production crew rotation. Underground mine production would commence after road completion with mining and direct shipping of massive sulphide mineralization to a Sudbury area mill/smelter complex at a rate of 1,000 tonnes per day. Upon exhausting the potentially mineable massive sulphide mineralization in approximately 1.2 years, the remaining potentially mineable disseminated sulphide mineralization would be mined and subsequently processed in an on-site mill at 1,500 tonnes per day over an additional five year period. For the purposes of this PEA, both indicated and inferred resources were included in the potentially mineable resource.

The conceptual mine design is based on accessing the deposit on the footwall side (the east side of the northeast striking deposit) through a decline. Sublevels could be developed in 25 m vertical intervals with main haulage drifts parallel to the strike in the footwall. The decline, the main haulage drifts and the mineralized body may be connected with access cross-cuts driven on 15 m centers.

The stope orientation in the conceptual plan differs between the massive sulphide and the disseminated sulphide zones. The massive sulphide zone could be mined as longitudinal blasthole stopes. The main disseminated sulphide zone could be mined as transverse blasthole stopes. Sill pillars may be required in the extraction of the massive sulphide zone stopes, however, they will likely be extracted with the disseminated resources.

The pre-production period is assumed to last 21 months. Massive resource sustaining development will last for approximately 7 months from the time the access road is completed to the end of month 28. Disseminated resource sustaining development will last for approximately 45 months, from the start of month 36 to the end of month 80.

Mine production is divided in two phases. Phase I involves the extraction of high grade massive sulphide resources from longitudinal stopes. Phase II involves the mining of the disseminated sulphide resource in transversal stopes. The massive sulphide resources will likely be mined from the top down and the excavated stopes will be backfilled with cemented rock fill (CRF) once all the massive resources have been extracted at the end of Phase I. Access to the longitudinal blasthole stopes could be via crosscuts driven from the haulage drifts through the disseminated resource halo to the massive resources on all development levels.

Drill / blast / extraction drifts could be driven within the massive resource zone to the northern and southern extent of the massive resource zone, on each level. The mining operation is assumed to be based on utilizing 64 mm diameter ITH drilled down holes. Slot raises will likely be driven between levels and the longitudinal blasthole stopes would then be drilled off and blasted from above and mucked from below. Remotely operated 6 yd scooptrams are thought to be used for final massive resource mucking at the bottom of each stope before CRF backfilling at the end of Phase I. The longitudinal blasthole stopes are designed to be 25 m high and average 5.6 m in thickness. Massive development resources could be mined during month 17. This development would then last for approximately 11 months until the end of month 28. A total of 53,800 tonnes of massive development resources, grading 5.8% Ni and 3.0% Cu could be extracted during that period.

Massive sulphide stope mining is assumed to start at the end of month 21 at a production rate of 1,000 tpd and last for approximately 15 months until the end of month 36. A total of 429,400 tonnes of massive stoping resources grading 6.1% Ni and 2.8% Cu could be extracted from these development headings. The disseminated sulphide stope resources are designed to be mined from the bottom up. Excavated stopes could be backfilled with classified mill tailings and 3% cement (cemented hydraulic backfill (CHBF)) once stope mining has been completed in each primary or secondary stope.

Access to the transverse blasthole stopes will be via crosscuts driven from the haulage drifts. Blasthole ring drilling and blasting will be completed from the upper stope crosscuts, on a retreat basis. Blasted mineral resources will be mucked using remotely operated 6 yd3 scooptrams from below. Slot raises will be driven at the massive resource / CRF backfill contact, between levels. The transverse blasthole stopes will be 25 m high, 15 m wide and average 25.8 m long.

Disseminated development resources would be mined during month 17. This development could then continue for approximately 64 months until month 81. A total of 109,300 tonnes of disseminated development resources grading 1.1% Ni and 0.7% Cu could possibly be extracted during that period. Disseminated stope mining may start at the beginning of month 37 at a production rate of 750 tpd. Production is designed to increase to 1,500 tpd during the 39th month and continue for approximately 52 months until the end of month 91. A total of 2,379,100 tonnes of disseminated stoping resources grading 1.1% Ni and 0.7% Cu could be extracted by stoping during this time period.

On site processing of the massive sulphide resource may not significantly increase the economic benefit to the project. Therefore, it is assumed that these massive resources will be direct shipped to a toll-milling facility. P&E assumes that a Sudbury area mill/smelter facilitywill be able to process 1,000 tpd of massive resources on a toll basis.

The disseminated sulphide resources however may require on-site processing starting at a rate of 750 tpd for the first 2.5 months then at a rate of 1,500 tpd thereafter. No metallurgical testwork has been conducted for this deposit and assumptions for metal recoveries in the PEA are provisional and solely based on industry typical recoveries for other Canadian and international nickel, copper, platinum, palladium, gold (PGE) and silver mineralization.

The assumed flowsheet for this study includes primary crushing via a jaw crusher which will be suitable for crushing both direct shipping resources and disseminated resources for site concentration, grinding, two stages of rougher flotation to produce separate copper and copper-nickel rougher concentrates followed by regrinding and cleaning of both to produce saleable concentrate grades. Final concentrates will need to be filtered to an approximate 8% moisture content for shipping..

A conventional tailings pond will be necessary to receive unthickened tailings for disposal. The supernatant water will likely be reclaimed by means of barge mounted pumps or other means to provide most of the water requirements for the mill. The tailings management facility (TMF) is assumed to accommodate an estimated 817,600 tonnes of hydraulic tailings. It is anticipated that the majority of the mill tailings (estimated 1.5 M tonnes) would likely be placed underground as cemented hydraulic backfill in the mined out disseminated sulphide resource stopes.

The envisaged project encompasses the construction, operation and closure of an underground mine and related infrastructure and facilities. The proposed project will be subject to harmonized Canadian federal environmental assessment requirements which require, without being limited to, the development of an environmental baseline database; the assessment of proposed project, controls and potential environmental and social impacts.

The timeline for the permitting of the project has yet to be established. However, given the scope, size and nature of the proposed project, it is estimated that environmental studies, impact assessment and permitting could be conducted in 3-5 years after a project “Go” decision. As part of this process, information will need to be collected regarding the acid drainage potential of waste rock and tailings, the state of and impact to enthic communities, fisheries, terrestrial life; river and site access and closure through studies and consultation with regulators and interested peoples.

Mine operating costs were estimated by P&E based on the industry accepted cost estimation software, adjusted to 3rd quarter 2008 Canadian Dollars. In addition cost estimates for mine air heating and cemented backfill were included in the estimate.

The direct ship massive sulphide resource processing cost estimate includes the cost of custom toll milling at a Sudbury area mill, and onsite primary crushing and resource handling. The onsite disseminated sulphide resource processing cost estimate is based on a similar size and types of processing facilities..

The G&A operating cost estimate includes the cost of mine, mill and project administration, and annual road maintenance and ferry service. The average operating cost for the direct shipping massive sulfide resource was estimated by P&E to be $116.07 per tonne and for the disseminated sulphide resource was $118.00 per tonne. The average life-of-mine operating cost for the project is estimated to be $117.69 per tonne.

Capital cost estimates are based on general budget pricing from suppliers, consultants, contractors and other Canadian projects. Capital expenditure estimates have been prepared to an accuracy of ±35%. The pre-production period is estimated to last for 21 months, starting with the construction of road access. During this period the total project pre-production capital expenditures are estimated to be $173.4 million. Sustaining capital expenditures include all life-of-mine capital expenditures beyond the pre-production period. Sustaining capital expenditures total $113.0 million including recuperated credit value for salvage of plant and equipment.

The base case for the project assumed 100% financing of the project through equity and utilized 48-month average commodity prices as of the close of markets on October 17, 2008. ON This basis, and using the proposed designs discussed above the project has a pre-tax payback of 2.2 years and generates an undiscounted net pre-tax cash flow of C$720.1 million over an estimated mine life of 7 years. This results in a pre tax IRR of 160.3% and an NPV of C$465 million at a discount rate of 10%. At spot metal prices prevailing at the close of markets on October 17, 2008, the project has a pre tax IRR of 7.0% and an NPV of C$(6.0) million at a discount rate of 10%. The resultant mine life is not specified by P&E.

While the PEA demonstrated that the Eagle One deposit could become a stand-alone deposit at one to four year trailing average metal prices, it also indicated that the project as conceptualized in the study was most sensitive to metal prices, metallurgical recovery and head grades. The Company is encouraged by these results and management believes that further exploration in the Ring-of-Fire may identify other mineralization that may serve to enhance the economics of developing the entire region.

Eagle Two (Nickel-Copper) Occurrence (located at AT2)

The target AT2 anomaly is a coincident magnetic and conductive feature that was recognized as paired linear AeroTEM conductors striking parallel to the margins of a highly magnetic body several kilometres long. The magnetic body is connected directly to the Eagle One magmatic massive sulfide deposit and as such was considered a prime target for further discoveries of peridotite-hosted magmatic sulfide mineralization.

In February 2008, the Company announced that drill holes had encountered extensive Ni-rich sulphide mineralization hosted by shear zones parallel to the contact between the ultramafic rocks and their felsic plutonic (granodiorite, sensu lato) host rocks. The sulphide deposit at the AT2 anomaly area was named the Eagle Two deposit. The Eagle Two deposit is located two kilometres south-west of Eagle One. Later, while continuing to drill at the Eagle Two site during the winter of 2008, Noront encountered massive chromite mineralization in boreholes drilled to further test the airborne (VTEM) anomaly at AT2 on the Double Eagle Property.

Blackbird One (Chromite) Occurrence (located at AT2)

The Company announced the occurrence of massive chromite with its first assay of drill hole NOT-08-1G17 with an apparent width of 49.4 metres averaging 39.1% Cr2O3 and a chromium to iron ratio of 2.34. This chromite mineralization zone has been named the Blackbird One Deposit. The Blackbird One mineralization consists of massive chromite layers interbedded with chromite-rich metadunite, now entirely replaced by talc carbonate minerals, chromite, and minor ferritchromite overgrowths. Continued drilling has intersected massive chromite mineralization to depth.

Some of the massive layers of chromite reach apparent thicknesses exceeding 70 metres, with true thicknesses exceeding 30 metres. Within the massive layers, there are occasional xenoliths and thin beds of talc after olivine. The chemical composition of the chromite mineralization has been assessed by three methods: whole-rock assay by instrumental neutron activation analysis (INAA), electron microprobe analysis of individual chromite grains (EMP), and hand-held semi-quantitative X-ray fluorescence spectrometry (HXRF).

Available assay results through the chromite zone are shown below. The main mineralized zone remains consistent around 40% Cr2O3 for more than 30 metres drill intercepts, and includes richer zones greater than 5 metres wide that average well above 45% Cr2O3. Similar visual results have been reported in deeper holes, and further assay results are pending. The Cr/Fe elemental weight percent ratio in the chromite zone is consistently around 2.0 and on occasion up to 2.6 over the richer chromite intervals.

AccordingtoNoront’sNI43‐101report,BlackbirdOnehashighgradesofCr2O3 withafavorablechrome/ironratioandade...

SELECTEDASSAYRESULTSFROMBLACKBIRDONE

Blackbird Two (Chromite) Occurrence

The demonstration of a detectable gravitational response to the massive chromite at the Blackbird One Deposit has been used to infer the presence of another body of chromite some 900 metres long striking 060° (azimuth) away from the AT2 area. Several diamond drill holes spaced 100 metres apart have cut through three layers of massive chromite, each with apparent thicknesses of 10-20 metres with a combined thickness of approximately 50 metres. Blackbird Two lies between the Eagle One and Eagle Two discoveries.

SIGNIFICANCE OF NORONT’S CHROMITE DISCOVERIES

Chromite is used to produce ferrochrome which is an essential ingredient in the production of stainless and alloy steel. Ferrochrome is what makes stainless steel, stainless. It is extremely corrosion resistant and is sought after for high-end tools and equipment. There are no economic substitutes for ferrochrome in the production of stainless steel. Recently the USA and Chinese governments have added this industrial metal to their respective strategic reserve lists. Ferrochrome content increases as steel production moves from austenitic to ferritic grades. Austenitic or the 300 series stainless steel contains a higher proportion of nickel and is generally the dominant steel type in North America and Europe. Austenitic stainless steel contains between 11-17% ferrochrome. Ferritic stainless steel, also known as the 400 series is the emerging steel type in the “BRIC” countries (Brazil, Russia, India and China) that are driving steel production growth. Ferritic stainless steel contains a higher proportion of ferrochrome generally between 17-27%.

The smelting process adds considerable value to chromite ores if a deposit is large enough to justify the capital cost of a smelter. Ferrochrome prices have rapidly increased in recent years due to escalating costs, interruptions and shortages in the electricity supply for the large global producers in South Africa and due to the escalating demand for stainless steel production, especially from China. Prices for ferrochrome are extremely dependant on the global demand for stainless steel and have decreased in recent months with a downturn in perceived global economic activity.

The closest geological analogs to the Blackbird One Deposit are the Kemi Mine in Finland, the Ipueira-Medrados Deposit in Brazil, and the Sukinda Valley Deposit in India. All consist of massive chromite bodies up to several tens of metres thick and hundreds of metres long, hosted by ultramafic rocks predominantly consisting of dunite and harzburgite. These three producing mines, on three continents, collectively account for approximately one third of global chromite production. Grades reported from diamond drilling at Noront’s Blackbird One compare favorably with those of the world's most important global chromite producers. Blackbird One combined with the geophysical anomaly known as Blackbird Two indicate that the presence of massive chromite persists in the area and along with additional high gravity targets indicate that the potential exists for a large resource that may be comparable in size to the Kemi, Sukinda Valley, or Ipueria-Medrados Deposits.

DOUBLE EAGLE GEOLOGICAL AND MINERALIZATION PROGRAM

On-going exploration work on the Double Eagle Property is partly predicated upon a conceptual model of the mineralizing mafic and ultramafic magmatic systems associated with the Ring of Fire. This model has been formulated by incorporating recent drill data along with geophysical, geological and other technical survey results.

The Ring of Fire model features a mantle-derived strongly magnetic ultramafic intrusion (the “Ring of Fire Intrusion” or “RFI”). The magmatic intrusion lies between a granodiorite pluton and the surrounding Sachigo greenstone belt rocks. The RFI is magnetically distinct allowing it to be traced more or less uninterrupted, for tens of kilometres along the granodiorite margin. It appears that a series of conduits cutting across the granodiorite have acted as feeders to the main RFI. On a world-wide basis ultramafic intrusions, such as the RFI, are known to host several types of deposits:

Layered chromite deposits

Nickel-Copper deposits and

Platinum Group Metals (PGM) deposits.

Recent drilling within the Ring of Fire area confirms that both PGM-rich Ni-Cu deposits (Eagle One and Two) and now chromite deposits, (Blackbird One and Two) are associated with the RFI and its related conduit feeder systems.

Several other anomalies have been identified within the company’s extensive land holdings related to the RFI. These are all high priority targets and plans are being made for drill testing in the next few quarters. The Company’s claims cover numerous coincident airborne magnetic and conductive anomalies related to the RFI. Ground follow-up programs of line cutting and magnetometer and horizontal loop electromagnetic surveys were initiated covering some of the nearby (to Eagle One) airborne anomalies and are designed to prioritize the anomalies for immediate diamond drilling during 2008 and 2009.

The Company has announced that it intends to increase its land position, where appropriate, and staking continues around the “Ring of Fire”. Noront has completed extensive airborne surveys which was followed up by an ongoing, very intense ground geophysical program to identify diamond drill targets. Noront’s exploration staff will continue its systematic exploration program on its very large land position around the potentially prolific Ring of Fire area.

WINDFALL LAKE PROJECT, URBAN TOWNSHIP, QUEBEC

The property is situated in Urban Township, approximately 100 km due east of Lebel-sur-Quevillon and 200 km northeast of Val d’Or in Quebec’s Abitibi region. It is accessible from Lebel-sur-Quevillon over 112 km of gravel roads that are maintained in part by the Company. Resources Metanor Inc. has recently brought their Barry gold mine, situated 8 km SW of Windfall, to full production and trucks the ore approximately 130 km northwards to their Bachelor Lake mill.

The Windfall project comprises four, contiguous, staked claim blocks as follows:

Block Claims Area (ha) Area (acres)

Windfall Lake 33 528 1,320 Alcane 57 912 2,280 South 38 608 1,520 Murgor-Freewest Option 29 464 1,160

Total 157 2,512 6,280

Claims in the Windfall Lake and Alcane blocks are subject to small Net Smelter Return (“NSR”) royalties. The South block was acquired by staking in late 2007 and is not subject to any royalty obligations.

The Company gained the option (as of 31 January 2007) to earn a 50% interest in 29 claims owned jointly by Murgor Resources Inc. (“Murgor”) and Freewest Resources Canada Inc. (“Freewest”) in return for 750,000 shares of Noront (then valued at $607,500) and a commitment to match, within four years, the cumulative expenditures of Murgor and Freewest, deemed to be $4 million. Upon reaching the deemed expenditure, Noront may earn a further 10% interest by funding a positive feasibility study. As operator, Noront may also propose additional exploration and development programs in which the Freewest-Murgor joint venture may participate pro rata or be diluted according to a predetermined dilution of interests formula.

Approximately 70,750 metres of drilling in 338 holes of all types are recorded on the combined properties since the early 1990’s following the discovery of visible gold in surface showings by Alto Minerals Inc. The drilling has focused on an 800 metre square area and has yielded many high grade gold intersections culminating in a section reporting 1,307 g/t Au over 4.8 metres or 38.1 troy ounces per tonne gold over 15.7 feet core length in hole NOT-06-100 in late 2006. Are these numbers correct? Reviews of cumulative diamond drill data by the Company’s independent geological consultants in early 2006 and again in 2007 confirm that gold mineralization occurs in parallel zones that trend 240° and are vertical or steeply dipping to the north.

In early 2007, Noront elected to carry out an underground exploration program to investigate this extensively mineralized zone, including the area immediately surrounding the NOT-06100 diamond drill intersection by way of a ramp. Genivar Société en Commandite (“Genivar”) of Val d’Or, QC was retained to successively prepare options for a ramp (15 degree decline), complete detailed engineering studies, support permitting, complete geotechnical and hydro geological studies tender, and provide engineering and supervisory support to the project.

Noront elected to complete the underground exploration program in two phases; the first entering the F-11, F-17 and W-3 (including the NOT-06-100 area) zones and the second several other zones lying to the west. The first phase has cost between $15 and $18 million and was completed in the current fiscal quarter.

The project operates subject to permits, certificates of approvals and regulations including the following. The permit to take a 25,000 tonne bulk sample was granted by Ministère des Ressources naturelles et de la Faune (“MRNF”) of Quebec for a one year term starting 1 September 2007 and is renewable upon application. The discharge of effluent is subject to standards set in Loi 19 (enforced by Ministère du Développement durable, de l'Environnement et des Parcs (“MDDEP”) and by mining effluent regulations under the Canada Fisheries Act (enforced by Environment Canada). The Company is required to sample the effluent discharge at prescribed intervals, complete specific analyses and to submit reports to MDDEP. Workplace safety is monitored by the Commission de la santé et de la sécurité du travail (“CSST”). The regional CSST inspector has inspected the site on two occasions.

Mining regulations require on-going monitoring of effluents and restoration of the site upon completion of work. The Company has submitted a restoration plan and posted a Letter of credit in the amount of $385,046 representing approximately 80% of the estimated cost of the work.

The project area also falls within the traditional territory of the Waswanipi Cree First Nation, includes parts of two traplines and lies on Category III lands, established under the James Bay and Northern Quebec Agreement (JBNQA) of 1975. Noront has signed a memorandum of understanding under which the Company agrees to compensate the Cree for disturbance to the traplines, to make available business and employment opportunities and to enter into an Impact Benefits Agreement (IBA) prior to commencing production.

In the second quarter, the Company completed phase 1 work at the Windfall Lake. The results of this work have been compiled and Windfall Lake has been put on care and maintenance with all work at the site halted for the winter. Results from the Phase 1 underground exploration program were inconclusive and given the liquidity preservation strategy of the Company at this time no further exploration is merited. The Company continues to examine alternatives at Windfall and how it can best benefit Noront.

OPTION AGREEMENTS AND JOINT VENTURES

The following option agreements are on claims that are part of the Ring of Fire area located in the James Bay Lowlands, which include the site of the McFaulds Lake Project at McFaulds Lake. In the case of sold options, Noront is the Optionor and will be in receipt of money and shares as the counterparty to the agreement earns into the claims.

NOTE: In addition to the expenditure commitments indicated above, each optionee must make an annual payment to Noront in cash or shares, in order to continue with the option. In the first year, the optionee typically chooses whether to make the payment by way of shares or cash. In subsequent years, if the optionee elects to continue with the option, Noront chooses whether the payment to it is made in cash or shares.

OTHER AGREEMENTS

In addition, Noront is a party to certain other option agreements with arm's-length third parties, including with WSR Gold Inc. and Golden Valley Mines Ltd. in respect of the Golden Valley Property and with East West Resource Corporation and Temex Resources Corp. in respect of the Fishhook Property.

TEMEX RESOURCES CORP, NORONT RESOURCES LTD. AND BALTIC RESOURCES INC. ACQUISITION

On December 11, 2007, Noront, Baltic Resources Inc. (“Baltic”) and Temex Resources Corp. (“Temex") announced that they had completed a significant land acquisition campaign in the McFaulds Lake area in the James Bay Lowlands region of northeastern, Ontario. The new properties, located in the general area of Noront’s Double Eagle Ni-Cu-PGE discovery, were acquired by Temex on behalf of Temex, Noront and Baltic collectively the Staking Syndicate (the “Staking Syndicate”). A total of 120 mining claims comprising 1900 claim units totaling 76,000 acres (the “Claims”) were acquired on behalf of the Staking Syndicate.

Subsequent to the staking campaign, Temex, Noront and Baltic have entered into a binding Letter of Agreement whereby each party has agreed to grant the other two parties a 100% interest in one third of the total claims staked, with each of the parties retaining a 1% NSR royalty in the claims granted to the other parties. Therefore each party has a 100% interest in one third of the claim units and a 1% NSR royalty in two thirds of the claim units. Temex acted as operator of the Staking Syndicate.

NORONT RESOURCES LTD. AND FREEWEST RESOURCES CANADA INC., JOINT EXPLORATION AGREEMENT

On May 14, 2008 the two companies announced a joint exploration agreement to explore a key airborne geophysical anomaly, situated on the boundary of their adjacent properties approximately 8 km northeast of the Eagle One deposit in the McFaulds Lake area. The McFaulds Lake area exploration play is situated in the Sachigo greenstone belt, 300 kilometres north of Nakina in the James Bay Lowlands of northern Ontario.

Under the terms of the agreement Freewest will contribute 68 acres (27.5 hectares) comprising a small portion of their 100%-owned property. Noront in turn, will contribute 70 acres (28.3 hectares) of their adjoining land to collectively form the joint-venture property.

Freewest and Noront shall share exploration costs on a 50%-50% basis and will share any mineralization found on the Property on a similar basis. Freewest will act as the operator of the initial exploration program which is to be agreed upon by both parties.

FINANCIAL AND OTHER INSTRUMENTS

The Company is not involved in any hedging program, nor is it a party to any financial instruments that may have an impact on its financial position.

OUTSTANDING SHARE DATA

Noront shares trade on Tier 2 of the TSX-V under the symbol “NOT”. The Company is authorized to issue an unlimited number of common shares without par value. On October 31, 2008, there were 130,134,783 common shares issued and outstanding, 4.53 million stock options outstanding with a weighted average exercise price of $2.69 expiring between 2008 and 2013, and 4.3386 million warrants outstanding with a weighted average exercise price of $0.75 expiring in December 2008. As of the date of this MD&A, all of these warrants have expired unexercised.

As of December 29, 2008, the company had 153,722,283 shares outstanding, 6.93 million stock options outstanding with a weighted average exercise price of $2.04 expiring between 2008 and 2013 and no warrants outstanding.

STOCK BASED COMPENSATION

Under the provisions of the Company's 2007 Incentive Stock Option Plan, an aggregate maximum of 10% of the issued and outstanding common shares may be issued for granting of options to directors, senior officers, full time employees of the Company, affiliates or subsidiaries, or any consultants to the Company. The terms of the awards under the Plan are determined by the Board of Directors.

As at October 31, 2008, there were 4,530,000 options outstanding (4,705,000 at July 31, 2008) with an average exercise price of $2.69 ($2.55 at July 31, 2008) with a Black-Scholes value of $9.8 million ($9.6 million at July 31, 2008).

On August 1, 2008, the Company issued an aggregate of 125,000 stock options to employees and a consultants with an exercise price of $3.30, expiring in five years from the date of issue. A fair value of $362,500 was estimated using the Black-Scholes option pricing model.

On November 11, 2008, the Company granted an aggregate of 1,800,000 stock options to six directors of the Company and 600,000 stock options to the interim Co-CEOs of the Company with an exercise price per share of $0.80, expiring on November 10, 2013.

The 1,800,000 options granted to directors are exercisable, upon vesting, until November 10, 2013 and vest upon the later to occur of the following: (i) the weighted average trading price of Noront’s common shares for ten consecutive trading days must exceed 120% of the increase in the S&P/TSX Venture Composite Index from the date of grant, and (ii) the weighted average closing price of Noront’s common shares for ten consecutive trading days must exceed the exercise price of the options by 125%.

The 600,000 options granted to the interim co-CEOs vest at a rate of 50,000 options in aggregate each month, for twelve months for so long as the optionee occupies the office of interim co-CEO and are exercisable, to the extent vested, until November 10, 2013.

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