From SEDAR (apologies for the lack of formatting):

MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE FIRST QUARTER ENDED JULY 31, 2010
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Table of Contents
CAUTIONARY NOTE REGARDING FORWARD‐LOOKING STATEMENT ................................................................ 2
COMPANY OVERVIEW .................................................................................................................................... 3
OBJECTIVES AND STRATEGY ............................................................................................................................ 3
CAPABILITY TO DELIVER RESULTS .................................................................................................................... 5
SELECTED QUARTERLY FINANCIAL INFORMATION ........................................................................................... 5
SUMMARY OF CASH FLOWS ............................................................................................................................ 6
OPERATIONS REVIEW AND OUTLOOK .............................................................................................................. 7
Mcfaulds Lake Project .................................................................................................................................... 8
Eagle’s Nest ............................................................................................................................................ 8
Technical Studies .................................................................................................................................... 9
AT‐12 Nickel, Copper, PGE Discovery ..................................................................................................... 10
Blackbird Chromite Deposits .................................................................................................................. 10
Blackstone Chromite Discovery ............................................................................................................ 11
Probe Joint Venture ............................................................................................................................... 11
Golden Valley .............................................................................................................................................. 12
Garden Island, Quebec ................................................................................................................................. 12
Windfall Lake Project ................................................................................................................................... 12
SUMMARY OF QUARTERLY RESULTS ............................................................................................................. 13
LIQUIDITY AND CAPITAL RESOURCES ............................................................................................................. 13
CONTRACTUAL OBLIGATIONS ........................................................................................................................ 14
RELATED PARTY TRANSACTIONS ................................................................................................................... 15
RISKS AND UNCERTAINTIES ........................................................................................................................... 15
ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES ................................................................... 16
ADDITONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT SIGNIFICANT REVENUE ...................................... 17
OUTSTANDING SHARE INFORMATION ........................................................................................................... 18
ADDITIONAL INFORMATION ......................................................................................................................... 18
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The following is Management’s Discussion and Analysis (“MD&A”) of the consolidated financial
condition and results of operations of Noront Resources Ltd. (“Noront” or the “Company”) for the
quarter ended July 31, 2010, which have been prepared in accordance with Canadian Generally
Accepted Accounting Principles. This discussion should be read in conjunction with the consolidated
financial statements and the notes thereto. Additional Company information, including the Company’s
most recent Financial Statements can be accessed through the System for Electronic Document Analysis
and Retrieval (“SEDAR”) website at www.sedar.com and the Company’s website at
www.norontresources.com. Information contained on the Company’s website is not incorporated
herein and does not form part of this MD&A.
All financial measures are expressed in Canadian dollars unless otherwise indicated.
Unless otherwise indicated, a Qualified Person as defined by National Instrument 43‐101, has reviewed
and is responsible for the technical information contained in this MD&A.
This information is provided as at September 14, 2010.
CAUTIONARY NOTE REGARDING FORWARD‐LOOKING STATEMENT
This MD&A includes certain “forward‐looking statements” within the meaning of applicable Canadian
securities legislation. All statements, other than statements of historical facts, included in this MD&A
that address activities, events or developments that the Company expects or anticipates will or may
occur in the future, including such things as future business strategy, competitive strengths, goals,
expansion and growth of the Company’s businesses, operations, plans and other such matters are
forward‐looking statements.
When used in this MD&A, the words “estimate”, “plan”, “anticipate”, “expect”, “intend”, “believe” and
similar expressions are intended to identify forward‐looking statements. These statements involve
known and unknown risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially different from any future results,
performance or achievements expressed or implied by such forward‐looking statements.
Examples of such forward looking statements include statements regarding financial results and
expectations for fiscal year 2011, such as, but not limited to, availability of financing, interpretation of
drill results, the geology, grade and continuity of mineral deposits and conclusions of economic
evaluations, metal prices, demand for metals, currency exchange rates, cash operating margins,
expenditures on property, plant and equipment, increases and decreases in exploration activity, changes
in project parameters, joint venture operations, resources and anticipated grades and recovery rates
and are or may be based on assumptions and/or estimates related to future economic, market and
other factors and conditions.
Although the Company has attempted to identify important factors that could cause actual results to
differ materially, there may be other factors that cause results not to be as anticipated, estimated or
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intended. There can be no assurance that such statements will prove to be accurate as actual results and
future events could differ materially from those reliant on forward‐looking statements. Factors that
could cause actual results, developments or events to differ materially from those anticipated include,
among others, the factors described or referred to elsewhere herein, and include unanticipated and/or
unusual events. Many of such factors are beyond Noront’s ability to control or predict.
Readers of this MD&A are cautioned not to put undue reliance on forward‐looking statements due to
their inherent uncertainty. Noront disclaims any intent or obligation to update any forward‐looking
statements, whether as a result of new information, future events or results or otherwise. These
forward looking statements should not be relied upon as representing the Company’s views as of any
date subsequent to the date of this MD&A.
The risk factors which may impact the Company, its business, affairs and prospects are described in
greater detail in the Company’s most recent Annual Information Form filed on November 9, 2009 with
Canadian securities regulators and available via SEDAR.
COMPANY OVERVIEW
Noront is engaged in the acquisition, exploration and development of properties prospective in base and
precious metals, including: nickel, copper, platinum group element metals (“PGE’s”), chromite, precious
metals and vanadium. The Company’s focus is in the exploration and development of its properties at
Mcfaulds Lake (the “Mcfaulds Lake Project”), in the James Bay Lowlands, Ontario within a geological
feature (intrusion) referred to as the Ring of Fire (“ROF”). The Company owns a 100% interest in three
nickel‐copper‐platinum group metal discoveries known as “Eagle’s Nest”, “Eagle Two”, and “AT‐12”; a
chromite discovery known as “Blackbird”; a vanadium discovery known as “Thunderbird”; and a gold
zone known as the “Triple J Gold Zone.”
Noront controls mineral claims, held directly or indirectly, through joint ventures, optioned claims and
earn‐in programs of approximately 115,000 hectares (285,000 acres) in the Ring of Fire area making
Noront the largest claim holder in the region.
OBJECTIVES AND STRATEGY
Eagle’s Nest
During the quarter, the Company focused on infill drilling at its Eagle’s Nest deposit. The results suggest
the program has successfully increased the confidence level of the resource as the majority of the infill
holes returned average grades consistently higher than the previously released inferred resource.
The infill drilling also allowed for the testing of theorized structural controls that the Company believes
may allow for improved predictive accuracy both within the Eagle’s Nest deposit and proximal to it.
Infill drilling was completed at the end of August 2010.
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Deep drilling with the objective of increasing the mineral resource at Eagle’s Nest is on‐going with two
drill rigs. The program has encountered mechanical and technical delays including excessive hole
deviation, engine and electrical malfunctions with the newly fabricated drills, lost holes as a result of
rods being stuck in the hole and poor ground conditions that prevented certain holes from reaching
their target depth. The Company remains committed to testing the continuation of the Eagle’s Nest
deposit at depth and two holes are currently underway with that objective.
Regional Exploration
The Company’s regional exploration, directed towards identifying new nickel, copper and platinum
group element mineralization proximal to Eagle’s Nest, commenced in late August 2010. Currently, two
drills are assigned to this program.
The Company has identified multiple targets which have been identified by down‐hole and surface
geophysical surveys, geological mapping and mineralization trends.
During the quarter, a regional drill at the AT‐1 target area, located between the Eagle’s Nest and
Blackbird Chromite deposits, intersected wide intervals of high quality chrome mineralization with
grades in excess of 40% Cr2O3 and chrome to iron ratios greater than 2:1. The location of this chromite
mineralization would allow this chromite to be accessed from the underground infrastructure planned
for the development of the Eagle’s Nest deposit.
Eagle’s Nest Technical Studies
During the quarter, the Company initiated several preliminary studies on transportation, environment,
mining and processing on the Eagle’s Nest deposit to develop preliminary cost estimates on which to
base further production decisions.
Subsequent to the end of the quarter, the Company released the results of an updated NI 43‐101
Preliminary Assessment (“PA”) for a stand‐alone nickel, copper, platinum group metal (“Ni‐Cu‐PGM”)
mine and mill complex exploiting the Company’s 100% owned Eagle’s Nest deposit (“Eagle’s Nest
Project”), McFaulds Lake, James Bay Lowlands, Ontario. The PA reported a net present value (“NPV”) at
a 6% discount factor of $540 million for the stand‐alone Eagle’s Nest Project.
First Nations
During the quarter, the Company entered into an Exploration Agreement with the Webequie First
Nations (“WFN”) which sets out protocols for conducting exploration activities on traditional lands of
the WFN and reinforces the Company’s intention to enter into a comprehensive Impact Benefit
Agreement in the future.
The Company continues to work with the local communities to identify employment, business and
training opportunities. Subsequent to the quarter, the Company partnered with Ontario’s Ministry of
Aboriginal Affairs and Ministry of Northern Development, Mines & Forestry to sponsor the PDAC Mining
Matters Aboriginal Youth Outreach Summer Camp in the First Nation communities of Webequie and
Marten Falls.
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CAPABILITY TO DELIVER RESULTS
The Company has sufficient financial resources to complete its planned exploration program and
development activities for the remainder of fiscal 2011. The Company will need to raise additional
funds to support the Company’s plans beyond fiscal 2011.
On May 12, 2010 the Company closed a private placement financing of flow‐through shares raising gross
proceeds of $13.9 million. Proceeds raised from the issuance of flow‐through shares will be spent on
eligible exploration expenditures on the Company’s Mcfaulds Lake Project.
At July 31, 2010, the Company had cash and cash equivalents of $24.8 million and working capital of
$21.9 million. This compares to cash and cash equivalents of $21.1 million and working capital of $24.1
million at April 30, 2010.
SELECTED QUARTERLY FINANCIAL INFORMATION
The following financial data is derived from the Company’s financial statements for the three months
ended July 31, 2010 and 2009:
(expressed in $ thousands except per share amounts)
Three months ended July 31 (Unaudited) 2010 2009
Income 46 51
Expenses 2,067 1,190
Severence 31 1,496
Non‐core property expense 13 90
Write‐down of marketable securities 2,707 ‐
Future income (tax) recovery 179 ‐
Net income/(loss) (4,593) (2,635)
Net income(loss) per share – basic and diluted (1) (0.03) (0.02)
Cash flow from/(used in) operations (1,478) (2,363)
Cash, cash equivalents and restricted cash 25,201 9,299
Working Capital 21,949 15,434
Assets 116,748 77,269
Long‐term Liabilities 2,284 150
(1) Fully diluted weighted average common shares outstanding, used in the calculation of fully dilutive net loss per share, are not reflective of
the outstanding stock options and warrants at that time as their exercise would be anti‐dilutive in the net loss per share calculation
Three Months Ended July 31, 2010 Compared to Three Months Ended July 31, 2009
Income is comprised of interest earned on deposits and management fees. The Company earned $46
thousand in interest income and $NIL in management fees during the period compared to $20 thousand
in interest income and $31 thousand in management fees during the prior year comparable period. The
increase in interest income is due to a higher average cash balance in the current period compared to
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the prior year comparable period. The decrease in management fee income is due to less activity in joint
ventures where the Company was the operator.
Expenses are comprised of office and general, consulting and professional fees, shareholder
information, amortization, and stock based compensation. Stock based compensation expense
increased from $158 thousand in the prior year comparable period to $653 thousand in the current
period. Adjusting for stock based compensation, expenses increased by $0.5 million. The increase in
expenses from the prior year comparable period is primarily related to:
 A $0.5 million increase in office and general expenses due to an $111 thousand increase in travel
related to the Mcfaulds Lake project, $88 thousand increase in directors fees, $42 thousand increase
in donations primarily for First Nations initiatives, $145 thousand increase in salaries and benefits,
$28 thousand increase in information technology related costs, and $104 thousand increase in other
office costs. Amortization expense increased by $15 thousand for the period due to the acquisition
of capital assets.
 The above increase in expenses was offset by a $57 thousand decrease in marketing costs and filing
and registration fees.
Non‐Recurring Expenses
The Company paid severance of $31 thousand in the current period, compared to $1.5 million (including
stock based compensation of $0.4 million) in the comparable prior year period, to certain former
members of management pursuant to their employment contracts.
Subsequent to the quarter end, the Company sold marketable securities which were previously written
down and recognized in Other Comprehensive Income as a temporary decline in value. The sale in
securities triggered a permanent decline in value of the securities and the loss of $2.7 million previously
recognized in Other Comprehensive Income was recognized in the Statement of Operations in the
current period.
SUMMARY OF CASH FLOWS
(expressed in $ thousands)
Three months ended July 31 2010 2009
Cash provided by (used in) operating activities (1,478) (2,363)
Cash provided by (used in) investing activities (7,922) (7,815)
Cash provided by (used in) financing activities 13,091 (99)
3,691 (10,278)
Operating Activities
For the period ended July 31, 2010, the Company had negative $1.5 million in cash flow from operations
compared to negative $2.4 million in cash flow from operations in the prior year comparable period.
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The decrease in cash outflows from operating activities is primarily related to the severance payments
made in the prior year comparable period of $1.1 million.
Investing Activities
For the period ended July 31, 2010, cash used for investing activities was spent on the Company’s
projects in the Mcfaulds Lake region and for the acquisition of capital assets, which is consistent with
the prior year comparable period.
Financing Activities
For the period ended July 31, 2010, cash flow from financing was $13.1 million compared to cash used
of $99 thousand in the prior year comparable period. The cash provided from financing is the result of
raising $13.9 million (net of the costs of issuance) in a flow‐through equity issuance.
OPERATIONS REVIEW AND OUTLOOK
From May 1, 2010 to July 31, 2010, $11.2 million was spent on exploration in the “Ring of Fire” and a
total of 18,265 metres were drilled.
(expressed in $ thousands) July 31 April 30
Deferred exploration expenditures as at 2010 2010
Fuel inventory $ 2,720 $ 4,101
Deferred exploration expenditures 86,120 74,843
Total $ 88,840 $ 78,944
(expressed in $ thousands) July 31 July 31
Exploration Expenditures for the three months ended 2010 2009
Exploration Projects
McFaulds Lake Project ‐ "Ring of Fire", James Bay Lowlands,
Northeastern Ontaro
$ 11,221 $ 7,604
Joint Ventures 56 43
Total $ 11,277 $ 7,647
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Mcfaulds Lake Project (Ring of Fire, James Bay Lowlands, Ontario)
(expressed in $ thousands) July 31 July 31
Exploration Expenditures for the three months ended 2010 2009
Eagles' Nest
Drilling $ 6,682 $ 1,091
Geophysics 14 188
Capital 277 ‐
6,973 1,279
Blackbird
Geophysics and Other 105 3,206
Regional
Drilling 1,803 2,856
Geophysics and Other 793 263
2,596 3,119
Technical Studies
Metallurgical/Geotechnical Drilling 184 ‐
Consulting 1,363 ‐
1,547 ‐
Total $ 11,221 $ 7,604
Eagle’s Nest Deposit
During the first quarter of fiscal 2011, the infill drilling program was completed. The results confirmed
grades in line or better than the Company’s geological model and demonstrated the continuity of the
Eagle’s Nest deposit including the massive sulphide mineralization which has now been traced from
surface to 1,200 metres.
On July 20, the Company released the following results from the infill drill program:
TO INT. Ni Cu Pt Pd Au
(m) (m) % % g/t g/t g/t
Eagle’s Nest
NOT‐10‐079
NOT‐10‐079‐W1 1029.2 1117.5 88.3 1.35 0.61 0.88 3.12 0.21
Including 1043 1097.1 54.1 1.71 0.75 0.99 3.75 0.24
also 1051.4 1051.6 0.2 2.3 0.5 2.44 5.82 35.9
NOT‐10‐080
NOT‐10‐082
NOT‐10‐083 564.9 652.3 87.4 1.93 0.82 1.8 3.17 0.12
Including 599 606.5 7.5 4.83 1.85 11.14 6.69 0.13
Including Sample 601.3 601.9 0.6 1.32 2.79 31.6 8.04 0.15
Also including 668.7 668.9 0.2 3.45 0.37 8.5 40.8 0.69
NOT‐10‐084 660.4 749.6 89.2 1.75 0.87 0.8 3.29 0.2
Including 674.6 679.7 5.2 5.21 2.54 0.81 11.1 0.55
NOT‐10‐087A 534.9 624.2 89.3 2.49 0.99 0.85 3.97 0.2
Including 604 617.8 13.8 6.97 1.03 0.7 7.72 0.09
No significant results
HOLE ID FROM (m)
No significant results
No significant results
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The infill drill results at Eagle’s Nest strongly suggest that the average grade of the inferred resource
area has been increased and a significant portion of the former inferred resource will convert to an
indicated resource. All of the holes testing the previously defined inferred resource area have
intersected higher grade nickel, copper, platinum and palladium than the average grades of the inferred
resource estimate.
On August 11, 2010, the Company released the latest infill and deep drill results at Eagle’s Nest:
TO NI CU Pt Pd Au
(m) % % g/t g/t g/t
Eagle’s Nest
NOT‐09‐049 EXT
NOT‐09‐049W1 791.1 979.5 188.4 1.67 1.3 1.13 4.24 0.22
NOT‐09‐079W2
NOT‐10‐085
NOT‐10‐086
NOT‐10‐088 770.5 776.5 6 0.82 0.87 0.32 0.17 0.07
NOT‐10‐089 518.5 594.7 76.2 2.34 1.07 0.92 3.26 0.21
Including 578.1 583.4 5.3 7.61 0.84 0.07 6.57 0.06
NOT‐10‐090 771.5 810 38.5 1.66 0.59 0.85 4.03 0.14
No significant results
HOLE ID FROM (m) INT. (m)
Abandoned hole – excessive deviation
Abandoned hole
Abandoned hole – driller error, rods lost in hole
Technical Studies
In the fourth quarter of fiscal 2010, the Company engaged Micon International as the lead consultant of
an engineering team that includes SNC‐Lavalin, Golder Associates, Cementation Ltd. (“Cementation”),
Penguin Automated Systems Inc. (“Penguin”), Knight Piesold and Wynterose Consulting. The objective of
the preliminary technical studies is to determine the value of the deposits discovered to date and
mitigate identified technical challenges in the development of the Eagle’s Nest deposit.
Subsequent to the quarter end the Company released the results of the PA for the Eagle’s Nest Project.
PA Economic Highlights Include:
The stand‐alone economics of the Eagle’s Nest Ni‐Cu‐PGM deposit, based on the Assumed Metal Prices1
are:
 after tax NPV at a 6.0% discount factor of approximately $540 million;
 after tax IRR exceeding 20%;
 at current spot metal prices, the after tax MPV increases by approximately 250 million and the IRR
increases by an additional 5%
 initial capital investment estimated to be between $600‐ $625 million;
 sustaining capital estimated to be between $270‐$300 million;
 operating costs estimated to be between $120‐$130 per tonne;
 project life of 11 years;
 capital expenditure payback between 3 and 4 years; and
 average operating cost estimate of approximately $3.00 per pound equivalent nickel based on the
Assumed Metal Prices 1
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Notes:
(1) The PA is based on metal prices derived from the Three Year Trailing Averages as follows:
Nickel $9.08 per pound
Copper $2.92 per pound
Platinum $1,427 per ounce
Palladium $345 per ounce
Gold $944 per ounce
The PA assumes a Canadian to US foreign exchange rate of 1.077.
AT‐12 Nickel, Copper, PGE Discovery
At AT‐12, the Company continued to encounter broad intersections (up to 145 metres) of disseminated
nickel‐copper sulphide mineralization within host rocks identical to those hosting the Eagle’s Nest
deposit. Shallow drilling continues to intersect thick intervals of favourable ultramafic host rocks
containing low grade Ni‐Cu‐PGE mineralization. The Company geologists are optimistic that the
mineralization at AT‐12 has the potential to coalesce into a larger volume of net‐textured or massive Ni‐
Cu Sulphide mineralization if a structural embayment in the footwall can be located.
A number of favourable targets have been identified for drill testing and the Company continues to
update its regional targets based on new data originating from down hole surveys.
The following table summarizes the significant results of the seven holes reported at AT‐12:
TO INT. Ni Cu Pt Pd Au
(m) (m) % % g/t g/t g/t
AT12
NOT‐10‐2G38
NOT‐10‐2G39
NOT‐10‐2G40
NOT‐10‐2G41 81.6 82.9 1.3 4.85 1.04 0.56 3.75 0.15
and 104.1 250.6 146.5 0.24 0.04 0.08 0.21 0.01
NOT‐10‐2G42 201.3 214.2 12.9 0.29 0.05 0.08 0.24 0.02
and 314.1 338 23.9 0.33 0.12 0.12 0.4 0.03
NOT‐10‐2G43 351.9 381 29.1 0.28 0.09 0.15 0.44 0.04
NOT‐10‐2G44 352.5 375 22.5 0.31 0.14 0.16 0.44 0.04
NOT‐10‐2G45 85.4 95 9.6 0.23 0.08 0.12 0.5 0.05
And 202.5 217.5 15 0.23 0.03 0.09 0.32 0.03
No significant results
No significant results
HOLE ID FROM
(m)
No significant results
The exploration program at AT‐12 has been put on hold until the winter season due to the demanding
ground conditions.
Blackbird Chromite Deposits
Two zones of massive‐disseminated chromium (Cr2O3) mineralization were identified approximately 2
kilometres southeast of Eagle’s Nest within the main ultramafic sill defining the Ring of Fire. These
zones, known as Blackbird One and Blackbird Two, have been drill traced from surface on roughly 50
metre centers. The deposits remain open at depth. In certain zones, the grade of the mineralization is in
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excess of 40% Cr203 with chromium to Iron (“Cr:Fe”) ratios as high as 2.2 enabling it to process into high
grade ferrochrome.
The Blackbird resource is a classic stratiform chromite deposit with original chromite layers broken up
into segments 300 to 400 metres in length. The chromite layers are sub‐vertical and extend from
surface to beyond 300 metres and are open at depth. The deposit geometry is very well suited for a low
impact, underground mine.
Following the completion of an NI‐43‐101 resource estimate dated December 31, 2009, no work has
been performed on the Blackbird Chromite Deposits.
Blackstone Chromite Discovery
During the quarter, the first of the Company’s regional targets AT‐1 intersected significant intervals of
high grade chromite mineralization almost equidistant between the Eagle’s Nest nickel‐copper sulphide
resource and the Blackbird Chromite resource. At this stage, the Blackstone chromite zone is open in all
directions and the thickness is not known. The airborne anomaly that was targeted is not explained by
the presence of chromite and further work is planned at a later date to evaluate this discovery.
The following table summarizes the Blackstone results:
TO Cr2O3
(m) %
Blackstone
NOT‐10‐1G184
NOT‐10‐1G184A 604.4 625.7 21.3 42.9 2.15:1
649 657.9 8.9 34.9 1.93:1
664.6 670 5.4 43.7 2.12:1
NOT‐10‐1G185
No significant results
No significant results
HOLE ID FROM
(m)
INT. (m) Cr:Fe
Probe Joint Venture
On May 20, 2009, the Company entered into a Joint Venture Agreement with Probe Mines Limited
(“Probe”) covering 87 claims approximately 8 kilometres northeast of the Eagle’s Nest deposit. Under
the terms of the joint venture the Company has been granted a 50% interest in the property and is
responsible for its proportionate share of expenditures. Probe is the operator and the exploration
program and budget is required to be approved by the Company.
The operator has completed phase two drilling on the Black Creek Chromite occurrence. A total of 1,706
metres in 11 holes was completed. Assays have returned chromite mineralization which has now been
intersected over a distance of 225 m to a depth of 150 m to 175 m.
In August 2010, the Company entered into an agreement with Probe to dissolve the joint venture
agreement with Probe in the Mcfaulds Lake Property, “Ring of Fire”, and James Bay Lowlands and to
allocate the claims that were subject to the joint venture between the companies. As a result of the
agreement the Company’s interest in the Black Creek chromite deposit and one other claim along the
chromite trend reverted to Probe and the claims proximal to the Company’s Eagle’s Nest nickel, copper
sulphide deposit and Thunderbird vanadium discovery reverted to the Company.
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Golden Valley
Golden Valley is a joint venture located in the northern portion of the Ring of Fire and operated by
White Pine Resources Ltd. (“White Pine”). The initial drill program to assess geophysical targets north
of Oval Lake commenced during fiscal 2009. The large property surrounds a copper‐zinc discovery by
Metalex Ventures Ltd.; a total of fourteen holes were completed at the joint venture in the fiscal 2009
year yielding two copper‐zinc anomalies. As per the terms of the option agreement, White Pine and
Noront are earning a 35% interest each in the property from Golden Valley Minerals Ltd.
The operator completed an Airborne EM survey (ZTEM) to detect deeper anomalies around the known
mineralization and completed 1,600 metres of drilling in December 2009.
Garden Island, Quebec
The Garden Island property is comprised of 568 mining claims totalling 23,763 hectares, most of which
are in Pascalis, Manneville and Senneville townships, which lie along a northwest‐southwest trending
Abitibi volcanic greenstone belt.
The Company has earned a 50% interest in the Garden Island gold, base‐metal property as a result of an
amended option agreement (July 10, 2008) entered into with a private arms length Quebec company,
TSR Resources Inc. (“TSR”).
The operator, TSR is expected to submit a further exploration program later in fiscal 2011.
Windfall Lake Project, Urban Township, Quebec
On July 20, 2009, the Company entered into a property option agreement with Eagle Hill Exploration
Corporation (“Eagle Hill”) pursuant to which Eagle Hill may earn up to a 100% interest subject to a 2%
net smelter royalty in the Company’s 100% owned Windfall Lake Property, located in Quebec, Canada.
Eagle Hill satisfied the financing condition during the year and as such made the first property of
payment of $400 thousand towards earning a 10% interest in the property.
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SUMMARY OF QUARTERLY RESULTS
The following information is derived from the Company’s quarterly consolidated financial statements for
the past eight quarters:
(expressed in thousands except per share amounts) 2011 2010 2010 2010 2010 2009 2009 2009
(quarterly results are unaudited) Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2
Income 46 30 30 93 51 426 326 224
Expenses 2,067 2,583 3,245 2,888 1,100 8,418 2,031 3,019
Write‐down of mining properties and
deferred exploration
‐ ‐ 1,014 ‐ ‐ 15,803 ‐ 95
Loss on sale/writedown of marketable
securities
2,707 16 403 ‐ ‐ 350 ‐ ‐
Non‐core property expense/(recovery) 13 92 129 (262) 90 ‐
Severence 31 ‐ ‐ ‐ 1,496 ‐ 860 852
Acquisition costs ‐ 42 863 840
Future income tax (expense) recovery 179 3,983 ‐ ‐ ‐ 5,472 ‐ ‐
Net income/(loss) (4,593) 1,280 (5,624) (3,373) (2,635) (11,686) (2,565) (3,742)
Net income(loss) per share – basic and
diluted (1) (0.03) 0.01 (0.03) (0.02) (0.02) (0.08) (0.02) (0.03)
Cash flow from/(used in) operations (1,478) (830) (2,528) 731 (2,363) 1,712 (5,982) (1,255)
Cash, cash equivalents and restricted cash 25,201 21,510 19,875 26,061 9,299 19,674 30,488 24,632
Working Capital 21,949 19,781 23,768 29,760 15,434 24,798 33,549 20,327
Assets 116,748 103,211 98,327 99,666 77,269 79,867 98,002 91,047
Long‐term Liabilities 2,284 2,462 156 153 150 147 514 505
(1) Fully diluted weighted average common shares outstanding, used in the calculation of fully dilutive net loss per share, are not reflective of
the outstanding stock options and warrants at that time as their exercise would be anti‐dilutive in the net loss per share calculation
Interest income varies quarterly based on the average cash balance on hand over the quarter and the
corresponding yield earned on the Company’s deposits. The quarterly variation in expenses is mainly
attributable to stock option expense which is recognized at the time of grant in accordance with the
vesting provisions and the timing of the Company’s marketing activities. Expenses excluding stock
option expense have decreased by $0.3 million from the previous quarter due to a decrease in office
and general expenses of $49 thousand, decrease in professional fees of $84 thousand and a decrease in
shareholder information expenses of $180 thousand.
LIQUIDITY AND CAPITAL RESOURCES
As at July 31, 2010 the Company had working capital of $21.9 million and a cash position (cash,
equivalents and restricted cash) of $25.2 million compared to $20 million and $21.5 million respectively
as at April 30, 2010. The increase in cash and cash equivalents balance at year end was due to the
financing completed during the current quarter.
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The Company completed a $13.9 million flow‐through financing on May 12, 2010. As a result of the
above the Company continues to have a strong cash position. Funds raised from the issuance of flowthrough
shares will or have been spent on eligible exploration expenditures on the Company’s Mcfaulds
Lake Project. Surplus funds are invested in a blend of high interest savings accounts in order to provide
liquidity while minimizing risk.
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. The temporary taxable differences
created by the renunciation have reduced 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.
The Company anticipates that it will be able to raise sufficient capital to further explore and develop its
properties and projects in the coming year. However, 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.
CONTRACTUAL OBLIGATIONS
At July 31, 2010 the company has a commitment to spend approximately $7.9 million on Canadian
exploration activity by December 31, 2011. This represents the remainder of the proceeds of the $13.9
million flow through share financing which occurred on May 12, 2010.
Other contractual obligations for the ensuing five‐year period can be summarized as follows:
(expressed in $ thousands)
Contractual Oligations Total
Less than 1
year 1 ‐3 years 4 ‐ 5 years
After
5 years
Operating Leases 632 261 371 ‐ ‐
Other Long Term Obligations 827 575 76 50 126
Total Contractual Obligations 1,459 836 447 50 126
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Operating lease obligations represent future minimum annual rentals under non‐cancellable operating
leases for Noront office space and office equipment.
Other Long Term Obligations represent commitments related to a site remediation plan established in
accordance with the requirements of the Quebec Ministry of Natural Resources for Windfall Lake.
RELATED PARTY TRANSACTIONS
During the three months ended July 31, 2010, $NIL (period ending July 31, 2009 ‐ $44,000) was payable
for management services to a company controlled by a director and former Co‐CEO of the Company.
Included in accounts payable as at July 31, 2010 is $NIL (April 30, 2010 ‐ $NIL).
During the three months ended July 31, 2010, $NIL (period ending July 31, 2009 ‐ $14,000) was paid or
payable for management services to a company controlled by a director and former Co‐CEO of the
Company. Included in accounts payable as at July 31, 2010 is $NIL (April 30, 2010 ‐ $NIL) owed with
respect to these services and ancillary expense reimbursements.
During the three months ended July 31, 2010, $NIL (period ending July 31, 2009 ‐ $32,594) was paid to a
company controlled by the VP Corporate Communications of the Company for office equipment,
services and other assets. Included in accounts payable as at July 31, 2010 is $NIL (April 30, 2009 ‐ $NIL)
owed with respect to these services.
During the three months ended July 31, 2010, the Company engaged Cementation whom who has subcontracted
Penguin; both Cementation and Penguin are working under the direction of Micon
International, Lead Consultant for certain technical studies. The Company’s Chief Operating Officer has
a 38.5% ownership interest in Penguin. Professional fees paid to Penguin for the three month period
ended July 31, 2010 were $108,088 (period ended July 31, 2009 ‐ $NIL) and the amount due to Penguin
as at July 31, 2010 is $76,606 (April 30, 2010 ‐ $NIL).
The above noted transactions are in the normal course of business and are measured at the exchange
amount, as agreed to by the parties.
RISKS AND UNCERTAINTIES
Noront’s business of exploring mineral resources involves a variety of operational, financial and
regulatory risks that are typical in the natural resource industry. These risks have been detailed in the
Company’s MD&A for the year ended April 30, 2010 and in the Company’s Annual Information Form
dated September 10, 2010. At September 14, 2010 the Company has not identified any material
changes to the risk factors affecting our business and our approach to managing those risks.
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The Company attempts to mitigate these risks and minimize their effect on its financial performance,
but there is no guarantee that the Company will be profitable in the future, and an investment in Noront
common shares should be considered speculative.
ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES
Certain accounting policies are critical to understanding the results of operations and financial
conditions. Some of these policies require certain judgments and estimates that are uncertain. Changes
to these estimates may result in material changes to the Company’s results of operations and financial
condition. These interim and unaudited consolidated financial statements follow the same accounting
principles and methods of application as those disclosed in Notes 1 and 2 to the April 30, 2010 Audited
Consolidated Financial Statements, except for as noted below.
Future Accounting Changes
International Financial Reporting Standards (“IFRS”)
In February 2008, the CICA announced that Canadian generally accepted accounting principles for profit
oriented enterprises will be replaced by IFRS for fiscal years beginning on or after January 1, 2011.
Companies will be required to provide IFRS comparative information for the previous fiscal year.
Accordingly, the conversion from Canadian GAAP to IFRS will be applicable to the Company's reporting
for the first quarter of 2012 for which the current and comparative information will be prepared under
IFRS. The Company is required to apply all of those IFRS standards which are effective for fiscal year
ending April 30, 2012 and apply them to its opening May 1, 2010 balance sheet.
The Company has completed the initial diagnostic phase and component evaluations and will continue
to update its Management Discussion & Analysis (MD&A) disclosures throughout 2010 to reflect specific
actions taken to facilitate changeover to IFRS effective May 1, 2011.
The Company has commenced the development of an IFRS implementation strategy to prepare for this
transition, and is currently analyzing the key areas where changes to current accounting policies may be
required. Analysis will be required for all current accounting policies, however the initial key areas of
assessment include:
 Deferred exploration expenditures,
 Property, plant and equipment,
 Impairment of assets
 Provisions, including remediation provisions,
 Stock options (share‐based payments)
 Flow‐through shares
 First‐time adoption of International Financial Reporting Standards (IFRS 1)
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As a detailed analyses of the each of the key areas is commenced, other elements of the Company’s IFRS
implementation plan will be addressed including the implication of changes to accounting policies,
processes or financial statement note disclosures on information technology, internal controls,
contractual arrangements and employee training.
The table below summarizes the expected timing of activities related to the Company’s transition to
IFRS.
Initial analysis of key areas for which changes to
accounting policies may be required.
Complete
Detailed analysis of all relevant IFRS
requirements and identification of areas
requiring accounting policy changes or those
with accounting policy alternatives.
Complete
Assessment of first‐time adoption
(IFRS 1) requirements and alternatives.
Complete
Final determination of changes to accounting
policies and choices to be made with respect to
first‐time adoption alternatives
Q1 fiscal 2011 – Q2 fiscal 2011
Resolution of the accounting policy change
implications on information technology,
internal controls and contractual arrangements
Q1 fiscal 2011 – Q2 fiscal 2011
Management and employee education and
training
Throughout the transition process
Quantification of the Financial Statement
impact of changes in accounting policies
Throughout fiscal 2011
ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT SIGNIFICANT REVENUE
Additional disclosure concerning the Company’s general and administrative expenses and resource
property costs is available in the Company’s consolidated financials for the year ended April 30, 2010.
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OUTSTANDING SHARE INFORMATION
As at July 31, 2010 As at Septermber 14, 2010
Authorized Unlimited Unlimited
Issued and outstanding shares 175,633,642 176,058,641
Options outstanding 10,720,001 9,881,667
Warrants outstanding 1,102,060 1,102,060
Fully diluted 1 87,455,703 187,042,368
ADDITIONAL INFORMATION
Additional information relating to Noront, including Noront’s annual information form dated September
10, 2010 for the year ended April 30, 2010, is available on the Internet at the SEDAR website
www.sedar.com , and is available on the Company’s website located at www.norontresources.com.