CORPORATE DEVELOPMENTS

The Company was very busy in the field during Q3’08. Its activities were focused on the drilling of the two properties of Wabassi and Max. Most of the work was done on the Max property pursuant to the Option and Joint Venture Agreement signed with East West Resources on June 23, 2008. The work is described in greater detail in the Principal Mineral Properties section of this document.

During the quarter there were two significant capital transactions. The first occurred on July 23, 2008, the issuance of 300,000 shares to East West Resources pursuant to the aforementioned option agreement on the Max property, with an ascribed value of $0.53 per share for a total value of $159,000.

The second transaction, on July 31, 2008, was the closing of a private placement. A total of 583,333 units were issued at $0.60 per unit with each unit consisting of one common share and one half of one purchase warrant with an exercise price of $0.85 and expiring 18 months from the date of issue. Total proceeds for the sale of the units were $350,000.

The Company appointed Mr. Peter Walker to the Board of Directors on July 21, 2008. Mr. Walker brings a wealth of mineral exploration and public company experience to the Board. Upon his appointment, he was granted 150,000 share purchase options. The options are fully vested, have a strike price of $0.59 and expire five years after the date of issuance.

At the beginning of the quarter, the Company moved its administrative offices to another location within Ottawa, ON.

Highbank Lake property

Infill sampling on approximately 400 metres of core from DDH-07HB-01 and 05 was also completed early in 2008. Independent consultants have confirmed that the rocks intersected in these drill-holes are likely extremely proximal to where the main PGE-bearing reef should be located and due to the very inconspicuous nature of platinum mineralization all the core near the Critical Zone should be sampled. The results from the infill sampling found no significant PGE mineralization but did confirm that the platinum anomalies found in 07HB-05 and 07-HB01 were ‘reef style’.

Subsequent to the third quarter ended September 30, 2008, a helicopter-borne VTEM survey has been completed over a portion of the Highbank Lake property and processing of the data is underway. The survey was conducted by Geotech Airborne Ltd using different technology than what was available in 2005 when the first survey was flown. In particular, the Geotech survey can “see” to greater depths. The survey was completed over the area interpreted to cover the transition from the main Zone to the Critical Zone. In layered intrusions such as the Bushveld, the main PGE-bearing reefs are located within a few hundred meters of this transition.

Since the Company’s acquisition of the property, systematic exploration by the Company has provided encouraging results at every exploration phase designed to prove the possible existence of a PGE deposit hosted in a layered intrusion. The interpretation of the current available data suggests that the geological processes that are a pre-requisite for the formation of PGE-bearing reefs have occurred within the intrusion at Highbank Lake.

EASTBANK

In February and March 2008 the Company completed a deep overburden sampling program at Eastbank. Six auger holes were drilled at strategic locations in the north-west portion of the intrusion where management believes there could be a “window” through the Paleozoic to the intrusion. A total of 18 samples were collected from the six holes at various depths. The depth of the holes ranged from 8 to 30 meters. The samples returned various minerals and fragments that could be indicative of the presence of a layered mafic/ultramafic intrusion. These include chromite, chrome-bearing clinopyroxene, orthopyroxene, olivine, nickel-cobalt bearing loellingite and fragments of gabbro. While the overall number of chromite grains are low (compared to some samples at Highbank) the samples are much smaller than typically taken and are dominantly composed of clay (till). Hence, the grains count should be normalized to a standard weight for a more meaningful understanding. Olivine and nickel-cobalt loellingite are readily weathered and hence the presence in the till sample suggests proximity to source.

Microprobe analysis on the chromite grains recovered show some of these grains to have high chrome content and exceptionally high chrome to iron ratios. Chrome grades range from 24.1 to 36 .6% Cr (35 to 53.6% Cr2O3) with Cr:Fe ratios ranging from 1.2:1 to 3.6:1.

These grades and ratios are not only indicative of chromite sourced from mafic-ultramafic layered intrusions but the very high Cr:Fe ratios suggest some of the chromite is coming from reefs in the very lower or outer levels of a layered intrusion. Chromite reefs with Cr:Fe ratios greater than 2 are sought after for the chrome metal potential. Chromite reefs are also a strong indicator of the PGE potential of a layered intrusion.

The Max property (see the ‘Resource Property Transactions’ section for the details of the transaction) consists of 21 claims totaling 91 square kilometer and is located adjacent to Northern Shield’s Wabassi property in northwestern Ontario. Northern Shield believes that the distinct magnetic anomaly within the Max property to be a chamber along a feeder conduit to the main Wabassi intrusion. The prime drill target on the Max property is a 700 metre long electromagnetic (EM) conductor that is believed to be hosted in a mafic/ultramafic intrusion.

Six drill holes totaling 2,998 meters were completed at Max over the summer and fall. The main target was a 3 x 1 km magnetic anomaly interpreted to represent an ultramafic body that could contain nickel-copper-(PGE) mineralization. Drilling confirmed the presence of an ultramafic intrusion composed mostly of olivine-rich peridotite. Five of the drill holes targeted this body with a sixth hole testing an EM anomaly to the east of the intrusion. Nickel and copper mineralization were seen in all holes drilled into the eastern contact of the intrusion (08MX-01, 02, 05 and 06). Anomalous to highly anomalous PGE values were seen throughout the intrusion

LIQUIDITY

Company currently funds its operations, including the acquisition, exploration and development of mineral properties, with its working capital of approximately $100,000 as at November 26, 2008.

At September 30, 2008 the Company had negative working capital of $909,916 (December 31, 2007 - $888,396). The Company intends to raise further capital, as required, through the equity markets in order for it to fund its operations. See ‘Subsequent Events” section for further details.

SUBSEQUENT EVENTS

On October 10, 2008, the Company completed a private placement of 1,355,000 flow-through shares at $0.35 per share for total proceeds of $474,250. Commissions of $25,970 and warrants entitling the holders of to acquire an aggregate of 81,300 common shares with an exercise price $0.35 per warrant for a period of 18 months were paid in connection with the private placement.

On October 31, 2008, the Company completed a private placement of 3,000,000 flow-through units at $0.25 per unit for total proceeds of $750,000. Each unit consisted of one common flow-through share and one half of one purchase warrant. Each purchase warrant entitles the holder to acquire one non-flow-through common share for $0.40 at any time before the first anniversary of issuance and for $0.65 thereafter until the warrant expires on the second anniversary of issuance. Commissions of $21,000 and 210,000 warrants were paid in connection with the private placement. Each warrant entitles the holder to acquire one unit for $0.25, each unit consisting of one common non-flow-through share and one half of one purchase warrant. Each purchase warrant entitles the holder to acquire one non-flow-through common share for $0.40 at any time on or before October 31, 2009 and for $0.65 thereafter until the warrant expires on October 31, 2010.

On November 11, 2008, the Company raised a further $235,000 through private placements, against which no commissions were paid. Of that, $200,000 was raised through the sale of 1,000,000 units at $0.20. Each unit consisted of one common share and one purchase warrant. Each purchase warrant has an exercise price of $0.30 in the first year and $0.55 in the second year and expires on the second anniversary of issuance. The next $10,000 was raised through the sale of 50,000 units at $0.20. Each unit consisted of one common share and one half of one purchase warrant. Each purchase warrant has an exercise price of $0.30 in the first year and $0.55 in the second year and expires on the second anniversary of issuance. The remaining $25,000 was raised through the sale of 100,000 flow-through units at $0.25 per unit. Each unit consisted of one common flow-through share and one half of one purchase warrant. Each purchase warrant entitles the holder to acquire one non-flow-through common share for $0.40 at any time before the first anniversary of issuance and for $0.65 thereafter until the warrant expires on the second anniversary of issuance.

CAPITALIZATION (NOVEMBER 26, 2008)

Shares Issued: 60,811,388

Fully Diluted: 67,626,355