UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,WASHINGTON, D.C. 20549

FORM 20-F

¨[   ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

x[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year endedDecember 31, 2004 (with other information to March 15, 2005 except where noted)2014

OR

¨[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

OR

[   ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

CIK Number 0001164771
Commission file number0-31224

NORTHERN DYNASTY MINERALS LTD.

(Exact name of Registrant as specified in its charter)

NORTHERN DYNASTY MINERALS LTD.
(Translation of Registrant’s name into English)

BRITISH COLUMBIA, CANADA

(Jurisdiction of incorporation or organization)

Suite 1020, 80015th Floor, 1040 West PenderGeorgia Street
Vancouver, British Columbia, Canada, V6C 2V6V6E 4H1

(Address of principal executive offices)

Marchand Snyman, Chief Financial Officer
Facsimile No.: 604-684-8092
15th Floor, 1040 West Georgia Street
COMMON SHARES WITHOUT PAR VALUEVancouver, British Columbia, Canada, V6E 4H1 

(Title     (Name, Telephone, E-mail and/or Facsimile number and Address of Class)Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act

- 2 -Act:

Common Shares without Par Value
(Title of Class)shares with no par value

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

Act:None

NumberIndicate the number of outstanding shares of Northern Dynasty's only classeach of the issuer's classes of capital or common stock as onof the close of the period covered by the annual report:

95,009,864 common shares as of December 31, 20042014

     47,690,287 Common Shares without Par Value
(Indicate by check mark if the number outstanding on March 15, 2005 was 49,316,165).registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [   ]               No [X]

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes [   ]               No [X]

Indicate by check mark whether Registrantthe registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934during the preceding 12 months (or for such shorter

period that Registrantregistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

NOT APPLICABLEYes [X]               No [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [   ]               No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (check one):

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item Registrantthe registrant has elected to follow:

Item 17 x[   ]               Item 18 ¨[   ]

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

IndicateIf this is an annual report, indicate by check mark whether Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d)the registrant is a shell company (as defined in Rule 12b-2 of theSecurities Exchange Act of 1934subsequent to the distribution of securities under a plan confirmed by a court.Act).

NOT APPLICABLE

Currency and Exchange Rates

All monetary amounts contained in this Annual Report are, unless otherwise indicated, expressed in Canadian dollars. On March 15, 2005 the Federal Reserve noon rate for Canadian Dollars was US$1.00:C$ 1.2078 (see Item 4 for further historical Exchange Rate Information).Yes [   ]               No [X]

- 3 -

T A B L E O F C O N T E N T S

Page

- 4 -

Geological Terms and Mineral Symbols

GENERAL

In this Annual Report on Form 20-F, all references to "we", "Northern Dynasty" or the "Company" refer to Northern Dynasty Minerals Ltd.

The Company uses the Canadian Dollar as its reporting currency. All references in this document to "Dollars" or "$" are expressed in Canadian Dollars ("CAD", "C$"), unless otherwise indicated. See alsoItem 3 – Key Information for more detailed currency and conversion information.

Except as noted, the information set forth in this Annual Report is as of May 11, 2015 and all information included in this document should only be considered correct as of such date.

GLOSSARY OF TERMS

Certain terms used herein are defined as follows:

Currency and MeasurementCURRENCY AND MEASUREMENT

All currency amounts in this Annual Report are stated in Canadian dollarsDollars unless otherwise indicated (see Item 3A for exchange rate information).

- 5 -

The following measurements may be used.

Conversionindicated. Approximate conversion of metric units into imperial equivalents is as follows:

RESOURCE CATEGORY (CLASSIFICATION) DEFINITIONS

The discussion of mineral deposit classifications in this Annual Report adheres to the mineral resource and mineral reserve definitions and classification criteria developed by the Canadian Institute of Mining ("CIM") 2014. Estimated mineral resources fall into two broad categories dependent on whether the economic viability of them has been established and these are namely "resources" (potential for economic viability) and "reserves" (viable economic production is feasible). Resources are sub-divided into categories depending on the confidence level of the estimate based on level of detail of sampling and geological understanding of the deposit. The categories, from lowest confidence to highest confidence, are inferred resource, indicated resource and measured resource. Reserves are similarly sub-divided by order of confidence into probable (lowest) and proven (highest). These classifications can be more particularly described as follows:

PART 1CAUTIONARY NOTES TO UNITED STATES INVESTORS CONCERNING MINERAL RESERVE AND RESOURCE ESTIMATES

This Annual Report on Form 20-F uses terms that comply with reporting standards in Canada and certain estimates are made in accordance with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"). NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, all resource estimates contained in or incorporated by reference in this prospectus have been prepared in accordance with NI 43-101. These standards differ significantly from the requirements of the SEC, and resource information contained herein and incorporated by reference herein may not be comparable to similar information disclosed by companies in the United States (“US companies”).

In addition, this Annual Report on Form 20-F uses the terms “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources” to comply with the reporting standards in Canada.

- 6 -We advise United States investors that while those terms are recognized and required by Canadian regulations, the SEC does not recognize them. United States investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into mineral reserves. These terms have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility.

ITEM 1 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERSFurther, “inferred resources” have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Therefore, United States investors are also cautioned not to assume that all or any part of the inferred resources exist. In accordance with Canadian rules, estimates of “inferred mineral resources” cannot form the basis of feasibility or other economic studies, except in limited circumstances where permitted under NI 43-101.

It cannot be assumed that all or any part of “measured mineral resources”, “indicated mineral resources”, or “inferred mineral resources” will ever be upgraded to a higher category. Investors are cautioned not to assume that any part of the reported “measured mineral resources”, “indicated mineral resources”, or “inferred mineral resources” in this prospectus is economically or legally mineable.

In addition, disclosure of “contained ounces” is permitted disclosure under Canadian regulations; however, the SEC only permits issuers to report mineralization as in place tonnage and grade without reference to unit measures.

FORWARD LOOKING STATEMENTS

The Annual Report on Form 20-F includes or incorporates by reference certain statements that constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995.

These statements appear in a number of places in this Form 20-F and include statements regarding our intent, belief or current expectation and that of our officers and directors. These forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this prospectus or in documents incorporated by reference in this prospectus, words such as “believe”, “anticipate”, “estimate”, “project”, “intend”, “expect”, “may”, “will”, “plan”, “should”, “would”, “contemplate”, “possible”, “attempts”, “seeks” and similar expressions are intended to identify these forward-looking statements. All statements in documents incorporated herein, other than statements of historical facts that address future production, permitting, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. These forward-looking statements are based on various factors and were derived utilizing numerous assumptions that could cause our actual results to differ materially from those in the forward-looking statements. Accordingly, you are cautioned not to put undue reliance on these forward-looking statements. Additional forward-looking statements include, among others, statements regarding:

Certain of the assumptions we have made include assumptions regarding, among other things:

Some of the risks and uncertainties that could cause our actual results to differ materially from those expressed in our forward-looking statements include:

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements or information. Forward-looking statements or information are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements or information due to a variety of risks, uncertainties and other factors, including, without limitation, the risks and uncertainties described above.

The Company’s forward-looking statements and information are based on the assumptions, beliefs, expectations and opinions of management as of the date such statements are made. The Company will update forward-looking statements and information if and when, and to the extent, required by applicable securities laws. Readers should not place undue reliance on forward-looking statements. The forward-looking statements and information contained herein are expressly qualified by this cautionary statement.

For the above reasons, information contained in this Form on 20-F herein containing descriptions of our mineral deposits may not be comparable to similar information made public by US companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

The Company advises you that these cautionary remarks expressly qualify, in their entirety, all forward-looking statements attributable to Northern Dynasty or persons acting on the Company's behalf. The Company assumes no obligation to update the Company's forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such statements. You should carefully review the cautionary statements and risk factors contained in this and other documents that the Company files from time to time with the Securities and Exchange Commission.

STATUS AS AN EMERGING GROWTH COMPANY

The Company is an "emerging growth company" as defined in section 3(a) of the Exchange Act, and the Company will continue to qualify as an "emerging growth company" until the earliest of:

Northern Dynasty expects to continue to be an emerging growth company until December 31, 2020.

Generally, a registrant that registers any class of its securities under section 12 of the Exchange Act is required to include in the second and all subsequent annual reports filed by it under the Exchange Act, a management report on internal control over financial reporting and, subject to an exemption available to registrants that are neither an "accelerated filer" or a "larger accelerated filer" (as those terms are defined in Exchange Act Rule 12b-2), an auditor attestation report on management's assessment of internal control over financial reporting. However, for so long as the Company continues to qualify as an emerging growth company, the Company will be exempt from the requirement to include an auditor attestation report in its annual reports filed under the Exchange Act, even if it were to qualify as an "accelerated filer" or a "larger accelerated filer". In addition, auditors of an emerging growth company are exempt from the rules of the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor's report in which the auditor would be required to provide additional information about the audit and the financial statements of the registrant (auditor discussion and analysis).

The Company has irrevocably elected to comply with new or revised accounting standards even though it is an emerging growth company.

Not applicable for an Annual Report.

- 7 -

ITEM 2 OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable for an Annual Report.

- 8 -

ITEM 3 KEY INFORMATION

A.               Selected Financial Data

ITEM 3

KEY INFORMATION

A.	SELECTED FINANCIAL DATA

The following constitutestables summarize selected financial data for Northern Dynasty Minerals Ltd. (“Northern Dynasty” orderived from the “Company”) for the last five fiscal years ended December 31, 2004,Company's audited financial statements, expressed in thousands of Canadian dollars, presentedDollars, and which have been prepared in accordance with Canadian generally acceptedand using accounting principles (“GAAP”policies in compliance with International Financial Reporting Standards ("IFRS") and United States GAAP.as issued by the International Accounting Standards Board ("IASB"). This selected financial data should be read in conjunction with the Company's audited financial statements for the fiscal years then ended.

No cash or other dividends have ever been declared.Statements of Financial Position Data

- 9 -

Statements of Comprehensive Loss (Income) Data

Currency and Exchange Rates

On March 15, 2005May 11, 2015, the Federal Reserverate of exchange of the Canadian Dollar, based on the daily noon rate for Canadian Dollarsin Canada as published by the Bank of Canada, was US$1.00:1.00 = C$ 1.2078. 1.2107. Exchange rates published by the Bank of Canada, available on its websitewww.bankofcanada.ca, are nominal quotations — not buying or selling rates — and are intended for statistical or analytical purposes.

The following table setstables set out the exchange rates, based on the daily noon buying rates in Canada as posted onpublished by the Bank of Canada website (www.bankofcanada.ca), for the conversion of Canadian dollarsDollars into U.S. Dollars.

Not applicable for an Annual Report.

Not applicable for an Annual Report.

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

Inability to Achieve Mine Permitting of the Pebble Project

The principal risk facing the Company is that it will be ultimately be unable to secure the necessary permits under United States dollars. These ratesFederal and Alaskan State laws to build a mine at Pebble. There are comprisedprominent and well organized opponents of those in effectthe Pebble Project and the Company may be unable, despite developing solid scientific and technical evidence of risk mitigation, to overcome such opposition and convince mining regulatory authorities that a mine should be permitted at Pebble. If we are unable to secure the necessary permits to build a mine at the endPebble Project, we may be unable to achieve revenues from operations and/or recover our investment in the Pebble Project.

Negative Operating Cash Flow

The Company currently has a negative operating cash flow and will continue to have that for the foreseeable future. Accordingly, the Company will require substantial additional capital in order to fund its future exploration and development activities. The Company does not have any arrangements in place for this funding and there is no assurance that such funding will be achieved when required. Any failure to obtain additional financing or failure to achieve profitability and positive operating cash flows will have a material adverse effect on its financial condition and results of operations.

The Company believes it is likely a "passive foreign investment company" which may have adverse U.S. federal income tax consequences for U.S. shareholders.

U.S. shareholders should be aware that the Company believes it was classified as a passive foreign investment company ("PFIC") during one or more previous tax years, and may be a PFIC in the current tax year and possibly in subsequent tax years. If the Company is a PFIC for any tax year during a U.S. shareholder's holding period, then such U.S. shareholder generally will be required to treat any gain realized upon a disposition of common shares, or any so-called "excess distribution" received on its common shares, as ordinary income, and to pay an interest charge on a portion of such gain or distributions, unless the shareholder makes a timely and effective "qualified electing fund" election or a "mark-to-market" election with respect to the common shares. A U.S. shareholder who makes a qualified electing fund election generally must report on a current basis its share of the six months includingCompany's net capital gain and immediately priorordinary earnings for any tax year in which the Company is a PFIC, whether or not the Company distributes any amounts to December 31, 2004its shareholders. A U.S. shareholder who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the common shares over the taxpayer's basis therein. This paragraph is qualified in its entirety by the discussion below under the heading "Certain United States Federal Income Tax Considerations." Each U.S. shareholder should consult its own tax advisor regarding the PFIC rules and the average exchange ratesU.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares.

The Pebble Project is Subject to Political and Environmental Regulatory Opposition

As is typical for a large scale mining project, the rangePebble Project faces concerted opposition from many individuals and organizations who are motivated to preclude any possible mining in the Bristol Bay Watershed ("BBW"). The BBW is an important wildlife and salmon habitat area. The United States Environmental Protection Agency has gone so far as to suggest that it may peremptorily prevent the Pebble Project from proceeding even before a mine permitting application is filed. Accordingly one of the greatest risks to the Pebble Project is seen to be political/permitting risk which may ultimately preclude construction of a mine at Pebble.

Northern Dynasty will require additional funding to meet the development objectives of the Pebble Project.

Northern Dynasty will need to raise additional financing (share issuances, debt or asset level partnering) to achieve permitting and development of the Pebble Project. In addition, a positive production decision at the Pebble Project would require significant capital for project engineering and construction. Accordingly, the continuing development of the Pebble Project will depend upon Northern Dynasty’s ability to obtain financing through debt financing, equity financing, the joint venturing of the project, or other means. There can be no assurance that Northern Dynasty will be successful in obtaining the required financing, or that it will be able to raise the funds on terms that do not result in high and low exchange rates for such periods.

Monthly Low and High Exchange Rates:

See Item 17 for accompanying audited year-end financial statements (prepared in accordance with Canadian GAAP) for further details.

B.               Capitalization and Indebtedness

Not applicable.levels of dilution to shareholders.

- 10 -The Pebble Partnership’s mineral property interests do not contain any ore reserves or any known body of economic mineralization.

C.               Reasons for the Offer and Use of Proceeds

Not applicable.

D.               Risk Factors

Northern Dynasty’s Pebble Property Contains No Known Reserves of Ore.Although there is aare known bodybodies of mineralization on the Pebble Property (see Items 4, 7Project, and 19), and Northern Dynastythe Pebble Partnership has completed a major definition and in-fill core drilling programprograms within, and adjacent to, the depositdeposits to determine measured and indicated and measured resources, to allow for completion of planned feasibility studies, there are currently no known reserves or body of commercially viable ore and the Pebble PropertyProject must be considered an exploration prospect only. Extensive additional exploration work is required before Northern Dynasty or the Pebble Partnership can ascertain if any mineralization may be economic and hence constitute ‘ore”"ore". Engineering, socioeconomic and environmental studies are ongoing. Additional drilling is planned to further define a new zone on the eastern flank of the deposit. Exploration for minerals is a speculative venture necessarily involving substantial risk. If the expenditures

Mineral Resources disclosed by Northern Dynasty makes onor the Pebble Property do not result in discoveries of commercial quantities of ore,Partnership for the value of exploration and acquisition expenditures will be totally lost and the value of Pebble Project are estimates only.

Northern Dynasty stock negatively impacted.has included mineral resource estimates that have been made in accordance with National Instrument 43-101. These resource estimates are classified as "measured resources", "indicated resources" and "inferred resources". Northern Dynasty advises investors that while these terms are mandated by Canadian securities administrators, the U.S. Securities and Exchange Commission does not recognize these terms. Investors are cautioned not to assume that any part or all of mineral deposits classified as "measured resources" or "indicated resources" will ever be converted into ore reserves. Further, "inferred resources" have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or prefeasibility studies, except in rare cases. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.

Further Funding Needed to Explore and Retain Rights to Pebble Property. Northern Dynasty’s primary meansAll amounts of generating funds is through the sale of common shares,mineral resources are estimates only, and Northern Dynasty cannot be certain that any specified level of recovery of metals from the mineralized material will needin fact be realized or that the Pebble Project or any other identified mineral deposit will ever qualify as a commercially mineable (or viable) ore body that can be economically exploited. Mineralized material which is not mineral reserves does not have demonstrated economic viability. In addition, the quantity of mineral reserves and mineral resources may vary depending on, among other things, metal prices and actual results of mining. There can be no assurance that any future economic or technical assessments undertaken by the Company with respect to continue to find buyers for its treasury shares in order to generate sufficient funds to allow the Pebble Project will demonstrate positive economics or feasibility.

Northern Dynasty to conduct further work on the Pebble Propertyhas no history of earnings and completion of the planned explorationno foreseeable earnings, and engineering, socioeconomic and environmental programs. If may never achieve profitability or pay dividends.

Northern Dynasty cannot fund such programs, its share value willhas only had losses since inception and there can be severely negatively impacted.no assurance that Northern Dynasty believes that it will need to raise additional funds to pursue the current level of exploration of the Pebble Property.

Northern Dynasty Has No History of Earnings and No Foreseeable Earnings.Northern Dynastyhas a history of 20 years of losses. Northern Dynasty may neverever be profitable. Northern Dynasty has paid no dividends on its shares since incorporation and does not anticipate paying dividendsincorporation. Northern Dynasty presently has no ability to generate earnings as its mineral properties are in the foreseeable future. A failure to eventually achieve profitability will negatively impact on pre-development stage.

Northern Dynasty’s share value.

Assets May be Subject to Future Write-Downs.Northern Dynasty’sconsolidated financial statements have been prepared assuming Northern Dynasty will continue on a going concern basis.

Northern Dynasty’s consolidated financial statements have been prepared on the basis that Northern Dynasty will continue its business onas a going-concern basis; however unless additional funding is obtained this assumption will have to change and Northern Dynasty’s assets may then have to be written-down from carrying values based on costs to asset prices which are realizable in insolvency or distress circumstances.

Significant Potential Equity Dilution and End of Lock-ups.going concern. At March 15, 2005,December 31, 2014, Northern Dynasty had 49,316,165working capital of approximately $9.4 million. Northern Dynasty has prioritized the allocation of available financial resources in order to meet key corporate and Pebble Project expenditure requirements in fiscal 2015. Additional financing will be required to pursue any material expenditures at the Pebble Project. Northern Dynasty’s continuing operations and the underlying value and recoverability of the amounts shown for mineral property interest are entirely dependent upon the existence of economically recoverable mineral reserves at the Pebble Project, the ability of the Company to finance the completion of the exploration and development of the Pebble Project, the Pebble Partnership obtaining the necessary permits to mine, and on future profitable production at the Pebble Project. Furthermore, failure to continue as a going concern would require that Northern Dynasty's assets and liabilities be restated on a liquidation basis, which would likely differ significantly from their going concern assumption carrying values.

As the Pebble Project is Northern Dynasty’s principal mineral property interest, the failure to establish that the Pebble Project possesses commercially viable and legally mineable deposits of ore may cause a significant decline in the trading price of Northern Dynasty’s common shares and 4,006,300 share purchase options and 2,925,478 warrants outstanding. reduce its ability to obtain new financing.

The resale of outstanding shares fromPebble Project is, through the exercise of dilutive securities could have a depressing effect on the market forPebble Partnership, Northern Dynasty’s shares. At March 15, 2005, dilutive securities represent approximately 14.1%principal mineral property interest. Northern Dynasty’s principal business objective is to carry out further exploration and related activities to establish whether the Pebble Project possesses commercially viable deposits of ore. If Northern Dynasty is not successful in its plan of operations, Northern Dynasty may have to seek a new mineral property to explore or acquire an interest in a new mineral property or project. Northern Dynasty anticipates that such an outcome would possibly result in further declines in the trading price of Northern Dynasty’s currently issuedcommon shares. As of March 15, 2005Furthermore, Northern Dynasty had agreedanticipates that its ability to issueraise additional financing to fund exploration of a further 14,002,268 shares, subjectnew property or the acquisition of a new property or project would be impaired as a result of the failure to regulatory approval,establish commercial viability of the Pebble Project.

If prices for a related party property acquisition. (See Item 7)

Exploration is a Risky Business. The exploration for mineral deposits involves significant financialcopper, gold and other risks over an extended period of time, which even a combination of careful evaluation, experience and knowledgemolybdenum decline, Northern Dynasty may not eliminate. Few properties thatbe able to raise the additional financing required to fund expenditures for the Pebble Project.

The ability of Northern Dynasty to raise financing to fund the Pebble Project, will be significantly affected by changes in the market price of the metals for which it explores. The prices of copper, gold and molybdenum are exploredvolatile, and are ultimately developed into producing mines. Factorsaffected by numerous factors beyond Northern Dynasty’s control will affectcontrol. The level of interest rates, the marketabilityrate of any substances discovered.

- 11 -

Gold,inflation, the world supplies of and demands for copper, gold and molybdenum and the stability of exchange rates can all cause fluctuations in these prices. Such external economic factors are influenced by changes in international investment patterns and monetary systems and political developments. The prices improvedof copper, gold and molybdenum have fluctuated in 2004, but had been depressed for severalrecent years, priorand future significant price declines could cause investors to be unprepared to finance exploration of copper, gold and molybdenum, with the result that Northern Dynasty may not have sufficient financing with which to fund its exploration activities

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

The mining industry is competitive in all of its phases, including financing, technical resources, personnel and may continueproperty acquisition. It requires significant capital, technical resources, personnel and operational experience to fluctuate widely. Even ifeffectively compete in the mining industry. Because of the high costs associated with exploration, is successful (andthe expertise required to analyze a project’s potential and the capital required to develop a mine, deemed warranted),larger companies with significant resources may have a competitive advantage over Northern Dynasty. Northern Dynasty faces strong competition from other mining requires huge capital investment, long capital recovery periodscompanies, some with greater financial resources, operational experience and ittechnical capabilities than Northern Dynasty possesses. As a result of this competition, Northern Dynasty may be unable to maintain or acquire financing, personnel, technical resources or attractive mining properties on terms Northern Dynasty considers acceptable or at all.

Compliance with environmental requirements will take considerable resources and changes to these requirements could significantly increase the costs of developing the Pebble Project and could delay these activities.

The Pebble Partnership and Northern Dynasty must comply with stringent environmental legislation in carrying out work on the Pebble Project. Environmental legislation is difficultevolving in a manner that will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. Changes in environmental legislation could increase the cost to suspend operations pending a recoverythe Pebble Partnership of prices.carrying out its exploration and, if warranted, development of the Pebble Project. Further, compliance with new or additional environmental legislation may result in delays to the exploration and, if warranted, development activities.

RiskChanges in government regulations or the application thereof and the presence of Adverse Government Policies.unknown environmental hazards on Northern Dynasty’s mineral properties may result in significant unanticipated compliance and reclamation costs.

Government regulations relating to mineral rights tenure, permission to disturb wilderness areas and the right to operate and export minerals can adversely affect Northern Dynasty. Northern Dynasty and the Pebble Partnership may not be able to obtain all necessary licenses and permits that may be required to carry out exploration at our projects. Environmental concerns in general continueObtaining the necessary governmental permits is a complex, time-consuming and costly process. The duration and success of efforts to obtain permits are contingent upon many variables not within our control. Obtaining environmental permits may increase costs and cause delays depending on the nature of the activity to be permitted and the interpretation of applicable requirements implemented by the permitting authority. There can be no assurance that all necessary approvals and permits will be obtained and, if obtained, that the costs involved will not exceed those that we previously estimated. It is possible that the costs and delays associated with the compliance with such standards and regulations could become such that we would not proceed with the development or operation of a significant challenge for mine at the Pebble Project. Refer to further discussion inItem 8 - A3. Legal Proceedings.

Litigation

The Company is currently and may in future be subject to legal proceedings in the development of its Pebble Project. Given the uncertain nature of these actions, the Company cannot reasonably predict the outcome thereof. If the Company is unable to resolve these matters favorably it may have a material adverse effect of the Company.

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

Hazards such as unusual or unexpected geological formations and other conditions are involved in mineral exploration and development. Northern Dynasty may become subject to liability for all exploration companies. Any changespollution, cave-ins or hazards against which it cannot insure. The payment of such liabilities could result in regulations or shiftincrease in political attitude are beyond the controlNorthern Dynasty’s operating expenses which could, in turn, have a material adverse effect on Northern Dynasty’s financial position and its results of operations. Although Northern Dynasty and may adversely affect its business.

Environmental Risks. Unexpected environmental damage from spills, accidentsthe Pebble Partnership maintain liability insurance in an amount which we consider adequate, the nature of these risks is such that the liabilities might exceed policy limits, the liabilities and severe acts of nature such as earthquakes are risks which mayhazards might not be fully insurable against, or Northern Dynasty and if catastrophicthe Pebble Partnership might elect not to insure itself against such liabilities due to high premium costs or other reasons, in which event Northern Dynasty could mean the total loss of shareholders’ equity.incur significant liabilities and costs that could materially increase Northern Dynasty’s operating expenses.

VolatilityThe market price of Northern Dynasty’s Shares Could Cause Investor Loss.common shares is subject to high volatility and could cause investor loss.

The market price of a publicly traded stock, especially a resource issuer like Northern Dynasty, is affected by many variables in addition to those directly related to exploration successes or failures. Such factors include the general condition of marketmarkets for resource stocks, the strength of the economy generally, the availability and attractiveness of alternative investments, and the breadth of the public marketmarkets for the stock. The effect of these and other factors on the market price of the Company’s common shares on the TSX Venture suggests Northern Dynasty’s shares will continue to be volatile. Therefore, investors could suffer significant losses if Northern Dynasty’s shares are depressed or illiquid when an investor seeks liquidity and needs to sell Northern Dynasty shares.

Northern Dynasty’s Directors, Officers and Staff are only Part-Time.Most of Northern Dynasty’s directors and senior officers also serve as officers and/or directors of other resource exploration companies and, as such, are engaged in and will continue to be engaged in the search for additional resource opportunities on behalf of such other companies. In particular, the success ofIf Northern Dynasty and its ability to continue to carry on operations is dependent upon its ability to retainloses the services of the key personnel that it engages to undertake its senior technical and management personnel. (See Item 7.)

Management May be subject to Conflicts of Interest Due to Affiliation With Other Resource Companies.As most ofactivities, then Northern Dynasty’s directors and officers serve as officers and/or directorsplan of other resource exploration companies which are themselves engaged in the search for additional opportunities, situations may arise where these directors and officers are presented with or identify resource exploration opportunities andoperations may be delayed or perceivedbe more expensive to be in competition with Northern Dynasty for exploration opportunities. Such potential conflicts, if any arise, will be dealt with in accordance with the relevant provisions of British Columbia corporate and common law. undertake than anticipated.

Northern Dynasty’s directors and officers expect that participation in exploration prospects offeredsuccess depends to the directors will be allocated between the various companies that they servea significant extent on the basisperformance and continued service of prudent business judgment and the relative financial abilities and needs of the companies to participate. In addition, all of Northern Dynasty’s officers and directors have a financial interest in other resource issuers to which they serve as management and hence may never be financially disinterested in the outcomes of these potential conflict of interest situations. This situation may require that shareholders favorably consider ratification of directors’ decisions where financial conflicts arise resulting in uncertainty with respect to completion of such matters.certain independent contractors, including Hunter Dickinson Services Inc. ("HDSI"). The Company has access to the full resources of Hunter Dickinson Inc. ("HDI"),HDSI, an experienced exploration and development firm with in-house geologists, engineers and environmental specialists, to assist in its technical review of the various opportunities; howeverPebble Project. There can be no assurance that the Company doesservices of all necessary key personnel will be available when required or if obtained, that the costs involved will not haveexceed those that we previously estimated. It is possible that the right to require HDI to bring tocosts and delays associated with the Company all corporate opportunitiesloss of services of key personnel could become such that come to HDI's attention.we would not proceed with the development or operation of a mine at the Pebble Project.

- 12 -Incorporation

Northern Dynasty’s Management May Not Be Subject to U.S. Legal Process. As Canadian citizens and residents most of Northern Dynasty’s directors and officers may not subject themselves to U.S. legal proceedings, so that recovery on judgments issued by U.S. courts may be difficult or impossible. While reciprocal enforcement of judgment legislation exists between Canada and the U.S., Northern Dynasty’s insiders may have defenses available to avoid in Canada the effect of U.S. judgments under Canadian law, making enforcement difficult or impossible. Northern Dynasty’s management may not have any personal assets available in the U.S. to satisfy judgments of U.S. courts. Therefore, Northern Dynasty shareholders in the United States may have to avail themselves of remedies under Canadian corporate and securities laws for perceived oppression, breach of fiduciary duty and like legal complaints. Canadian law may not provide for remedies equivalent to those available under U.S. law.

Likely PFIC Status Has Possible Adverse Tax Consequences for U.S. Investors. Potential investors who are U.S. taxpayers should be aware that Northern Dynasty expects to be classified for U.S. tax purposes as a passive foreign investment company (“PFIC”) for the current fiscal year, and may also have been a PFIC in prior years, and may also be a PFIC in subsequent years. This status arises due to the fact that Northern Dynasty’s excess exploration funds are invested in interest-bearing, securities creating “passive income” which, while modest and ancillary to the exploration business, is Northern Dynasty’s only source of income. If Northern Dynasty is a PFIC for any year duringmineral exploration company incorporated on May 11, 1983 pursuant to the Company Act of the Province of British Columbia (predecessor statute to the British Columbia Corporations Act in force since 2004), under the name "Dynasty Resources Inc.". On November 30, 1983 the Company changed its name to "Northern Dynasty Explorations Ltd." and subsequently, on October 11, 1997, changed its name to Northern Dynasty Minerals Ltd. Northern Dynasty became a U.S. taxpayer’s holding period, then such a U.S. taxpayer,reporting company in the Province of British Columbia on April 10, 1984 and was listed on the Vancouver Stock Exchange (now the TSX Venture Exchange and herein generally will be required"TSX Venture") from 1984-1987, listed on the Toronto Stock Exchange from 1987-1993, and unlisted but continued to treat any so-called “excess distribution” receivedcomply with its continuous disclosure obligations from 1993 to 1994, and thereupon listed on itsTSX Venture from 1994 to October 30, 2007 when it began trading on the Toronto Stock Exchange ("TSX"). In November 2004, the common shares, or any gain realized upon a disposition of common shares, as ordinary income and to pay an interest charge on a portion of such distribution or gain, unless the taxpayer makes a qualified electing fund (“QEF”) election or a mark-to-market election with respect to the shares of Northern Dynasty. In certain circumstances,Dynasty were also listed on the sumAmerican Stock Exchange ("AMEX"). AMEX was purchased by the New York Stock Exchange ("NYSE") and the Company now trades on the NYSE MKT Exchange ("NYSE MKT").

Offices

The head office of Northern Dynasty is located at Suite 1500, 1040 West Georgia Street, Vancouver, British Columbia, Canada V6E 4H1, telephone (604) 684-6365, facsimile (604) 684-8092. The Company’s legal registered office is in care of its Canadian attorneys, McMillan LLP, Barristers & Solicitors, at Suite 1500, 1055 West Georgia Street, Vancouver, British Columbia, Canada V6E 4N7, telephone (604) 689-9111, facsimile (604) 685-7084.

The Company’s Alaska mineral resource exploration business is operated through an Alaskan registered limited partnership, the Pebble Limited Partnership (the "Pebble Partnership" or "PLP"), in which the Company (since December 2013) owns a 100% interest through subsidiary entities. A 100% subsidiary of the tax andCompany, Pebble Mines Corp. is the interest charge may exceed the amountgeneral partner of the excess distribution received, orPebble Partnership and responsible for its day-to-day operations. The business address of the amount of proceeds of disposition realized, by the taxpayer. A U.S. taxpayer who makes a QEF election generally must report on a current basis its share of Northern Dynasty’s net capital gain and ordinary earnings for any year in which Dynasty Partnership is Suite 602, 3201 C Street, Anchorage, Alaska, USA, 99503.

Company Development

Northern Dynasty is a PFIC, whether or not Northern Dynasty distributes any amounts to its shareholders. A U.S. taxpayer who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the common shares over the taxpayer’s tax basis therein. (See also ITEM 10E - Passive Foreign Investment Company.)

For more information about penny stocks, contact the Office of Filings, Information and Consumer Services of the U.S. Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 telephone (202) 272-7440.

- 13 -

ITEM 4 INFORMATION ON THE COMPANY

SUMMARY

A.               History and Development of Northern Dynasty

- 14 -

B.               Business Overview

Northern Dynasty’s Business Strategy and Principal Activities

Pebble Property, Alaska USA - Overview

Northern Dynasty is generally in the business of acquiring, exploring and developing mineral properties.

Since October 2001 its principal focus has been exploration and since 2004, feasibility level engineering studies for all project components, including road access, port and power transmission, of the Pebble Property (“theProject, a copper-gold-molybdenum mineral project. The Pebble Property”) that hosts a large gold copper molybdenum porphyry deposit andProject is located in southwest Alaska, approximately 200 miles (320 kilometers) southwest of the Statecity of Alaska. Comprehensive environmentalAnchorage.

To December 31, 2014, approximately $797 million (US$744 million)¹ in expenditures have been incurred on the Pebble Project. Of this amount, approximately $595 million (US$573 million) in funding was provided to the Pebble Partnership by an affiliate of Anglo American plc ("Anglo American") and socioeconomic base line data collection and studies are also underway.

On October 29, 2001,expended from 2007 to December 10, 2013 after which time Northern Dynasty acquired from a related party two options which provided for the right for Northern Dynasty to purchase up to a 100% working (i.e. beneficial)re-acquired Anglo American’s 50% ownership interest in the Pebble Property. The options were granted by Teck Cominco American Incorporated (“Teck Cominco”) (asPartnership on the latter’s withdrawal. Prior to 80%) and Hunter Dickinson Group Inc. (“HDGI”) a related party which retained an interest in the options (see Item 7), (as to 20%, carried) as more particularly described below.

The first of the two options permitted Northern Dynasty to purchase the previously drilled (by Teck Cominco) portionsformation of the Pebble Property on which the majority of the known gold/copper mineralization is known to exist (the “Resource Lands”). The Resource Lands option required the payment of cash or shares during the three year term of the option (as extended by one year) and a balloon option payment at the end of the third year of approximately US$10 million (prior to November 30, 2004) at which time Northern Dynasty would own 80% of the Resource Lands (and HDGI, 20%) The second part of the Teck Cominco option permitted Northern Dynasty to earn a minimum of 40% (and up to 80% with HDGI holding 20%) interestPartnership in the remainder of the Pebble Property which was the area outside of the known mineralization (the “Exploration Lands”) by doing 60,000 feet of exploration drilling by November 30, 2004.

As of November 30, 20042007, Northern Dynasty had completed its option requirementsspent approximately $188 million on exploration activities and had exercised 80% of the Resource Lands and by February 2005, 80% of the Exploration Lands was acquired by exercise of the second option. The right to purchase the final 20% (by then participating working interest)a further $106 million in both Resource Lands and Exploration Lands options was agreed to be exercised by Northern Dynasty and acquired from HDGIacquisition costs on March 14, 2005 (but in respect of which regulatory approval has been applied for and is pending as of March 31, 2005). Upon regulatory approval to complete the acquisition of the final 20% working interest, Northern Dynasty will thereupon own a 100% working interest in the Pebble project subject only to a royalty (2-5% of after pay back net profits) held by Teck Cominco on the Exploration Lands.

- 15 -

Northern Dynasty’s exploration and feasibility determination program for fiscal 2005 involves exploration drilling of the newly discovered East Zone on the flank of the known Pebble deposit, and the continued collection of environmental and socioeconomic data and ongoing engineering studies required for the completion of a feasibility study and the initiation of the permitting process in 2006. The program encompasses approximately 97,000 feet (30,000 m) of exploration and infill drilling as well as holes for metallurgical testing, and 60 days of rotary drilling for hydrological testing.

The budget for Northern Dynasty’s proposed 2005 program is C$44.5 million. The Company’s working capital as of March 21, 2005 was approximately $36 million, and there were approximately 2.3 million in-the-money warrants (exercisable at $4.15). It will however need to raise funds cover the future exploration programs and ongoing administrative costs. If the equity markets for resource issuers are not receptive to additional financings, Northern Dynasty will likely have to reduce the planned expenditures.Project.

Northern Dynasty does not have any operating revenue, although currently and historically it has had non-material annual interest revenue as a consequence of investing its surplus funds.

Significant Acquisitions, Dispositions and Group Reorganization

Northern Dynasty via 100% owned subsidiaries and other entities holds indirect interests in mineral claims on State land in southwest Alaska, USA. These claims (including certain area claims) form what is referred to as the Pebble Copper-Gold-Molybdenum Project (the "Pebble Project").

Pebble Limited Partnership and Pebble Project

On July 26, 2007, the Company converted a wholly-owned general partnership that held its Pebble Project interests into a limited partnership, the Pebble Partnership. The purpose of the Pebble Partnership is to engineer, permit, construct and operate a modern, long-life mine at the Pebble Project.

¹ During the period 2007 to 2013, the Pebble Partnership expended several hundred million dollars on the Pebble Project, a major portion of which was spent on exploration funds pendingprograms, resource estimates, environmental data collection and technical studies, with a significant portion spent on engineering of various possible mine development models, as well as related infrastructure, power and transportation systems. As a consequence of several factors, including the completionEnvironmental Protection Agency (the "EPA") opposition to the Pebble Project, the withdrawal of exploration programs. Although exploration activities canAnglo American plc from the project and the passage of time, technical and engineering studies related to mine-site and infrastructure development are considered to have very uncertain and perhaps little value at this time. Environmental baseline studies and data collection remains a significant legacy asset of the Company from this period.

Anglo American through a wholly-owned affiliate subscribed for 50% of the Pebble Partnership's equity effective July 31, 2007. To maintain its 50% interest in the Pebble Partnership, Anglo American was required to commit staged cash investments into the Pebble Partnership aggregating to US$1.5 billion. On September 15, 2013, Anglo American gave notice to the Company of its withdrawal from the Pebble Partnership. In December 2013, the Company exercised its right to acquire Anglo American’s 50% interest and consequently holds a 100% interest in the Pebble Partnership and Pebble Mines Corp. (the General Partner of the Pebble Partnership which administers the Pebble Project).

Under the Pebble Partnership Agreement and applicable tax regulations, neither the Company nor its affiliated general partnership will be more challengingentitled to the benefits for tax purposes of the expenditures incurred by the Pebble Partnership from Anglo American’s investment, as these benefits accrued exclusively to Anglo American under the Pebble Partnership Agreement and applicable tax regulations.

2006 Equity Investment by Rio Tinto Affiliate

In 2006, the Company issued 8,745,845 common shares in winter conditions,connection with a share purchase agreement with Kennecott Canada Exploration Inc. ("Kennecott", a subsidiary of Rio Tinto plc) for $10.00 per share for proceeds of approximately $87 million. In January 2007, Northern Dynasty was advised by Galahad Gold plc ("Galahad"), a significant shareholder of the Company that QIT-Fer Et Titane Inc., an affiliate of Rio Tinto, agreed to purchase 9.4 million shares of Northern Dynasty from Galahad at a price of $10.00 per share. The share purchase, which closed February 1, 2007, increased Rio Tinto’s indirect ownership in Northern Dynasty to approximately 19.8% . In early 2014, this holding represented approximately 19.1% of Northern Dynasty’s outstanding and issued common shares. Rio Tinto plc divested of its shares in April 2014.

Special Warrant Financing

In late December 2014 and early January 2015, the Company completed a financing to raise proceeds of $15.5 million through the issuance of 35,962,735 Special Warrants, each convertible into one Common Share without payment of additional consideration. SeeItem 10 - C. Material Contracts.

The Company’s business cannot be saidis the exploration and advancement towards feasibility, permitting and ultimately development of a copper-gold-molybdenum mineral resource in Alaska, USA known as the "Pebble Project".

The Pebble Project is Subject to be significantly seasonalState and Federal Laws

The Pebble Partnership is required to comply with all Alaska statutes in nature. Metals prices have traditionally seen multi-year cycles of higherconnection with the Pebble Project. These statutes govern titles, operations, environmental, development, operating and lower prices, which often impact the availabilitygenerally all aspects of exploration and development fundsof a mine in years with depressed prices.Alaska.

Alaska StatutesStatute 38.05.185 and following establishamong others establishes the rights to mining claimclaims and mineral leases on lands owned by the State of Alaska and open to mineral entry. This group of statutes also covers annual labour, annuallabor and rental requirements, and royalties.

Operations on claims or leases on state owned land must be permitted under a plan of operations as set out in Title 11 of the Alaska Administrative Code, 86.800.Chapter 86, Section 800. This regulation generally provides that the State Division of Mining can be the lead agency in coordinating the comments of all agencies which must consent to the issuance of a plan of operations, and sets the requirements for the approval of a plan of operations.

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

Once a decision is made to enter permitting, the Pebble Project will be required to satisfy permitting requirements at three levels: federal, state and local (borough). The Company completedprocess takes approximately 3-4 years to complete and involves 11 regulatory agencies, 60+ categories of permits and significant ongoing opportunities for public involvement. The Alaska Department of Natural Resources Large Mine Permitting Team is responsible for coordinating permitting activities for large mine projects.

To satisfy permitting requirements under the National Environmental Policy Act ("NEPA") and other regulatory statutes, a private placement financingproject must provide a comprehensive project design and operating plan for gross proceedsmine-site and infrastructure facilities; documentation of C$30.5 million in March 2005 included in working capital amounts as noted above. However, it may havedevelopment alternatives investigated; mitigation and compensation strategies, and identification of residual effects; and environmental monitoring, reclamation and closure plans. The first step is to raise additional fundsprovide the required information for an Environmental Impact Statement ("EIS") under NEPA, including a Project Description and Environmental Baseline Document Prepared by a third-party contractor under the direction of a lead federal agency, expected to carry onbe the planned exploration program.

Further ParticularsUS Army Corps of Engineers. The EIS will determine whether sufficient evaluation of the Originsproject's environmental effects and development alternatives has been undertaken. It will also provide the basis for federal, state and local government agencies to make individual permitting decisions.

Under the U.S. Clean Water Act, Section 404(c), the Administrator of the Pebble Property Options, 2001 Assignment from Related Party

By an Assignment Agreement dated October 29, 2001 between Northern Dynasty as assignee and Hunter Dickinson Group Inc. (“HDGI”Environmental Protection Agency ("EPA") as assignor, (the “HDGI Assignment”) (see Item 7 and Item 19), Northern Dynasty was assignedis given the right to acquire up todisallow the specification (including the withdrawal of specification) of any defined area as a 100% interestdisposal site if he or she determines that the release of such material will have an unacceptable adverse effect on municipal water supplies, local wildlife, spawning and breeding areas of fisheries, shellfish beds, and/or recreational areas. Such decisions made by the Administrator require notice and opportunity for public hearings, and consultation with the Secretary of the Army Corp of Engineers. The Administrator shall set forth in two discrete but interdependent options which were granted towriting and make public his or her findings and reasons for making any determination under this subsection.

Ownership History

In October 2001, Northern Dynasty acquired, through its Alaskan subsidiary, a two-part Pebble Property purchase option previously secured by HDGI byfrom an Alaskan subsidiary of Teck Cominco respectingLimited, now Teck Resources Limited (“Teck”). In particular, HDGI assigned 80% of this two-part option (the Teck Option) to Northern Dynasty while retaining 20% thereof. The first part of the Teck Option permitted Northern Dynasty to purchase (through its 22,582 hectare “Pebble” copper/gold prospect in southwestern Alaska. The two options relate to separateAlaskan subsidiary) 80% of the previously drilled portions of the Pebble Property which are referred to as (a) the “Resource Lands” on which a mineralized body had already been outlined by Teck Cominco, and (b) the “Exploration Lands” which constitute the remaindermajority of the Pebble Property area. In this Annual Report, these two options may be referred to as thethen known copper mineralization occurred (the “Resource Lands Option” and the “Exploration Lands Option” and together they are referred to as the “Teck Cominco Options”). HDGI is a private company owned by certain directors of Northern Dynasty could exercise the Resource Lands Option through the payment of cash and their associates and hence is a related partyshares aggregating US$10 million prior to Northern Dynasty. (See Item 7)

- 16 -

UnderNovember 30, 2004. The second part of the HDGI Assignment,Teck Option permitted Northern Dynasty was assigned the options at HDGI’s out-of-pocket costs of $586,966 (which includes HDGI’s 2001 exploration and additional property staking costs related to the Pebble Property), an 80%earn a 50% interest in the Teck Cominco Options, together with the right to acquire HDGI’s retained 20% interest which is a “carried” interest up to the point of the termination of the resource Lands Option. HDGI was carried with respect to its retained 20% interest, meaning that Northern Dynasty must incur 100% of all exploration costs and 100% of all underlying option payments to Teck Cominco required by the Teck Cominco Options to the point of exercisearea outside of the Resource Lands Option (assuming Northern Dynasty decided to exercise the Teck Cominco Options)(the “Exploration Lands Option”). Northern Dynasty hadcould exercise the rightExplorations Lands Option by doing some 60,000 ft (18,200 m) of exploration drilling by November 30, 2004, which it completed on time. The HDGI assignment of the Teck Option also allowed Northern Dynasty to purchase (or “call”) HDGI’s carried interest for a 90-day period commencing at the time that, and in the event that, Northern Dynasty exercised the Resources Lands Option which it did on November 23, 2004. The Assignment Agreement provided that the carried interest call price was to be determined as the independently appraised valueother 20% of the carried interest which call amount will be payableTeck Option retained by Northern Dynasty in common shares of Northern Dynasty valued at market at that time.HDGI for its fair value.

OnIn November 26, 2004, Northern Dynasty exercised the Resource Lands Option and acquired 80% option from Teck Cominco onof the Resource Lands by issuing 1.77 million Northern Dynasty common sharesLands. In February 2005, Teck elected to Teck Cominco American Inc., which represents the adjusted final payment of US$10 million (adjusted to US$9.94 million for previous excess proceeds of share resale proceeds received by Teck Cominco). On February 23, 2005, Northern Dynasty acquired an 80%sell its residual 50% interest in the Exploration Lands by acquiring Teck Cominco’s residual interest in the Exploration Lands, consequent upon Teck Cominco’s election, through the issuance of US$4 million into Northern Dynasty common shares at the prevailing market price (approximately 977,795 shares). On March 14, 2005 Northern Dynasty, on the recommendation of an independent committee of its directors, elected to call HDGI’s 20% interest for 14,002,268 shares based on an independent appraisal of the 20% interest and a fairness opinion to separate parties (see item 19).US$4 million. Teck Cominco nowstill retains only a 4% pre-payback netsadvance net profits royalty interest (after debt service) and 5% after-payback net profits interest royalty in any mine production from the Exploration Lands portion of the Pebble Property.property as shown on the figure below.

The Teck Cominco Options provide Teck Cominco with the right to require

In June 2006, Northern Dynasty to in effect guarantee that Teck Cominco will receive cash proceeds equivalent toacquired, through its Alaska subsidiaries, the approximately US$14 million deemed value of the 2,750,520 shares issued to it for exercise of the Resource Lands Option and the Exploration Lands Option. However, in order to avail itself of this right Teck Cominco must permit Northern Dynasty the right to determine the timing and method of resale of the shares. Teck Cominco’s election to require the minimum proceeds guarantee must be made within 180 days of the receipt of these shares (November 23, 2004 as to 1772,725 shares and February 25, 2005 for 977,795 shares). As of March 31, 2005 Northern Dynasty is awaiting Teck Cominco’s determination (to be made by May 23, 2005 and July 25, 2005) as to whether Northern Dynasty will be required to manage the resale of the two tranches of shares. Northern Dynasty’s commitment extends to seeking investors to purchase the shares and by using reasonable efforts to achieve an orderly resale market for these shares. Northern Dynasty is not obligated (nor permitted by law) to re-purchase the shares itself. In the event Northern Dynasty secures purchasers after Teck Cominco’s election, any excess of resale proceeds over the US$14 million will be credited to Northern Dynasty (by way of cancellation of excess shares) and any share resale shortfall must be made up by Northern Dynasty.

Other interim option payments to Teck Cominco were made during 2001 to 2004, including US$250,000 in cash plus 500,000 two-year share purchase warrants (exercisable at $0.75) prior to December 31, 2001 (which consideration was paid on December 31, 2001) and 500,000 shares and 500,000 two-year share purchase warrants (exercisable at $1.15) prior to March 31, 2002 (which consideration was paid on March 28, 2002) and a further 500,000 shares and 250,000 warrants before December 31, 2002 (which consideration was paid on December 19, 2002). Pursuant to an agreement, an additional 200,000 shares

- 17 -

were issued to Teck Cominco on December 19, 2002 to extend the deadline to purchase the Resource Lands from November 30, 2003 to November 30, 2004.

If Teck Cominco gives notice to Northern Dynasty by May 23, 2005 or July 25, 2005 (respecting the US$10 million and US$4 million share tranches respectively) that it wishes Northern Dynasty to control the resale of the 1,772,725 shares or 977,795 shares respectively, then Northern Dynasty shall manage the resale of those shares so that the return to Teck Cominco is US$9.94 million for the 1,772,725 shares (or applicable portion thereof) if resold within the following 12 months from the date of notice to sell or US$11 million if sold within the following 24 months, but in either case with a minimum requirement of US$1 million per each 3-month period after the notice. Any shares remaining after the required US$9.94 million resale proceeds has been received by Teck Cominco will be returned to Northern Dynasty’s treasury for cancellation, and if there are any deficiencies in the resale proceeds, Northern Dynasty must provide top-up shares or the cash equivalent until the minimum is achieved. If Teck Cominco does not give notice by the notice to sell deadline, there will be no minimum proceeds requirement and Northern Dynasty will have no influence over the timing or manner of any resales of these shares.

On February 25, 2005 Teck Cominco elected to sell its 50% interest in the Exploration Lands to Northern Dynasty and, consequently, Northern Dynasty purchased the interest by paying Teck Cominco US$4 million in 977,795 shares valued at $5.03 and by granting Teck Cominco a net profits royalty on any mine in the Exploration Lands. Prior to the recovery of the capital costs of constructing a mine on the Exploration Lands, the net profits royalty will be based upon the net cash flow from the sale of minerals after operating, marketing, distribution and debt-financing repayments to a maximum of 4% of the net cash flow. Following payback of any mine’s capital costs, the royalty is 5% of net profits.

If Teck Cominco elects to liquidate these 977,795 shares, it may, by notice to Northern Dynasty by July 25, 2005 require Northern Dynasty to manage the resale of these shares with a view to realizing at least US$4 million over the 12-month period after the notice. Any deficiencies from this figure will require Northern Dynasty to provide top-up with shares or cash so that the US$4 million is achieved. Any Northern Dynasty shares remaining unsold after the maximum of US$4 million has been realized will be returned to Northern Dynasty’s treasury for cancellation. If Teck Cominco does not give notice of sale by the notice to sell deadline, there is no resale proceeds protection, and if Teck Cominco elects to sell after the notice to sell deadline, then Northern Dynasty may retain control of the share resale process for a 48-month period with any profit or loss on the share resale (measured from the initial issuance value) which will be for the account of Teck Cominco. Northern Dynasty must direct the resale of the shares in good faith with a view to maximizing Teck Cominco’s proceeds with all such resale activities in compliance with applicable US and Canadian securities laws and the policies of the TSX Venture. All negotiations between Northern Dynasty and Teck Cominco took place in Canada. Teck Cominco American Incorporated is a US holding subsidiary of Teck Cominco Ltd. (whose shares are listed on The Toronto Stock Exchange and bonds are listed on the American Stock Exchange). Securities issued to Teck Cominco are issued relying on the exemption from US registration found in Rule 903(c)(1) of Regulation S to the United States Securities Act of 1933 and are expected to be eligible for resale through the TSX Venture Exchange under Rule 904 to Regulation S.

On March 14, 2005, Northern Dynasty had agreed to exercise its right to acquire theHDGI 20% remaining carried working interest in the Resource Lands portion and Exploration Lands by acquiring HDGI from its shareholders and through its various subsidiaries had thereby acquired an aggregate 100% interest in the Pebble Property, subject only to the Teck net-profits royalties on the Exploration Lands portionLands. At that time, Northern Dynasty operated the Pebble Property through anAlaskan general partnership with one of its subsidiaries.

In July 2007, the Pebble Partnership was created and an indirect wholly-owned subsidiary of Anglo American subscribed for 50% of the Pebble Property for a purchase price consistingPartnership's equity effective July 31, 2007. Each of 14,002,268 Northern Dynasty commonand Anglo American effectively had equal control and management rights in the Pebble Partnership and its general partner, Pebble Mines Corp., through respective wholly-owned affiliates. The Pebble Partnership's assets include the shares of two Alaskan subsidiaries, which represents approximately 20%hold registered title to the claims. To maintain a 50% interest in the Pebble Partnership, Anglo American was required to make staged cash investments into the Pebble Partnership, aggregating $1.5 billion, towards comprehensive exploration, engineering, environmental and socioeconomic programs and, if warranted, development of the adjusted market capitalizationPebble Project. On September 15, 2013, Anglo American gave Northern Dynasty a 60-day notice of withdrawal from the Pebble Project. In December 2013, Northern Dynasty. This is subjectDynasty exercised its right to regulatory approval as ofacquire Anglo American’s interest in the date hereof. There are no resale provisions with respect to these shares (except securities laws of general application). Upon receipt of the approvalsPebble Partnership and issuance of the 14,002,268 common shares, the Company will holdnow holds a 100% interest in the Pebble Partnership.

On June 29, 2010, Northern Dynasty entered into an agreement with Liberty Star Uranium and Metals Corp. and its subsidiary, Big Chunk Corp. (together, "Liberty Star"), pursuant to which Liberty Star sold 23.8 square miles of claims (the 95 "Purchased Claims") to a U.S. subsidiary of Northern Dynasty in consideration for both a $1 million cash payment and a secured convertible loan from Northern Dynasty in the amount of $3 million. The parties agreed, through various amendments to the original agreement, to increase the principal amount of the Loan by $730,174. Northern Dynasty later agreed to accept transfer of 199 claims (the “Settlement Claims”) located north of the ground held 100% by the Pebble Partnership in settlement of the Loan. These claims are now held by Northern Dynasty’s subsidiary U5 Resources Inc. See Property Description below for current claim holding.

On January 31, 2012, the Pebble Partnership entered into a Limited Liability Company Agreement with Full Metal Minerals (USA) Inc. (“FMMUSA”), a wholly-owned subsidiary of Full Metal Minerals Corp., to form Kaskanak Copper LLC (the “LLC”). Under the agreement, the Pebble Partnership could earn a 60% interest in the LLC, which indirectly owned 100% of the Kaskanak claims, by incurring exploration expenditures of at least US$3 million and making annual payments of $50,000 to FMMUSA over a period ending on December 31, 2013. On May 8, 2013, the Pebble Partnership purchased FMMUSA’s entire ownership interest in the LLC for a cash consideration of $750,000. As a result, the Pebble Partnership gained a 100% ownership interest in the LLC, the indirect owner of a 100% interest in a group of 542 claims located south and west of other ground held by the Pebble Partnership. See Property Description below for current claim holding.

TECHNICAL SUMMARY

The following disclosure is mainly summarized from the “2014 Technical Report on the Pebble Project, Southwest Alaska, USA” by J. David Gaunt, P.Geo., James Lang, P.Geo., Eric Titley, P.Geo., and Ting Lu, P.Eng., effective date December 31, 2014 (“2014 Technical Report”), and updated from Company files. Additional details can be found in the 2014 Technical Report which is filed on the Company’s profile atwww.sedar.com and as a Form 6-K on the Company’s profile atwww.sec.gov.

Introduction

The Pebble deposit was originally discovered in 1989 and was acquired by Northern Dynasty in 2001. Since that time, Northern Dynasty and subsequently the Pebble Limited Partnership (the “Pebble Partnership”, in which Northern Dynasty currently owns a 100% interest) have conducted significant mineral exploration, environmental baseline data collection, and engineering work on the Pebble Project to advance it towards development.

Work at Pebble has led to an overall expansion of the Pebble deposit, as well as the discovery of several other mineralized occurrences along an extensive northeast-trending mineralized system underlying the property. Over one million feet of drilling has been completed on the property, a large proportion of which has been focused on the Pebble deposit.

In light of more recent stakeholder and regulatory feedback, Northern Dynasty initiated a comprehensive review of previous analyses of the Pebble Project in late 2013 and in 2014 commissioned the 2014 Technical Report to update information on the mineral resources and metallurgy for the project.

Property Description and Location

The Pebble Project is located in southwest Alaska, approximately 200 miles southwest of Anchorage, 17 miles northwest of the village of Iliamna, 160 miles northeast of Bristol Bay, and approximately 60 miles west of Cook Inlet.

Figure 1 Property Location – Pebble Project

Northern Dynasty holds, indirectly through wholly-owned subsidiaries including the Pebble Partnership, a 100% interest in a contiguous block of 2,402 mineral claims covering approximately 417 square miles (Figure 2). This includes 1,718 claims covering 248.2 square miles (including the Pebble deposit) held by Pebble Partnership subsidiaries, Pebble East Claims Corporation and Pebble West Claims Corporation; 464 claims covering an area of 116 square miles held by Pebble Partnership indirect subsidiary, Kaskanak LLC¹; and 220 claims covering 52.5 square miles held by Northern Dynasty subsidiary U5 Resources Inc. The details of the mineral claims are provided as Exhibit 15.01.

State mineral claims in Alaska are kept in good standing by performing annual assessment work or in lieu of assessment work by paying $100 per year per 40 acre (0.06 square mile) mineral claim, and by paying annual escalating state rentals. All of the assessment work payment obligations come due annually on August 31. Credit for excess work can be banked for a maximum of five years afterwards, and can be applied as necessary to continue to hold the claims in good standing. The Project claims have a variable amount of work credit available that can be applied in this way and will be applied in 2015². State rentals for 2015 are US$990,390 and are payable no later than 90 days after the assessment work.

The Pebble Partnership currently does not own surface rights associated with the mineral claims that comprise the Pebble Property. All lands are held by the State of Alaska, and surface rights may be acquired from the state government once areas required for mine development have been determined and permits awarded. Permits necessary for exploration drilling and other field programs associated with pre-development assessment of the Pebble Project are applied for each year. There are no existing material environmental liabilities associated with the Pebble Project.

Figure 2 Mineral Claims – Pebble Project

Accessibility, Climate, Local Resources, Infrastructure and Physiography

Current access to the property is by helicopter from Iliamna. There is a modern airfield at Iliamna, with two paved 4,920 ft airstrips, that services the communities of Iliamna, Newhalen and Nondalton. The runways are suitable for DC-6 and Hercules cargo aircraft and commercial jet aircraft.

There are paved roads that connect the villages of Iliamna and Newhalen to the airport and to each other, and a partly paved, partly gravel road that extends to a proposed Newhalen River crossing near Nondalton. The property is currently not connected to any of these local communities by road; a road would be planned as part of the project design.

There is no access road that connects the communities nearest the Pebble Project to the coast on Cook Inlet. From the coast, at Williamsport on Iniskin Bay, there is an 18.6 mile state-maintained road that terminates at the east end of Iliamna Lake, where watercraft and transport barges may be used to access Iliamna. The route from Williamsport, over land to Pile Bay on Iliamna Lake, is currently used to transport bulk fuel, equipment and supplies to communities around the lake during the summer months. Also during summer, supplies are barged up the Kvichak River, approximately 43.4 miles southwest of Iliamna, from Kvichak Bay on the North Pacific Ocean.

A small run-of-river hydroelectric installation on the nearby Tazamina River provides power for the three communities in the summer months. Supplemental power generation using diesel generators is required during winter months.

Iliamna and surrounding communities have a combined population of just over 400 people. As such, there is limited local commercial infrastructure except that which services seasonal sports fishing and hunting.

The property is situated at approximately 1,000 ft above mean sea level in an area described as subarctic tundra. It is characterized by gently rolling hills and an absence of permafrost. The climate is sufficiently moderate to allow a well-planned mineral exploration program to be conducted year-round at Pebble.

Geological Setting and Mineralization

Pebble is a porphyry-style copper-gold-molybdenum-silver deposit that comprises two adjacent, contiguous, coeval hydrothermal centers called the Pebble East and Pebble West zones. Mineralization in the Pebble West zone extends from surface to depths of at least 3,000 ft whereas higher grade mineralization in the Pebble East zone extends to a depth of at least 5,810 ft but is concealed beneath an east-thickening wedge of unmineralized rock types. An important exploration target is represented by high-grade, but as yet undelineated, mineralization on the far eastern side of the deposit which was dropped 1,970 to 2,950 ft by normal faults into the northeast-trending East Graben.

The Pebble deposit formed about 90 million years ago in response to intrusion of granodiorite magmas generated by subduction of the Pacific Plate beneath the Wrangellia Superterrane. The Pebble deposit is hosted by these granodiorite intrusions and by the sedimentary and volcanic rocks of Jurassic to Cretaceous age, granodiorite and diorite sills and alkalic monzonite intrusions and associated breccias which host them.

Mineralization at Pebble is predominantly hypogene, although the Pebble West zone contains a thin zone of variably developed leached cap and underlying supergene mineralization. Disseminated and vein-hosted copper-gold-molybdenum-silver mineralization, dominated by chalcopyrite and locally accompanied by bornite, is associated with early potassic alteration in the shallow part of the Pebble East zone and with early sodic-potassic alteration in the Pebble West zone and deeper parts of the Pebble East zone. High-grade copper-gold mineralization is associated with younger pyrophyllite- and sericite-bearing subtypes of advanced argillic alteration in the Pebble East zone. The deposit is surrounded by weakly mineralized quartz-sericite-pyrite alteration; in the upper center of the deposit quartz-illite-pyrite alteration is an illite-altered relict of a mostly eroded quartz-sericite-pyrite cap to the deposit.

Exploration

Historical

Cominco Alaska, a division of Cominco Ltd. now Teck (“Cominco (Teck)”) began reconnaissance exploration in the Pebble region in the mid-1980s and in 1984 discovered the Sharp Mountain gold prospect near the southern margin of the current property. Gold was discovered in quartz veins of probable Tertiary age near the peak of Sharp Mountain. Grab samples of veins in talus ranged from 0.045 oz/ton Au to 9.32 oz/ton Au and 3.0 oz/ton Ag. In 1987, examination and sampling of several prominent limonitic and hematitic alteration zones yielded anomalous gold concentrations from the Sill prospect and the Pebble discovery outcrop.

Geophysical surveys were conducted on the property between 1988 and 1997. An IP survey in 1989 at Pebble displayed response characteristics of a large porphyry-copper system. The surveys were dipole-dipole induced polarization (“IP”) surveys which defined a chargeability anomaly about 31.1 square miles in extent within Cretaceous age rocks which surround the eastern to southern margins of the Kaskanak batholith. All known zones of mineralization of Cretaceous age on the Pebble property occur within the broad IP anomaly.

In 1991, baseline environmental and engineering studies were initiated and weather stations were established. A preliminary evaluation was undertaken by Cominco (Teck) in 1991, and updated in 1992. Historical estimates of the mineral resources for the Pebble deposit were completed by Cominco (Teck), most recently in 2000.

Northern Dynasty and Pebble Partnership

Between 2001 and 2006, the entire Pebble property subject onlywas mapped for rock type, structure and alteration at a scale of 1:10,000, providing an important geological framework for interpretation of other exploration data. A geological map of the Pebble deposit was also constructed but, due to Teck Cominco’s net profits interest royaltya paucity of outcrop, was based solely on drill hole information. The content and interpretation of district and deposit scale geological maps have not changed materially from those presented in 2009 and 2010.

A number of geophysical surveys, including IP, magnetic and other survey types were completed by Northern Dynasty and the Pebble Partnership between 2001 and 2010 to test the Pebble deposit and other occurrences on the Pebble property. Between 2001 and 2003, Northern Dynasty collected 1,026 soil samples, outlining high-contrast, coincident anomalies in gold, copper, molybdenum and other metals in an area that measures at least 5.6 miles north-south by up to 2.5 miles east-west, with strong but smaller anomalies in several outlying zones. All soil geochemical anomalies lie within the 31.1 square mile IP chargeability anomaly. Limited surficial geochemical surveys were completed in 2010 and 2011.

Drilling

Extensive drilling totalling 1,042,218 ft has been completed in 1,355 holes on the Pebble Project. These result from annual drill programs which took place during 19 of the 26 years from 1988 to 2013.

Northern Dynasty and the Pebble Partnership completed drilling for exploration, deposit delineation, engineering and environmental purposes between 2001 and 2013. Highlights from exploration and deposit delineation drilling since 2001 include:

Drilling for engineering (metallurgical and geotechnical) and environmental (hydrological) purposes began in 2004 and continued through 2013.

The spatial distribution and type of holes drilled are illustrated below.

Figure 3 Location of Drill Holes – Pebble Project

Most of the footage on the Pebble Project was drilled using diamond core drills. Only 18,716 ft were percussion-drilled from 222 rotary drill holes. Many of the cored holes were advanced through overburden using a tricone bit with no core recovery. These overburden lengths are included in the Exploration Lands.core drilling total.

Since early 2004, all Pebble drill core has been geotechnically logged on a drill run basis. Over 69,000 measurements were made for a variety of geotechnical parameters on 735,000 ft of core drilling. Recovery is generally very good and averages 98.5% overall; two-thirds of all measured intervals have 100% core recovery. Additionally, all Pebble drill core from the 2001 through 2013 drill programs was photographed in a digital format.

All drill hole collars have been surveyed using a differential global positioning system. A digital terrain model for the site was generated by photogrammetric methods in 2004. All post-Cominco (Teck) drill holes have been surveyed downhole, typically using a single shot magnetic gravimetric tool. A total of 989 holes were drilled vertically (-90°) and 192 were inclined from -42° to -85° at various azimuths.

A summary of drilling by various categories (operator, type, year and area) to the end of the 2013 exploration program are compiled in the table below. As shown in Figure 3 and Table 1 (East, West, Main), a large proportion of the drilling has been directed toward the Pebble deposit.

Table 1 Summary of Drill Holes – Pebble Project

Notes to table:

Some numbers may not sum exactly due to rounding.

- 18 -Sampling, Analysis and Security of Samples

The Pebble Property, Alaska, USA - Technicaldeposit has been explored by extensive core drilling, with 80,859 samples having been taken from drill core for assay analysis. Nearly all potentially mineralized Cretaceous core drilled and recovered has been sampled by halving in 10 ft lengths. Similarly, all core recovered from the Late Cretaceous to Early Tertiary cover sequence has also been sampled, typically on 20 ft sample lengths, with some shorter sample intervals in areas of geologic interest. Unconsolidated overburden material, where it exists, is generally not recovered by core drilling and therefore not usually sampled.

Rock chips from the 222 rotary percussion holes were generally not sampled for assay analysis, as the holes were drilled for monitoring wells and environmental purposes. Only 35 samples were taken from the drill chips of 26 rotary percussion holes outside the Pebble deposit area, which were drilled for condemnation purposes.

Analytical work in 2002 and from 2004 to 2013 was completed by ALS Minerals Laboratories of North Vancouver, an ISO 9002 certified laboratory. Analytical work for the 2003 drilling program was completed by SGS Canada Inc. of Toronto, ON, an ISO 9002 registered, ISO 17025 accredited laboratory.

Northern Dynasty maintained an effective Quality Control/Quality Assurance (“QA/QC”) program consistent with industry best practices, which has continued from 2007 to 2013 under the Pebble Partnership. This program is in addition to the QA/QC procedures used internally by the analytical laboratories. The QA/QC program has also been subject to independent review by Analytical Laboratory Consultants Ltd. and Nicholson Analytical Consulting. The analytical consultants provide ongoing monitoring, including facility inspection and timely reporting of the performance of standards, blanks and duplicates in the sampling and analytical program. The results of this program indicate that analytical results are of a high quality, suitable for use in detailed modelling and resource evaluation studies. The QA/QC sample types used in the program are described in the table below.

Table 2 Summary of Quality Control/Quality Assurance Sampling – Pebble Project

Core was boxed at the rig and transported daily by helicopter to the secure logging facility in Iliamna. Half cores remaining after sampling were replaced in the original core boxes and stored at Iliamna, AK in a secure compound. Crushed reject samples from the 2006 through 2013 analytical programs are stored in locked containers at Delta Junction, AK. Drill core assay pulps from the 1989 through 2013 programs are stored at a secure warehouse in Langley, BC.

Mineral Resources

The current estimate of the mineral resources in the Pebble deposit is based on approximately 59,000 assays obtained from 699 drill holes completed to the end of 2013. The resource tabulated below was estimated using ordinary kriging by David Gaunt, P.Geo., a qualified person who is not independent of Northern Dynasty.

The tabulation is based on copper equivalency that incorporates the contribution of copper, gold and molybdenum. Although the estimate includes silver, it was not used as part of the copper equivalency calculation in order to facilitate comparison with previous estimates which did not consider the silver content or its potential economic contribution. A base case cut-off of 0.3% CuEq is highlighted.

Table 3 2014 Estimate of Mineral Resources – Pebble Deposit Measured and Indicated Categories

Location and AccessTable 4 2014 Estimate of Mineral Resources – Pebble Deposit Inferred Category

The Pebble Property is centered at latitude 59 degrees 53 minutes 54 seconds North and longitude 155 degrees 17 minutes 44 seconds West in the Iliamna region of southwestern Alaska. It is approximately 380 km southwest of Anchorage and 27 km northwest of the village of Iliamna (Figure 1).

Accesstabulated mineral resources are subject to the Pebble Project from Anchorage is via fixed wing aircraft to Iliamna. Iliamna has a state-operated airportnotes below:

These resource estimates have been prepared in accordance with two 1,700 m paved runways. It is serviced by several passenger and cargo flights daily from Anchorage, using Convair, Hercules and DC-6 aircraft, as well as smaller charter aircraft. Current access from Iliamna to the property is by helicopter, a flying distance of 27 km.

The Pebble Property is located 95 km from tidewater. Access to the coast from Lake Iliamna is provided by a 30 km, state-maintained road, which extends from Pile Bay at the eastern end of Lake Iliamna to Williamsport near Iniskin Bay on Cook Inlet. Bulk fuel and heavy freight can also be barged in during the summer months to Lake Iliamna via the Kvichak River. There is currently no road from Iliamna northwest to the Pebble Property.

- 19 -

Figure 1 Location

Topography and Climate

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

The Pebble Property lies within an area of rolling hills and low mountains. Valley bottoms are at elevations of 250 m above sea level. The highest point on the property is Kaskanak Peak, at an elevation of 841 m. The currently known mineralized deposit (a mass of naturally occurring mineral material without regard to mode of origin) is situated at the 325 m elevation. Vegetation consists of sparse patches of alder trees separated by expanses of tundra and grass. The area was recently glaciated and glacial soil deposits and hummocky terrain abound. There are numerous streams and small, shallow lakes and ponds in the vicinity of the project, which provide water for exploration drilling.

Mineral Claims Status

The property forms a continuous block consisting of 1,331 located Alaska State mineral claims totaling 39,600 hectares (98,000 acres). Annual rental fees are US$160,295 and annual assessment work obligations are US$245,000.

- 20 -

Exploration History

In the mid 1980s, Teck Cominco began reconnaissance exploration in the Pebble region and in 1984 discovered the Sharp Mountain gold prospect. Gold occurs in drusy quartz veins of probable Tertiary age that cut Cretaceous rocks near the peak of Sharp Mountain. Grab samples of veins in talus ranged from 1.5 g/t Au to 9.32 oz/ton Au and 3.0 oz/ton silver. No record of further work is available.

Examination and sampling of several color anomalies in 1987 yielded anomalous gold concentrations from the Sill prospect, recognized as a precious-metal, epithermal-vein occurrence,NI 43-101 and the Pebble discovery outcrop, which wasCIM Definition Standards. Inferred resources have a great amount of uncertain affinity. The 1988 exploration program included 24 diamond drill holes at the Sill epithermal gold prospect, soil sampling, geological mappinguncertainty as to their existence and two diamond drill holes at the Pebble target. Drilling at the Sill prospect intercepted mineralization with gold gradeswhether they can be mined legally or economically. It cannot be assumed that justified more work, but the initial Pebble drill holes yielded only modest encouragement. In 1989, an expanded soil sampling program, an IP survey and 12 diamond drill holes were completed at the Pebble target, and 15 diamond drill holes were completed at the Sill prospect. Although limited in scope, the IP survey at Pebble displayed a response characteristic of a large, porphyry-copper system. This interpretation was validated through subsequent drilling by Teck Cominco that intercepted significant intervals of porphyry-style gold, copper, and molybdenum mineralization.

When it became apparent that a significant copper-gold porphyry deposit had been discovered, exploration was accelerated in 1990 and 1991 when 73 additional diamond drill holes were completed. In 1991, baseline environmental and engineering studies were initiated and weather stations were established. A preliminary economic evaluation was undertaken by Cominco Engineering Services Ltd. (“CESL”) in 1991 and subsequently revised in 1992. In 1992, 14 drill holes were completed in the deposit area. In 1993, IP surveying and a 4-hole drilling program were completed at a target 6 km to the south of the Pebble deposit. In 1997, Teck Cominco did IP surveying, geochemical sampling and geological mapping, and drilled 20 holes into and around the Pebble deposit. Preliminary engineering studies carried out by CESL in 1991-1992 indicate several road access options, including a 130 km gravel access road connecting the Pebble project to a deep-draft ocean port site on Iniskin Bay. The State of Alaska has provided significant financial assistance for the construction of similar access roads and ports for major mineral development projects, such as that at the Red Dog Mine in northwestern Alaska. Power required for project development could be provided by natural gas from offshore wells in Cook Inlet, transported by pipeline to the mine site, where natural gas turbines would be situated. The preliminary engineering work also evaluated and selected a number of possible sites for processing facilities, a water source, accommodations, tailings storage, and waste rock disposal.

Preliminary metallurgical testing was conducted on various samples from the Pebble project during the period 1991 through 1994. In 1991, two independent metallurgical laboratories conducted grindability test work on six core samples. In 1992, flotation testing utilized material assaying 0.41% Cu and 0.34 g/t Au, comprised of 1.2% chalcopyrite, 12.3% pyrite and 86.5% host rock with minor amounts of molybdenite. Metallurgical testing in 1994 utilized a 310 kg composite sample of mineralization collected from 8 core drill holes. The holes were a good spatial mix from within the centralall or any part of the deposit.

Grindability test results among the various metallurgical programs were fairly consistent; the metric ballmill work index range is 15.6 to 17.5 kilowatt hours per tonne of mineralization (kWh/t), averaging 17.1 kWh/t. The grindability tests are initial tests and only provide information on the known mineralized area only. Test work comprised bench scale as well as lock cycle testing. A variety of grind sizes, pH conditions, reagent suites and simulated flow schematics were tried. The Pebble sulphide mineralization is fine grained and disseminated throughout the host rock as well as in the veins and veinlets that occur

- 21 -

throughout the deposit. As a result, much of the test work involved optimization of primary liberation size within a wide range.

Flotation (separation of minerals from waste rock in solution) test work was conducted during several programs from 1991 to 1994. The 1992 work utilized rougher, scavenger and cleaner flotation schematics. During the four years of test work, the range of recoveries obtained was 81% to 94% for copper and 60% to 84% for gold. The 1994 flotation results did not achieve the 1992 high results, but coarser grinds and various regrind schemes were investigated. Much of the work in 1994 included pyrite depression and separation, which reduced gold recovery. Results were not conclusive and additional test work will have to be done, including optimization of flotation, regrind and pyrite handling.

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

During 2002, Northern Dynasty drilled 68 holes totaling 11,306 m exploring for additional porphyry deposits within which to define higher-grade resources. Four new mineral zones were discovered. One of these, the Thirty-Eight Zone, is a till-covered copper-gold porphyry deposit located 12 km south-southwest of the Pebble deposit. Some 86% of Teck Cominco’s drill core from the Pebble deposit (16,000 m) was relogged and a sectional geological model was completed. Based on this model, the Pebble deposit resource was calculated (Snowden, 2003). Surface work included an 18.5 -line-km ground magnetometer survey; a 328-sample soil geochemical survey and a few man-days of geological traverses.

Prior to the 2003 drilling program, Northern Dynasty commissioned an independent mineral resource estimate. Inferred resources in the Pebble deposit were estimatedwill ever be upgraded to be 1.0 billion tonnes grading 0.40 g/t gold, 0.30% copper, and 0.015% molybdenum (0.61% copper-equivalent) above a cut-off grade of 0.30% copper-equivalent, and 271 million tonnes of 0.59 g/t gold, 0.43% copper and 0.018% molybdenum (0.86% copper-equivalent) above a cut-off grade of 0.70% copper equivalent.higher category.

In 2003, Northern Dynasty drilled 58 holes totaling 19,729 m to define higher-grade portions in the Pebble deposit and 9 holes totaling 1,987 m to test four other prospective zones. Limited surface exploration was conducted, consisting of 5 days of geological mapping and collection of 97 samples in three soil geochemical traverses.

Nine holes drilled on the Exploration Lands in 2003 included three holes at the Central IP Anomaly area, three holes at the Northeast IP Anomaly area, one hole at the 38 Porphyry Deposit and two holes at the 37 Skarn Zone. Drilling at the Central IP target intersected weak mineralization, indicating potential for porphyry mineralization at depth but not near to the surface. Drilling at the Northeast IP target indicates good potential for an extension to the Pebble deposit to the northeast. The 2003 drilling continued to indicate the presence of substantial porphyry mineralization at the 38 Porphyry Deposit. Drilling at the 37 Skarn intersected moderate gold and copper values; further work is necessary to fully determine the potential of the skarn mineralization.

Drilling on the Resource Lands in 2003 was designed to test for continuity and extensions of higher-grade zones within and adjacent to the deposit, and to further delineate the extent of the deposit. The program was successful in achieving both of these objectives and a new independent resource estimate was done in February 2004.

- 22 -

The estimated inferred mineral resource was 2.74 billion tonnes grading 0.55% copper-equivalent¹ (0.30 g/t Au, 0.27% Cu and 0.015% Mo above a cut-off grade of 0.30% copper-equivalent), containing 26.5 million ounces of gold and 16.5 billion pounds of copper. In addition, higher-grade material of 435 million tonnes grading 0.49 g/t Au, 0.42% Cu and 0.021% Mo, or 0.84% copper-equivalent above a cut-off grade of 0.70% copper-equivalent was also estimated.

¹Copper and gold equivalent calculations use metal prices of US$0.80/$1.85/lb for copper, US$350/$902/oz for gold and US$4.50/$12.50/lb for molybdenum. The containedmolybdenum, and recoveries of 85% for copper 69.6% for gold, and copper represent estimated contained metal77.8% for molybdenum in the groundPebble West zone and have not been adjusted89.3% for copper, 76.8% for gold, and 83.7% for molybdenum in the Pebble East zone.

A 0.30% CuEQ cut-off is considered to be comparable to that used for porphyry deposit open pit mining operations in the Americas.

The resource estimate is constrained by a conceptual pit that was developed using a Lerchs-Grossman algorithm and is based on the parameters set out below:

These mineral resource estimates may ultimately be affected by a broad range of environmental, permitting, legal, title, socioeconomic, marketing and political factors commensurate with the specific characteristics of the Pebble deposit (including its scale, location, orientation and poly-metallic nature) as well as its setting (from a natural, social, jurisdictional and political perspective).

Mineral Processing and Metallurgical Testing

Metallurgical testwork for the Pebble Project was initiated by Northern Dynasty in 2003 and continued under the direction of Northern Dynasty until 2008. From 2008 to 2013, metallurgical recoveries. Adjustment factorstestwork progressed under the direction of the Pebble Partnership.

Geometallurgical studies were initiated by the Pebble Partnership in 2008, and continued through 2012. The principal objective of this work was to account forquantify significant differences in relativemetal deportment that may result in variations in metal recoveries during mineral processing. The results of the geometallurgical studies indicate that the deposit comprises several geometallurgical (or material type) domains. These domains are defined by distinct, internally consistent copper and gold deportment characteristics that correspond spatially with changes in silicate alteration mineralogy.

The first major distinction between domains is characterized by hypogene and supergene mineralization. Hypogene mineralization reflects the copper-, gold- and molybdenum-bearing minerals which precipitated from hot hydrothermal solutions when the deposit initially formed in the Cretaceous Period. In contrast, supergene mineralization represents modifications, mostly to the Cu-bearing minerals present in the near-surface parts of the Pebble West zone, during a much more recent weathering phase of the deposit when it became exposed for a time at the surface of the earth. The second critical influence on metallurgical recoveries is related directly to different alteration assemblages that formed over time in different parts of the Pebble deposit.

These alteration assemblages as listed in Table 5 include sodic potassic, illite-pyrite (described as quartz-illite-pyrite inGeological Setting and Mineralization above), K-silicate (potassic inGeological Setting and Mineralization), QSP (quartz-sericite-pyrite in Geological Setting and Mineralization), QP (pyrophyllite inGeological Setting and Mineralization) and sericite types. Each of these assemblages contains a distinct suite of minerals that precipitated from hydrothermal fluids under different conditions of temperature, pressure and chemical composition, and including, in some cases, differences in the types of copper- and gold-bearing minerals.

Recognition of the relationships between metallurgical behavior and mineralization styles and alteration assemblages provides significant technical advantages to further testwork on the Pebble Project. The samples selected for gold,the comminution, copper-gold-molybdenum bulk flotation, and copper molybdenum separation testing were representative of the various types and styles of mineralization present at the Pebble deposit.

Metallurgical testwork and associated analytical procedures were performed by recognized testing facilities with extensive experience with this analysis, with this type of deposit, and with the Pebble Project.

The test results on variability samples derived from the 103 lock cycle flotation tests indicate that marketable copper and molybdenum will depend uponconcentrates can be produced with gold and silver contents that meet or exceed payable levels in representative smelter contracts. Metal recoveries projected in the completion of definitive metallurgical testing. CuEQ = Cu % + (Au g/t x 11.25/17.64) + (Mo % x 99.23/17.64)

Property Geology

The Pebble property encompasses2014 Technical Report and in the eastern and southern marginstable below are based on the locked-cycle test (“LCT”) results of the approximately 200 square km in size, Late Cretaceous (89.7 Ma) in age, tonalite-granodiorite Kaskanak Batholith (coarse grained igneous rocks of intermediate composition, covering a large area),variability samples, and associated gold leach testwork. The table below provides projected overall recoveries, which include the adjacent Jurassic-Cretaceous sedimentaryflotation and interbedded volcanic rocks that the batholith had intruded. On the east side of the batholith, a northeast-trending structural corridor is marked by a linear cluster of multi-phased, compositionallygold plant recoveries.

Table 5 Projected Metallurgical Recoveries¹ – Pebble Project

Notes to table:

Environmental and texturally variable, irregular stocks, sills, dikes and breccia bodies (igneous bodies that are relatively small and circular, flat-lying, linear and structurally shattered, respectively) that are associated with and formed at the same time as the batholith. Numerous gold and copper-gold mineral occurrences, including the large Pebble and Thirty-Eight porphyry copper-gold-molybdenum deposits, are related to this diverse group of intrusions (coarse grained igneous rocks).Socioeconomic

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

Mineralization

Mineralization consists principally of pyrite, chalcopyrite and molybdenite (common sulphide minerals of iron, iron-copper and molybdenum, respectively), occurring in and disseminated adjacent to stockworks (crosscutting network of veins) of fine veins in intrusive and sedimentary host rocks. Gold is present with the sulphides in a ratio of approximately 1 g/t gold to 1% copper. Mineralization is strongest within and around the upper parts of the granodiorite stocks and is associated with strong secondary potassium-silicate alteration and development of quartz vein stockworks. The deposit mineralization occurs over an area of at least 2.8 km by 2.2 km, and to a depth of 500 m, and is unconstrained to the east under Tertiary cover, to the south, southwest, and to depth. A phyllic and propylitic alteration envelope (potassic, phyllic and propylitic alteration consists of assemblages of minerals that are commonly associated with porphyry mineralization; they occur in successive zones or envelopes in the deposit), up to 5.5 km by 2.5 km in area, is present around the deposit and contains gold concentrations exceeding 100 parts per billion (ppb).

Primary copper-gold-molybdenum mineralization occurs throughout the zone of potassic alteration and is concentrated in and surrounding the upper parts of the granodiorite stocks. Copper occurs in chalcopyrite as disseminated grains and along sulphide-rich veins. Most gold grains are a few microns in diameter and occur near grain boundaries of pyrite and chalcopyrite. The pyrite content is low in the zone of potassic alteration. The overall ratio of gold grade (in g/t) to copper grade (in %) is about one. Molybdenite commonly occurs in quartz + pyrite veins and veinlets. The central higher-grade portions of the deposit contain >200 parts per million (ppm) molybdenum.

The intrusive complex is defined by widely spaced drilling, extending south from the southern edge of Pebble deposit for 1.5 km and with a widthlocated on the order of 600 m. Relatively sparse drilling defines persistent low-grade (0.2 to 0.3 g/t Au and 0.07 to 0.1% Cu) mineralization in this intrusion breccia. It is not clear if this mineralization is related to additional granodiorite stocks at depth (none have been encountered in drilling) or if it is related genetically to one or more of the older intrusive phases. High copper concentrations occur where the intrusive complex was intruded by the granodiorite; this might be

- 23 -

related to a subordinate copper/gold contribution from one or more of the earlier intrusive phases, combined with the main copper mineralizing phase related to the later granodiorite.

Gold mineralization, in the range 0.5 to 1.5 g/t, is widespread in the zone of phyllic alteration bordering the zone of potassic alteration and propylitic alteration zone in diorite/gabbro to the northwest of the deposit (Hole 1 Gold Zone). Copper concentrations are very low in these areas. Gold mineralization is also associated with phyllic and locally k-feldspar alteration zones, up to a few metres wide, cutting across the major potassic alteration zone. Some of the phyllic zones are envelopes of quartz-pyrite-(sericite-chlorite) veinlets and veins. Some crosscutting zones of phyllic alteration contain strongly anomalous concentrations of zinc, lead, and silver; some also contain strongly anomalous concentrations of gold. These zones represent a later, lower-temperature phyllic alteration that was superimposed on earlier, higher-temperature potassic alteration.

Exploration in 2004

The 2004 program involved collection of engineering, environmental and socioeconomic data required for the completion of feasibility studies and the commencement of preparation of permitting applications. The program encompassed approximately 130,000 feet (40,000 m) of drilling, including holes to establish measured and indicated resources and others to collect geotechnical, metallurgical and hydrological data to use for mine planning for the Pebble deposit. Some exploratory drilling for new zones and unexplored targets was also done and enabled the Company to complete the 60,000 feet of drilling required exercise its option on the Exploration Lands (67,651 feet had been completed to September 30, 2004).

In 2004, core drilling by Northern Dynasty was targeted primarily in and adjacent to the Pebble deposit where 132 geology holes, totaling 32,826 m, and 26 metallurgy holes, totaling 6505 m, were completed in the Resource Lands, and 15 holes, totaling 7177 m, were completed in the Exploration Lands to test for continuity and extensions of higher-grade zones. One hole, totaling 263 m, was drilled in the southwestern part of the Exploration Lands to test an IP/resistivity anomaly. Various sites for proposed tailings and waste disposal were tested by 53 engineering holes, totaling 2,778 m.

This drilling identified a significant, new porphyry centre (the East Zone) on the eastern side of the Pebble deposit beneath a cover of Tertiary rocks that apparently thickens to the east (Figures 2 and 3). The characteristics of the East Zone indicate a setting proximal to a thermal and fluid centre. These include intense biotite (potassic) alteration, a high density of early-stage quartz veins, the extent to greater depth of strong Au-Cu-Mo mineralization and alteration, the presence of numerous granodiorite sills and dykes at depth, and the weakness of late-stage, lower-temperature alteration overprints. The source of heat and fluids for the East Zone may be a stock of granodiorite below and/or to the east of the current drilling. The East Zone is unconstrained to the east, northeast and southeast under Tertiary cover, and to depth. Considerable additional drilling will be necessary to adequately assess its full extent.

- 24 -

Figure 2 Drill Hole Plan Pebble Deposit

- 25 -

Figure 3 Cross Section Pebble Deposit

In the Pebble deposit, potentially economic mineralization extends over a known area of 3 km by 2.2 km and to a depth of 600 m in the Central zone, and to a depth of 800 m in the East Zone. A phyllic alteration envelope around the deposit is up to 5.5 km by 2.5 km in area and contains abundant gold concentrations over 100 ppb (0.1 g/t).

The intrusive and intrusive breccia complex that extends south for more than 1.5 km from the presently defined southern edge of the deposit has been tested mainly by shallow and widely spaced holes. Alteration assemblages indicate that is a prospective area for exploration for another porphyry copper-gold centre. The margins of the intrusive complex are zones that may have undergone multiple stages of dilation, intrusion and hydrothermal activity, which could be conducive to formation of higher-grade copper-gold mineralization; these also warrant further drill testing.

In 2004, a drill hole in the southwestern part of the Exploration Lands intersected a 247-m long zone of porphyry-style mineralization in an arm of the Kaskanak batholith that extends southwest from the main batholith into a broad area of hornfelsed, andesitic sedimentary rocks, which on surface contains 2-5% disseminated pyrite. This 308 Zone is similar in character and grade to the Thirty-Eight Zone a few

- 26 -

kilometers to the east-northeast. To determine the extent and grade of the 308 Zone will require further drill testing.

Estimates of Mineralization – Pebble Deposit

Subsequent to year end in March 2005, a new resource estimate based on diamond drilling programs by Northern Dynasty up to and including 2004 and previous drilling by Teck Cominco through to 1997, was announced. The estimate, completed by Roscoe Postle Associates, Inc., shows that Pebble deposit contains a Measured and Indicated Mineral Resource of 3.03 billion tonnes grading 0.28% Cu, 0.32 g/t Au, and 0.015% Mo (0.56% copper equivalent²), with an additional Inferred Mineral Resource of 1.13 billion tonnes grading 0.24% Cu, 0.30 g/t Au, and 0.014% Mo (0.50% copper equivalent) above a cut-off grade of 0.30% copper equivalent. The Measured and Indicated Resource contains 31.3 million ounces of gold 18.8 billion pounds of copper and nearly 1 billion pounds of molybdenum. A higher-grade Measured and Indicated Mineral Resource core consists of 569 million tonnes grading 0.46% Cu, 0.50 g/t Au, and 0.021% Mo (0.88% copper equivalent) above a cut-off grade of 0.70% copper equivalent. A technical report by independent qualified persons D.W. Rennie, P.Eng., and R.M. Srivastava, P.Geo., can be found at www.sedar.com.

Mineral resources that are not mineral reserves do not have demonstrated economic viability.
²Copper-equivalent calculations use metal prices of US$1.00/lb for copper, US$400/oz for gold, and US$6.00/lb for molybdenum. CuEQ = Cu % + (Au g/t x 12.86/22.06) + (Mo% x 132.28/22.06) . Copper-equivalent has not been adjusted for metallurgical recoveries. Adjustment factors to account for differences in relative metallurgical recoveries for gold, copper and molybdenum will depend upon the completion of definitive metallurgical testing.

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

During the period 1988-1997, several phases of soil geochemical surveys in the northeastern part of the property were completed with a total of 7,337 samples collected. As well, a total of 164 core drill holes were completed prior to 2002. Samples of the NQ (6.3 cm diameter) drill core generally consisted of 3.05 m (10 ft) lengths of half core that was split using a mechanical core splitter. Holes within the Pebble deposit were sampled from top to bottom whereas in some outlying holes, sampling was more selective and related to mineralized intervals.

All Pebble deposit core samples were analyzed for gold (Au). Copper (Cu) assays were done for samples from Hole 4 onward. Molybdenum assays were done on some drilling campaigns, representing 83.7% of the assay database in the Pebble deposit. Multi-element Inductively Coupled Plasma (ICP) analysis was also done on every sample beginning with hole 15. In the Sill area, samples from selected core intervals were analyzed for Au and silver (Ag).

The 1997 drill core samples were prepared by drying, then crushing to 10 mesh (<2mm); a 250 g portion was pulverized to 200 mesh (<75 microns). The sample was analyzed for Cu using an Aqua Regia (AR) digestion and Inductively Coupled Plasma Atomic Emission Spectroscopy (ICP-AES). Au was analyzed using Fire Assay (FA) on a one assay ton sample with an Atomic Absorption Spectrometry (AAS-AES) finish. Trace elements were also analyzed by AR digestion and ICP-AES. One blind standard was inserted for every 20 samples analyzed. One duplicate sample was taken for each ten samples analyzed. The 1997 drill hole samples were check analyzed with excellent correlation for Cu and good correlation for Au. Every 40 soil samples analyzed included four random repeats, one standard and one blank sample. There was excellent correlation for Cu among these samples and good to adequate Au correlation.

Northern Dynasty personnel or agents collected all samples during the 2001-2004 programs. A total of 658 analytical results were received for soil samples from 601 locations in 2001, and 374 analytical results for soil samples from 341 locations in 2002. The results included 30 lab duplicates and 60 lab

- 27 -

standards. In 2001, samples were air dried, then shipped by airfreight from the project site to Acme Analytical Laboratories (“Acme”) in Vancouver, B.C. via Anchorage, Alaska. At Acme, the soils were dried and sieved through an 80-mesh screen and then analyzed for 32 elements using two methods. Au content was determined to the 0.2 ppb level using the Acme Group 3A wet digestion method. A 10 g sample was digested in AR, and analyzed by Graphite Furnace Atomic Absorption Spectroscopy or Inductively Coupled Plasma Mass Spectroscopy (ICP-MS) finish. The Acme Group 1D multi-element method was used on a minimum one gram pulp to determine other elements and gold to the ppm level. In this method, the samples were digested in hot AR and analyzed by ICP-AES.

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

A total of 2,467 core samples, averaging 3.9 m in length, were taken from the 68 NQ2 (5.02 cm diameter) core holes drilled during 2002. All core drilled was sampled, except for 170 m of overlying Tertiary volcanic rocks in holes 2036 and 2040. In 2002, sample preparation was done at ALS Chemex’s Fairbanks laboratory. Each sample bags was verified against the numbers listed on the shipment notice. The entire sample of drill core was dried, weighed and crushed to 70% passing 10 mesh (1.7 mm), then a 250 g split was taken and pulverized to 85% passing 200 mesh (75 micron). The pulp was split, and approximately 125 g shipped by commercial airfreight for analysis at ALS Chemex, North Vancouver, British Columbia, an ISO 9002 certified laboratory. The remaining pulps were shipped to the Company’s secure warehouse at Port Kells, BC. The coarse rejects were held for several months at the Fairbanks laboratory until all Quality Assurance/Quality Control (QAQC) measures were completed, then discarded.

All 2,467 samples taken during the 2002 program were analyzed for Au by FA and for 34 elements, including Cu and molybdenum (Mo), using a standard multi-element geochemical method. In addition, several drill holes exhibiting copper-gold porphyry style mineralization were subject to Cu assay level determinations, and a few Mo assay level determinations were also performed. Au content was determined by 30 g FA fusion with lead as a collector and an AAS finish. The four samples that returned Au results greater than 10,000 ppb (10 g/t) were re-analyzed by 1 assay ton FA fusion with a gravimetric finish. All samples were subject to multi-element analysis for 34 elements, including Cu and Mo, by AR digestion with ICP-AES finish. A total of 1,822 samples from 31 holes drill holes exhibiting porphyry-style mineralization were assayed for Cu by four-acid (total) digestion with an AAS finish to the ppm level. For Cu assays >10,000 ppm, another total digestion-AAS finish analysis was performed to the percent level. A further 61 samples from drill hole 2034 were assayed for Mo by four-acid digestion-AAS finish to the ppm level.

As part of Northern Dynasty’s analytical QAQC program, Cu-Au-bearing or Au-bearing standard reference samples were inserted with the regular samples. The 118 analyses of these standards represent over 5% of the total samples analyzed. For drill holes 2044 through 2068, an in-line reject duplicate was made and analyzed with the regular samples. The 65 analyses of duplicates, represents 4% of the total number of samples in this series. These standards and duplicates are in addition to the laboratory’s internal quality control work. Inter-laboratory analysis included a total of 25 pulp duplicates analyzed for gold, and 13 reject duplicates analyzed for gold and four ¼ core reject splits assayed for metallic gold by Acme in Vancouver.

- 28 -

In 2003, SGS Minerals Services (“SGS”) laboratories completed all analytical work. A total of 6,443 drill core samples, averaging 3.3 m in length, were taken from the 19,552 m drilled in this program. At SGS in Fairbanks, the sample bags were verified against the numbers listed on the shipment notice. The entire sample was dried, weighed, crushed to 75% passing 2 mm (10 mesh), a 400 g split taken and pulverized to 95% passing 75 micron (200 mesh). The pulp was split and 125 g shipped by commercial air freight. In June 2003, 96 soil samples were taken, expanding the surface geochemical survey coverage. These samples were sent to SGS in Fairbanks Alaska, dried at 60° C and sieved through an 80-mesh screen. All samples were shipped to SGS Canada Inc., an ISO 9002 registered ISO 17025 accredited laboratory in Toronto, Ontario, for AR digestion ICP-AES and Cu analyses. Au was determined by one assay ton (30 g), lead collection FA fusion with an AAS finish at the SGS laboratory in Rouyn, Québec.

Gold was determined at the SGS laboratory in Rouyn, Québec, by one assay ton (30 g), lead collection FA fusion with an AAS finish. Ten samples with Au results greater than 2,000 ppb (2 g/t) were reanalyzed by 30 g FA fusion with a gravimetric finish. All samples were subject to multi-element analysis, for 33 elements including Cu and Mo, by AR digestion ICP-AES finish. Total Cu content was determined for all 6,226 drill core samples taken from porphyry-style deposits. Samples were fused with sodium peroxide, digested in dilute nitric acid and the solution analyzed by ICP-AES, results reported in percent. Five drill holes were not assayed for Cu by peroxide fusion: hole 3103 drilled on the Hole 5 Zone, holes 3088 and 3090 drilled on the 37 Skarn Zone, and holes 3107 and 3109 drilled on the North IP Anomaly target. Copper results for these holes are by multi-element ICP. The remaining pulp was shipped to the Company’s Port Kells warehouse. The coarse reject is stored at the Fairbanks laboratory.

Drilling, sampling and QAQC are supervised by qualified persons employed by Northern Dynasty. Core samples were logged and identified in the field with consecutively numbered sample tags, on which the analytical QAQC designations for standards and duplicates were pre-marked. In the 2003 program, Au-Cu-bearing or Cu-bearing standard reference samples were inserted with the regular samples. The 331 blind analyses of standards represent over 5% of the total samples analyzed. A total of 381 reject duplicates samples were also prepared and analyzed at the ALS Chemex, representing a further 6% of the total. The program is separate from the internal procedures used at the analytical laboratory.

In 2004, NQ2 (5.02 cm), HQ (6.35 cm) and PQ (8.31 cm diameter) core was drilled. The drill core was boxed at the drill rig and transported daily by helicopter to Northern Dynasty’s secure logging facility at the village of Iliamna, AK. Between May and October 2004, 49,533 m (162,510 feet) were drilled in 227 holes. The 13,208 samples taken in this Phase averaged 3 m (10 feet) in length.

The 2004 drilling program included 26 large diameter holes for metallurgical testing. A total of 1990 samples were taken from these holes for analysis. Samples were taken by cutting an off-center slice representing 20% of the core volume, which was submitted for analysis. The remaining 80% was used for metallurgical purposes.

ALS Chemex laboratory in Fairbanks, Alaska, performed sample drying and crushing. ALS Chemex Laboratories of North Vancouver, an ISO 9001:2000 registered laboratory pulverized the samples and performed the analytical work for the 2004 drill program. All 13,208 samples were analyzed for 25 elements, including copper (Cu) and molybdenum (Mo), by a four acid digestion multi-element method. All samples, except for 188 Tertiary waste rock characterization samples, were analyzed by fire assay for gold (Au).

- 29 -

Gold content was determined by one assay ton (30 g) lead collection Fire Assay (FA) fusion with an Atomic Absorption Spectroscopy (AAS) finish, with results reported in parts per million (ppm). One sample which returned Au results greater than 10 ppm was re-analyzed by 30 g FA fusion with a gravimetric finish, with results reported in ppm. Total copper content was determined by four acid (HF-HNO₃-HClO₄-HF-HCl) digestion and the solution analyzed by Inductively Coupled Plasma – Atomic Emission Spectroscopy (ICP-AES) with results reported in ppm. All samples were subject to multi-element analysis for 25 elements, including Cu, Mo and S, by four acid digestion with an ICP-AES finish.

Coarse rejects are stored at Delta Junction, Alaska. Remaining pulps have been shipped for long term storage to Northern Dynasty’s secured warehouse at Port Kells, B.C.

Drilling, sampling and QAQC are supervised by qualified persons employed by Northern Dynasty. Core samples were logged and identified in the field with consecutively numbered sample tags, on which the analytical QAQC designations for standards and duplicates were pre-marked. In the 2004 program, Au-Cu-bearing standard reference samples and unmineralized blank samples were inserted with the regular samples. The blind analyses of 688 standards and 167 blanks represent over 6% of the total samples analyzed. A total of 658 reject duplicates samples were also prepared and analyzed at the Acme Analytical Laboratories in Vancouver, BC, representing a further 5% of the total. The program is separate from the internal procedures used at the analytical laboratory.

Engineering Studies in 2004

Preliminary Assessment

In November, 2004, a preliminary economic assessment of the Pebble project was done based on an early 2004 resource estimate. The following is a summary of the technical report, entitled “Preliminary Assessment of the Pebble Gold-Copper-Molybdenum Project, Iliamna Area, Alaska, USA” November 2004 by qualified persons Derek J. Barratt, P.Eng., and Peter G. Beaudoin, P.Eng., filed onwww.sedar.com.

The Preliminary Assessment was prepared in order to quantify the Pebble project’s cost parameters and to provide guidance for the ongoing engineering work that will ultimately define the optimal scale of production. Preliminary forecasts and estimates in the report were developed to an order of magnitude level and are not based on systematic engineering studies. As is normal at this stage of a project, data is incomplete and estimates were developed based on the expertise of the engineers involved.

The Preliminary Assessment indicates that the Pebble gold-copper-molybdenum porphyry deposit would be developed by conventional, large-scale, open pit mining methods. Four open pit stages were designed using the block model of the Pebble deposit established for the February 2004 resource estimate. Processing of mill feed from the open pit would produce a flotation copper sulphide concentrate with gold and silver values as well as a separate molybdenum sulphide concentrate. Targeted metal recoveries of 88% for copper, 76% for gold and silver, and 60% for molybdenum were utilized in the financial modeling. These estimates are based upon on-going testwork by Northern Dynasty, and are in-line with other comparable large gold-copper porphyry mines. In the Preliminary Assessment, copper concentrate was estimated to grade 28% copper, 26.6 g/t gold, and 100 g/t silver, whereas molybdenum sulphide flotation concentrate was estimated to grade 50% molybdenum.

The Preliminary Assessment examined three production rate scenarios: 100,000 tonnes per day, 200,000 tonnes per day, and a phased expansion from 100,000 tonnes per day to 200,000 tonnes per day in year six. Construction capital costs, sustaining capital, operating costs, and off-site charges (such as concentrate transportation and smelter/refining charges) as well as revenues were all estimated in 2004 US dollars. Capital and operating cost estimates for the three production scenarios were developed from

- 30 -

initial estimates by the major company which was the previous operator, as well as site specific data, current major equipment costs and reported costs at similar operating mines throughout the world. Capital cost estimates range from US$1.0 billion for a 100,000 tpd facility (Case 1) to US$1.5 billion for a 200,000 tpd facility (Case 2). Life of mine sustaining capital estimates range from a total of US$276 million for a 100,000 tpd project (Case 1) to a total of US$197 million for a 200,000 tpd project (Case 2). Operating cost estimates range from US$5.06 per tonne milled for a 100,000 tpd production rate (Case 1) to US$4.36 per tonne milled for a 200,000 tpd production rate (Case 2).

Financial models were developed on a pre-tax, 100 percent equity financed basis for each of the three production rates assessed. For the Preliminary Assessment, long-term average metal prices were estimated to be US$0.95/lb copper, US$395/oz gold, US$5.00/oz silver, and US$5.00/lb molybdenum. In addition, for each production rate scenario, financial analyses were completed over a range of metal prices. Although a capital cost of US$103 million was estimated for construction of the sea port and access road for the Pebble project, the financial analyses in this Preliminary Assessment do not include these costs on the assumption that the State of Alaska will parallel the implementation of its Southwest Alaska Regional Transportation Plan with project development. The results of financial analyses for the three production rates under consideration indicate that at the long-term average metal prices used in the Preliminary Assessment, the Pebble project could generate an Internal Rate of Return (IRR) of between 15.3% and 20.3%, and a Net Present Value (NPV), discounted at 5%, of between US$1.047 billion and US$2.091 billion. At recent metal prices of US$1.25/lb Cu, US$415/oz Au, US$7.00/oz Ag, and US$15/lb Mo, the IRR would increase to between 33.0% and 40.8% and the NPV, discounted at 5%, to between US$3.511 billion and US$5.972 billion.

These financial analyses are preliminary in nature and were based entirely on the inferred mineral resources estimated in February 2004 (see Exploration History and the Company's 2003 Form 20-F). A Preliminary Assessment is defined under Canadian Securities Administrators National Instrument 43-101 as an economic evaluation that uses inferred resources. Inferred resources are considered too speculative geologically to be categorized as mineral reserves and to have economic considerations applied to them. There is no assurance that the operating and financial projections in the Preliminary Assessment will be realized.

All information contained in the Preliminary Assessment, including but not limited to statements of the Pebble project's potential and information under the headings "Production Parameters," "Capital Costs, Sustaining Capital Costs, and Operating Costs," "Production Summary," “Off-site Costs,” and "Financial Analyses," are "forward looking statements" within the definition of the United States Private Securities Litigation Reform Act of 1995. The information relating to the possible construction of a port, road, power generating facilities and power transmission facilities also constitutes such "forward looking statements." The Preliminary Assessment was prepared to broadly quantify the Pebble project's capital and operating cost parameters and to provide guidance on the type and scale of future project engineering and development work that will be needed to ultimately define the project's likelihood of feasibility and optimal production rate. It was not prepared to be used as a valuation of the Pebble project nor should it be considered to be a pre-feasibility study. The capital and operating cost estimates which were used have been developed only to an approximate order of magnitude based on generally understood capital cost to production level relationships and they are not based on any systematic engineering studies, so the ultimate costs may vary widely from the amounts set out in the Preliminary Assessment. This could materially and adversely impact the projected economics of the Pebble project. As is normal at this stage of a project, data is incomplete and estimates were developed based solely on the expertise of the individuals involved as well as the assessments of other persons who were involved with previous operators of the project. At this level of engineering, the criteria, methods and estimates are very preliminary and result in a high level of subjective judgment being employed. The Preliminary Assessment uses only inferred mineral resources which are considered too speculative geologically to be categorized as mineral reserves and to have economic considerations applied to them. There can be no assurance that the operating and financial projections contained in the Preliminary Assessment will be realized.

The following are the principal risk factors and uncertainties which, in management's opinion, are likely to most directly affect the conclusions of the Preliminary Assessment and the ultimate feasibility of the Pebble project. The mineralized material at the Pebble project for the Preliminary Assessment was classified as an inferred resource and it is not a reserve. The mineralized material in the Preliminary Assessment is based only on the inferred resource model developed in February, 2004. That model includes only assay information from drilling up to the end of 2003. Considerable additional work, including in-fill drilling, additional process tests, and other engineering and geologic work will be required to determine if the mineralized material is an economically exploitable reserve. There can be no assurance that this mineralized material can become a reserve or that the amount may be converted to a reserve or the grade thereof. Final feasibility work has not been done to confirm the pit design, mining methods, and processing methods assumed in the Preliminary Assessment. Final feasibility could determine that the assumed pit design, mining methods, and processing methods are not correct. Construction and operation of the mine and processing facilities depends on securing environmental and other permits on a timely basis. No permits have been applied for and there can be no assurance that required permits can be secured or secured on a timely basis. Data is incomplete and cost estimates have been developed in part based on the expertise of the individuals participating in the preparation of the Preliminary Assessment and on costs at projects believed to be comparable, and not based on firm price quotes. Costs, including design, procurement, construction, and on-going operating costs and metal recoveries could be materially different from those contained in the Preliminary Assessment. There can be no assurance that mining can be conducted at the rates and grades assumed in the Preliminary Assessment. The project requires the development of port facilities, roads and electrical generating and transmission facilities. Although Northern Dynasty believes that the State of Alaska favours the development of these facilities and may be willing to arrange financing for their development, there can be no assurance that these infrastructure facilities can be developed on a timely and cost-effective basis. Energy risks include the potential for significant increases in the cost of fuel and electricity. The Preliminary Assessment assumes specified, long-term prices levels for gold, copper, silver and molybdenum. Prices for these commodities are historically volatile, and Northern Dynasty has no control of or influence on those prices, all of which are determined in international markets. There can be no assurance that the prices of these commodities will continue at current levels or that they will not decline below the prices assumed in the Preliminary Assessment. Prices for gold, copper, silver, and molybdenum have been below the price ranges assumed in Preliminary Assessment at times during the past ten years, and for extended periods of time. The project will require major financing, probably a combination of debt and equity financing. Interest rates are at historically low levels. There can be no assurance that debt and/or equity financing will be available on acceptable terms. A significant increase in costs of capital could materially and adversely affect the value and feasibility of constructing the project. Other general risks include those ordinary to very large construction projects including the general uncertainties inherent in engineering and construction cost, the need to comply with generally increasing environmental obligations, and accommodation of local and community concerns.

- 31 -

Other Engineering Studies

In 2004, the focus of the Pebble project made a transition from exploration to comprehensive studies designed to collect the necessary resource, engineering, environmental and socioeconomic data to complete a feasibility study and application for permits for a large scale open pit mining operation. Engineering studies for all project components, including road access, port and power transmission, as well as comprehensive environmental and socioeconomic base line data collection and studies took place through out 2004 and are continuing in 2005.

AMEC Americas Limited was selected in December 2004 as the lead engineering contractor for preparation of the Pebble Project Feasibility Study. As well, in association with the local Alaskan power utility, Homer Electric Association, Power Engineers Ltd has been retained to undertake the detailed investigation of power supply to the proposed mine location. Knight Piesold Ltd. was contracted to collect geotechnical and hydrogeological data required for a feasibility level open pit slope design.

Geotechnical

The 2004 program consisted of eight oriented drill holes, totaling 3,065 m, 50 overburden holes (GH-series), and test pitting. A comprehensive geotechnical database was developed that includes results from both laboratory and field strength tests on point load and direct shear. In situ packer permeability testing was completed in the deeper, more competent rock in the geotechnical holes. Standpipe piezometers were installed in some exploration holes to characterize hydrogeological characteristics of the rock mass. The overburden holes and test pits were done to investigate the geotechnical and hydrogeological characteristic of overburden material in order to select suitable areas for storage of waste rock and mill tailings. The oriented holes were drilled to obtain structural information required for the design of a Stage-1 open-pit. The oriented holes were oriented outwards to intersect the proposed pit walls. The intact strength of the rock mass at Pebble is fair to good, with some poor sections in the Tertiary sedimentary rocks and upper parts of intrusions. Steeply dipping faults and shears are present and will affect the pitwall design. The groundwater table is near the surface and moderate groundwater flow is expected at the interface between overburden and bedrock. The permeability of the rock mass generally is low.

The study concluded that the intact strength of the rock mass at Pebble is fair to good, with some poor sections in the Tertiary sedimentary rocks and upper parts of intrusions. Steeply dipping faults and shears are present and will affect the pitwall design. The groundwater table is near the surface and moderate groundwater flow is expected at the interface between overburden and bedrock. The permeability of the rock mass generally is low.

Vein orientations were measured and analyzed from cores of the oriented holes to identify vein sets and significant structural orientations. The data show a strong cluster of veins whose dips are oriented inwards from the northwest and southeast sides of the zone, a pattern that is consistent with the interpretation of the Pebble deposit as occupying the core of a broad anticline trending east-northeast. The veins are interpreted to occupy preferentially fractures in zones of dilatent stress on the limbs of the anticline. Patterns are generally similar for veins of all ages. The data may be biased because the preferred orientation in all holes was subperpendicular to the axis of the hole.

Metallurgical

In November 2004, 85 tons (77 tonnes) of samples from 27 PQ (85 mm diameter) and HQ (63.5 mm diameter) drill holes in the Pebble gold-copper molybdenum deposit were shipped to SGS Lakefield Research Limited (“SGS Lakefield”) in Ontario, Canada for metallurgical test work. At SGS Lakefield’s research facilities, the drill core will be prepared into a number of composite samples for testing variability in the crushing, grinding and processing properties of the mineralization and different rock types in the Pebble deposit. These composites will be selected to accurately define the metallurgical variances across the deposit in rock masses of sufficient tonnage to impact daily, monthly and yearly production schedules. These detailed studies will provide a thorough understanding of the Pebble deposit in terms of power requirements for crushing and grinding as well as the expected metal recoveries and product quality during flotation. All reject products from the process will be characterized for the most suitable manner of disposal so that appropriate conventional waste management facilities can be designed.

These metallurgical studies are part of ongoing testing of drill core materialstate land that has been underway since mid 2004. Work on the new composite samples will commence upon receipt by SGS Lakefield,specifically designated for mineral exploration and is expected to continue to mid 2005.

Infrastructure

Infrastructure requirements for the Pebbledevelopment. The project are being defined and significant progressarea has been made on specific infrastructure development plans. Developmentthe subject of a mine at Pebble will requiretwo comprehensive land-use planning exercises conducted by the constructionAlaska Department of a 138-kilometer (85 mi) road to connectNatural Resources (the “ADNR”), the project to tidewater at Cook Inlet and a deep sea port facility. The State of Alaska’s Southwest Regional Transportation Plan includesfirst in the construction of transportation facilities from Cook Inlet to the town of Iliamna, 27 km (17 miles) from the Pebble project. Northern Dynasty1980s and the State aresecond completed in discussion to integrate this sector of the State’s plan with the Pebble project’s potential development schedule. A recent transportation corridor analysis, commissioned by the State’s Department of Transportation and Public Facilities,2005. The ADNR identified a preferred road corridor and port option.

- 32 -

Pre-feasibility level engineering studies for the port site and the road transportation corridor have now been commissioned by the State, with results expected to be reported in early 2005. Northern Dynasty’s environmental consulting team is collecting the necessary data for road and port permit applications on a year-round basis. The State and Northern Dynasty plan to continue their co-operation under a Memorandum of Understanding to be negotiated in the coming months.

A number of options for the provision of electric power to the project and neighboring villages have been identified and are currently being evaluated. These options include connection to the State’s existing power transmission grid, either through a 66-km (41 miles) submarine connection to the Kenai Peninsula or an overland route on the west side of Cook Inlet. An alternative to a transmission grid connection would involve the establishment of new generation facilities close to the mine or port area. Homer Electric Utility and Northern Dynasty are jointly funding a feasibility study of a power development plan to connect the deposit site to the State of Alaska’s Railbelt electrical grid.

Environmental Considerations

The local communitiesfive land parcels (including Pebble) within the Bristol Bay districtplanning area as having “significant mineral potential,” and where the planning intent is to accommodate mineral exploration and development. These parcels total 2.7% of southwesternthe total planning area (ADNR, 2005).

Environmental standards and permitting requirements in Alaska are reliant on the commercial salmon-fishing industry, the recreational sports fishing industry,stable, objective, rigorous and subsistence hunting and fishing. Although, the region is searching for waysscience-driven. These features are an asset to diversify, economically, it is importantprojects like Pebble that potential mineral development in the area is designed in such a way as to ensure that surface and groundwater quality standards will be maintained.

Accordingly, a wide variety of comprehensive and multi-disciplinary base-line environmental and socioeconomic studies where begun in 2004. The studies are being conducted at the project site, along the road and at the potential port site include:

• Meteorology;
• Air quality;
• Surface water quantity/quality;
• Ground water quantity/quality;
• Fish and aquatic resources;
• Wildlife and terrestrial resources;
• Wetland resources; Marine studies at the port site;
• Trace elements in sediment, soils, vegetation, fish and aquatic resources;
• Subsistence; Cultural resources;
• Renewable Resource use;
• Socio-economic factors;
• Viewscapes;
• Noise;
• Mine rock and tailings chemical characterization;
• Laboratory Analysis quality samples taken during the study;
• Impact assessment and management;
• and Mine closure and reclamation.

- 33 -

There are 24 different consulting companies providing experts and more than 80% are Alaskans. Along with the surveys of the wetlands; spring stream surveys, marine studies, and summer fisheries studies are also ongoing.

This comprehensive environmental and socio-economic studies program began in 2004 and will garner the scientific and traditional knowledge that provides the foundation for:

• Sound environmental design of the Pebble project;
• Documenting baseline conditions;
• Assessing/managing project impacts;
• and Rigorous project review and permitting.

The 2004 program of studies will be continued in 2005 to ensure that an adequate baseline of environmental and socioeconomic data is available to support the permitting phase of project development. Approximately $20 million has been allocated for the 2005 study program.

An extensive community relations program has been initiated involving local residents in Iliamna, Newhalen, Nondalton, Pedro Bay and 14 other Bristol Bay native communities. Northern Dynasty have been assigned to visit these communities on a regular basis in order to establish meaningful relationships with community leaders, provide specific information to the communities as a whole and solicit information from them regarding their desires and concerns for responsible mineral development. The Company is also initiating, with local and state authorities a workforce development strategy for the project moving forward.

Integrated Project Design Process

In order to facilitate the project permitting process, a project design process has been initiated to integrate the environmental baseline information with the engineering factors needed to develop a viable project. The process is designed to address the environmentalmeet U.S. and socioeconomic factors at an early stage.

Planinternational best practice standards of Operation - Exploration, Engineering and Environmental Programs in 2005

A $44.5 million program is planned for 2005.

The core drilling portion includes 30,000 m (97,000 feet) of exploration and infill drilling, focused on the East Zone, and 2,700 m (9,000 feet) of metallurgical drilling in the Pebble deposit. In addition, 60 days of reverse circulation drilling to collect further hydrological data throughout the site is also planned.

Comprehensive engineering, environmental, and socioeconomic programs, designed for the completion of a feasibility study and permit applications will continue in parallel with the drill program.

Waste and Water Management System Assessment

The waste and water management system assessment will be continued for incorporation in the feasibility study. This work will include additional data collection for seepage control, foundation design and waste and water characterization. The facility layouts will continue.performance.

Metallurgical Testwork

The metallurgical testwork, which commenced in 2004, will continue to mid 2005. In addition, as a result of the expansion of the resource to the east, additional testwork requirements were identified. A second

- 34 -

suite of samples, based on a combination of existing drill core and a series of new drill holes, will be collected and the tests on these samples added to the program.

The goal of the metallurgical program is two-fold. First, the data generated will be adequate to support the feasibility level design of the process plant. Second, the response of the ore within the plant – i.e. grindability, metal recovery, reagent consumption, etc. – will be defined to permit to the proper estimate of operating costs and financial returns.

TransportationEnvironmental Baseline Studies

The transportation studies also have two components. The first is to support the State in its assessment of the Southwest Alaska transportation system. The second is to determine the transportation requirements for the project. This latter task includes evaluating concentrate transport alternatives, developing a project logistics plan, and determining the costs for the feasibility study.

Power Studies

Northern Dynasty will continuebegan an extensive field study program in 2004 to support Homer Electriccharacterize the existing physical, chemical, biological, and social environments in its assessment of the capacity ofBristol Bay and Cook Inlet areas where the Railbelt electrical grid to supply power toPebble Project might occur. The Pebble Partnership compiled the project.

Feasibility Study

The basic objective ofdata for the feasibility2004-2008 study will be to consolidate the results of the various engineering studiesperiod into a comprehensive document that defines the costs and financial returns of the project. The work specific to the study will be to complete mine planning based on the new resource estimate, complete a feasibility-level plan for the process plant and associated infrastructure, and to estimate the costs of these facilities.multi-volume Environmental Baseline Document¹. These studies have been designed to:

¹Baseline data collecting and monitoring has continued since that time. The program data from 2009 to 2014 is being integrated with environmental baseline data reports from 2004 to 2008 so that this information can also be shared with state/federal agencies and the public as part of the future permitting process under NEPA.

The baseline study program includes:

Potential Environmental Effects and Proposed Mitigation Measures

The application of sound engineering, environmental planning and best management practices, including compliance with existing U.S. federal and state environmental laws, regulations and guidelines, will ensure that all of the environmental issues associated with the development and operation of the Pebble Project can be effectively addressed and managed.

The major environmental components include air, water and terrestrial resources. During the preliminary stages of the Pebble Project, Northern Dynasty identified key environmental issues and design drivers that have formed the basis of baseline data collection, environmental and social analysis and continuing stakeholder consultations influencing the Pebble Project design. The effects assessment has confirmed these as important issues and design drivers, and has identified mitigation measures for each. The key mitigation strategies for these drivers include:

Direct integration of these and other appropriate measures into the Pebble Project design and operational strategies are expected to effectively mitigate possible environmental effects and minimize residual environmental effects associated with the construction, operation and eventual closure of any proposed mine at the Pebble Project.

Community Consultation and Stakeholder Relations

Since 2004, the Company has undertaken a comprehensive stakeholder relations and community outreach program. In addition to ensuring that relevant stakeholder groups and individuals receive early notification of all work programs, the objectives of the Pebble Partnership’s stakeholder and community relations program are:

- 35 -The Pebble Partnership has developed a dedicated and knowledgeable stakeholder relations team to implement this program. In addition to stakeholder relations staff in Anchorage, the team includes two representatives living in Bristol Bay communities. The Pebble Partnership has provided ongoing training for all of its community relations personnel.

ITEM 5 OPERATING AND FINANCIAL REVIEW AND PROSPECTSStatus of Project Engineering and Previous Mine Planning Work

Overview

Northern Dynasty’s business strategy isDuring the period 2007 to acquire, explore and conduct preliminary engineering and economic analyses of mineralized deposits, which have large tonnage and multi-year production potential. This work is done with a view to enhancing2011, the value of the mineral prospect. As an active junior resource issuer, Northern Dynasty does not consider it likely that even if project economics warrant commercial production that Northern Dynasty as it is presently constituted would have the financial and manpower resources to placePebble Partnership expended several hundred million dollars on the Pebble Project, into commercial production entirelya major portion of which was spent on exploration programs, resource estimates, environmental data collection and technical studies involving engineering of various possible mine development models, as well as related infrastructure, power and transportation systems. During this period, the Pebble Partnership was funded by itself, as such operations require large corporate,the international mining company Anglo American through an affiliate which had acquired a 50% interest in the limited partnership which owns the Pebble Project contingent on the provision of $1.5 billion in funding for project costs. These studies informed a preliminary assessment of the project released by the Company in 2011. As a consequence of several factors, including EPA opposition to the Pebble Project discussed underItem 8 – A3. Legal Proceedings, the withdrawal of Anglo American from the project and the passage of time, technical and financialengineering studies related to mine-site and infrastructure development are considered to have very uncertain and perhaps little value at this time. Environmental baseline studies and data collection remains a significant legacy asset of the Company from this period. The 2014 Technical Report does not attempt to build on this previous engineering work given that, unless and until there is some visibility in excessthe litigation with the EPA in regards to the possibility of Northern Dynasty’s present capacities.permitting any kind of mine at Pebble, it is not appropriate for the technical report authors to use or build upon previously posited mine models or to make large dollar recommendations in furtherance of assessing the technical or economic feasibility of a potential mine at Pebble.

Plans for 2015

Structure as at December 31, 2014:

In January 2015, Kaskanak Inc and Kaskanak Copper LLC were merged with Pebble East Claims Corporation, with the latter the surviving entity.

The Company’s principal property is the Pebble Project, as discussed above in Item 4.B.

The Company has approximately $972,000 in plant and equipment primarily at the Pebble Project site located in Iliamna.

The Company, through the Pebble Partnership, has leased premises in Anchorage and at the Pebble Project site and as result the Company has lease commitments which have been disclosed underItem 5 –F. Tabular Disclosure of Contractual Obligations.

There are none.

OVERVIEW

Northern Dynasty’s resultsDynasty is a mineral exploration company which, via its subsidiaries, holds a 100% interest in mining claims on State of operationsAlaska land in southwest Alaska, USA ("US") that are economically evaluated by investors on an “event driven” basispart of or in thatthe vicinity of the Pebble Copper-Gold-Molybdenum Project (the "Pebble Project" or “Pebble”).

None of the Company's properties have any mineral reserves or have been proven to host mineralized material which can be said to be "ore" or feasibly economic at current metals prices. The Company incurs significant exploration expenditures yield information onas it carries out its business strategy. As Northern Dynasty is an exploration stage company, it does not have any revenues from its operations to offset its exploration expenditures. Accordingly, the nature, extent and statistical confidence (primarily from core drillingCompany's ability to continue exploration programs) in a mineralized deposit’s size and continuity which information is not contained in financial statements. Thus, it is difficult to evaluate the success of operations in a fiscal year by reference to the financial statements given that results are more appropriately measured by an evaluation of the minerals discovered and/or confirmed. Northern Dynasty’s operating activities do not occur on a regular or periodic basis and are subject to the economic realities of metals prices and equity financing conditions for natural resource exploration issuers. Accordingly, it may not be meaningful to seek observable trends in financial operating statistics although liquidity statisticsits properties will be important. Northern Dynasty calculates an annual loss per share (which has varied over a rangecontingent upon the availability of $0.35 to $0.41 over the last three fiscal years), but is of the view that Northern Dynasty’s share price does not vary in accordance with the loss per share statistic. Rather Northern Dynasty share prices vary with the outlook for its mineral projects and the price of the underlying market for gold and copper and the outlook for these metals.additional financing.

Northern Dynasty’sDynasty's financial statements are prepared on the basis that it will continue operations as a going concern. Given thatThe Company has incurred losses since inception and the ability of the Company to continue as a going concern depends upon its ability to continue to raise adequate financing and to develop profitable operations. Northern Dynasty has no source of significant revenue this assumption is always subjectDynasty's financial statements do not reflect adjustments, which could be material, to the further assumption that there will continue tocarrying values of assets and liabilities, which may be investment interest in equity funding exploration to seek large tonnage metal deposits. Northern Dynasty can give no assurance that it will continue to be able to raise sufficient funds and,required should itthe Company be unable to continue as a going concern.

The following discussion should be read in conjunction with the audited annual financial statements for the years ended December 31, 2014, 2013, and 2012, and the related notes accompanying this Annual Report ("2014 Financial Statements"). The Company prepares and presents its financial statements in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board.

Critical Accounting Policies and Estimates

The preparation of the 2014 Financial Statements requires management to do so,make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the end of the reporting period presented and reported amounts of expenses during said reporting period. Actual outcomes may differ from these estimates.

Areas where significant estimates exist include:

Areas where significant judgments exist include:

Further discussion can be unablefound in note 2 of the 2014 Financial Statements which form Item 18 of this Annual Report.

Financial Instruments and Other Instruments

The Company has no derivative financial assets or liabilities.

The following selected annual information is from the audited consolidated financial statements which have been prepared in accordance with IFRS. The 2013 figures include the Pebble Partnership on a consolidated basis with effect from December 10, 2013. Unless otherwise stated, all monetary amounts are expressed in thousands of Canadian dollars except per share amounts, which are expressed in Canadian dollars.

Year Ended December 31, 2014 versus Year Ended December 31, 2013

The Company recorded an increase in loss of $29.4 million due primarily to realizethe increase in Exploration and Evaluation expenses ("E&E"), general and administrative expenses ("G&A") and share-based compensation ("SBC"). In 2013, the Company recorded a $5.1 million gain on the carryingdiscontinuance of the equity method in accounting for the Pebble Partnership.

E&E increased by $10.9 million as the Company funded all exploration and evaluation work on the Pebble Project and included the updating of information on mineral resources (discussed underItem 4 – Technical Summary), other technical studies, site activities including payment of annual fees for claims, site leases and land access agreements, environmental monitoring and Native community engagement. E&E comprised mainly of the following for the year as compared to 2013, expressed in thousands of dollars:

Until December 10, 2013, the Pebble Project was under joint control with Anglo American with the latter funding exploration and evaluation work on the Pebble Project. Pursuant to the agreement with Anglo American, the distribution of losses funded by Anglo American were to be allocated 100% to Anglo American until satisfaction of Anglo American’s earn-in expenditures, and as a result Northern Dynasty did not recognize any share of the losses.

G&A increased to $17.4 million from $6.2 million in 2013 due to the inclusion of the Pebble Partnership’s management, administration, and office expenses for the full year and increased legal costs which were incurred in response to the EPA’s activities during the year (seeItem 8 – A3. Legal Proceedings).

The following table provides a breakdown of G&A incurred in the year as compared to 2013, expressed in thousands of dollars:

SBC increased to $3.9 million from $0.6 million in 2013 as the Company granted 5.9 million share purchase options in the current year (2013 – no options were granted).

The Company recognized an exchange gain on translation of subsidiaries which have a U.S. Dollar functional currency of $9.9 million (2013 – $6.9 million) in other comprehensive income with the result that the Company recorded comprehensive loss for the year of $21.4 million as compared to a comprehensive gain of $4.4 million in 2013.

Cash Flows for the Year Ended December 31, 2014 versus 2013

Net cash used in operations increased to $27.8 million in 2014 from $7.8 million in 2013, due to the increase in the Company’s operating activities as discussed above. The source of cash and cash equivalents during 2014 included the Company’s cash resources and cash received from the issue of special warrants in a private placement late in December 2014.

Financial position as at December 31, 2014 versus December 31, 2013

Total assets decreased by $6.3 million to $135.5 million. This decrease was due mainly to the utilization of the Company’s cash and cash equivalents in its operating activities.

Year Ended December 31, 2013 versus Year Ended December 31, 2012

The Company recorded a decrease in loss of $13.1 million due mainly to the decrease in E&E, SBC and a gain recognized on discontinuance of the equity method for accounting for the investment in the Pebble Partnership.

E&E decreased by $2.5 million as the Company’s work on technical studies wound down.

G&A decreased to $6.2 million from $6.8 million in 2012 due mainly to a reduction in consulting fees paid and conference and travel costs. In 2012, in response to EPA’s initiatives such as the Bristol Bay Watershed Assessment, the Company retained US political and scientific representatives and consultants to assist, consult and represent the Company; such costs were lower in 2013. This was offset by increased shareholder communication in 2013 as the Company focused more resources in the area of investor relations and shareholder communication.

The following table provides a breakdown of G&A incurred in the year as compared to 2012, expressed in thousands of dollars:

SBC decreased to $0.6 million from $5.2 million in 2012 due mainly to the Company not granting share purchase options in 2013. In 2012 the Company granted 2.2 million options and recognized an additional $0.5 million expense for options that were cancelled voluntarily. Although over 2.0 million options were cancelled voluntarily in 2013, they were fully vested, and there was no impact on SBC as the Company had previously recognized SBC thereon.

The Company recognized an exchange gain on translation of the Pebble Partnership, which has a US dollar functional currency, of $6.9 million (2012 – loss of $2.2 million) in other comprehensive income, with the result that the Company recorded comprehensive income for 2013 of $4.4 million as compared to a comprehensive loss of $17.8 million in 2012.

Cash Flows for the Year Ended December 31, 2013 versus 2012

Net cash used in operations decreased by $2.7 million to $7.8 million in 2013 due mainly to the decrease in Company corporate activities.

The Company contributed a further $1.0 million to the Pebble Partnership before the change in control of the Pebble Partnership on December 10, 2013. On assumption of control, the Company’s cash resources increased by $6.5 million.

The Company received $0.6 million in interest on cash balances as compared to $0.4 million in 2012 as the Company’s funds were invested at higher rates. For the 2013 year, the Company had a net decrease in cash of $1.7 million (2012 – $9.9 million).

Financial position as at December 31, 2013 versus December 31, 2012

The Company’s total assets increased by $8.9 million to $141.8 million. The increase was mainly the result of consolidating the assets and liabilities of the Pebble Partnership as a result of assuming control thereof. In respect to non-current assets, the Company recognized the Pebble mineral property and plant and equipment as it discontinued the equity method of accounting for the Pebble Partnership, which including a foreign exchange gain on translation amounted to an increase of $7.7 million. Current assets increased by $1.2 million as the Company consolidated amounts receivable and prepaid expenses, certain restricted cash ($1.2 million) and cash and cash equivalents from the Pebble Partnership. The additional cash and cash equivalents reduced the decrease in cash and cash equivalents utilized for the year to $1.7 million. Other changes included the change in value of the resource project. amounts receivable due to accrued interest ($0.3 million) and foreign exchange gain on translation ($0.5 million).

The net realizable value could be materially less than Northern Dynasty’s liabilities with a potentialPebble Partnership under Joint Venture

Until the change of control on December 10, 2013, the Company accounted for total loss to Northern Dynasty shareholders.its investment in the Pebble Partnership under the equity method.

Northern Dynasty does not believe that it is significantly impactedExpenditures incurred by the effects of inflation nor currency moves asPebble Partnership on the Canadian dollar has fluctuatedPebble Project were funded by Anglo American in a relatively narrow bandorder to retain its 50% interest in the United States dollar during the last three years. Northern Dynasty’s principal property is located in Alaska and most on-site property related expenses will be transacted in United States dollars. Northern Dynasty will monitor exchange rates and buy US dollars at the most favorable rates available to mitigate the effectsPebble Project. Anglo American’s total contributions from inception of the United States/Canadian dollar exchange rate on its business. For additional details respecting the five year historical exchange rates, see Item 3A. Northern Dynasty has not been significantly affected by government economic, fiscal, monetary or political policies and the outlook for Northern Dynasty’s assets primarily relatePebble Partnership to the results of exploration and the outlook for copper and gold.

- 36 -

Operating Results

Fiscal 2004 Compared with Fiscal 2003

Loss for the year ended December 31, 2004, increased2013 total $594.9 million (US$573.2 million). For the period ended January 1 to $41,698,647, comparedDecember 10, 2013, the Pebble Partnership incurred losses of $68.8 million (December 31, 2012 – $102.9 million). E&E costs decreased to a loss of $8,299,461 in the previous fiscal year. Included in the loss for the current year was stock-based compensation expense of $6,378,877.

Expenses, excluding stock-based compensation, foreign exchange, interest and write down of marketable securities increased to $35,075,467$58.5 million from $6,754,715 in the previous year.

Exploration costs increased by $27,093,171 to $32,594,900, from $5,501,729 spent in the previous year. The main exploration expenditure during the year was for environmental (2004 - $9,806,864; 2003 – nil) for planning and carrying out a variety of environmental test work. Other significant exploration costs are:

• drilling (2004 – $7,689,138; 2003 – $2,050,068) as the Company was completing its current year drill program on the property,
  
• helicopter transportation for geological and environmental crews as well as drills and drill crews (2004 – $3,823,073; 2003 – $632,331),
  
• engineering (2004 – $3,886,839; 2003 – $83,301) for tailings site studies and site and infrastructure planning, and
  
• site activities (2004 – $3,715,240; 2003 – $723,326), including site support and cost of the new field office in Anchorage.

Office and administration costs increased by $861,429 to $1,382,986 from $521,557$93.3 million in the previous year as additional activities have been requiredthe Pebble Partnership focused on various programs to advance the completion of a prefeasibility study for the Pebble Project and the completion of a Project Description to support work atthe permit application under NEPA. In Q1 of 2012, the Pebble site. Shareholder communication expenses decreased from $578,476 spent in previous year to $471,032 in fiscal 2004.

Stock-based compensation of $6,378,877 was charged to operations during 2004 fiscal year, compared to $1,675,064 inPartnership released the previous year. The increase in stock-based compensation expense in the 2004 fiscal year is related primarily to the increase in the share price of the Company during the year. The share price is a significant component of the value of stock-based compensation for unvested options to non-employees.

Fiscal 2003 Compared with Fiscal 2002

The Company recorded a loss of $8,299,461 over the 2003 fiscal year, compared to a loss of $4,502,094 over the first nine months of 2003 and $5,112,493 in the prior fiscal year. The expenditures for 2003 ($8,429,779) are higher than in the previous fiscal year ($5,101,817) and this is largely attributed to higher exploration costs (2003 - $5,501,729; 2002 - $4,329,936), stock-based compensation (2003 - $1,675,064; 2002 - $13,271), and shareholder communication (2003 - $578,476; 2002 - $164,031).27,000-page Environmental Baseline Document.

The main exploration expenditure was for drilling (2003 - $2,700,068; 2002 - $1,142,867). During the 2003 fiscal year, 21,713 metres (71,238 feet) of drilling were completed. Other significant explorationE&E costs for the year were (2003 - $632,331; 2002 - $601,641) for helicopter and fixed wing for transportation to site and drill moves, (2003 - $723,326; 2002 - $497,291) for site activities that include local support services and supplies and (2003 - $622,183; 2002 - $629,082) for geological wages for planning and supervising the drill program and for logging core from the program. Increased assay and analytical costs of $290,771 (2002 - $118,948) were also paid during the year.

- 37 -

Office and administration costs increased from $454,190 spent in the 2002 fiscal yearperiod ended January 1 to $521,557 in the 2003 fiscal year. Shareholder communication expenses increased from $164,031 spent in the previous year to $578,476 in fiscal 2003, and reflect the increased level of corporate and investor relations activity.December 10, 2013, were:

Fiscal 2002 Compared with Fiscal 2001Liquidity

The Company writes off as expenses all of its resource expenditures hence it recorded a loss of $5,112,493 over the 2002 fiscal year as compared to a loss of $4,120,331 over the first nine months of 2002 and $1,454,844 in the prior fiscal year. The expenditures for fiscal 2002 year ($5,101,817) are higher than in the prior fiscal year ($1,563,515), and this is largely attributed to higher exploration costs (2002 - $4,329,926; 2001 - $1,168,394) incurred at the Pebble Project. Administrative costs were also higher in 2002 (2002 - $771,881; 2001 - $395,121) because of additional support for the exploration programs and securities reporting and registration activities. Expenses increased in 2002 over 2001 in all areas except for management and consulting fees and property investigation costs. The latter 2001 costs were related to the technical review and development of a qualifying report, and negotiation and completion of agreements on the Pebble Project.

Expenses decreased in the fourth quarter to $988,986 as compared to $1,564,462 in the third quarter, due mainly to a decrease in exploration expenditures (December 31, 2002 - $737,287; September 30, 2002 - $1,425,595). This decrease was partially offset by an increase in shareholder communication costs (December 31, 2002 - $97,672; September 30, 2002 - $17,872). Shareholder communication costs increased due to a wide distribution of information to potential investors during the quarter. Exploration expenditures decreased as site work was completed in the third quarter.

The highest exploration expenditures in the fourth quarter were option payments (December 31, 2002 - $420,000; September 30, 2002 - nil) for the Pebble property; geological wages (December 31, 2002 - $89,798; September 30, 2002 - $245,012) for compilation of the results from drilling and re-logging programs; site activities (December 31, 2002 - $74,424; September 30, 2002 - $199,071) which involved final payments for the third quarter work at site; and assays (December 31, 2002 - $48,204; September 30, 2002 - $53,216) for completion of analytical work on the drill core samples.

Hunter Dickinson Inc. (“HDI”) of Vancouver, British Columbia is a private company with certain directors in common that carries out geological, corporate development, shareholder communications, administration and other management activities for, and incurs third party costs on behalf of, the Company. HDI is reimbursed on a full cost recovery basis. In fiscal 2002, Northern Dynasty paid $1,227,425 to HDI, as compared to $333,142 in fiscal 2001. The Company also paid $28,698 to Hunter Dickinson Group Inc., a decrease from $586,966 paid in fiscal 2001. (See also “Related Party Transactions”.)

Northern Dynasty has no legally committed capital resources or otherCompany's major sources of debt or equity capital. Northern Dynasty generally secures funding by presenting resource projects to a network of exploration investors including individual, institutional and brokerage firms. Northern Dynasty’s ability to fund projects is contingent on not only the perceived merits of its prospects but also on conditions generally in the exploration venture capital markets.

- 38 -

B.               Liquidity and Capital Resources

Overview

Historically, Northern Dynasty’s source of funding has been the saleissuance of equity securities for cash, primarily through private placements to sophisticated investors and insidersinstitutions and their associates. Northern Dynasty hasthe issue of common shares pursuant to the exercise of share purchase options. The Company's access to financing is always uncertain. There can be no assurance of continued access to significant equity funding. Northern Dynasty believes it has sufficient working capital to meet

As at December 31, 2014, the Company’s cash and cash equivalents were $9.4 million, down from $25.8 million at December 31, 2013 as the Company used $27.9 million of its cash in its operating requirements to December 31, 2005 depending on the level of activity it pursues. In March, 2004 Northern Dynasty completed a Cdn$30.8activities and raised net $11.3 million financing by issuing shares and warrants (together as Units) for Cdn$4.25 per Unit. Equity funding was secured in February 2002 and January 2003, an aggregate of $1.3 million. Contingent on positive results from the exploration program, Northern Dynasty will require additional financing to cover future exploration programs and ongoing administrative costs. The Company is actively sourcing additional funding however; there can be no assurance that Northern Dynasty will be able to raise the additional funds, and should it be unsuccessful, the Company would be required to scale back its operations.

Northern Dynasty has no legally committed capital resources or other sourcesissuance of debt or equity capital. Northern Dynasty generally secures funding by presenting resource projects to a network of exploration investors including individual, institutional and brokerage firms. Northern Dynasty’s ability to fund projects is contingent on not only the perceived merits of its prospects but also on conditions generally in the exploration venture capital markets.

Fiscal 2004 Compared with Fiscal 2003

On March 16, 2004, the Company completed a private placement by issuing 2,750,000 units at $8.00 each, for net proceeds of approximately $21.9 million. Each unit was comprised of a common share and one half warrant. Each whole warrant entitles the holder to purchase one common share27,622,642 special warrants at a price of $9.00 until March 16, 2005. The TSX Venture Exchange subsequently consented to the reduction of the exercise price of 821,875 of these warrants to $4.65.

On August 5, 2004,$0.431 per special warrant in a private placement. In January 2015, the Company completed a $10 millionthe private placement of a further 8,340,093 special warrants for gross proceeds of $3.6 million (seeItem 10 – C. Material Contracts). The Company has prioritized the allocation of available financial resources in order to meet key corporate and Pebble Project expenditure requirements in the near term. Additional financing consisting of 2,816,902 units ofwill be required to pursue any material work programs at the Pebble Project. There can be no assurances that the Company will be successful in obtaining additional financing. If the Company is unable to raise the necessary capital resources to meet obligations as they come due, the Company will have to reduce or curtail its capital at $3.55 per unit. Each unit consisted of one common share and one share purchase warrant exercisable to purchase an additional common share at a price of $4.15 until August 5, 2005.operations.

At December 31, 2004, Northern Dynasty2014, the Company had working capital of approximately $10.2$5.9 million as compared to $3.2$29.7 million at the end of the 2003 fiscal year. Working capital increased as a result of the March 2004 $21.9 million private placement, the August 5, 2004 $9.8 million private placement and $10,987,764 received in cash from the exercise of options and warrants during the year. Northern Dynasty had 47,690,287 common shares issued and outstanding at December 31, 2004.2013. The Company has no long term debt, capital lease obligations, operating leases or any other long term obligations other than those disclosed below (referF. Tabular Disclosure of Contractual Obligations).

The Company has no "Purchase Obligations", defined as any agreement to purchase goods or services that is enforceable and legally binding on the Company that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The Company is responsible for maintenance payments on the Pebble Project claims and other claims and routine office leases.

Capital Resources

The Company’s capital resources consist of its cash reserves. As of December 31, 2014, the Company had no long term debt or commitments for material capital expenditures asother than what has been disclosed in below inF. Tabular Disclosure of December 31, 2004.Contractual Obligations.

The Company has no lines of credit or other sources of financing which have been arranged but as yet unused.or utilized.

DuringRequirement of Financing

North Dynasty does not earn any revenues and has historically had, and will continue to have for the period November 2004foreseeable future, negative cash flows. Historically, Northern Dynasty's sole source of funding has been provided by the sale of equity securities for cash, primarily through private placements to March 2005, the Company acquired a 100% working interest (subjectsophisticated investors and institutions. Like all exploration stage companies, Northern Dynasty will need to a 4-5% net profits royalty) inraise additional financing to pursue any material work programs at the Pebble property (see Item 1.2 of this MD&A). The Company will useProject and to meet its capital resources primarily to continue to conduct an exploration and development program on the Pebble property.

- 39 -

Subsequent to the year end, the Company completed a $30.8 million private placement equity financing, consisting of 7,247,000 shares and 7,247,000 warrants. Assuming the exercise of in-the-money dilutables, the Company has sufficient capital to execute its 2005 work programs.

Fiscal 2003 Compared with Fiscal 2002

On July 31, 2003, the Company completed a private placement consisting of 6,944,445 units at a price of $0.72 per unit. Each unit was comprised of one common share and one warrant exercisable to purchase an additional common share at a price of $0.90 until June 12, 2004. All shares issued pursuant to the private placement financing and upon the exercise of the warrants have a hold period expiring July 31, 2004.

The private placement financing was made by Shambhala Gold Limited (“Shambhala”), a subsidiary of Galahad Gold plc, and received shareholder approval at the annual and extraordinary general meeting of shareholders of the Company on July 14, 2003. Shambhala Mining Corp., a wholly owned subsidiary of Shambhala incorporated under the laws of the Yukon, at June 1, 2004 held approximately 20% of the issued shares of Northern Dynasty. Shambhala has the right to participate in any equity financing by the Company to maintain its pro rata interest in the Company as long as Shambhala controls 20% or more (undiluted) of the Company’s issued and outstanding shares (the “Cooperative Period”). During the Cooperative Period, Shambhala is entitled to and did nominate two directors to Northern Dynasty’s board, namely Brian Mountford and Ian Watson. Shambhala has agreed that it will vote its shares in favour of resolutions recommended by the Company’s board of directors. If at any time during the Cooperative Period, Northern Dynasty elects to exercise its right to purchase the area of the Pebble Property known as the Resource Lands, financed by way of equity, Shambhala has a right of first refusal to subscribe for securities of Northern Dynasty to finance all or part of the exercise amount. The initial proceeds of the financing were allocated for the 2003 drilling program and the remainder (and potential additional proceeds from the exercise of warrants) to further advance the Pebble project.

The main activity in 2003 was drilling. All of the anticipated exploration expenditures were comparable to those proposed in the budget, except for site activities and miscellaneous. Site activities and miscellaneous are lower because the drilling program was completed in a shorter time than was anticipated. Administrative costs are higher mainly due to increased financing and shareholder communications activities.

- 40 -

At December 31, 2003, Northern Dynasty had working capital of $3,240,887, as compared to $496,048 at the end of the previous fiscal year. Working capital increased as a result of the Shambhala financing, the July 2003 private placement, and $4,239,257 in cash received from the exercise of options and warrants during the year. Northern Dynasty had 31,733,186 common shares issued and outstanding at December 31, 2003.

Subsequent to the year-end, on March 16, 2004, the Company completed a private placement by issuing 2,750,000 units at $8.00 each. Each unit was comprised of a common share and one half warrant. Each whole warrant entitles the holder to purchase one common share at a price of $9.00 until March 16, 2005.

Fiscal 2002 Compared with Fiscal 2001

On July 29, 2002, the common shares of Northern Dynasty commenced trading on the OTC Bulletin Board (“OTCBB”) in the United States. The Company now trades on the TSX Venture Exchange (symbol NDM) and the OTC-BB (symbol NDMLF).

On August 27, 2002, the Company closed a private placement of 197,548 units at a price of $1.05 per unit for net proceeds of $190,815. Each unit is comprised of one common share and one share purchase warrant. Each share purchase warrant entitles the holder to purchase an additional common share at a price of $1.15 until December 27, 2003. The share purchase warrants are subject to a four-month hold period and an accelerated expiry. If the closing price of the common shares as traded on the TSX Venture Exchange is greater than or equal to $1.73 for ten consecutive trading days, warrant holders will be given notice that the warrants will expire in 45 days.

On January 14, 2003, Northern Dynasty completed a private placement by issuing 1,300,000 flow-through units and 400,000 non flow-through units at $0.50 each. Each flow-through unit is comprised of a flow-through common share and a two-year non flow-through share purchase warrant. Each warrant entitles the Investor to purchase one common share at a price of $0.60 for two years after the issue date. The non flow-through units are comprised of one common share and a two-year share purchase warrant with the same warrant terms.

At December 31, 2002, Northern Dynasty had working capital of $496,048, as compared to a working capital deficit of $77,575 at the end of the previous quarter.

Fiscal 2001 Compared with Fiscal 2000

At December 31, 2001, Northern Dynasty has a positive working capital position of $1.82 million (excluding the $400,000 private placement announced December 13, 2001 and the $1.0 million placement announced March 6, 2002), compared to $2.64 million at the end of 2000. At December 31, 2001 Northern Dynasty has 9,292,455 issued and outstanding shares.

In July 2001, the Company closed a private placement of 2,100,000 units at a price of $0.30 of which 1,900,000 were placed to insiders of the Company and/or their associates. Each Unit issued on conversion of the Special Warrants comprised of one common share and one share purchase warrant exercisable to purchase an additional share at a price of $0.40 for a two-year period from the date of issuance. The offering closed July 17, 2001. Proceeds, some $630,000, from the placement will be used for working capital.

On December 13, 2001, the Company announced that it had reached agreement in principle for a private placement to insiders. The placement comprises 1,176,470 units at $0.34 each. Each unit will consist of one common share and a share purchase warrant exercisable to purchase an additional common share at a price $0.45 for a two-year period, subject to a four-month hold period. Proceeds will be used for working capital and for the advancement of exploration of the Pebble Project. The offering closed February 20, 2002.

- 41 -

On March 6, 2002 and subsequent to year-end, the company announced that it had reached agreement in principle with certain private investors to privately place 2,000,000 Units at a price of $0.50 per Unit. Each Unit will comprise one share and one share purchase warrant exercisable to purchase an additional share at a price of $0.62 for a two year period from the date of issuance. The Company will pay placement fees in accordance with TSX Venture Exchange Policies on a portion of the private placement. The offering closed April 19, 2002. Proceeds from the placement were used for working capital and the advancement of the Pebble Project.business objectives.

Financial Instruments

Northern DynastyThe Company has no derivative financial assets or liabilities and has the following non-derivative financial assets and liabilities.

The Company keeps its financial instruments denominated in US and Canadian dollars andDollars, depending on expected needs in each currency. The Company does not engage in any hedging operations with respect to currency.currency or in-situ minerals. Funds which are currently in excess to Northern Dynasty’sDynasty's current needs are invested in short term near cash investments pending the need for the funds.short-term near-cash investments.

Northern Dynasty does not have any material, commitments forlegally enforceable obligations requiring it to make capital expenditures and accordingly, can remain relatively flexible in gearing its activities to the availability of funds. As

Northern Dynasty does not carry out any research or development activities. Please refer to Item 3 and Item 4 above for a discussion of the fiscal 2004 year-end, Northern Dynasty estimatesexploration expenditures that the costCompany has incurred in connection with the exploration of maintaining its corporate administrative activities at approximately $100,000 per month. Accordingly, Northern Dynasty’s management estimates that approximately $1.2 million will be needed to maintain its corporate status and assets over the ensuing one-year period excluding Pebble Property activities. Northern Dynasty had current working capital of approximately $10.2 million as of December 31, 2004, and completed a $30.8 million private placement in March 2005, and expects to be able to raise sufficient capital to fund the cost of the next two years administration and exploration programs. There is, however, no assurance that Northern Dynasty will be able to raise the required funds.mineral properties.

Northern Dynasty will consider raising, if possible, further funds for the Pebble Property contingent on the outcome of the first phase of exploration.

C.               Research Expenditures

Northern Dynasty is a natural resource exploration expenditure based corporation and does not have a program of intellectual property development or patenting or licensing.

D.               Trend Information

As a natural resource exploration company, Northern Dynasty’s activities are mainly event-driven, that is based on exploration successes and failures than seasonal, but it may be seen to be affected by the cyclic nature of metal prices.

Copper is a commodity metal used extensively in the housing and automotive industries and accordingly demand for copper varies directly with general economic conditions. The copper price has increased substantially, averaging US$0.81/lb in 2003 and approximately US$1.25/lb in 2004 and is in the US$1.50/lb range as of March 15, 2005.

Gold prices continued an overall uptrend in 2004, averaging US$410 per ounce, compared to US$364 per ounce in 2003. At March 15, 2005, the gold price was in the range of US$425/oz.

Molybdenum oxide prices increased from US$7.60/lb early 2009 until late 2011. From that time, prices have been variable and weakened overall. The recent closing price is US$2.89/lb.

The average annual gold price steadily increased from 2008 to 2012. Gold prices trended lower in 20042013, and have been variable but weakened overall in 2014 and 2015. The recent closing price is US$1,189/oz.

Molybdenum prices were variable, but improving in 2010 and 2011, variable in 2013, and then began an uptrend that extended through the end of June 2014. Prices have been on a downtrend since that time with a recent closing price of US$7.76/lb.

An upward trend in silver prices began in 2010, and continued to late September 2011; prices reached as high as $43/oz in 2011, resulting in the highest average annual price since 2008. Prices ranged between $26/oz and $35/oz between October 2011 and December 2012. Prices trended downward in 2013. They have been variable in 2014 and 2015, with an overall decrease in the average price. The recent closing price is US$34.00/lb by year end.16.39/oz.

Average annual prices since 2010 as well as the average prices so far in 2015 for copper, gold, molybdenum and silver are shown in the table below:

Source: LME Official Cash Price as provided at www.metalprices.com

Northern Dynasty has no off-balance sheet arrangements.

The following commitments and payables (expressed in thousands) existed at December 31, 2014:

The Company had no long-term debt obligations, no capital (finance) lease obligations, no operating lease obligations (other than noted above), no purchase obligations, or other long-term liabilities.

The safe harbor provided in Section 27A of the Securities Act and Section 21E of the Exchange Act applies to forward-looking information provided pursuant to Item 5.E and Item 5.F above.

- 42 -

ITEM 6 DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.              Directors and Senior Management

The names and municipalities of residence of the directors and officers of the Company, their principal occupations during the past five years, and the period of time they have served as directors or officers of Northern Dynasty are presented in the table below. Except where indicated, each director and senior officer of Northern Dynasty has held the same or similar principal occupation with the organization indicated or a predecessor thereof for the last five years.

Notes

DAVID J. COPELAND, P.Eng. - Director

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

Mr. Copeland is, or was within the past years, an officer and/or directoreach of the following public companies:Amarc Resources Ltd., Director (September 1995persons listed above. Where indicated in the reference to present);Anooraq Resources

- 44 -

Corporation, Director (September 1996"CEO" refers to present); Farallon Resources Ltd., Director (December 1995“Chief Executive Officer” and “CFO” to present); Great Basin Gold Ltd., Director (February 1994 to present); Continental Minerals Corporation (formerly Misty Mountain Gold Limited), Vice-President, Project Development (June 1995 to February 1996 and June 1997 to June 1998) and Director (November 1995 to present); Northern Dynasty Minerals Ltd., Director (June 1996 to present); Taseko Mines Limited, Director (January 1994 to present) (including Director of Gibraltar Mines Ltd., a private mining company, which is a wholly owned subsidiary of Taseko Mines Limited); Casamiro Resource Corp., Director (February 1995 to August 2002).

SCOTT D. COUSENS - Director“Chief Financial Officer”:

Scott D. Cousens – Director

Scott Cousens provides management, technical and financial services to a number of publicly traded companies. Mr. Cousens’ focus for the past 14 yearssince 1991 has been the development of relationships within the international investment community. SubstantialThrough substantial financings and subsequent corporate success, Mr. Cousens has established strong ties with North American, European and Asian investors. Mr. Cousens is a director of HDI and HDSI.

Mr. Cousens is, or was within the past five years, an officer and/or director of the following public companies:Amarc Resources Ltd., Director (September 1995 to present);Anooraq Resources Corporation, Director (March 1994 to September 1994) and (September 1996 to present);Farallon Resources Ltd., Director (December 1995 to present);Great Basin Gold Ltd., Director (March 1993 to present);Continental Minerals Corporation(formerly Misty Mountain Gold Limited), Director (June 1994 to present);Northern Dynasty Minerals Ltd., Director (June 1996 to present);Rockwell Ventures Inc., Director (November 2000 to present); andTaseko Mines Limited, Director (October 1992 to present).