Duluth Metals Highlights Low Copper (C1) Cash Costs and Strong Operating Margins in its

Pre-feasibility Study for Twin Metals Minnesota Project

The draft pre-feasibility study set out in the independent National Instrument 43-101 Technical

Report (“PFS Technical Report”) prepared by a multi-company team led by AMEC E&C

Services Inc. (“AMEC”) for Duluth Metals Limited confirms that the proposed underground

copper, nickel and Platinum Group Metals (“PGMs”) mining project (the “TMM Project”) is

supported by financial fundamentals showing a competitive cost position, high margins sustained

over time, and capital efficiencies resulting from outstanding regional and local infrastructure and

competitive advantages.

The PFS Technical Report is based on a 30-year underground mine plan focused on the part of

the TMM Project known as the Maturi and Maturi SW mineral deposits with an average

production rate of 50,000 short tons (st) per day, producing copper and nickel concentrates that

are anticipated to be marketable to customers across the world.

Over the TMM Project’s planned 30 years of operation, the PFS Technical Report estimates the

mine will produce approximately 5.8 billion pounds of copper, 1.2 billion pounds of nickel, 1.5

million ounces of platinum, 4.0 million ounces of palladium, 1.0 million ounces of gold, and 25.2

million ounces of silver.

Low C1 cu cash cost of $0.31/lb (net of byproduct credits) over the first 10 years of production

and 30 year Copper (C1) cash cost of $0.76/lb (net of byproduct credits).

Strong 30 year Onsite Operating Margin of $36.54/short ton.

The TMM Project’s pre-tax base case, as calculated by AMEC, shows a net present value

(“NPV”) of CDN $1.5billion @8% discount factor (US$1.4 billion @8% discount factor).

The TMM Project’s after tax base case, as calculated by PricewaterhouseCoopers LLP, shows an

NPV of CDN $0.9 billion @8% discount factor (US$0.8 billion @8% discount factor).

Analyst and Investor Conference Call

A conference call with senior management of Duluth Metals for the investment community has been

scheduled for Wednesday, August 20, 2014 at 10:30 a.m. EDT. Christopher Dundas, Executive

Chairman, and Kelly Osborne, President and CEO, will be available to answer questions during the call.

To participate in the call, please dial-in five minutes prior to the call:

Participant Dial-In Number(s):

*Operator Assisted Toll-Free Dial-In Number: (888) 231-8191

*Local Dial-In #: (647) 427-7450

TORONTO, Ontario, August 20, 2014 – Duluth Metals Limited (“Duluth” or “Duluth Metals”)

(TSX: DM) (TSX:DM.U) today announced that it has received the draft pre-feasibility study set out in

the independent National Instrument 43-101 Technical Report (“PFS Technical Report”) prepared by a

multi-company team led by AMEC E&C Services Inc. (“AMEC”) for Duluth Metals for the proposed

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underground copper, nickel and platinum group elements mining project located in northeastern

Minnesota (the “TMM Project”). The full PFS Technical Report will be filed within 45 days on

www.SEDAR.com.

“The PFS Technical Report validates the TMM Project to be one of the most compelling greenfield

copper-nickel development projects in the world,” stated Kelly Osborne, President and CEO of Duluth

Metals. “The foundations of the TMM Project are its tremendous mineral resource, technically sound

engineering and test work, strong operating margins, and location in a state that supports the mining

industry and has ready-built mining infrastructure and an experienced workforce to support a large-scale

mining operation. We look forward to the next Phase of the TMM Project and continued efforts to

improve the value of the TMM Project.”

The PFS Technical Report is based on a 30-year underground mine plan with an average production rate

of 50,000 short tons of ore per day, generating marketable copper and nickel concentrates. The mine plan

is focused on the development of the Maturi and Maturi SW mineral deposits, located approximately nine

miles southeast of the city of Ely, MN, and 11 miles northeast of the city of Babbitt, MN. Some

properties of the TMM Project are owned jointly by TMM and the Birch Lake Joint Venture (see “About

Birch Lake Joint Venture” below). The TMM Project has the potential to create approximately 850 full

time jobs when the mine is in operation and generate some 12 million labor hours during an approximate

three-year construction period.

The chart below is from the recent June 2014 Strategic Report prepared by SNL Metals and Mining

entitled “Production Costs: Copper Mines”.

Copper Mine Cash Costs in 2013

© Copyright by SNL Metals & Mining, 2014

The PFS Technical Report indicates a C1 cash cost/lb. of copper (Cu) (“life of mine” or LOM) of $0.76

(net of all byproduct credits) and a C1 cash cost/lb. of copper-equivalent (CuEq.) LOM of $1.64. Duluth

believes that the PFS Technical Report confirms that the TMM Project has:

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a competitive cost position whereby the TMM Project would be in the first quartile of C1 cash

costs per pound of Cu produced over the mine’s 30 years of operation when benchmarked against

other producing copper mines throughout the world,

strong operating margins sustained over time, and

capital efficiencies resulting from outstanding local infrastructure and workforce.

“The PFS Technical Report confirms that the TMM Project offers an extraordinary long-term economic

opportunity for the state of Minnesota, local communities, and TMM Project stakeholders,” stated

Christopher Dundas, Executive Chairman of Duluth Metals. “The TMM Project enjoys many advantages

including excellent infrastructure, a mining friendly jurisdiction and upsides for future expansion and

potential down-stream processing.”

All dollar amounts in this press release are shown in US dollars, unless otherwise stated.

PFS Technical Report Highlights

The independent PFS Technical Report was prepared at the request of Duluth by AMEC, and therefore

the conclusions and opinions expressed in the PFS Technical Report, and those contained in this new

release, are those of AMEC arrived at independently of Duluth Metals, Antofagasta P.l.c. (“Antofagasta”)

and TMM. The estimations set out in the PFS Technical Report and summarized in this news release for

operating costs, commercial terms and metal price parameters are a result of AMEC’s independent

evaluation of the TMM Project.

1. NPV:

In the PFS Technical Report, AMEC has calculated a range of TMM Project pre-tax and after-tax

net present values (“NPVs”) based on discount factors of six, eight (base case) and 10 percent.

The NPV calculation represents cash flows discounted to the beginning of the first year when

construction expenditures are made and represented in 2014 constant dollars.

Base Case* Pre-tax NPV (@8% discount) = $1.36 billion

Base Case After-tax NPV (@8%) = $0.75 billion

Pre-tax NPV (@6%) = $2.22 billion

After-tax NPV (@6%) =$1.45 billion

Pre-tax NPV (@10%) = $0.73 billion

After-tax NPV (@10%) = $0.26 billion

(* “Base Case” calculations use projected metal prices of $3.50/lb copper, $9.50/lb nickel, $1,300/oz gold, $1,680/oz platinum,

$815/oz palladium, and $21.50/oz silver.)

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2. Low 30-year Cash Cost Position:

The C1 cash costs in the PFS Technical Report are as follows:

C1 Cash Cost/lb. of Cu (LOM) = $0.76 (net of all byproduct credits)

C1 Cash Cost/lb. of CuEq. (LOM) = $1.64

where CuEq is derived by adding the lbs. of Cu plus the Ni Revenue/price of copper.

3. Strong Operating Margins:

The PFS Technical Report margins include:

Revenue/ton milled (LOM) = $58.27

Onsite operating costs/ton milled (LOM) = $21.73

Onsite Operating Margin/ton milled (LOM) = $36.54

Total operating costs/ton milled (LOM) = $30.58

Total operating margin/ton milled (LOM) = $27.69

4. Efficient Capital Investment:

The PFS Technical Report capital cost estimates are:

Initial Capital = $2.77 billion

Pre-tax Payback Period = 6.4 years from start of production

Capital Intensity1 = $6.24 /annual lb CuEq produced

LOM Capital = $5.41 billion

Internal Rate of Return Pre-tax (IRR) = 13.6 %

(Note 1: Capital Intensity equals Initial Capital divided by Average Annualized pounds of CuEq produced for the first 10 years.)

5. A Strong Economic Engine during the First 10 Years:

The TMM Project is focused on maximizing project economics from startup. The PFS Technical

Report estimates that, in the first 10 years of production, the total TMM Project will generate the

following average annual financial measures:

Revenue (years 1-10) = $12.11billion

Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) = $6.19

billion

Free Cash Flow (pre-tax) = $4.60 billion

Free Cash Flow (after-tax) = $3.87 billion

Production of Payable Cu = 2.11 billion lbs.

Production of Payable Ni = 378.55 million lbs.

C1 Cash Cost/lb of CuEq = $1.36

C1 Cash Cost/lb of Cu = $0.31

Operating Margin = $37.18 per ton milled

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A summary of the TMM Project economics, as set out in the PFS Technical Report, is shown in Table 1,

and TMM Project capital cost is shown in Table 2.

Table 1 - TMM Project Economics

Valuation Indicators Pre Tax UNITS LOM

Cumulative Cash flow Pre Tax $M 7,913

NPV 6% $M 2,231

Base Case NPV 8% $M 1,358

NPV 10% $M 732

Payback period from start of production Years 6.4

IRR before tax % 13.6%

After Tax UNITS LOM

Cumulative Cash flow After Tax $M 6,003

NPV 6% $M 1,449

Base Case NPV 8% $M 753

NPV 10% $M 257

Payback period from start of production Years 7.2

IRR after tax % 11.4%

Table 2 - TMM Project Capital Cost

TMM Project Capital Cost

UNITS VALUE

Initial Capital $M 2,775

Sustaining Capital $M 2,636

LOM Capital $M 5,410

Capital Intensity1 $/lb CuEq year 6.24

(Note 1: Capital Intensity equals Initial Capital divided by Average Annualized pounds of CuEq produced for the

first 10 years.)

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Mineral Reserves

The mine plan is based on the Mineral Reserves converted from 1.233 billion short tons of Measured +

Indicated Mineral Resources within the Maturi and Maturi SW deposits. The Mine Plan, including dilution, estimates total proven and probable reserves, as set out in the PFS

Technical Report, of 527 Mst over the LOM as shown in Table 3. The total contained metal is shown in

Table 4.

Table 3 – Mineral Reserve Estimates

Area Classification Ore Tons Cu Ni Pt Pd Au Ag

(Mst) (%) (%) ppm ppm ppm ppm

Maturi

Proven 130 0.65 0.21 0.152 0.354 0.086 2.31

Probable 351 0.59 0.19 0.163 0.367 0.087 2.15

P&P 482 0.61 0.19 0.160 0.363 0.087 2.19

Maturi SW

Proven 0 0.00 0.00 0.000 0.000 0.000 0.00

Probable 43 0.48 0.16 0.083 0.192 0.048 1.60

P&P 43 0.48 0.16 0.083 0.192 0.048 1.60

Total

Proven 130 0.65 0.21 0.152 0.354 0.087 2.31

Probable 397 0.58 0.19 0.154 0.348 0.083 2.09

P&P 527 0.59 0.19 0.154 0.349 0.084 2.14

Table 4 – Contained Metal in Mineral Reserve Estimates

Contained Metal

Area Classification Ore Tons Cu Ni Pt Pd Au Ag

(Mst) Blbs Blbs Moz Moz Moz Moz

Maturi

Proven 130 1.7 0.5 0.6 1.4 0.3 8.8

Probable 351 4.2 1.3 1.7 3.8 0.9 22.2

P&P 482 5.8 1.9 2.3 5.1 1.2 31.0

Maturi SW

Proven 0 0.0 0.0 0.0 0.0 0.0 0.0

Probable 43 0.4 0.1 0.1 0.2 0.1 2.0

P&P 43 0.4 0.1 0.1 0.2 0.1 2.0

Total

Proven 130 1.7 0.5 0.6 1.4 0.3 8.8

Probable 397 4.6 1.5 1.8 4.0 1.0 24.2

P&P 527 6.2 2.0 2.4 5.4 1.3 33.0

Notes to Mineral Reserve Estimates Table

1. The Qualified Person for the Mineral Reserve estimate is Joanna Poeck, an employee of SRK Consulting (U.S.), Inc. The

Mineral Reserves have an effective date of 1 July 2014.

2. Mineral Reserves are contained within mine designs based on Measured and Indicated Mineral Resources, and assume a mining rate of 50,000 st/d of mineralized material over a 30 year mine life. Underground mining will utilize conventional

post-pillar cut-and-fill and long-hole open stoping methods. Paste backfill will be employed. The mine plan includes the

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mining of remnant mineralized material, which is mineralized material that is above the marginal cut-off grade, but is left

behind during the first pass mining of higher-grade material.

3. Mineral Reserves are contained within Measured and Indicated mine designs using the following net smelter return (NSR)

calculation inputs. Recovery assumptions used in the calculations were 94.0% for Cu, 60.8% for Ni, 82.3% for Au, 36.1% for Pd and 42.5% for Pt. Payability assumptions were 76.4% for Cu, 70.8% for Ni, 45% for Au, 68.6% for Pd and 69.3%

for Pt. Metal price assumptions were $3.00/lb for Cu, $9.50/lb for Ni, $1,200/oz for Au, $700/oz for Pd and $1,650/oz for

Pt. Operating cost assumptions used in the NSR equations total $23.53/st mined and include mining costs of $13.80/st, process costs of $5.02/st, paste backfill costs of $1.28/st, water management costs of $0.21/st, tailings costs of $0.06/st,

general and administrative costs of $2.44/st; technical services costs of $0.45/st and financial assurance costs of $0.27/st.

4. Mineral Reserves are reported using an NSR cut-off of $25.00/st.

5. Mineral Reserves are reported according to CIM Definition Standards for Mineral Resources and Mineral Reserves (May 10, 2014).

6. Mineralization that was either not classified or assigned to the Inferred Mineral Resource category was set to waste within the above NSR cut-off mining shapes. Mine design incorporates geotechnical and hydrogeological considerations that take

into account paste and hanging wall dilution. Dilution is allocated in the mine design based on the mining method, and

ranges from 3–5%. Mining recovery is assumed at 95%.

7. Tonnage figures are reported as million US short tons (st); grade figures as parts per million (ppm) or percent (%);

contained copper and nickel are reported in billion pounds (B lb), contained platinum, palladium, gold and silver are reported in million troy ounces (M oz). Contained metal is reported as in situ metal content and does not include any

adjustments for recoverability.

8. Rounding as required by reporting guidelines may result in apparent summation differences between tons, grade and contained metal content.

9. Antofagasta uses different parameters in its calculation of Mineral Reserves.

Mineral Resources

The PFS Technical Report provides an updated resource estimate for the TMM Project, which includes

four deposits known as the Maturi, Maturi SW, Birch Lake and Spruce Road deposits. The PFS

Technical Report mine plan and financial estimates for the TMM Project are based on Mineral Resource

estimates from the Maturi and Maturi SW deposits that have been updated from the previously-disclosed

January 2014 resource estimates. Maturi Measured, Indicated, and Inferred Mineral Resources

incorporate assay results from 57 drill holes totaling 65,635.5 ft drilled between September 2012 and

January 2014. In addition, the resource estimate tabulates silver grades for the first time, estimating a

Maturi Measured + Indicated grade of 2.14 ppm Ag (0.063 oz/st Ag), and Maturi SW Indicated grade of

1.58 ppm Ag (0.046 oz/st), for a total of 75.4 Moz of silver contained in the Maturi and Maturi SW

Measured + Indicated Mineral Resources.

Current resource estimates for Maturi, Maturi SW, Birch Lake and Spruce Road deposits are presented in

Table 5, below:

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Table 5 – Mineral Resource Estimates

Deposit Category Tons

(M st)

CuEq

(%)

Cu

(%)

Ni

(%)

Pt

(ppm)

Pd

(ppm)

Au

(ppm)

Ag

(ppm)

Maturi Measured 308 1.02 0.63 0.20 0.146 0.339 0.083 2.26

Indicated 822 0.96 0.58 0.19 0.155 0.350 0.083 2.10

Inferred 531 0.81 0.49 0.16 0.138 0.314 0.070 1.81

Maturi SW Indicated 103 0.77 0.48 0.17 0.080 0.185 0.048 1.58

Inferred 32 0.70 0.43 0.15 0.065 0.157 0.041 1.43

Subtotal Maturi and

Maturi SW

Measured 308 1.02 0.63 0.20 0.146 0.339 0.083 2.26

Indicated 924 0.94 0.57 0.19 0.147 0.332 0.079 2.04

Measured + Indicated 1,233 0.96 0.58 0.19 0.147 0.334 0.080 2.10

Inferred 563 0.81 0.49 0.16 0.134 0.305 0.068 1.79

Birch Lake Indicated 100 1.02 0.52 0.16 0.233 0.511 0.114 —

Inferred 239 0.88 0.46 0.15 0.180 0.370 0.087 —

Spruce Road Inferred 480 0.66 0.43 0.16 — — — —

Deposit Category Contained

Cu

(B lb)

Contained

Ni

(B lb)

Contained

Pt

(M oz)

Contained

Pd

(M oz)

Contained

Au

(Moz)

Contained

Ag

(M oz)

Maturi Measured 3.9 1.2 1.3 3.0 0.7 20.3

Indicated 9.5 3.1 3.7 8.4 2.0 50.3

Inferred 5.2 1.7 2.1 4.9 1.1 28.0

Maturi SW Indicated 1.0 0.3 0.2 0.6 0.1 4.7

Inferred 0.3 0.1 0.1 0.1 0.0 1.3

Subtotal Maturi and

Maturi SW

Measured 3.9 1.2 1.3 3.0 0.7 20.3

Indicated 10.5 3.5 4.0 8.9 2.1 55.1

Measured +

Indicated

14.4 4.7 5.3 12.0 2.9 75.4

Inferred 5.5 1.8 2.2 5.0 1.1 29.4

Birch Lake Indicated 1.0 0.3 0.7 1.5 0.3 —

Inferred 2.2 0.7 1.3 2.6 0.6 —

Spruce Road Inferred 4.1 1.5 — — — —

Notes to Mineral Resource Estimates Table

1. The Mineral Resource estimates have different effective dates as follows: Maturi: 4 February 2014; Maturi SW: 15 June 2013; Birch Lake: 15 September 2012; Spruce Road: 15 September 2012.

2. The Qualified Person for the estimates is Dr. Harry Parker, RM SME, who is a Professional Geologist licensed in Minnesota.

3. Mineral Resources are reported inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not

have demonstrated economic viability.

4. Mineral Resources were estimated assuming underground bulk mining methods and are reported at a cut-off grade of 0.3% Cu.

5. Maturi and Maturi SW copper equivalent (CuEq) grades are based on the following assumptions: CuEq = Cu + 1.459*Ni + 0.265*Au + 0.101*Pd + 0.228*Pt + 0.004*Ag; where global metallurgical recoveries are 93.4% (Cu), 61.4% (Ni), 78.5%

(Au), 74.9% (Pd), and 63.2% (Pt) and 76.5% (Ag); smelter returns are 94.3% (Cu), 77.1% (Ni), 54.9% (Au), 35.0% (Pd),

and 45.2% (Pt) and 47.6% (Ag), and long-term consensus metal prices are $3.50/lb Cu, $9.50/lb Ni, $1,300/troy oz Au,

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$815/troy oz Pd and $1,680/troy oz Pt and $21.50/troy oz Ag. The Birch Lake CuEq formula is based on November 2012

parameters: CuEq = Cu + 1.58*Ni + 0.285*Au + 0.219*Pd + 0.435*Pt, where concentrate metallurgical recoveries are 94.3% (Cu), 60.0% (Ni), 85.0% (Au), 90.0% (Pd), and 93.0% (Pt); CESL metallurgical recoveries are 96.3% (Cu), 95.6%

(Ni), 74.5% (Au), 70.7% (Pd), and 59.4% (Pt); smelter returns are 100% (Cu), 80% (Ni), 80% (Au), 80% (Pd), and 80%

(Pt); long-term consensus metal prices of $3.00/lb Cu, $9.38/lb Ni, $1,050/troy oz Au, $805/troy oz Pd and $1,840/troy oz Pt. The Spruce Road CuEq formula is based on the Maturi parameters, and restricted to Cu and Ni: CuEq = Cu +

1.459*Ni; where global metallurgical recoveries are 93.4% (Cu), 61.4% (Ni); smelter returns of 94.3% (Cu), 77.1% (Ni);

long-term consensus metal prices of $3.50/lb Cu, and $9.50/lb Ni.

6. Silver is not included in the 2012 resource estimate for Birch Lake as QA/QC results had not been reviewed at the time of

the estimate. Silver is not a contributor to either the NSR calculation or the CuEq grade for Birch Lake. Gold, platinum, palladium and silver assays were not available to support estimation in the 2012 Spruce Road resource model. Gold, Ag,

Pt and Pd do not contribute to either the NSR calculation or the CuEq grade for Spruce Road.

7. No allowances for mining recovery and external dilution have been applied. Mineral Resources for Maturi assume a 400-foot-thick safety pillar above the Mineral Resource. Mineral Resources for Maturi SW are tabulated based on a 15 foot

allowance for overburden and no safety pillar. Mineral Resources for Birch Lake do not have a safety pillar allowance since the mineralization is located 600 feet below ground surface. Mineral Resources at Spruce Road assume a 164-foot-

thick safety pillar.

8. Tonnage figures are reported as million US short tons (st); grade figures as parts per million (ppm) or percent (%); contained copper and nickel are reported in billion pounds (B lb), contained platinum, palladium, gold and silver are

reported in million troy ounces (M oz). Contained metal is reported as in situ metal content and does not include any adjustments for recoverability.

9. Rounding as required by reporting guidelines may result in apparent summation differences between tons, grade and contained metal content.

TMM Project Description

Duluth believes that the TMM Project is expected to be one of the world’s largest development-stage

polymetallic projects and that Minnesota offers worldwide competitive advantages through extensive

modern infrastructure such as easily accessible roads, rail lines, ports, power and water supplies, as well

as a highly-experienced mining labor force.

The TMM Project comprises four major areas: the Underground Mine Site, Concentrator Site,

Tailings Storage Facility Site and the Utility Corridors, as shown in Figure 2. The Mine Site is located

at the Maturi and Maturi SW deposits. The TMM Project has two declines that involve non-ore

development, with the portals located on and near the Concentrator Site. The Concentrator Site

includes the primary portal, temporary ore stockpiles (lined with leachate collection), and a process water

pond. The Tailings Storage Facility located south of the city of Babbitt, would store tailings that are not

returned to the underground mine as paste backfill. The Tailings Storage Facility also includes a

concentrate filtration plant, intermediate pond, electrical substation, and rail load-out facility. The TMM

Project will use multiple Utility Corridors for infrastructure needs including concentrate, tailings and

water pipelines, service and contact roads, and an extension of the existing railroad.

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Figure 1 – TMM Project Configuration

Mining Methodology

The TMM Project is based on an underground mining operation with a throughput capacity of 50,000 st

per day, or 18.25 Mst per year. The underground operation would utilize a combination of post-pillar cut-

and-fill and long-hole stoping mining methods (PPCF and LHS, respectively). These methods were

selected for their ability to accommodate specific geometries of the deposit, to allow for a relative low

cost, high ramp-up rate, and high productivity.

The mine plan estimates a LOM production of 527 Mst of mineralized material at 0.59 percent copper and

0.19 percent nickel. Mine infrastructure covers a wide variety of fixed facilities to be constructed

underground (e.g., primary crushers, conveyors, pumping stations, explosives magazine, and electrical

substations). Mine equipment has been selected to satisfy high productivities and low costs, and all

selected equipment is considered well suited for mass mining and appropriate for a modern operation.

Mining will occur in mining units or panels separated by barrier pillars. These panel areas are a

maximum of 1,700 ft along strike by 1,700 ft along dip. Mining recoveries inside the panels varies

between 75 to 82 percent depending on the depth, dip, width, and mining method selected.

Mine construction and pre-production development will take place in years -3 through -1. Mineralized

material will be stockpiled until year 1, when ore production ramps up and is fed directly to the

processing plant. The mine achieves peak sustainable production of 50,000 st per day in year 2, which is

sustained through year 26. Initial mine construction is estimated to take approximately three years.

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The TMM Project has been designed to minimize the waste impact. The underground mining methods

generate little waste rock in comparison to surface mining, and when in production, all waste rock will be

used as underground backfill. Similarly, approximately half of the tailings produced by the concentrator

will be placed back into the mine in the form of paste backfill, with the remainder being held in surface

storage at the Tailings Storage Facility (TSF).

Mineral Processing

Extraction and processing of the valuable minerals is centered upon sequential flotation where a copper

concentrate is first produced from the mineralized material, followed by production of a nickel

concentrate. The tailings produced from the flotation process will be very low in sulfur, with

approximately half contained in a conventional lined tailings impoundment, and the remainder combined

with cement and fly ash and returned to the mine as paste backfill.

The copper and nickel concentrate process flowsheet was mainly developed through an investigative pilot

plant program conducted at ALS Metallurgy in Kamloops, B.C. Following that program, an optimization

bench-scale program was undertaken at Blue Coast Research in Parksville, B.C.

The concentrator facilities proposed for the TMM Project comprise a process plant with an ore treatment

capacity of 50,000 st per day, a single process line using SAG and ball milling with sequential copper and

nickel flotation, high-rate tailings thickening, concentrate receiving system, filter plant, concentrate

storage, and rail loadout.

Extensive work on mineral processing and metallurgy for the PFS Technical Report was carried out

between 2012 and 2014 on a variety of samples obtained through major drilling programs conducted

between 2010 and 2012. Key projected recovery results over the Life-of-Mine are presented in Table 6

below:

Table 6 – LOM Process Recovery Estimates

Life Of Mine Recovery

Metal Cu Concentrate (%) Ni Concentrate (%) Cumulative (%)

Copper 85.75 7.99 93.74

Nickel 6.71 55.50 62.21

Gold 64.69 13.32 78.01

Palladium 38.84 35.99 74.83

Platinum 23.90 39.20 63.10

Silver 64.43 12.46 76.89

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The key characteristics expected in the TMM Project’s copper and nickel concentrates are presented in

the following Table 7:

Table 7 – TMM Concentrate Grades

Element Unit Typical Assay

Expected Range

Copper Concentrate Grade

Copper Cu % 25.4 23.5 to 25.5

Nickel Ni % 0.64 0.57 to 0.66

Gold Au ppm 2.7 1.9 to 4.1

Palladium Pd ppm 6.8 4.4 to 10.6

Platinum Pt ppm 1.9 1.1 to 2.9

Silver Ag ppm 69.1 66.0 to 73.1

Nickel Concentrate Grade

Copper Cu % 4.7 4.4 to 7.8

Nickel Ni % 10.5 8.4 to 13.4

Gold Au ppm 1.1 0.9 to 1.6

Palladium Pd ppm 12.6 9.2 to 18.4

Platinum Pt ppm 6.1 4.3 to 9.0

Silver Ag ppm 26.4 23.8 to 42.3

There are not expected to be any deleterious or penalty elements in the concentrate.

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Capital and Operating Costs

A summary of the average cost per metric tonne Total Annual Operating Costs for LOM in the Duluth

business model is shown in the following Table 8:

Table 8 – TMM Operating Cost Estimates

Operating Costs onsite

Mining Cost / st milled $/st 12.56

Process Cost / st milled $/st 3.99

G&A / st milled $/st 2.69

Surface operating costs/ st milled $/st 2.49

Operating Costs onsite / st milled $/st 21.73

Operating Costs off site

Treatment charges / st milled $/st 5.13

Freight costs / st milled $/st 3.71

Operating Costs off site / st milled $/st 8.85

Total Operating cost / st milled $/st 30.58

The capital cost estimate for the TMM Project is an Association for the Advancement of Cost

Engineering (AACE) class 4 (PFS) estimate with a ± 25 percent accuracy. The summary of capital costs

estimates is shown in Table 9 below.

Table 9 – TMM Capital Cost Estimates

Description Initial Capital

(Millions)

Mine $793

Concentrator $956

Tailings Management $547

Surface Infrastructure and Utilities $379

Owner’s Costs $100

Total Capital Cost $2,775

The PFS Technical Report will be authored by Mr. John Barber, P.E., Dr. Ted Eggleston, RM SME, Dr.

Harry Parker, RM SME, Mr. David Frost, FAusIMM, Mr. Simon Allard, P.Eng., and Ms. Janine Hartley,

P.E., of AMEC, Mr Chris Martin C. Eng., of Blue Coast Group, Mr. Tom Radue, PE, of Barr

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Engineering, Dr. Mathew Pierce, PE and Dr. Robert Sterrett, PG of Itasca, Mr. Matthew Malgesini, P.E.

of Golder, and Ms. Joanna Poeck, RM SME of SRK.

The Qualified Persons will be responsible for the preparation of the PFS Technical Report. These

Qualified Persons have verified the data in this news release that pertain to the PFS Technical Report.

Phillip Larson, P. Geo. is the Qualified Person for Duluth Metals, in accordance with National Instrument

43-101 of the Canadian Securities Administrators, and reviewed and has approved the technical content

of this press release.

About Duluth Metals Limited

Duluth Metals is committed to acquiring, exploring and developing copper, nickel and PGM deposits.

Duluth Metals has a joint venture with Antofagasta on the TMM Project, located within the rapidly

emerging Duluth Complex mining camp in north-eastern Minnesota. The Duluth Complex hosts one of

the world’s largest undeveloped repositories of copper, nickel and PGMs, including the world’s third

largest accumulation of nickel sulphides, and one of the world's largest accumulations of polymetallic

copper and platinum group metals. Aside from the TMM Project, Duluth Metals retains a 100% position

on approximately 30,000 acres of mineral interests on exploration properties adjacent to and nearby the

TMM Project.

About Twin Metals Minnesota LLC

TMM is a limited liability company, 60 percent owned by Duluth and 40 percent owned by Antofagasta.

TMM was formed in 2010 to pursue the development and operation of a copper, nickel and PGM

(strategic metals) underground mining project within the Duluth Complex in northeastern Minnesota.

TMM holds mineral and land assets of approximately 40,000 acres of leased, leased applications and

permitted land.

About Birch Lake Joint Venture

In 2011, TMM acquired Franconia Minerals Corporation (“Franconia”). Franconia’s principal assets

were a 70% interest in the Birch Lake, “old Maturi” (not including the former Nokomis property), Maturi

Southwest and Spruce Road deposits through the Birch Lake Joint Venture (“BLJV”), with Beaver Bay,

Inc. owning the remaining 30%. Franconia announced in November 2010 its intention to increase its

ownership in the BLJV to 82% upon the commencement of production.

This press release contains forward-looking statements (including “forward-looking information” within

the meaning of applicable Canadian securities legislation and “forward-looking statements”within the

meaning of the US Private Securities Litigation Reform Act of 1995) relating to, among other things, the

results of drilling operations of Duluth Metals and exploration and mine development. Generally,

forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not

expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or

“does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain

actions, events or results “may”, “could”, ”would”, “might” or “will be taken”, “occur” or “be

achieved”. Duluth Metals has relied on a number of assumptions and estimates in making such forward-

looking statements, including, without limitation, the prices of copper, nickel and platinum group metals

(PGMs) and the costs associated with continuing exploration and mining development. Such assumptions

and estimates are made in light of the trends and conditions that are considered to be relevant and

reasonable based on information available and the circumstances existing at this time. A number of risk

factors may cause actual results, level of activity, performance or outcomes of project development and

exploration programs to be materially different from those expressed or implied by such forward-looking

15

statements including, without limitation, the following: the economic and feasibility parameters of the

pre-feasibility study; assumptions with respect to exchange rates, future metal prices, and concentrate

sales contracts; the estimation of Mineral Reserves and Mineral Resources and the realization of Mineral

Reserve estimates; possible variations in Mineral Reserves, grade or recovery rates; changes in the

geotechnical and hydrogeological parameters used in development of mine plans; changes in project

parameters as mine and process plans continue to be refined; the timing and amount of estimated future

production; the basis for and estimation of capital and operating cost estimates, and any future

requirements for additional capital; the net present value (NPV) and internal rate of return (IRR) and

payback period of capital; cash costs and all-in sustaining costs; changes to tax rates; assumed

permitting time lines for development; the timing of the environmental assessment process; modifications

to assumptions in the permitting process and allocation of reclamation expenses so as to comply with any

future permit conditions that may be imposed by the appropriate regulator; risks and uncertainties with

respect to obtaining necessary surface rights and permits or delays in obtaining same; risks associated

with maintaining and renewing permits and complying with permitting requirements; environmental

risks; obtaining the social licence to operate; delays in obtaining regulatory approval; changes to

government regulations of mining operations; accidents, labor disputes and other risks of the mining

industry; title disputes or claims; political risks; the need for additional funding to continue development,

permitting and exploration efforts; and general business, market and economic conditions, and those

other risks set forth in Duluth Metals’ most recent annual information form under the heading “Risk

Factors” and in its other public filings. Statements related to “reserves” and “resources” are deemed

forward-looking statements as they involve the implied assessment, based on realistically assumed and

justifiable technical and economic conditions, that an inventory of mineralization will become

economically extractable. Forward-looking statements are not guarantees of future performance and

such information is inherently subject to known and unknown risks, uncertainties and other factors that

are difficult to predict and may be beyond the control of Duluth Metals. Although Duluth Metals has

attempted to identify important risks and factors that could cause actual actions, events or results to differ

materially from those described in forward-looking statements, there may be other factors and risks that

cause actions, events or results not to be as anticipated, estimated or intended. Consequently, undue

reliance should not be placed on such forward-looking statements. In addition, all forward-looking

statements in this press release are given as of the date hereof. Duluth Metals disclaims any intention or

obligation to update or revise any forward-looking statements, whether as a result of new information,

future events or otherwise, save and except as may be required by applicable securities laws. The

forward-looking statements contained herein are expressly qualified by this disclaimer.

Cautionary Note to United States Investors Concerning Estimates of Indicated and Inferred Mineral

Resources

This press release uses the terms “Indicated Mineral Resources” and “Inferred Mineral Resources” in

accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition

Standards. While such terms are recognized under Canadian securities legislation, the United States

Securities and Exchange Commission does not recognize these terms. The term “Inferred Mineral

Resource” refers to a mineral resource for which quantity and grade or quality can be estimated on the

basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological

and grade continuity. These estimates are based on limited information and it cannot be assumed that all

or any part of an “Inferred Mineral Resource” will be upgraded to a higher classification resource, such

as “Indicated” or “Measured”, as a result of continued exploration. Accordingly, an estimate relating to

an “Inferred Mineral Resource” is insufficient to allow meaningful application of technical and economic

parameters or to enable an evaluation of economic viability. Under Canadian securities legislation,

estimates of an “Inferred Mineral Resource” may not form the basis of feasibility or other economic

studies. Investors are cautioned not to assume that all or any part of an “Inferred Mineral Resource” is

economically or legally mineable. Investors are also cautioned not to assume that all or any part of

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“Indicated” will ever be converted into “Mineral Reserves” (being the economically mineable part of an

“Indicated” or “Measured Mineral Resource”).

For more information please contact:

Mara Strazdins

Vice President Investor Relations and Corporate

Communications

Telephone: (416) 369-1500 ext. 222

Email: mstrazdins@duluthmetals.com

Kelly Osborne

President & CEO

Telephone: (651) 389-9990

Email: kosborne@duluthmetals.com

Webpage: www.duluthmetals.com