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Northland Restates Preliminary Economic Assessment, Maintains Robust Project Valuation

June 23, 2008

VANCOUVER, BRITISH COLUMBIA–(Marketwire – June 23, 2008) – Bill Wagener, the COO of Northland Resources Inc. (TSX:NAU)(FRANKFURT:NBS)(OSLO:NAUR), is pleased to announce the revised results of the NI 43-101 compliant Preliminary Economic Assessment (“PEA”) of its three main magnetite projects: Tapuli and Stora Sahavaara in northern Sweden, and Hannukainen in northern Finland.

Last week, Northland published – and subsequently retracted – the PEA, after a routine review of a shareholder enquiry related to the model highlighted two errors; the first relating to the revenue calculations, and the second related to double-counting of a significant contingency in the mining costs. Over the last 5 days Northland and Wardell Armstrong International (WAI) have re-worked, and extensively re-checked the financial model, concluding that the net effect of the revision on the NPV, IRR and payback of the combined projects is limited and the projects have retained their robust valuation.

The combined projects deliver an amended Net Present Value at a 10% discount rate (“NPV10″) of EUR 1.114 Billion and Earnings Before Interest and Tax (“EBIT”) of EUR 5.085 Billion. The Internal Rate of Return (“IRR”) remains unchanged at 27% and the discounted payback period is 7 years from start of the development program.

At the project level, the EBIT has increased for Hannukainen, and decreased slightly for Tapuli and Stora Sahavaara but was not great enough to affect the overall IRR or NPV. The key economic findings of the individual studies for each project expressed in Euros (EUR) are:

Tapuli__________ NPV at a 10% discount rate (NPV10) of EUR 116.7 million, ________________ EBIT of EUR 415.1 million and an IRR of 34% with a payback ________________ period of 5 years. Estimated Capital Expenditures ________________ (“CAPEX”) of EUR 146.6 million for mine development and ________________ construction of the processing facility includes EUR 18.1 ________________ million in contingency and EUR 15.8 million in ________________ Engineering, Procurement, Construction Management (EPCM) ________________ costs. Stora Sahavaara__NPV10 of EUR 567.2 million, EBIT of EUR 2.646 Billion and ________________ an IRR of 27% with a payback period of 6 years. Estimated ________________ CAPEX of EUR 258.2 million for mine and processing ________________ facilities and EUR 279.0 million to build a 5 million ________________ tonne per annum (“Mtpa”) pelletizing facility includes ________________ EUR 26.0 million in contingency and EUR 24.2 million in ________________ EPCM. Hannukainen______NPV10 of EUR 429.7 million, EBIT of EUR 2.024 Billion and ________________ an IRR of 26% with a payback period of 6 years. Estimated ________________ CAPEX of EUR 276.2 million for mine and processing ________________ facilities and EUR 279.0 million for construction of a ________________ 5Mtpa pelletizing facility includes EUR 35.5 million in ________________ contingency and EUR 33.6 million in EPCM.

WAI have reconfirmed that all three projects are robust and strongly positive in terms of NPV and IRR. The Preliminary Economic Assessment is preliminary in nature. It includes inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty the preliminary assessment will be realized.

Buck Morrow, the President/CEO of Northland, commented: “I would like to apologize on behalf of the entire management team for the confusion caused by last week’s retraction. Under the circumstances, we felt it was the only appropriate course of action. The team has worked very hard this week to resolve the outstanding issues and I’m very pleased to be able to reiterate the robust financial models for our three development projects to our shareholders. As we noted last week, we plan to focus our efforts in three areas; 1) putting Tapuli, the lowest capital cost and highest IRR project, into production first while progressing Stora Sahavaara and Hannukainen to development, 2) there is considerable room to optimize the studies and we will be pushing hard to evaluate the alternatives identified by the PEA and optimize the project designs, and 3) our on-going drill programs within the Pajala Shear Zone and more particularly the drilling at Pellivuoma and Kuervitikko, with the aim of adding substantial resource tonnes which will be brought into the financial models down the road.”

Copies of the executive summaries provided by WAI, which include the mining schedules with detailed operating and capital cost estimates, will be posted shortly on Northland’s website at www.northlandresourcesinc.com/s/pea.asp and the full NI 43-101 engineering report will be posted within 45 days on www.sedar.com. A conference call hosted by Buck Morrow, President of Northland, will be scheduled during the week of June 23rd. Call-in details will be published shortly and will also be available on Northland’s website.

Summary of PEA Results

The basic model and financial evaluation for each project is tabulated below.

——————————————————————– —— ________________________________________________________Stora Item______________________________ Units____Tapuli__Sahavaara__Hannukainen ——————————————————————– —— Total Iron Ore Mined______________ Mt________65.88____ 101.75______ 117.55 Average Grade______________________% Fe______28.34______43.32________31.69 Iron Recovered____________________ Mt________15.55______36.40________26.08 Copper Recovered__________________ Kt____________-__________-______ 179.94 Gold Recovered____________________ Koz__________ -__________-______ 124.25 Fe Concentrate Produced____________Mt________22.51______52.68________36.94 Pellets Produced________________________________ – ______54.74________38.52 Gross Revenue Generated____________EUR M__ 1,301.0____5,590.0______4,528.0 Cash Operating Costs______________ EUR M____ 727.8____2,353.0______1,903.0 Mine and Processing Capital Costs__EUR M____ 146.6______258.2________276.2 Pelletizing Capital Cost__________ EUR M________ – ______279.0________279.0 ——————————————————————– —— EBIT______________________________ EUR M____ 415.1____2,646.0______2,024.0 NPV________________________________EUR M____ 116.7______567.2________429.7 IRR________________________________%____________34________ 27__________ 26 Pay-back Period (Discounted)(i)____Years________ 5__________6____________6 ——————————————————————– —— (i) Note: The undiscounted Pay-back Period from first production for __________Tapuli is 3 years, Stora Sahavaara 3 years and Hannukainen 3 __________years. Inflation was not applied to the cash flow model on __________operating costs, capital costs or product pricing. Corporate __________income tax applied at a rate of 28% on net income.

Near Term Development Strategy

Tapuli combines low CAPEX, low operating cost, and a production capacity which fits the existing infrastructure with development timing suited to meet anticipated market demand. Northland will now focus its permitting and engineering efforts on developing first production and cash flow from the Tapuli project. The current plan envisages a development sequence of Tapuli, Stora Sahavaara then Hannukainen. However, each mine is being treated by management as a “stand alone” project and the development sequence may change depending on operational realities including customer requirements for specific products, terms of off take agreements, permitting, transportation routes and availability of processing equipment. Tapuli has a low waste to ore stripping ratio (2.27:1) coupled with favorable mining geometry, simple processing scheme to concentrates and yearly production rate sized to fit existing infrastructure. These attributes make Tapuli Northland’s first choice for production of concentrates for pellet producers. Northland’s marketing studies indicate a growing demand for high quality pellet feed and its projects are well positioned to serve these markets.

Optimization of the PEA

The base case PEA presented here was developed around three discrete and “stand alone” operations producing 5Mtpa of Direct Reduction (“DR”) and 5Mtpa of Blast Furnace (“BF”) pellets and 3Mtpa of pellet feed concentrate. It reflects the CAPEX, operating costs and infrastructure development necessary to establish Northland as an independent merchant producer and seller of iron ore products. Alternatives that are available to enhance the development sequence, reduce the capital and operating costs and improve the economics include:

– Developing a complementary port at Kalix in Sweden which is a natural deep water port and will be able to accommodate vessels with a global reach.

– Eliminating the need to construct one or more of the pellet plants by securing potential customers to take pellet feed instead of pellets, reducing the planned tonnage of pellet production. This would also eliminate some of the longest lead time items.

– Optimizing the mining and processing areas. For example, alternative transportation methods to truck haulage as the pits deepen were not included. Use of alternative haulage methods could significantly reduce capital and/or operating costs in the outlying years as strip ratios and volumes increase.

– The use of autogenous mills for the second stage of size reduction, thereby reducing power consumption, consumables and operating costs. The PEA assumes use of high pressure grinding rolls for secondary crushing, and ball mills for grinding.

– Mine life is based on the existing NI 43-101 surface mineable resources. It is anticipated that systematic exploration of 35 nearby known magnetite occurrences could extend surface mineable operations.

PEA Background

WAI, in association with GBM Minerals Engineering Ltd (“GBM”), were commissioned to prepare a PEA of the Tapuli, Stora Sahavaara and Hannukainen iron ore deposits and to assess the combined infrastructure required to transport the products to market. The PEA design criteria include:

– Tapuli will produce 3Mtpa of iron ore concentrate commencing in 2009, initially producing 300Ktpa of High Density Aggregate. Iron ore concentrate production will begin in 2010 targeting markets in Northern Europe and the Middle East.

– Stora Sahavaara will produce 1Mtpa of BF pellets in 2012 increasing to 5Mtpa of pellets in 2013. The target markets for the pellets are the Baltic and Northern Europe.

– Hannukainen will produce 1Mtpa of DR grade Pellets in 2013 and 5Mtpa of DR grade pellets from 2014 onwards. The target markets for the pellets are Northern Africa and the Middle East.

– Mine life must be based on the existing NI 43-101 measured, indicated and inferred resources. (Northland is systematically exploring at least 35 nearby known magnetite occurrences. It is anticipated that operation of the processing facilities will, in the long term, be sustained by the continued exploration and resource growth.)

– Contract mining will be used at all three projects: no mining equipment capital was included in the CAPEX. This reduces the upfront capital cost but increases the per unit operating costs. A 15% surcharge was included to cover contractor profit, depreciation and equipment purchases.

– The CAPEX assumptions should be conservative: all capital costs assumed by Northland in the financial model were based on the purchase of new equipment – there is an opportunity to acquire at least some of the equipment on the used market to reduce capital costs.

– Each project should be examined on a stand-alone basis.

– All infrastructure CAPEX was identified. Since much of the required infrastructure will be shared between the three projects, it was assumed that a third party provider will make the necessary investments and Northland will compensate for that investment through usage charges. A surcharge of 20% was added to all infrastructure Operating Costs to address the necessary return on investment to the infrastructure providers.

Commodity Price Assumptions

Northland commissioned Raw Materials Group to provide base sales price forecasts out to 2023, incorporating shipping rate forecasts to key iron ore markets which were provided and confirmed independently. Northland updated the forecast to reflect 2008 settlements and set a pricing strategy that assumes that it will sell iron ore on a ‘Free On Board’ basis, at the port of origin and will be able to sell its iron ore products at prices competitive to those secured by the major producers, at the same destination port.

Operating and Capital Expenditure Summaries for the Three Projects

The basic mining and processing operating costs parameters shown below, defined in the PEA for each of the three projects, are used in the preliminary economic assessment:

——————————————————————– —— ________________________________________________________Stora Operating Cost Parameter____Units__________ Tapuli__Sahavaara__Hannukainen ——————————————————————– —— First Year Mining Cost(i)__ EUR/t of ore______4.84______ 1.92________ 2.18 ____________________________ mined Last Year Mining Cost(i)____EUR/t of ore______6.51______13.30________ 9.50 ____________________________ mined Processing Cost____________ EUR/t of ore______3.17______ 6.99________ 5.24 ____________________________ processed Pelletizing Costs__________ EUR/t of pellets____ -______ 6.25________ 6.05 ——————————————————————– —— (i) Note: Mining cost varies over the life-of-mine based on the waste to __________ore stripping ratio, and includes mining contractor fees. Please __________refer to the Executive Summaries for the detailed mining __________schedule.

The major items that make up the operating costs for all three mines are salaries, drilling, blasting, loading and hauling of the ore and waste. A significant proportion of the cost of these mining related activities is fuel. Fuel consumption figures were generally supplied by the manufacturers of each plant item. The fuel cost is assumed to be EUR 0.70 per liter.

The Rail haulage and port handling costs defined by the PEA and used to develop the FOB costs for the three projects are summarized below:

——————————————————————– —— ________________________________________________________Stora Operating Cost______________Units__________ Tapuli__Sahavaara__Hannukainen ——————————————————————– —— Rail Costs to Kemi__________EUR/t of product__2.98______ 2.98____________- Rail Costs to Narvik________EUR/t of product__1.63______ 1.63________ 1.84 Port Handling Costs Narvik__EUR/t of product__3.50______ 3.50________ 3.50 Port Handling Costs Kemi____EUR/t of product__2.50______ 2.50____________- ——————————————————————– ——

A summary of the CAPEX defined in the study for each project is shown below (all figures in millions of Euros (EUR M):

———————————————————– ______________________________________ Stora Capital Cost__________ Tapuli______Sahavaara____Hannukainen ———————————————————– Heavy Aggregate__________ 8.4______________-______________- Mining____________________8.7__________ 12.9__________ 11.9 Processing______________129.5__________245.3__________264.3 Pelletizing________________ -__________279.0__________279.0 ———————————————————– Total CAPEX____________ 146.6__________537.2__________555.2 ———————————————————–

Tapuli

Resources

Tapuli contains a large resource of open-pittable magnetite. Exploration drilling has delineated the deposit from near-surface to 300m depth with a true thickness of between 10m to 200m. The mineralization remains open at depth. A conceptual mine plan was developed to mine an estimated 65.8Mt of mineralized, fully diluted, surface mineable material averaging 28.3% Fe within a previously defined NI 43-101 compliant resource of:

——————————————————————– – Resource Category(i)________Tonnage________Fe %________S %________P % ——————————————————————– – Indicated____________________ 54.38______ 27.68______ 0.24______ 0.06 Inferred______________________47.60______ 26.27______ 0.26______ 0.07 ——————————————————————– – (i) Note: Using a 15% Fe cut off. See Northland’s news release dated __________Feb. 11, 2008.

The stripping ratio is 2.27:1 tonnes of waste mined per tonne of ore. The mineralized material includes dilution and allowances for losses which may occur when the material is mined and accounts for realistic mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors.

Mining and Processing Capital and Operating Costs

A conceptual open pit mining schedule was developed using NPV Scheduler(R) optimized, where possible, to maintain an even head grade and an even stripping ratio. On average 8.5Mtpa of iron ore is mined to produce 3.0Mtpa of iron ore concentrate.

The CAPEX for the Tapuli mine and HDA production is EUR 17.1M. The design of processing plant and facilities, based on conventional crushing, screening, grinding and low intensity magnetic separation (“LIMS”) technology, allows for production of 3.0Mtpa of iron ore concentrate at a CAPEX of EUR 106.3M. The Tapuli plant is located on the same site as the Stora Sahavaara processing plant to enable sharing of facilities and resources between the two operations. Thus an additional facility CAPEX of EUR 46.4M will be shared between both Tapuli and Stora Sahavaara.

The Life-of-Mine average direct cash operating cost per tonne of saleable product, including transport costs and port loading (FOB), is estimated at EUR 29.94 per tonne including HDA production of 1.8M tonnes.

Stora Sahavaara

Resources

Stora Sahavaara contains a large resource of open-pittable magnetite. Exploration drilling has delineated the deposit from near- surface to more than 300m depth. The mineralization remains open at depth. A conceptual mine plan was developed to mine an estimated 102Mt of mineralized, fully diluted, surface mineable, material averaging 43.3% Fe within a previously defined NI 43-101 compliant resource of:

——————————————————– Resource Category(i)____Tonnes________ Fe %________ Cu % ——————————————————– Measured____________77,063,210________43.32________0.080 Indicated__________ 44,634,770________43.28________0.076 Inferred____________23,346,373________41.76________0.051 ——————————————————– (i) Note: Using a 25% Fe cut off. See Northland’s press __________release dated May 18, 2006.

The stripping ratio over the life of the open-pit mine averages 5.94:1. The mineralized material includes dilution and allowances for losses which may occur when the material is mined and accounts for realistic mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors.

Mining, Processing and Pelletizing Capital and Operating Costs

A conceptual open pit mining schedule was developed using NPV Scheduler(R) optimized, where possible, to maintain an even head grade and an even stripping ratio. On average 9.5Mtpa of iron ore is mined to produce 5.0Mtpa of iron ore pellets.

The processing plant flowsheet design is based upon conventional crushing, screening, grinding, LIMS and flotation technology. The CAPEX for the Stora Sahavaara mine is estimated at EUR 12.9M and processing plant costs are estimated to be EUR 222.2M. The plant and processing facilities have been designed to produce 5.0Mtpa of iron ore concentrate which will feed into a separate pelletizing facility located on-site. The operating costs for the Stora Sahavaara processing plant are estimated at EUR 6.99 per tonne of ore feed or EUR 13.14 per tonne of product.

The estimated CAPEX for the design and supply of a 5Mtpa pellet plant is EUR 279.0M and estimated operating costs are EUR 31.3M per year or EUR 6.25 per tonne of product.

The Life-of-Mine average direct cash operating cost per tonne of saleable product, including transport costs and port loading (FOB), is estimated at EUR 42.99 per tonne.

Hannukainen

Resources

The Hannukainen deposit contains a large resource of near surface iron ore amenable to open pit mining. A conceptual mine plan was developed to mine an estimated 117.5Mt of mineralized, fully diluted, surface mineable, material averaging 31.7% Fe, 0.16% Cu and 0.07g/t Au within a previously defined NI 43-101 compliant resource of:

——————————————————————– – Resource Category(i)________ Tonnes________Fe %______ Cu %____ Au g/ t ——————————————————————– – Measured________________ 53,140,000________35.6______ 0.25______0.124 Indicated________________31,460,000________32.9______ 0.11______0.043 Inferred________________ 81,630,000________35.7______ 0.13______0.036 ——————————————————————– – (i) Note: Using a 15% Fe cut off. See Northland’s press release dated __________August 23, 2007.

The stripping ratio over the life of the open-pit mine averages 3.93:1. The mineralized material includes dilution and allowances for losses which may occur when the material is mined and accounts for realistic mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors.

Mining, Processing and Pelletizing Capital and Operating Costs

A conceptual open pit mining schedule was developed using NPV Scheduler(R) optimized, where possible, to maintain an even head grade and an even stripping ratio. On average 15.8Mtpa of mineralized material is mined to produce 5.0Mtpa of iron ore pellets.

The processing plant flowsheet design is based upon conventional crushing, screening, grinding, LIMS and flotation technology. The CAPEX for the Hannukainen mine is estimated at EUR 11.9M and processing plant costs are estimated to be EUR 264.3M including the equipment necessary to recover the copper and gold by-products. The plant and processing facilities have been designed to produce 5.0Mtpa of iron ore concentrate which will feed into a separate pelletizing facility located on-site. The operating costs for the Hannukainen processing plant are estimated at EUR 5.24 per annual tonne of ore feed or EUR 17.10 per annual tonne of product.

The estimated CAPEX for the design and supply of a 5Mtpa pellet plant is EUR 279.0M and operating costs have been estimated at EUR 30.3M per year or EUR 6.05 /t of product.

The Life-of-Mine average direct cash operating costs per tonne of saleable product, including transport costs and port loading (FOB), are estimated at EUR 49.40 per tonne – this cost does not include any allowance for by-product credits.

Rail and Port Options

The PEA for each of the three deposits assumes that a contract transport and logistics provider will be responsible for building and operating the transport system. All three deposits are within 20km or less of existing rail infrastructure and will be using the same transport infrastructure. It is therefore difficult to proportion capital costs accurately to each of the deposits, transport operating costs from the Tapuli, Stora Sahavaara and Hannukainen mine sites to the ports of Kemi and Narvik have been calculated and then inflated by 20% to provide for this contract logistics company.

The Port of Kemi in Finland is the nearest port to all three operations and is approximately 235km to the south by Finnish Railways. The state owned port has an existing bulk handler with a capability of 2Mtpa, which could be increased to 3Mtpa with minimal investment.

The Port of Narvik in Norway is a deep water port located on the north-west coast of Norway with direct access to the Norwegian Sea and the Atlantic Ocean. The port is ice free all year round and capable of handling Capesize vessels with a draft of up to 26m. Narvik port is connected to the heavy-haul rail line with its 30t axle loading. Narvik has the advantages of good high capacity rail connection and an ice free port capable of handling the largest size vessels, removing any economic disadvantage by shipping to Middle East or European steel producers with smaller vessels.

Qualified Person & NI 43-101 Statements

Qualified Person

Mr. Owen Daniel Mihalop, BSc, MSc, MCSM, Professional Member of the Institute of Materials, Minerals and Mining and a Chartered Engineer (Registrant No. 569812), Principal Mining Engineer and Associate Director of Wardell Armstrong International Ltd., is the principle author and Qualified Person in accordance with National Instrument 43-101 responsible for the preparation of the report titled “Preliminary Economic Assessment of the Fennoscandian Iron Ore Mines” and dated June 2008, Ref WAI/61-0495 and for the three executive summaries of this report, dated June 2008 titled “Summary of the Preliminary Economic Assessment of the Hannukainen Iron Ore Deposit, Finland”, “Summary of the Preliminary Economic Assessment of the Tapuli Iron Ore Deposit, Finland”, and “Summary of the Preliminary Economic Assessment of the Stora Sahavaara Iron Ore Deposit, Finland” upon which this news release is based.

Paul Marsden, VP Metallurgical Development and Operations for Northland, is a member of the IMMM, a Chartered Engineer and a Chartered Scientist and is the Qualified Person as defined in NI 43- 101 responsible for overseeing the preparation of this news release. Mr. Marsden has verified that the results presented here have been accurately summarized from the engineering studies provided to Northland by its contracting engineers.

Metallurgical Test-Work

Metallurgical test-work on Hannukainen mineralized material was performed by SGS Lakefield Research Ltd. Test-work was completed on Tapuli magnetite by the Geological Survey of Finland (GTK) in Outokumpu, Finland and by SGS in Truro, UK. The majority of the metallurgical test-work for Stora Sahavaara was completed by SGS in Lakefield, Ontario and a program of Davis tube testing was completed by Midland Standard Research Laboratories, Minnesota. Northland commissioned Corus RD&T to perform a preliminary study including basic balling and induration tests on Stora Sahavaara magnetite. Further test-work is underway at COREM. GBM used the metallurgical test-work data from all three deposits (see below) as part of their engineering design in order to determine capital and operating cost estimates.

Resource Estimates

The Hannukainen resource modeling was completed in a joint effort between Micon International of Norwich, United Kingdom and Geovista of Lulea, Sweden. Mr. D.K. Mukhopadhyay, MAusIMM, of Micon served as the independent Qualified Person for the resource modeling. The Stora Sahavaara resource estimates were prepared by a third party consultant (Bart Stryhas, PhD Structural Geology); the resource model and estimates were subsequently reviewed by Chlumsky Armbrust & Meyer LLC an independent, mineral resource, consulting and engineering group based in Lakewood, Colorado USA. Thomas Lindholm was the Qualified Person responsible for the preparation of all sections in the report entitled “NI 43-101 Technical Report – Tapuli Resource Estimate” for Northland Exploration Sweden AB. Mr. D.K. Mukhopadhyay, MAusIMM, of Micon, also a Qualified Person as defined in NI 43-101, verified the Tapuli grade interpolation protocol for the resource model calculation.

About Northland (www.northlandresourcesinc.com)

Northland is a well-structured, debt free junior exploration company with a portfolio of high quality iron, gold, and base metal exploration projects in Sweden and Finland.

ON BEHALF OF THE BOARD

Bill Wagener

NORTHLAND RESOURCES INC.

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