Northland Resources Inc.
TSX VENTURE : NAU

Northland Resources Inc.

July 21, 2005 13:53 ET

North American Gold Focuses on Stora Sahavaara Resource Drilling

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - July 21, 2005) - North American Gold Inc. (TSX VENTURE:NAU) ("NAU") is pleased to provide an update on its Stora Sahavaara iron project in Sweden.

The information gained from recent drilling by NAU at Stora Sahavaara, combined with historic drill information from the Swedish archives, has provided enough encouragement regarding the dimensions of the magnetite body, that the Company is moving to expedite the second phase of drilling. NAU's technical team will advance the project as rapidly as possible towards development of a NI43-101 compliant resource and anticipate starting Phase 2 drilling in August.

Historic drill data indicates that the Stora Sahavaara massive magnetite body can be traced for 1,300m along strike, and subcrops close to surface below a few meters of glacial till. The body-which is reported to be between 40m to 100m in true thickness-appears to be open down dip below the current known extent of 750m. NAU's recent drilling intersected the body near surface over downhole thicknesses in excess of 50m. The geometry of Stora Sahavaara-a moderately dipping, roughly tabular sheet-is highly favorable for open pit mining.

Work by the Swedish Geological Survey (SGU) defined a 100 million tonne magnetite (43.7% Fe) resource. (The resource estimates quoted in this news release were prepared prior to the implementation of National Instrument 43-101. Please refer to the Disclaimer below.) By comparison, the profitable Malmberget mine, also located in northern Sweden owned and operated by LKAB, has proven and probable reserves of 116Mt and 71Mt respectively at a grade of 43.6% Fe.

The Malmberget facility produces approximately 12.5 million tonnes of iron concentrates per year. Malmberget's production has been derived from about 20 separate ore bodies. Currently there are 10 ore bodies in production with the main haulage level at 1,000m depth. There has been no reported copper or gold production from Malmberget.

According to LKAB 2005 First Quarter Report prices have increased 80% in US Dollar terms. The same report states that Net Sales have increased 75% and the demand remains strong. These statements are consistent with recent news from iron ore producers in other parts of the world.

Metallurgical Test Drilling

Summary logs for the three holes completed to date are given below and a drill collar plan has been posted on the North American Gold website (www.northamgold.com):

The drill program was designed for representative metallurgical testing of approximately 500m strike length of the Stora Sahavaara deposit, with each hole estimated to return approximately 50m of magnetite. Holes 001 and 002 were drilled in the central portion of the deposit. It was not possible to drill to the southern end of Stora Sahavaara because the magnetite zone is too thick for depth capacity of the drill rig (using 80mm diameter core, the rig has a capacity of roughly 100m due to pull down capability).

All drill holes are oriented normal to the strike of the magnetite zone and the angle between the inclination of the drill hole and the dip of the zone is estimated at 70 to 75 degrees for a -50 degree hole and 60 to 65 degrees for a -60 degree hole. True widths of the mineralization are therefore estimated to be +90% of drill intercept.



Stora Sahavaara metallurgical test holes, summary logs.

Hole No. SAH05-001 Total Depth 97.4m

--------------------------------------------------------------------
From To Thickness (m) Description
--------------------------------------------------------------------
0 28.4 28.4 Overburden & wallrock
--------------------------------------------------------------------
28.4 81.7 53.3 Massive to semi-massive
magnetite, minor wall rock
intercalations
--------------------------------------------------------------------
81.7 97.4 eoh Wallrock with semi-massive
sulphides. greater than 1%
chalcopyrite
--------------------------------------------------------------------

Hole No. SAH05-002 Total Depth 99.1m

--------------------------------------------------------------------
From To Thickness (m) Description
--------------------------------------------------------------------
0 23.6 23.6 Overburden & wallrock
--------------------------------------------------------------------
23.6 84.3 60.7 Massive to semi massive
magnetite, locally +/- 0.5%
chalcopyrite, short wallrock
intercalations
--------------------------------------------------------------------
84.3 99.1 14.8 Wallrock with dissem sulphides
10-15%. Chalcopyrite less
than 1%
--------------------------------------------------------------------

Hole No. SAH05-003 Total Depth 99.6m

--------------------------------------------------------------------
From To Thickness (m) Description
--------------------------------------------------------------------
0 28.5 28.5 Overburden & wallrock
--------------------------------------------------------------------
28.5 80.0 33.1 Massive to semi massive
magnetite, locally +/- 0.5%
chalcopyrite, short wallrock
intercalations
--------------------------------------------------------------------
80.0 99.6 19.6 Wallrock
--------------------------------------------------------------------


Visual examination of the core from all of NAU's holes indicates that copper sulfide mineralization (chalcopyrite) is present although the copper grades are not known at this time.

NI43-101 Disclaimer

The resource estimates quoted in this news release were prepared prior to the implementation of National Instrument 43-101. North American Gold is relying on estimates prepared by the SGU and published in 1967 in a report titled "The Stora Sahavaara Iron Ore Deposit, Kaunisvaara, Northern Sweden" written by Bo Lundberg.

None of the historical resource estimates in the SGU use the resource categories stipulated in Section 1.3 of National Instrument 43-101, which are "inferred mineral resource", "indicated mineral resource" and "measured mineral resource". Rather, the historical resource estimate for the Stora Sahavaara deposit reported by the SGU refers to "100 million tonnes", which is not a category stipulated in National Instrument 43-101. The Company does not have, and is not aware of, any more recent resource estimates which conform to the standards laid out in National Instrument 43-101.

The Company advises that it has not done the work necessary to verify the classification of either of the mineral resource estimates and such estimates have not been verified by a qualified person. The Company is not treating the historical resource estimate as a National Instrument 43-101-defined resource or reserve, and the historical resource estimate should not be relied upon. Work is currently underway to bring these estimates up to NI43-101 standard.

Vance V. Thornsberry, PGeo, Vice-President of Exploration for North American Gold, is the qualified person as defined in National Instrument 43-101 and has verified that the information presented in this release has been accurately summarized from the reports quoted herein.

Background

North American Gold Inc. 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

Buck Morrow, President

NORTH AMERICAN GOLD INC.


The TSX Venture Exchange has not reviewed and does not take responsibility for the accuracy of this release.

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