Northland Resources Inc.

Northland Resources Inc.

September 01, 2005 10:00 ET

North American Gold Provides Exploration Update

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Sept. 1, 2005) - North American Gold Inc. (TSX:VENTURE:NAU) is pleased to provide an update on its exploration and development activities in Finland and Sweden. NAU is focused on two key projects: the Pajala Shear Zone iron ore project which straddles the border between Finland and Sweden, and the Norra-Barsele gold project in Sweden. The Company's objective is to establish itself as a mid-cap mining company with iron, copper and gold production on the doorstep of the major industrial manufacturing regions of Europe.

Highlights of NAU's on going work include:

- A leading international metals research and management consulting firm has been retained to provide marketing strategies for NAU's anticipated iron ore production;

- Metallurgical and resource infill drilling continuing at Stora Sahavaara iron project;

- Planning underway for drilling on IOCG targets in Finland;

- NAU further consolidates its ground position in Sweden and Finland;

- Additional resource definition drilling underway at Norra-Barsele gold project.

Iron Ore Projects

NAU's main exploration effort is being directed towards development of several substantial magnetite bodies in the Pajala Shear Zone (PSZ). These include the Stora Sahavaara magnetite deposit in Sweden and the Kolari district in Finland. The PSZ is an important geological belt straddling the border between northern Sweden and Finland. It hosts a number of known magnetite bodies and many untested iron-oxide+copper+gold (IOCG) targets.

Metals Strategies Inc., a leading international metals research and management consulting firm, located in Philadelphia, USA has been retained by NAU. They will provide marketing strategies for the anticipated iron ore production from both Sweden and Finland, assist in developing end-user contacts, and advise in product selection.

Stora Sahavaara

Four large diameter core holes have been completed for a metallurgical test program. Core from the holes has been logged and photographed and is being shipped to a US-based metallurgical consultants, Midland Standard Inc. (Midland). Midland, who specializes in the metallurgy of iron ores, has been retained to determine the type and quality of product that can be produced from the Stora Sahavaara magnetite body. This in turn will help to determine the economics of the resources that NAU is defining in the region.

Six "H" diameter holes have been completed to test for strike and down dip continuity of the Stora Sahavaara magnetite body. Four holes remain to be drilled and completion of the program is expected in early September. The first six holes cut the magnetite zone at the expected depths and over the expected thicknesses. The drilling has demonstrated the down dip and along strike continuity of the mineralization, and has tested 800m of the estimated 1300m strike length and 200m of the 750m down dip extent of the magnetite body. The estimated average true thickness is 56m. Future drill programs will further define the Stora Sahavaara body and adjoining magnetite deposits.

NAU has also started a technical review of other known magnetite deposits close to the main Stora Sahavaara body. The Swedish Geological survey (SGU) report a combined total of over 90-million tonnes of magnetite in bodies adjacent to, and in addition to the Stora Sahavaara body (the reader is referred to the Disclaimer at the end of this release.)

An additional 1,200 ha of prospective ground have been applied for within the district to consolidate NAU's ground position. The Company is currently awaiting approval of the application from the Mines Inspector.

For the next few months, NAU's work at Stora Sahavaara will focus on:

- Completing sufficient drilling to allow calculation of an independent NI43-101 resource statement;

- the metallurgical test work on Stora Sahavaara core;

- the environmental work required for future drill programs within and surrounding the main magnetite body.

Kolari, Finland

In Finland, NAU's geologists are re-logging archived core stored at the core library of the Geological Survey of Finland (GTK) which was drilled within the Hannukainen iron ore deposit. Approximately 14,500m of core has been re-logged and roughly 8,500m has been cut and submitted for assay. Initial assay results are expected in early September. NAU's field staff is conducting an extensive review of all of the GTK's geological and geophysical data for the Kolari district. In the near term work at Kolari will focus on:

- Developing and executing a winter drill program.

- Development of a NI43-101 standard resource for the Kolari deposits.

- Complete evaluation of Reservations in order to select lands to be held under Exploration Licenses.

Barsele-Norra Gold Deposit, Sweden

NAU has defined a substantial gold resource at the Norra Barsele project in Sweden which is held under a joint venture with MinMet PLC. An independent NI43-101 estimate found 290,788 ounces in the Indicated Resource category, and 348,196 ounces in the Inferred Resource category (see news release dated March 16, 2005).

A six hole large diameter RC drill program was recently completed at Barsele to investigate the impact of larger sample size on the average gold grade at Barsele. Results of the program are expected shortly. Further core drilling is planned at Barsele for late 2005. The results from both programs will be used to complete a new 43-101 resource calculation for Barsele which it is hoped will lead to a higher average gold grade for the project.

Future News Flow

For the remainder of 2005, NAU's anticipate news flow is as follows:

- Results for the recent drilling at Stora Sahavaara which should allow NAU to comment on the strike and down dip extent of the magnetite body, and the average iron grades.

- Results for metallurgical test work of the Stora Sahavaara drill core.

- Results of the first six holes from Barsele Central Zone.

- Comparative assays of core from the Hannukainen iron-copper-gold mine, Kolari, Finland.

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 as well as a report titled "Review of iron-oxide-copper-gold mineralization in northern Fennoscandia (Sweden and Finland)" prepared by the Geological Survey of Finland for NAU, dated February, 2005.

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.

Resource estimates for the Norra-Barsele gold deposit were prepared by third party consultants (Bart Stryhas, PhD, structural geology, and Dwight Crossland, BS, mining engineering); the resource model and estimates were subsequently reviewed by Chlumsky Armbrust & Meyer LLC (CAM), an independent, mineral resource, consulting and engineering group based in Lakewood, Colo.

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.


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. The Company's objective is to establish itself as a mid-cap mining company with iron, copper and gold production on the door step of the major industrial manufacturing regions of Europe.


Buck Morrow, President

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

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