Northland Resources Inc.
TSX VENTURE : NAU

Northland Resources Inc.

May 23, 2006 09:30 ET

Northland Completes Purchase of 100% of Barsele Gold Project, Sweden

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 23, 2006) - Mr. Buck Morrow, President of Northland Resources Inc. (TSX VENTURE:NAU), is very pleased to announce that Northland has now closed the purchase of 100% of Minmet plc's Barsele gold project in Sweden. The project has a NI43-101 compliant Indicated resource of 393,324 oz. of gold contained within 7.625 million tonnes at an average grade of 1.6 g/t gold, and an Inferred resource of 437,041 oz. gold contained within 9.026 million tonnes at an average grade of 1.51 g/t gold (see table below).

In consideration for the acquisition of the Barsele Project, the Company has issued to a subsidiary of Minmet plc 3,000,000 shares of Northland and warrants to purchase up to 1,500,000 shares of the Company exercisable at $0.80 per share for two years. These securities have a hold period until September 20, 2006.

Following the Barsele transaction, Northland has 54,615,654 shares issued and 62,642,203 shares fully diluted. At the closing price on the TSX Venture Exchange on May 19, 2006, the Company has a fully diluted market capitalization of $87-million. The Company has $22.5-million dollars in its treasury after recent financing activities in the second quarter of 2006. Approximately 6.95-million warrants have been exercised since January 1, 2006, bringing in $3.94-million.

Northland recently published NI43-101 compliant resources for 2 projects in Sweden -the Barsele gold project, and the Stora Sahavaara iron project- and is drilling on a third project, the Hannukainen iron-copper-gold project in Finland.

Barsele Gold Project

In March, the Company published a NI43-101 compliant gold resource calculation for the Barsele gold project (see Northland press release dated March 1, 2006). Using a 0.7 g/t Au cut off the resources are as follows:



-----------------------------------------------------------
Indicated Resources at a 0.7 g/t Au cut off
-----------------------------------------------------------
Zone Tonnes Grade Au g/t Contained Oz Au
-----------------------------------------------------------
Central 5,123,844 1.67 275,602
Avan 1,596,368 1.36 69,661
Norra 247,670 2.43 19,325
Skirasen 656,745 1.36 28,736
-----------------------------------------------------------
Total 7,624,627 1.60 393,324
-----------------------------------------------------------
Inferred Resources at a 0.7 g/t Au cut off
-----------------------------------------------------------
Zone Tonnes Grade Au g/t Contained Oz Au
-----------------------------------------------------------
Central 4,100,794 1.62 213,850
Avan 3,428,178 1.41 155,536
Norra 78,429 2.33 5,866
Skirasen 1,418,619 1.35 61,789
-----------------------------------------------------------
Total 9,026,020 1.51 437,041
-----------------------------------------------------------


The Indicated resources have increased by 26% to 393,324 oz from the previous estimate (See "Technical Report Barsele Project, Sweden" dated April 15, 2005 filed on www.sedar.com and Northland press release dated March 17, 2005). The Inferred resources have increased by 15% from the previous estimate to 437,041 oz Au.

Stora Sahavaara Iron Project

Northland also recently announced the completion of the first NI43-101 compliant resource calculation for the Stora Sahavaara magnetite body in northern Sweden (see Northland press release dated May 18, 2006). Using a 25% Fe cut off, the study has delineated:



----------------------------------------
Category 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
----------------------------------------


A NI43-101 compliant report detailing the methodology and results of the current resource calculation will be filed on www.sedar.com within 45 days.

Hannukainen Drill Program

A 10,000m diamond drill program is underway at the Company's 100%-owned Hannukainen iron-copper-gold project in Finland. Previous work by Northland in 2005 identified a significant copper-gold target centered near the past-producing Hannukainen (Laurinoja) open pit mine which is reported to have produced 4.5 million tonnes at a grade of 43% Fe, 0.88% Cu, and 1 g/t Au. The drill program, which is expected to continue for much of 2006, has the following objectives:

- Investigate the copper + gold potential along strike and down dip of the historic drilling at Hannukainen.

- Confirmation and expansion of the historic 66 million tonne iron-copper-gold resource and recalculation of the resource to NI 43-101 standards (This resource estimate was prepared prior to the implementation of National Instrument 43-101 and does not 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". The Company believes that term "resources" is used differently from the use of that term in NI 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 NI 43-101 and the historical estimate should not be relied upon).

- Evaluation of adjacent iron-oxide-copper-gold targets

NI43-101 Compliance

Resource estimates for both the Barsele and Stora Sahavaara projects were prepared by third party consultant (Bart Stryhas, PhD Structural Geology); the resource models and estimates were subsequently reviewed by Chlumsky Armbrust & Meyer L.L.C. ("CAM") an independent, mineral resource, consulting and engineering group based in Lakewood, Colorado USA. CAM has reviewed the database and modeling procedures used by Northland to calculate the Barsele gold resource and the Stora Sahavaara magnetite resource. On the basis of its reviews CAM believes that the Stora Sahavaara and Barsele resources and resource models have been prepared according to accepted engineering practice for a project at this level of development and that the results obtained are suitable for determining if further exploration work on the properties is warranted.

Vance V. Thornsberry, P.Geol., Vice-President of Exploration for Northland Resources, is the Qualified Person as defined in NI43-101, and has verified that the information presented in this release has been accurately summarized from the reports quoted herein. Mr. Thornsberry is also the Qualified Person as defined in NI43-101, responsible for overseeing the design and execution of the Barsele exploration program, and the Stora Sahavaara and Hannukainen exploration programs. In accordance with NI 43-101, Mr. Thornsberry has verified the data disclosed in this release other than certain information provided by MinMet PLC.

Background

Northland Resources 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

NORTHLAND RESOURCES INC.


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

Contact Information

  • Northland Resources Inc.
    Buck Morrow
    President
    Toll Free: 1-866-312-8630
    or
    Northland Resources Inc.
    Ralph Rushton
    Investor Relations
    Toll Free: 1-866-312-8630
    or
    Northland Resources Inc.
    Karen Davies
    Investor Relations
    Toll Free: 1-866-312-8630
    www.northlandresourcesinc.com