The Property is located in the western margin of the Labrador Trough that extends for more than 1,000 km, from Ungava Bay to Lake Pletipi in Québec. The belt is about 100 km wide in its central part and narrows considerably to the north and south. The Grenville Front crosses the southern part of the Trough. The rocks in the Trough are subdivided into an upper volcanicdominated suite (Doublet Group) and a lower sedimentary sequence (Knob Lake Group) that
includes the Sokoman Formation hosting the iron formations found in the region.

The Sokoman formation is essentially un-deformed, strikes northwest and has a shallow dip to the northeast. The iron formation at KéMag has been explored by diamond drilling over a strike length of 9.5 km and it extends beyond the northwest and southeast Property boundaries.

The KéMag Deposit consists of magnetite Banded Iron Formation (“BIF”) of the Lake Superior
type. BIFs are sedimentary rocks composed of alternating mm- to cm-scale beds of quartz
(chert or jasper) and iron oxides (predominantly magnetite and hematite). Variable amounts of
gangue minerals, mostly silicates and carbonates, are present. BIFs have greater than 15% iron
content and have been the principal sources of iron throughout the world and host many gold
deposits (Gross, 1996).

The taconite at the KéMag Deposit consists mostly of alternating small-scale (mm to cm) bedsof recrystallized chert or jasper and massive or disseminated magnetite. Magnetite is the predominant iron oxide mineral, while hematite and martite occur in subordinate amounts. Gangue minerals are represented by iron silicates (minnesotaite and stilpnomelane), iron carbonate (siderite) and manganese carbonates (rhodochrosite and kutnahorite).

The mining method selected for the Project is conventional truck and wheel loader. Vegetation
and topsoil will be cleared using a mining contractor and be carried out with a fleet of dozers, small excavators and articulated haul trucks ahead of the mining operation. Suitable organic material will be stockpiled for future reclamation use. Overburden will then be stripped using a fleet of excavators and hauled to the overburden dump. The ore and waste rock will be mined with 15 m high benches, drilled and blasted and then loaded with wheel loaders into a fleet of rigid frame trucks that will haul the material either to the waste dump or the primary crushers.

During peak production, the total number of 180-tonne haul trucks is expected to reach ten (10), along with three (3) wheel loaders, three (3) production drills and a fleet of support and
service equipment.

The basic process flow sheet consists of primary and secondary crushing and screening circuits feeding the concentrator. The first and main grinding stage uses two (2) passes of HPGRs in
closed circuit with screens and cobber magnetic separation. During this separation stage, a large amount of tailings are rejected. After cobbing, the liberation of the iron bearing mineral (magnetite) is completed in two (2) stages of Vertimill grinding. Two (2) additional stages of
low intensity magnetic separators are also used. If needed, the magnetic separation concentrate is sent to the flotation circuit. The final concentrate is thickened and stored in slurry storage tanks prior to pressure filtration.

The combination of HPGRs with secondary crushing have been selected to replace the conventional SAG mill circuit for the primary grinding circuit. The main advantages of HPGR over other mills are their low energy consumption and the fact that they require no grinding media. NML has done extensive pilot scale testing of HPGR for the grinding of its taconite ore, which is a very hard and abrasive material and test work by all three major HPGR suppliers has been successful.

Depending on the product silica level required at the pellet plant, part or all of the concentrate
will be floated. Final concentrate will be filtered for transportation via rail. During winter, drying will be required to achieve the moisture level of less than 4% that prevents freezing during the transportation to the port.