Noront Resources Ltd.

NOT-V: $2.51 August 6, 2009

TARGET: $2.70 (FROM $2.00)

RECOMMENDATION: HOLD (FROM BUY)

RISK RATING: SPECULATIVE

Michael Gray – 604.694.6961

[email protected]

Samuel Jang – 604.694.6964

[email protected]

Hole 49 assays deliver – Lots of drilling

ahead (all figures in C$, unless noted)

Price (8/05/2009) $2.51

Total return to target 8%

Shares O/S (m) 154.6

Shares F/D (m) 164.9

Market cap F/D ($m) $413.9

Market value ($m) $349.2

10-day Ave Daily Vol (m) 5.0

Debt ($m) 0

Cash ($m) $20.0

FD cash ($m) $35.0

6-mo Burn-rate ($m) $10.0

Shareholders 10% Mgmt

~9% Sprott Asset Mgmt

~9% Rosseau Asset Mgmt

~7% Pinetree Cap

CEO Wes Hanson

Director Paul Parisotto

Director Joseph Hamilton

NOT-V

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Noront Resources Ltd. (NOT-V) is a Canadianbased

precious metals exploration company

focused on northern Ontario, Canada. Its key

asset is its 100%-owned McFauld’s Lake project

that hosts the ultra high-grade Ni-Cu-PGE Eagle

One deposit and the prospective Blackbird

chromite deposits.

 Yesterday, after market close, Noront reported the muchanticipated

Eagle One “depth” assays from drill hole 49 on its

100%-owned McFauld’s Lake project, northern Ontario, Canada.

Two new lenses were documented and named Eagle 1B and 1C.

 High-grade assays from hole 49 massive sulphides – Eagle

1B returned 4.7 metres at 5.1% Ni, 1.3% Cu, 0.6g/t Pt and 5.3g/t

Pd within a larger 178.8-metre interval of 1.2% Ni, 0.5%Cu, 0.9g/t

Pt and 2.0g/t Pd (at 306.7-485.5 metres). Lower Eagle 1C

returned 23.7 metres at 5.2% Ni, 1.0% Cu, 0.2g/t Pt and 7.9g/t Pd

within a large 149.5-metre interval at 2.4% Ni, 1.1% Cu, 1.0g/t Pt

and 5.1g/t Pd (at 796.2-945.7 metres). This confirms the high

nickel tenors that were expected (Eagle One 450kt resource1 is

6.75% Ni) and the high, albeit lower, Pt+Pd contents to depth

(Eagle One 14g/t). Although extensive disseminated sulphide

mineralization was documented in both the upper (1B) and lower

(1C) lenses in hole 49, it is the massive portion that has the

highest chance to be economic.

 Impact – Positive. Hole 49 has confirmed additional high-grade

zones at depth within the Eagle One conduit. Scissor holes are in

progress to document true thicknesses. We expect a large amount

of drilling will be required to “sketch-in” Eagle 1B and 1C, and that

the lenses will be podiform with lots of hits and misses. Exploration

potential for additional lenses at depth is rated very high.

 Valuation – For now, we use a direct shipping scenario with triple

our estimates of the Eagle One massive sulphides (to 1.8mt) and

apply a DCF8% conceptual mine model through an underground

ramp and shaft. Capex is increased to $70 million for the road and

$180 million for the mine site (production in 2013), resulting in a

0.8x operating NAVPS of $1.98. We are also adding 16 million

shares of dilution for $40 million in financing for adjusted cash of

$0.20/share. For chromite and belt land value, we maintain our

$0.50/share comparative analysis view for a sum-of-the-parts

NAVPS of $2.68. On this basis, we have adjusted our target price

upward to $2.70 (from $2.00). Given the implied 8% return to our

target, we are lowering our recommendation to a HOLD (from a

BUY