Duluth Metals files new NI 43-101 preliminary assessment report confirming positive economics for expanded Nokomis Project

    TORONTO, Jan. 12 /CNW/ - Duluth Metals Limited ("Duluth Metals") (TSX:
DM) (TSX:DM.U) today announced the receipt of a new independent NI 43-101
Preliminary Assessment ("PA" or Scoping Study) on its Nokomis Project, a large
copper-nickel-PGM deposit in Minnesota, from Scott Wilson Roscoe Postle
Associates ("Scott Wilson RPA"). Highlights of the study were press released
on November 25, 2008 and the full report has now been filed on SEDAR. This
report provides an updated Preliminary Assessment of the Nokomis Project,
based on the June 2008 Mineral Resource Estimate, and is based on an expanded
40,000 tonne per day ("tpd") production rate scenario, doubling the January
2008 PA production rate case. The report confirms positive economics for the
Nokomis Deposit even at today's lower metal prices with the potential to be
one of the world's low cost copper-nickel producers.
    The new Scoping Study used three metal price scenarios (all monetary
units are in $US) to examine the economics of developing and mining the
Nokomis Deposit:

    -   Low-Price Case - reflecting recent low metal prices of 1.55/lb Cu;
        $4.90/lb Ni; $10.00/lb Co; $795/oz Pt; $295/oz Pd; $600/oz Au.
    -   Base Case - same base case prices used in the previous Technical
        Report (January 2008 PA), based on long-term average price forecasts
        of the past several years. ($1.75/lb Cu; $7.00/lb Ni; $10.00/lb Co;
        $1,100/oz Pt; $350/oz Pd; $600/oz Au)
    -   Market-Price Case - prices as of January 13, 2008, for direct
        comparison to the previously-reported 20,000 tpd scenario contained
        in the January 2008 PA.

                    EXPANDED - 40,000 TPD PRODUCTION CASE
                              Low-Price Case     Base Case   Case (Jan 13/08)

    Key Variable - Cu Price
     ($/lb)                       $1.55           $1.75           $3.31
    Key Variable - Ni Price
     ($/lb)                       $4.90           $7.00          $12.70


    Average NSR Value ($/t)     $ 47/tonne      $ 59/tonne      $106/tonne
    Average Operating
     Costs ($/t)                $ 23/tonne      $ 23/tonne      $ 23/tonne
    Average Annual
     Cash Flow ($)             $ 283 Million   $ 434 Million  $1.014 Billion
    Capital Cost,
     including Contingency    $1.332 Billion  $1.332 Billion  $1.332 Billion
    Payback Period (years)       6 years         4 years         2 years
    Total Undiscounted
     Cash Flow                 $4.90 Billion   $8.21 Billion  $20.98 Billion
    NPV @ 7.5%              $1.18 Billion   $2.41 Billion   $7.11 Billion
    NPV @ 10%               $0.67 Billion   $1.60 Billion   $5.14 Billion
    NPV @ 12.5%             $0.33 Billion   $1.04 Billion   $3.77 Billion
    IRR (%)                       16.2%           23.0%           41.4%

    Potential annual metal production under the 40,000 tpd expanded production
scenario for all three price cases is as follows:

    -   181.7 million pounds of copper per annum;
    -   42.3 million pounds of nickel per annum; and
    -   251,000 ounces of platinum-palladium-gold per annum.

    The new independent NI 43-101 Scoping Study was completed by Scott Wilson
Roscoe Postle Associates ("Scott Wilson RPA"). Holger Krutzelmann, P.Eng.,
Jason Cox, P.Eng., and Richard Routledge, M.Sc., P.Geo., of Scott Wilson RPA
are the Independent Qualified Persons who are responsible for the report.
    This new PA for the Nokomis Project encompasses the following general
process flow: Ore production rate of 40,000 tonnes per day, or 14 million
tonnes per year; Underground mining by blasthole open stoping with partially
recoverable pillars; Underground access by shaft and ramp; Underground ore
handling by conveyor systems; Underground primary crushing, further crushing
and grinding on surface; Transfer from mine to concentrator via 10 km slurry
line; Agitated holding tanks at mill with a minimum capacity of 11,000 m(3);
Flotation concentration, producing a bulk copper-nickel-cobalt-PGM-gold
concentrate; Hydrometallurgical processing using PLATSOL(TM) process;
Production of saleable copper and nickel metal via standard electrowinning,
and production of cobalt and PGM-gold products to be shipped to refineries for
final processing to metal; and a brownfields tailings disposal facility within
three kilometers of the processing site.
    The following table shows unit cash costs (operating and capital),
calculated for either nickel or copper. This measure provides a means to
compare costs in dollars per pound of metal to individual metal prices (also
in dollars per pound of metal). Scott Wilson RPA notes that the calculation is
net of byproduct credits, which in this case amount to approximately 60% of
revenue. Since no single metal is a dominant contributor, unit cash costs
calculated in this manner appear very low, or negative in most cases.

                    EXPANDED - 40,000 TPD PRODUCTION CASE
                              Low-Price Case     Base Case   Case (Jan 13/08)

    Key Variable - Cu Price
     ($/lb)                       $1.55/lb.       $1.75/lb.       $3.31/lb.
    Key Variable - Ni Price
     ($/lb)                       $4.90/lb.       $7.00/lb.      $12.70/lb.
    Capital Cost,
     including Contingency    $1.332 Billion  $1.332 Billion  $1.332 Billion
    Conceptual Projected
     Mine Life                    22 years        22 years        22 years

    Unit Cash Costs -
     Operating ($/lb Cu)        $(0.09)/lb.     $(0.72)/lb.     $(2.36)/lb.
    Unit Cash Costs - Capital
     ($/lb Cu)                    $0.42/lb.       $0.42/lb.       $0.42/lb.
    Total Unit Cash Costs
     - Operating plus
     Capital ($/lb Cu)            $0.32/lb.     $(0.30)/lb.     $(1.94)/lb.

    Unit Cash Costs -
     Operating ($/lb Ni)        $(2.15)/lb.     $(3.61)/lb.    $(11.62)/lb.
    Unit Cash Costs -
     Capital ($/lb Ni)            $1.79/lb.       $1.79/lb.       $1.79/lb.
    Total Unit Cash Costs -
     Operating plus Capital
     ($/lb Ni)                  $(0.36)/lb.     $(1.82)/lb.     $(9.83)/lb.

    "We are pleased that the new Preliminary Assessment report indicates that
the expanded Nokomis Project is robust at the selected scenarios of long-term
metal prices" said Dr. Henry Sandri, President & CEO of Duluth Metals Limited.
"Both the new expanded case at 40,000 tonnes per day of production and the
earlier 20,000 tonne per day case demonstrate positive economics at various
price cases. This demonstrates that the Nokomis Project has significant
flexibility in optimizing the production throughput, relative to the overall
size of our published resource to date. We are currently in the
pre-feasibility data collection and assessment stage of the project and
anticipate enhancing the economics by delineating higher grade feed that can
be mined and processed at an early stage of the project, studying the impact
and staging of various scales of operation, as this 40,000 tpd case is doing,
confirming much larger Indicated and Inferred Resources, and converting a
significant portion of those resources to Measured Reserves."
    Scott Wilson RPA reports their model is sensitive to higher grade and
world metal prices. The economic analysis contained in this press release is
based, in part, on Inferred Resources, and is preliminary in nature. Inferred
Resources are considered too geologically speculative to have mining and
economic considerations applied to them and to be categorized as Mineral
Reserves. There is no certainty that the reserves development, production and
economic forecasts on which this Preliminary Assessment is based will be
    The database for the Resource used in the PA was based on 106 drill holes
drilled by DML. In completing the 2008 drill program, DML has now drilled 154
holes, of which 48 holes are not included in the current Indicated and
Inferred Resources. The new PA has scoped a conceptual mine plan based on a
40,000 tpd operation over a 22 year mine life with average grades of Cu 0.68%,
Ni 0.21%, Pd 0.47g/t, Pt 0.21 g/t, Au 0.10 g/t, Co 0.01%. This proposed
operation mines 282 million tonnes, which is less than half the resource
estimate published by Scott Wilson RPA on July 18, 2008. The current Nokomis
Resource Estimate as per the Scott Wilson NI 43-101 Technical Report on the
Resource Estimate, dated July 18, 2008, is as follows:

                             Indicated Resources
    Cut-off                                                        TPM    (*)
     Grade   Tonnes      Cu %   Ni %   Co %   Au %   Pt %   Pd %   g/t  CuEq%
     CuEq  449,413,000  0.624  0.199  0.010  0.084  0.159  0.358  0.600  1.46
                             Inferred Resources
    Cut-off                                                        TPM    (*)
     Grade   Tonnes      Cu %   Ni %   Co %   Au %   Pt %   Pd %   g/t  CuEq%
    CuEq   284,230,000  0.627  0.194  0.010  0.096  0.191  0.431  0.718  1.50

    (Note - (*)Copper Equivalent is based on US metal prices of: Copper -
    $1.75/lb, Nickel - $7.00/lb, Cobalt - $10.00/lb, Gold - $600/oz, Platinum
    - $1,100/oz, and Palladium - $350/oz. and the methodology with
    metallurgical recoveries, refining costs and other charges being
    considered for all metals in accordance with the Net Smelter Return
    Factors contained in the January 22, 2008, NI 43-101 Scoping Study
    produced by Scott Wilson RPA.)

    The full Scott Wilson RPA NI 43-101 Preliminary Assessment Report is
available on SEDAR as well as the Company's web site www.duluthmetals.com.
    David Oliver, P. Geo. and Nokomis Project Manager is the Qualified
Person, in accordance with NI 43-101 of the Canadian Securities
Administrators, and is responsible for the technical content of this press
release and quality assurance of the data and analytical results.

    About Duluth Metals

    Duluth is committed to acquiring, exploring and developing copper, nickel
and platinum group metal (PGM) deposits. Duluth's principal property is the
Nokomis Deposit located within the rapidly emerging Duluth Complex mining camp
in northeastern Minnesota. The Duluth Complex hosts one of the world's largest
undeveloped repositories of copper, nickel and PGMs, including the world's
third largest accumulation of nickel sulphides, and one of the world's largest
accumulations of polymetallic copper and platinum group metals.

    This document may contain forward-looking statements (including
"forward-looking statements" within the meaning of the US Private Securities
Litigation Reform Act of 1995) relating to Duluth's operations or to the
environment in which it operates. Such statements are based on operations,
estimates, forecasts and projections. They are not guarantees of future
performance and involve risks and uncertainties that are difficult to predict
and may be beyond Duluth's control. A number of important factors could cause
actual outcomes and results to differ materially from those expressed in
forward-looking statements, including those set forth in other public filings.
In addition, such statements relate to the date on which they are made.
Consequently, undue reliance should not be placed on such forward-looking
statements. Duluth disclaims any intention or obligation to update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise, save and except as may be required by applicable
securities laws.

For further information:

For further information: please contact Mara Strazdins, Director of
Corporate Communications, at mstrazdins@duluthmetals.com or at (416) 369-1500
or Henry Sandri, President and CEO, at hsandri@duluthmetals.com; Minnesota
corporate office: telephone (651) 389-9990; Web Page: www.duluthmetals.com

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