Duluth Metals Highlights Low Copper (C1) Cash Costs and Strong Operating Margins in its Pre-feasibility Study for Twin Metals Minnesota Project

• The draft pre-feasibility study set out in the independent National Instrument 43-101 Technical Report ("PFS Technical Report") prepared by a multi-company team led by AMEC E&C Services Inc. ("AMEC") for Duluth Metals Ltd. confirms that the proposed underground copper, nickel and Platinum Group Metals ("PGMs") mining project (the "TMM Project") is supported by financial fundamentals showing a competitive cost position, high margins sustained over time, and capital efficiencies resulting from outstanding regional and local infrastructure and competitive advantages.


• The PFS Technical Report is based on a 30-year underground mine plan focused on the part of the TMM Project known as the Maturi and Maturi SW mineral deposits with an average production rate of 50,000 short tons (st) per day, producing copper and nickel concentrates that are anticipated to be marketable to customers across the world.


• Over the TMM Project's planned 30 years of operation, the PFS Technical Report estimates the mine will produce approximately 5.8 billion pounds of copper, 1.2 billion pounds of nickel, 1.5 million ounces of platinum, 4.0 million ounces of palladium, 1.0 million ounces of gold, and 25.2 million ounces of silver.


• Low C1 cu cash cost of $0.31/lb (net of byproduct credits) over the first 10 years of production and 30 year Copper (C1) cash cost of $0.76/lb (net of byproduct credits).


• Strong 30 year Onsite Operating Margin of $36.54/short ton.


• The TMM Project's pre-tax base case, as calculated by AMEC, shows a net present value ("NPV") of CDN $1.5billion @8% discount factor (US$1.4 billion @8% discount factor).


• The TMM Project's after tax base case, as calculated by PricewaterhouseCoopers LLP, shows an NPV of CDN $0.9 billion @8% discount factor (US$0.8 billion @8% discount factor).

Analyst and Investor Conference Call

A conference call with senior management of Duluth Metals for the investment community has been scheduled for Wednesday, August 20, 2014 at 10:30 a.m. EDT. Christopher Dundas, Executive Chairman, and Kelly Osborne, President and CEO, will be available to answer questions during the call. To participate in the call, please dial-in five minutes prior to the call:

Participant Dial-In Number(s):
*Operator Assisted Toll-Free Dial-In Number: (888) 231-8191
*Local Dial-In #: (647) 427-7450


TORONTO, Aug. 20, 2014 /CNW/ - Duluth Metals Ltd. ("Duluth" or "Duluth Metals") (TSX: DM) (TSX:DM.U) today announced that it has received the draft pre-feasibility study set out in the independent National Instrument 43-101 Technical Report ("PFS Technical Report") prepared by a multi-company team led by AMEC E&C Services Inc. ("AMEC") for Duluth Metals for the proposed underground copper, nickel and platinum group elements mining project located in northeastern Minnesota (the "TMM Project"). The full PFS Technical Report will be filed within 45 days on www.SEDAR.com.

"The PFS Technical Report validates the TMM Project to be one of the most compelling greenfield copper-nickel development projects in the world," stated Kelly Osborne, President and CEO of Duluth Metals.  "The foundations of the TMM Project are its tremendous mineral resource, technically sound engineering and test work, strong operating margins, and location in a state that supports the mining industry and has ready-built mining infrastructure and an experienced workforce to support a large-scale mining operation. We look forward to the next Phase of the TMM Project and continued efforts to improve the value of the TMM Project."

The PFS Technical Report is based on a 30-year underground mine plan with an average production rate of 50,000 short tons of ore per day, generating marketable copper and nickel concentrates. The mine plan is focused on the development of the Maturi and Maturi SW mineral deposits, located approximately nine miles southeast of the city of Ely, MN, and 11 miles northeast of the city of Babbitt, MN. Some properties of the TMM Project are owned jointly by TMM and the Birch Lake Joint Venture (see "About Birch Lake Joint Venture" below). The TMM Project has the potential to create approximately 850 full time jobs when the mine is in operation and generate some 12 million labor hours during an approximate three-year construction period.

The PFS Technical Report indicates a C1 cash cost/lb. of copper (Cu) ("life of mine" or LOM) of $0.76 (net of all byproduct credits) and a C1 cash cost/lb. of copper-equivalent (CuEq.) LOM of $1.64. Duluth believes that the PFS Technical Report confirms that the TMM Project has:

• a competitive cost position whereby the TMM Project would be in the first quartile of C1 cash costs per pound of Cu produced over the mine's 30 years of operation when benchmarked against other producing copper mines throughout the world,


• strong operating margins sustained over time, and


• capital efficiencies resulting from outstanding local infrastructure and workforce.

"The PFS Technical Report confirms that the TMM Project offers an extraordinary long-term economic opportunity for the state of Minnesota, local communities, and TMM Project stakeholders," stated Christopher Dundas, Executive Chairman of Duluth Metals. "The TMM Project enjoys many advantages including excellent infrastructure, a mining friendly jurisdiction and upsides for future expansion and potential down-stream processing."

All dollar amounts in this press release are shown in US dollars, unless otherwise stated.


PFS Technical Report Highlights

The independent PFS Technical Report was prepared at the request of Duluth by AMEC, and therefore the conclusions and opinions expressed in the PFS Technical Report, and those contained in this new release, are those of AMEC arrived at independently of Duluth Metals, Antofagasta P.l.c. ("Antofagasta") and TMM. The estimations set out in the PFS Technical Report and summarized in this news release for operating costs, commercial terms and metal price parameters are a result of AMEC's independent evaluation of the TMM Project.


1. NPV:

In the PFS Technical Report, AMEC has calculated a range of TMM Project pre-tax and after-tax net present values ("NPVs") based on discount factors of six, eight (base case) and 10 percent. The NPV calculation represents cash flows discounted to the beginning of the first year when construction expenditures are made and represented in 2014 constant dollars.

• Base Case* Pre-tax NPV (@8% discount) = $1.36 billion


• Base Case After-tax NPV (@8%) = $0.75 billion


• Pre-tax NPV (@6%) = $2.22 billion


• After-tax NPV (@6%) =$1.45 billion


• Pre-tax NPV (@10%) = $0.73 billion


• After-tax NPV (@10%) = $0.26 billion

(* "Base Case" calculations use projected metal prices of $3.50/lb copper, $9.50/lb nickel, $1,300/oz gold, $1,680/oz platinum, $815/oz palladium, and $21.50/oz silver.)


2. Low 30-year Cash Cost Position:

The C1 cash costs in the PFS Technical Report are as follows:

• C1 Cash Cost/lb. of Cu (LOM) = $0.76 (net of all byproduct credits)


• C1 Cash Cost/lb. of CuEq. (LOM) = $1.64

where CuEq is derived by adding the lbs. of Cu plus the Ni Revenue/price of copper.


3. Strong Operating Margins:

The PFS Technical Report margins include:

• Revenue/ton milled (LOM) = $58.27


• Onsite operating costs/ton milled (LOM) = $21.73


• Onsite Operating Margin/ton milled (LOM) = $36.54


• Total operating costs/ton milled (LOM) = $30.58


• Total operating margin/ton milled (LOM) = $27.69

4. Efficient Capital Investment:

The PFS Technical Report capital cost estimates are:

• Initial Capital = $2.77 billion


• Pre-tax Payback Period = 6.4 years from start of production


• Capital Intensity¹ = $6.24 /annual lb CuEq produced


• LOM Capital = $5.41 billion


• Internal Rate of Return Pre-tax (IRR) = 13.6 %

(Note 1: Capital Intensity equals Initial Capital divided by Average Annualized pounds of CuEq produced for the first 10 years.)


5. A Strong Economic Engine during the First 10 Years:

The TMM Project is focused on maximizing project economics from startup. The PFS Technical Report estimates that, in the first 10 years of production, the total TMM Project will generate the following average annual financial measures:

• Revenue (years 1-10) = $12.11billion


• Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) = $6.19 billion


• Free Cash Flow (pre-tax) = $4.60 billion


• Free Cash Flow (after-tax) = $3.87 billion


• Production of Payable Cu = 2.11 billion lbs.


• Production of Payable Ni = 378.55 million lbs.


• C1 Cash Cost/lb of CuEq = $1.36


• C1 Cash Cost/lb of Cu = $0.31


• Operating Margin = $37.18 per ton milled

A summary of the TMM Project economics, as set out in the PFS Technical Report, is shown in Table 1, and TMM Project capital cost is shown in Table 2.


Table 1 - TMM Project Economics

Valuation Indicators
Pre Tax		UNITS	LOM
	Cumulative Cash flow Pre Tax	$M	7,913
	NPV 6%	$M	2,231
	Base Case NPV 8%	$M	1,358
	NPV 10%	$M	732
	Payback period from start of production	Years	6.4
	IRR before tax	%	13.6%
After Tax		UNITS	LOM
	Cumulative Cash flow After Tax	$M	6,003
	NPV 6%	$M	1,449
	Base Case NPV 8%	$M	753
	NPV 10%	$M	257
	Payback period from start of production	Years	7.2
	IRR after tax	%	11.4%

Table 2 - TMM Project Capital Cost

TMM Project Capital Cost
	UNITS	VALUE
Initial Capital	$M	2,775
Sustaining Capital	$M	2,636
LOM Capital	$M	5,410
Capital Intensity1	$/lb CuEq year	6.24

(Note 1: Capital Intensity equals Initial Capital divided by Average Annualized pounds of CuEq produced for the first 10 years.)


Mineral Reserves

The mine plan is based on the Mineral Reserves converted from 1.233 billion short tons of Measured + Indicated Mineral Resources within the Maturi and Maturi SW deposits.

The Mine Plan, including dilution, estimates total proven and probable reserves, as set out in the PFS Technical Report, of 527 Mst over the LOM as shown in Table 3.  The total contained metal is shown in Table 4.


Table 3 – Mineral Reserve Estimates

Area	Classification	Ore Tons	Cu	Ni	Pt	Pd	Au	Ag
		(Mst)	(%)	(%)	ppm	ppm	ppm	ppm
Maturi	Proven	130	0.65	0.21	0.152	0.354	0.086	2.31
	Probable	351	0.59	0.19	0.163	0.367	0.087	2.15
	P&P	482	0.61	0.19	0.160	0.363	0.087	2.19
Maturi SW	Proven	0	0.00	0.00	0.000	0.000	0.000	0.00
	Probable	43	0.48	0.16	0.083	0.192	0.048	1.60
	P&P	43	0.48	0.16	0.083	0.192	0.048	1.60
Total	Proven	130	0.65	0.21	0.152	0.354	0.087	2.31
	Probable	397	0.58	0.19	0.154	0.348	0.083	2.09
	P&P	527	0.59	0.19	0.154	0.349	0.084	2.14

Table 4 – Contained Metal in Mineral Reserve Estimates

			Contained Metal
Area	Classification	Ore Tons	Cu	Ni	Pt	Pd	Au	Ag
		(Mst)	Blbs	Blbs	Moz	Moz	Moz	Moz
Maturi	Proven	130	1.7	0.5	0.6	1.4	0.3	8.8
	Probable	351	4.2	1.3	1.7	3.8	0.9	22.2
	P&P	482	5.8	1.9	2.3	5.1	1.2	31.0
Maturi SW	Proven	0	0.0	0.0	0.0	0.0	0.0	0.0
	Probable	43	0.4	0.1	0.1	0.2	0.1	2.0
	P&P	43	0.4	0.1	0.1	0.2	0.1	2.0
Total	Proven	130	1.7	0.5	0.6	1.4	0.3	8.8
	Probable	397	4.6	1.5	1.8	4.0	1.0	24.2
	P&P	527	6.2	2.0	2.4	5.4	1.3	33.0

Notes to Mineral Reserve Estimates Table

1. The Qualified Person for the Mineral Reserve estimate is Joanna Poeck, an employee of SRK Consulting (U.S.), Inc. The Mineral Reserves have an effective date of 1 July 2014.


2. Mineral Reserves are contained within mine designs based on Measured and Indicated Mineral Resources, and assume a mining rate of 50,000 st/d of mineralized material over a 30 year mine life. Underground mining will utilize conventional post-pillar cut-and-fill and long-hole open stoping methods. Paste backfill will be employed. The mine plan includes the mining of remnant mineralized material, which is mineralized material that is above the marginal cut-off grade, but is left behind during the first pass mining of higher-grade material.


3. Mineral Reserves are contained within Measured and Indicated mine designs using the following net smelter return (NSR) calculation inputs. Recovery assumptions used in the calculations were 94.0% for Cu, 60.8% for Ni, 82.3% for Au, 36.1% for Pd and 42.5% for Pt. Payability assumptions were 76.4% for Cu, 70.8% for Ni, 45% for Au, 68.6% for Pd and 69.3% for Pt. Metal price assumptions were $3.00/lb for Cu, $9.50/lb for Ni, $1,200/oz for Au, $700/oz for Pd and $1,650/oz for Pt. Operating cost assumptions used in the NSR equations total $23.53/st mined and include mining costs of $13.80/st, process costs of $5.02/st, paste backfill costs of $1.28/st, water management costs of $0.21/st, tailings costs of $0.06/st, general and administrative costs of $2.44/st; technical services costs of $0.45/st and financial assurance costs of $0.27/st.


4. Mineral Reserves are reported using an NSR cut-off of $25.00/st.


5. Mineral Reserves are reported according to CIM Definition Standards for Mineral Resources and Mineral Reserves (May 10, 2014).


6. Mineralization that was either not classified or assigned to the Inferred Mineral Resource category was set to waste within the above NSR cut-off mining shapes. Mine design incorporates geotechnical and hydrogeological considerations that take into account paste and hanging wall dilution. Dilution is allocated in the mine design based on the mining method, and ranges from 3–5%. Mining recovery is assumed at 95%.


7. Tonnage figures are reported as million US short tons (st); grade figures as parts per million (ppm) or percent (%); contained copper and nickel are reported in billion pounds (B lb), contained platinum, palladium, gold and silver are reported in million troy ounces (M oz). Contained metal is reported as in situ metal content and does not include any adjustments for recoverability.


8. Rounding as required by reporting guidelines may result in apparent summation differences between tons, grade and contained metal content.


9. Antofagasta uses different parameters in its calculation of Mineral Reserves.

Mineral Resources

The PFS Technical Report provides an updated resource estimate for the TMM Project, which includes four deposits known as the Maturi, Maturi SW, Birch Lake and Spruce Road deposits.  The PFS Technical Report mine plan and financial estimates for the TMM Project are based on Mineral Resource estimates from the Maturi and Maturi SW deposits that have been updated from the previously-disclosed January 2014 resource estimates. Maturi Measured, Indicated, and Inferred Mineral Resources incorporate assay results from 57 drill holes totaling 65,635.5 ft drilled between September 2012 and January 2014. In addition, the resource estimate tabulates silver grades for the first time, estimating a Maturi Measured + Indicated grade of 2.14 ppm Ag (0.063 oz/st Ag), and Maturi SW Indicated grade of 1.58 ppm Ag (0.046 oz/st), for a total of 75.4 Moz of silver contained in the Maturi and Maturi SW Measured + Indicated Mineral Resources.

Current resource estimates for Maturi, Maturi SW, Birch Lake and Spruce Road deposits are presented in Table 5, below:


Table 5 – Mineral Resource Estimates

Deposit	Category	Tons (M st)	CuEq (%)	Cu (%)	Ni (%)	Pt (ppm)	Pd (ppm)	Au (ppm)	Ag (ppm)
Maturi	Measured	308	1.02	0.63	0.20	0.146	0.339	0.083	2.26
	Indicated	822	0.96	0.58	0.19	0.155	0.350	0.083	2.10
	Inferred	531	0.81	0.49	0.16	0.138	0.314	0.070	1.81
Maturi SW	Indicated	103	0.77	0.48	0.17	0.080	0.185	0.048	1.58
	Inferred	32	0.70	0.43	0.15	0.065	0.157	0.041	1.43
Subtotal Maturi and  Maturi SW	Measured	308	1.02	0.63	0.20	0.146	0.339	0.083	2.26
	Indicated	924	0.94	0.57	0.19	0.147	0.332	0.079	2.04
	Measured + Indicated	1,233	0.96	0.58	0.19	0.147	0.334	0.080	2.10
	Inferred	563	0.81	0.49	0.16	0.134	0.305	0.068	1.79
Birch Lake	Indicated	100	1.02	0.52	0.16	0.233	0.511	0.114	—
	Inferred	239	0.88	0.46	0.15	0.180	0.370	0.087	—
Spruce Road	Inferred	480	0.66	0.43	0.16	—	—	—	—

Deposit	Category	Contained  Cu (B lb)	Contained  Ni (B lb)	Contained  Pt (M oz)	Contained  Pd (M oz)	Contained  Au (Moz)	Contained  Ag (M oz)
Maturi	Measured	3.9	1.2	1.3	3.0	0.7	20.3
	Indicated	9.5	3.1	3.7	8.4	2.0	50.3
	Inferred	5.2	1.7	2.1	4.9	1.1	28.0
Maturi SW	Indicated	1.0	0.3	0.2	0.6	0.1	4.7
	Inferred	0.3	0.1	0.1	0.1	0.0	1.3
Subtotal Maturi and  Maturi SW	Measured	3.9	1.2	1.3	3.0	0.7	20.3
	Indicated	10.5	3.5	4.0	8.9	2.1	55.1
	Measured + Indicated	14.4	4.7	5.3	12.0	2.9	75.4
	Inferred	5.5	1.8	2.2	5.0	1.1	29.4
Birch Lake	Indicated	1.0	0.3	0.7	1.5	0.3	—
	Inferred	2.2	0.7	1.3	2.6	0.6	—
Spruce Road	Inferred	4.1	1.5	—	—	—	—

Notes to Mineral Resource Estimates Table

1. The Mineral Resource estimates have different effective dates as follows: Maturi: 4 February 2014; Maturi SW:  15 June 2013;  Birch Lake: 15 September 2012; Spruce Road: 15 September 2012.


2. The Qualified Person for the estimates is Dr. Harry Parker, RM SME, who is a Professional Geologist licensed in Minnesota.


3. Mineral Resources are reported inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.


4. Mineral Resources were estimated assuming underground bulk mining methods and are reported at a cut-off grade of 0.3% Cu.


5. Maturi and Maturi SW copper equivalent (CuEq) grades are based on the following assumptions:  CuEq = Cu + 1.459*Ni + 0.265*Au + 0.101*Pd + 0.228*Pt + 0.004*Ag; where global metallurgical recoveries are 93.4% (Cu), 61.4% (Ni), 78.5% (Au), 74.9% (Pd), and 63.2% (Pt) and 76.5% (Ag); smelter returns are 94.3% (Cu), 77.1% (Ni), 54.9% (Au), 35.0% (Pd), and 45.2% (Pt) and 47.6% (Ag), and long-term consensus metal prices are $3.50/lb Cu, $9.50/lb Ni, $1,300/troy oz Au, $815/troy oz Pd and $1,680/troy oz Pt and $21.50/troy oz Ag.  The Birch Lake CuEq formula is based on November 2012 parameters:  CuEq = Cu + 1.58*Ni + 0.285*Au + 0.219*Pd + 0.435*Pt, where concentrate metallurgical recoveries are 94.3% (Cu), 60.0% (Ni), 85.0% (Au), 90.0% (Pd), and 93.0% (Pt); CESL metallurgical recoveries are 96.3% (Cu), 95.6% (Ni), 74.5% (Au), 70.7% (Pd), and 59.4% (Pt); smelter returns are 100% (Cu), 80% (Ni), 80% (Au), 80% (Pd), and 80% (Pt); long-term consensus metal prices of $3.00/lb Cu, $9.38/lb Ni, $1,050/troy oz Au, $805/troy oz Pd and $1,840/troy oz Pt.  The Spruce Road CuEq formula is based on the Maturi parameters, and restricted to Cu and Ni: CuEq = Cu + 1.459*Ni; where global metallurgical recoveries are 93.4% (Cu), 61.4% (Ni); smelter returns of 94.3% (Cu), 77.1% (Ni); long-term consensus metal prices of $3.50/lb Cu, and $9.50/lb Ni.


6. Silver is not included in the 2012 resource estimate for Birch Lake as QA/QC results had not been reviewed at the time of the estimate. Silver is not a contributor to either the NSR calculation or the CuEq grade for Birch Lake.  Gold, platinum, palladium and silver assays were not available to support estimation in the 2012 Spruce Road resource model. Gold, Ag, Pt and Pd do not contribute to either the NSR calculation or the CuEq grade for Spruce Road.


7. No allowances for mining recovery and external dilution have been applied. Mineral Resources for Maturi assume a 400-foot-thick safety pillar above the Mineral Resource. Mineral Resources for Maturi SW are tabulated based on a 15 foot allowance for overburden and no safety pillar. Mineral Resources for Birch Lake do not have a safety pillar allowance since the mineralization is located 600 feet below ground surface. Mineral Resources at Spruce Road assume a 164-foot-thick safety pillar.


8. Tonnage figures are reported as million US short tons (st); grade figures as parts per million (ppm) or percent (%); contained copper and nickel are reported in billion pounds (B lb), contained platinum, palladium, gold and silver are reported in million troy ounces (M oz).  Contained metal is reported as in situ metal content and does not include any adjustments for recoverability.


9. Rounding as required by reporting guidelines may result in apparent summation differences between tons, grade and contained metal content.

TMM Project Description

Duluth believes that the TMM Project is expected to be one of the world's largest development-stage polymetallic projects and that Minnesota offers worldwide competitive advantages through extensive modern infrastructure such as easily accessible roads, rail lines, ports, power and water supplies, as well as a highly-experienced mining labor force.

The TMM Project comprises four major areas: the Underground Mine Site, Concentrator Site, Tailings Storage Facility Site and the Utility Corridors, as shown in Figure 2. The Mine Site is located at the Maturi and Maturi SW deposits. The TMM Project has two declines that involve non-ore development, with the portals located on and near the Concentrator Site. The Concentrator Site includes the primary portal, temporary ore stockpiles (lined with leachate collection), and a process water pond. The Tailings Storage Facility located south of the city of Babbitt, would store tailings that are not returned to the underground mine as paste backfill. The Tailings Storage Facility also includes a concentrate filtration plant, intermediate pond, electrical substation, and rail load-out facility. The TMM Project will use multiple Utility Corridors for infrastructure needs including concentrate, tailings and water pipelines, service and contact roads, and an extension of the existing railroad.


Mining Methodology

The TMM Project is based on an underground mining operation with a throughput capacity of 50,000 st per day, or 18.25 Mst per year.  The underground operation would utilize a combination of post-pillar cut-and-fill and long-hole stoping mining methods (PPCF and LHS, respectively). These methods were selected for their ability to accommodate specific geometries of the deposit, to allow for a relative low cost, high ramp-up rate, and high productivity.

The mine plan estimates a LOM production of 527 Mst of mineralized material at 0.59 percent copper and 0.19 percent nickel. Mine infrastructure covers a wide variety of fixed facilities to be constructed underground (e.g., primary crushers, conveyors, pumping stations, explosives magazine, and electrical substations). Mine equipment has been selected to satisfy high productivities and low costs, and all selected equipment is considered well suited for mass mining and appropriate for a modern operation.

Mining will occur in mining units or panels separated by barrier pillars. These panel areas are a maximum of 1,700 ft along strike by 1,700 ft along dip.  Mining recoveries inside the panels varies between 75 to 82 percent depending on the depth, dip, width, and mining method selected.

Mine construction and pre-production development will take place in years -3 through -1. Mineralized material will be stockpiled until year 1, when ore production ramps up and is fed directly to the processing plant. The mine achieves peak sustainable production of 50,000 st per day in year 2, which is sustained through year 26. Initial mine construction is estimated to take approximately three years.

The TMM Project has been designed to minimize the waste impact. The underground mining methods generate little waste rock in comparison to surface mining, and when in production, all waste rock will be used as underground backfill. Similarly, approximately half of the tailings produced by the concentrator will be placed back into the mine in the form of paste backfill, with the remainder being held in surface storage at the Tailings Storage Facility (TSF).


Mineral Processing

Extraction and processing of the valuable minerals is centered upon sequential flotation where a copper concentrate is first produced from the mineralized material, followed by production of a nickel concentrate.  The tailings produced from the flotation process will be very low in sulfur, with approximately half contained in a conventional lined tailings impoundment, and the remainder combined with cement and fly ash and returned to the mine as paste backfill.

The copper and nickel concentrate process flowsheet was mainly developed through an investigative pilot plant program conducted at ALS Metallurgy in Kamloops, B.C.  Following that program, an optimization bench-scale program was undertaken at Blue Coast Research in Parksville, B.C.

The concentrator facilities proposed for the TMM Project comprise a process plant with an ore treatment capacity of 50,000 st per day, a single process line using SAG and ball milling with sequential copper and nickel flotation, high-rate tailings thickening, concentrate receiving system, filter plant, concentrate storage, and rail loadout.

Extensive work on mineral processing and metallurgy for the PFS Technical Report was carried out between 2012 and 2014 on a variety of samples obtained through major drilling programs conducted between 2010 and 2012.  Key projected recovery results over the Life-of-Mine are presented in Table 6 below:


Table 6 – LOM Process Recovery Estimates

Life Of Mine Recovery
Metal	Cu Concentrate (%)	Ni Concentrate (%)	Cumulative (%)
Copper	85.75	7.99	93.74
Nickel	6.71	55.50	62.21
Gold	64.69	13.32	78.01
Palladium	38.84	35.99	74.83
Platinum	23.90	39.20	63.10
Silver	64.43	12.46	76.89

The key characteristics expected in the TMM Project's copper and nickel concentrates are presented in the following Table 7:


Table 7 – TMM Concentrate Grades

Element						Unit	Typical  Assay	Expected  Range
Copper Concentrate Grade
Copper	Cu					%	25.4	23.5 to 25.5
Nickel	Ni					%	0.64	0.57 to 0.66
Gold	Au					ppm	2.7	1.9 to 4.1
Palladium	Pd					ppm	6.8	4.4 to 10.6
Platinum	Pt					ppm	1.9	1.1 to 2.9
Silver	Ag					ppm	69.1	66.0 to 73.1
Nickel Concentrate Grade
Copper	Cu					%	4.7	4.4 to 7.8
Nickel	Ni					%	10.5	8.4 to 13.4
Gold	Au					ppm	1.1	0.9 to 1.6
Palladium	Pd					ppm	12.6	9.2 to 18.4
Platinum	Pt					ppm	6.1	4.3 to 9.0
Silver	Ag					ppm	26.4	23.8 to 42.3

There are not expected to be any deleterious or penalty elements in the concentrate.


Capital and Operating Costs

A summary of the average cost per metric tonne Total Annual Operating Costs for LOM in the Duluth business model is shown in the following Table 8:


Table 8 – TMM Operating Cost Estimates

Operating Costs onsite
	Mining Cost / st milled	$/st	12.56
	Process Cost / st milled	$/st	3.99
	G&A / st milled	$/st	2.69
	Surface operating costs/ st milled	$/st	2.49
Operating Costs onsite / st milled		$/st	21.73
Operating Costs off site
	Treatment charges / st milled	$/st	5.13
	Freight costs / st milled	$/st	3.71
Operating Costs off site / st milled		$/st	8.85
Total Operating cost / st milled		$/st	30.58

The capital cost estimate for the TMM Project is an Association for the Advancement of Cost Engineering (AACE) class 4 (PFS) estimate with a ± 25 percent accuracy. The summary of capital costs estimates is shown in Table 9 below.


Table 9 – TMM Capital Cost Estimates

Description	Initial Capital  (Millions)
Mine	$793
Concentrator	$956
Tailings Management	$547
Surface Infrastructure and Utilities	$379
Owner's Costs	$100
Total Capital Cost	$2,775

The PFS Technical Report will be authored by Mr. John Barber, P.E., Dr. Ted Eggleston, RM SME, Dr. Harry Parker, RM SME, Mr. David Frost, FAusIMM, Mr. Simon Allard, P.Eng., and Ms. Janine Hartley, P.E., of AMEC, Mr Chris Martin C. Eng., of Blue Coast Group, Mr. Tom Radue, PE, of Barr Engineering, Dr. Mathew Pierce, PE and Dr. Robert Sterrett, PG of Itasca, Mr. Matthew Malgesini, P.E. of Golder, and Ms. Joanna Poeck, RM SME of SRK.

The Qualified Persons will be responsible for the preparation of the PFS Technical Report.  These Qualified Persons have verified the data in this news release that pertain to the PFS Technical Report.

Phillip Larson, P. Geo. is the Qualified Person for Duluth Metals, in accordance with National Instrument 43-101 of the Canadian Securities Administrators, and reviewed and has approved the technical content of this press release.


About Duluth Metals Limited

Duluth Metals is committed to acquiring, exploring and developing copper, nickel and PGM deposits.  Duluth Metals has a joint venture with Antofagasta on the TMM Project, located within the rapidly emerging Duluth Complex mining camp in north-eastern 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. Aside from the TMM Project, Duluth Metals retains a 100% position on approximately 30,000 acres of mineral interests on exploration properties adjacent to and nearby the TMM Project.


About Twin Metals Minnesota LLC

TMM is a limited liability company, 60 percent owned by Duluth and 40 percent owned by Antofagasta. TMM was formed in 2010 to pursue the development and operation of a copper, nickel and PGM (strategic metals) underground mining project within the Duluth Complex in northeastern Minnesota. TMM holds mineral and land assets of approximately 40,000 acres of leased, leased applications and permitted land.


About Birch Lake Joint Venture

In 2011, TMM acquired Franconia Minerals Corporation ("Franconia"). Franconia's principal assets were a 70% interest in the Birch Lake, "old Maturi" (not including the former Nokomis property), Maturi Southwest and Spruce Road deposits through the Birch Lake Joint Venture ("BLJV"), with Beaver Bay, Inc. owning the remaining 30%. Franconia announced in November 2010 its intention to increase its ownership in the BLJV to 82% upon the commencement of production.


This press release contains forward-looking statements (including "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements"within the meaning of the US Private Securities Litigation Reform Act of 1995) relating to, among other things, the results of drilling operations of Duluth Metals and exploration and mine development. Generally, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Duluth Metals has relied on a number of assumptions and estimates in making such forward-looking statements, including, without limitation, the prices of copper, nickel and platinum group metals (PGMs) and the costs associated with continuing exploration and mining development. Such assumptions and estimates are made in light of the trends and conditions that are considered to be relevant and reasonable based on information available and the circumstances existing at this time. A number of risk factors may cause actual results, level of activity, performance or outcomes of project development and exploration programs to be materially different from those expressed or implied by such forward-looking statements including, without limitation, the following: the economic and feasibility parameters of the pre-feasibility study; assumptions with respect to exchange rates, future metal prices, and concentrate sales contracts; the estimation of Mineral Reserves and Mineral Resources and the realization of Mineral Reserve estimates; possible variations in Mineral Reserves, grade or recovery rates; changes in the geotechnical and hydrogeological parameters used in development of mine plans; changes in project parameters as mine and process plans continue to be refined; the timing and amount of estimated future production; the basis for and estimation of capital and operating cost estimates, and any future requirements for additional capital; the net present value (NPV) and internal rate of return (IRR) and payback period of capital; cash costs and all-in sustaining costs; changes to tax rates; assumed permitting time lines for development; the timing of the environmental assessment process; modifications to assumptions in the permitting process and allocation of reclamation expenses so as to comply with any future permit conditions that may be imposed by the appropriate regulator; risks and uncertainties with respect to obtaining necessary surface rights and permits or delays in obtaining same; risks associated with maintaining and renewing permits and complying with permitting requirements; environmental risks; obtaining the social licence to operate; delays in obtaining regulatory approval; changes to government regulations of mining operations; accidents, labor disputes and other risks of the mining industry; title disputes or claims; political risks; the need for additional funding to continue development, permitting and exploration efforts; and general business, market and economic conditions, and those other risks set forth in Duluth Metals' most recent annual information form under the heading "Risk Factors" and in its other public filings. Statements related to "reserves" and "resources" are deemed forward-looking statements as they involve the implied assessment, based on realistically assumed and justifiable technical and economic conditions, that an inventory of mineralization will become economically extractable. Forward-looking statements are not guarantees of future performance and such information is inherently subject to known and unknown risks, uncertainties and other factors that are difficult to predict and may be beyond the control of Duluth Metals. Although Duluth Metals has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors and risks that cause actions, events or results not to be as anticipated, estimated or intended.  Consequently, undue reliance should not be placed on such forward-looking statements. In addition, all forward-looking statements in this press release are given as of the date hereof. Duluth Metals 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. The forward-looking statements contained herein are expressly qualified by this disclaimer.


Cautionary Note to United States Investors Concerning Estimates of Indicated and Inferred Mineral Resources

This press release uses the terms "Indicated Mineral Resources" and "Inferred Mineral Resources" in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards.  While such terms are recognized under Canadian securities legislation, the United States Securities and Exchange Commission does not recognize these terms.  The term "Inferred Mineral Resource" refers to a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity.  These estimates are based on limited information and it cannot be assumed that all or any part of an "Inferred Mineral Resource" will be upgraded to a higher classification resource, such as "Indicated" or "Measured", as a result of continued exploration. Accordingly, an estimate relating to an "Inferred Mineral Resource" is insufficient to allow meaningful application of technical and economic parameters or to enable an evaluation of economic viability. Under Canadian securities legislation, estimates of an "Inferred Mineral Resource" may not form the basis of feasibility or other economic studies. Investors are cautioned not to assume that all or any part of an "Inferred Mineral Resource" is economically or legally mineable. Investors are also cautioned not to assume that all or any part of "Indicated" will ever be converted into "Mineral Reserves" (being the economically mineable part of an "Indicated" or "Measured Mineral Resource").



Contact

Duluth Metals Ltd.
Mara Strazdins
Vice President Investor Relations and Corporate Communications
Telephone: (416) 369-1500 ext. 222
Email: mstrazdins@duluthmetals.com

Duluth Metals Ltd.
Kelly Osborne, President & CEO
Telephone: (651) 389-9990
Email: kosborne@duluthmetals.com
Webpage: www.duluthmetals.com