Noront Resources Ltd. Annual Report 2017

FY2017 Annual Report · Noront Resources Ltd.

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ANNUAL REPORT

FOR THE YEAR ENDED DECEMBER 31, 2017

LETTER FROM THE PRESIDENT

Fellow shareholders,

The past year saw some major achievements for your Company with the government’s announcement of the funding of two all-
season access roads to the Ring of Fire, exploration success at McFaulds Lake and the receipt of four strong proposals from Ontario
cities to host Noront’s planned Ferrochrome Production Facility (FPF).

In the fall of last year, the provincial government announced that it would be providing funding and support for the development
of two road projects to the Ring of Fire. Construction of all-season industrial and community access roads is one of the key project
enablers that Noront has been working toward with the government and our First Nation partners. Since the announcement, a great
deal of progress has been made and Noront has transferred large amounts of engineering and Environmental Assessment data to
the First Nations groups in order to streamline the permitting activities. A group consisting of members of four provincial ministries
has also been supporting the First Nation proponents of the roads. The province stated that it would target 2019 for the start of
construction activities.

The Company also continued its work with Marten Falls First Nation (MFFN) on the Eagle’s Nest development agreement. The
two groups meet regularly to map out how the deposit will be developed, how the community will participate and what new
businesses will be created to support the activity. It is the intention of both parties that this work will lead into the negotiation of
an impact benefit agreement.

We shifted our exploration focus during the year from nickel-copper deposits to copper-zinc and started a systematic review of our
McFaulds Lake claim blocks. The exploration team covered the McFaulds Lake area with modern geophysical surveys, both at
surface and down old drill holes which resulted in a new discovery - McFaulds No.8. To date we have drilled three holes and have
hit massive copper-zinc sulphides in every hole. Our goal is to develop a number of copper-zinc deposits in addition to the two
deposits in the area with existing resources (McFaulds No.1 and No.3) in order to provide at least five million tonnes of feed to a
centrally located mill.

Noront also staked several groups of claims in the Ring of Fire area to develop the gold potential of the region. Previous drilling
in the area inadvertently intersected gold values while targeting base metals and our geologists saw the value in identifying
prospective areas in this un-explored Archean aged greenstone belt. We are currently in discussions with several mid-tier to large
gold companies regarding a multi-year joint venture approach to gold exploration.

Again, this year, 65% of our exploration workforce comes from local First Nation communities, filling roles such as geophysical
surveyor, camp support staff, line-cutter, drill helper and cook/medic. It is important for the Company to work closely with the
communities, to demonstrate the tangible benefits and opportunities that can accrue from resource development.

Our chromite plans were advanced considerably this year with a formal bidding process attracting proposals from four northern
Ontario cities; Sault Ste. Marie, Sudbury, Thunder Bay and Timmins. Noront is looking for a brown fields industrial site that we
can repurpose to house our Ferrochrome Production Facility (FPF). As well as being an environmentally sound approach, reusing
an existing site will reduce the capital construction cost by taking advantage of pre-existing infrastructure such as buildings, roads,
rail, material handling facilities and electrical infrastructure. As there has not been a smelter permitted in Ontario since Kidd Creek
in the 1970’s, we considered it prudent to get started on this activity immediately by selecting our strategic partnering site. We are
currently evaluating the proposals and will publicly announce our decision mid-year.

Longstanding Board member Dave Thomas of Resource Capital Funds (RCF) announced his retirement this spring and will not be
seeking re-election to the Board at the annual AGM. I would like to thank Dave for his outstanding contributions over the years
as an energetic Board member and Committee Chair. Also this year, Board member Greg Rickford announced that he will be
seeking a seat in the provincial legislature representing Kenora/Rainy River and resigned from Noront’s Board of Directors. I wish
Greg well in his future endeavors.

Finally, I’d like to thank you, our shareholders, for your ongoing support and confidence as Noront strives to become a Canadian
mining champion based on the tremendous resources we have acquired in the emerging Ring of Fire district. The past year saw
tangible progress and exciting outcomes that we intend to build upon in the up-coming year.

Sincerely,

Alan Coutts, P. Geo
President & CEO
Noront Resources

Table of Contents

Management Discussion and Analysis…………………………………………………………. 3

Management Responsibility for Financial Reporting………………………………….............. 29

Independent Auditors Report…………………………………………………………………... 30

Consolidated Statement of Financial Position…………………………………………............. 32

Consolidated Statement of Loss and Comprehensive Loss……………………………………. 33

Consolidated Statement of Changes in Shareholders’ Deficit…………………………............. 34

Consolidated Statement of Cash Flows………………………………………………………... 35

Notes to Consolidated Financial Statements…………………………………………………… 36

2MANAGEMENT’S DISCUSSION AND ANALYSIS

(Expressed in Canadian Dollars)

The following is Management’s Discussion and Analysis (“MD&A”) of the consolidated financial condition and results of operations
of Noront Resources Ltd. (“Noront” or the “Company”) for the year ended December 31, 2017, which have been prepared in
accordance with International Financial Reporting Standards (“IFRS”), including International Accounting Standard (“IAS”) 34,
Interim Financial Reporting. This discussion should be read in conjunction with the consolidated financial statements and the notes
thereto for the same period as noted above (collectively, the “Financial Statements”). Additional Company information, including the
Company’s most recent Financial Statements, can be accessed through the System for Electronic Document Analysis and Retrieval
(“SEDAR”) website at www.sedar.com and the Company’s website at www.norontresources.com. Information contained on the
Company’s website is not incorporated herein and does not form part of this MD&A.

All financial measures are expressed in Canadian dollars unless otherwise indicated.

Ryan Weston M.Sc., MBA, P.Geo., Vice-President Exploration of Noront and a Qualified Person as defined by National Instrument 43-
101 - Standards of Disclosure for Mineral Projects (“NI 43-101”), has reviewed and is responsible for the technical information
contained in this MD&A. For further information on the McFaulds Lake Project, please refer to Noront’s technical report titled
“Feasibility Study, McFaulds Lake Property, Eagle’s Nest Project, James Bay Lowlands, Ontario, Canada” dated October 19, 2012
(effective date September 4, 2012) (the “Feasibility Study”), prepared in accordance with the requirements of NI 43-101 and available
on SEDAR and the Company’s website. For further information on the Black Thor, Black Label and Big Daddy chromite deposits,
please refer to Noront’s technical report titled “National Instrument 43-101 Technical Report – Black Thor, Black Label and Big
Daddy chromite deposits, McFaulds Lake Area, Ontario, Canada, Porcupine Mining Division, NTS 43D16 Mineral Resource
Estimation (the “Acquired Properties Report”), prepared in accordance with the requirements for NI 43-101 and available on SEDAR
and the Company’s website.

This information is current as of April 17, 2018.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

This MD&A includes certain “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-
looking information is provided as of the information currency date referred to above or, in the case of documents incorporated by
reference herein, as of the date of such documents.

Generally, forward-looking information can be identified by the use of forward-looking terminology 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”. Examples of such forward-looking information include information regarding
financial results and expectations for fiscal year 2017, such as, but not limited to, availability of financing, interpretation of drill results,
the geology, grade and continuity of mineral deposits and conclusions of economic evaluations (including those contained in the
Feasibility Study), metal prices, demand for metals, currency exchange rates, cash operating margins, expenditures on property, plant
and equipment, increases and decreases in exploration activity, changes in project parameters, joint venture operations, mineral
resources and anticipated grades and recovery rates, information regarding planned infrastructure for the Ring of Fire Region required
for the development of the Eagle’s Nest Project (as hereinafter defined) and information regarding government support for such plan,
approval of the Company’s EA and EIS (as hereinafter defined) application for the Eagle’s Nest Project and are, or may be, based on
assumptions and/or estimates related to future economic, market and other factors and conditions. All statements, other than statements
of historical facts, included in this MD&A that address activities, events or developments that the Company expects or anticipates will
or may occur in the future, including such things as future business strategy, competitive strengths, goals, expansion and growth of the
Company’s businesses, operations, plans and other such matters are forward-looking information.

Forward-looking information is based on reasonable assumptions that have been made by the Company as at the date of such
information and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of
activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-
looking information, including but not limited to: the impact of general business and economic conditions; risks related to government

32017 Management's Discussion and Analysisand environmental regulation, actual results of current exploration activities, conclusions of economic evaluations (including those
contained in the Feasibility Study) and changes in project parameters as plans continue to be refined; problems inherent to the
marketability of base and precious metals; industry conditions, including fluctuations in the price of base and precious metals,
fluctuations in interest rates; government entities interpreting existing tax legislation or enacting new tax legislation in a way which
adversely affects the Company; stock market volatility; competition; risk factors disclosed under the heading “Risks and
Uncertainties”; risk factors disclosed under the heading “Risk Factors” in the Company’s most recent Annual Information Form
(“AIF”) dated April 17, 2018, available electronically on SEDAR; and such other factors described or referred to elsewhere herein,
including unanticipated and/or unusual events. Many of such factors are beyond Noront’s ability to control or predict.

Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be
other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking
information will prove to be accurate as actual results and future events could differ materially from those reliant on forward-looking
information.

All of the forward-looking information given in this MD&A is qualified by these cautionary statements and readers of this MD&A are
cautioned not to put undue reliance on forward-looking information due to its inherent uncertainty. Noront disclaims any intent or
obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise,
except as required by law. This forward-looking information should not be relied upon as representing the Company’s views as of any
date subsequent to the date of this MD&A.

NOTE TO U.S INVESTORS REGARDING MINERAL RESOURCE ESTIMATES

All mineral resource estimates contained in this MD&A have been prepared in accordance with NI 43-101 and the Canadian Institute
of Mining, Metallurgy and Petroleum Classification System in compliance with Canadian securities laws, which differ from the
requirements of United States securities laws. Without limiting the foregoing, this report uses the terms “measured mineral resources”,
“indicated mineral resources” and “inferred mineral resources”. Any U.S. Investors are advised that, while such terms are recognized
and required by Canadian securities laws, the U.S. Securities and Exchange Commission (“SEC”) does not recognize them. Under U.S.
standards, mineralization may not be classified as a “mineral reserve” unless the determination has been made that the mineralization
could be economically and legally produced or extracted at the time the mineral reserve determination is made. Any U.S. investors are
cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves.
Mineral resources which are not mineral reserves do not have demonstrated economic viability. Further, inferred mineral resources
have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. It cannot be
assumed that all or any part of the inferred mineral resources will ever be upgraded to a higher category. Under Canadian rules,
estimates of inferred mineral resources may not form the basis of an economic analysis, except in rare cases. Any U.S. investors are
cautioned not to assume that all or any part of the inferred mineral resources exists, or that they can be mined legally or economically.
Information concerning descriptions of mineralization and mineral resources contained in this MD&A has been prepared in accordance
with Canadian requirements and may not be comparable to information made public by U.S. companies subject to the reporting and
disclosure requirements of the SEC.

42017 Management's Discussion and Analysis
COMPANY OVERVIEW

Noront is engaged in the development, exploration and acquisition of properties prospective in base and precious metals, including:
nickel, copper, zinc, platinum group elements (“PGE’s”), chromite, iron, titanium, vanadium, gold and silver. The Company is
currently focused on the development of its 100% owned Eagle’s Nest deposit, a high-grade nickel, copper, platinum and palladium
deposit located in the James Bay Lowlands of Ontario (the “Eagle’s Nest Project”), within a geological feature (intrusion) commonly
referred to as the “Ring of Fire”. On September 5th, 2012, the Company released the Feasibility Study on the Eagle’s Nest project
demonstrating positive economic returns.

The Company has 100% ownership of the most significant chromite resources in the Ring of Fire including the Black Thor chromite
deposit and the Blackbird chromite deposit as well as a 100% interest in the Black Label chromite deposit and a 70% interest in the Big
Daddy chromite deposit. The Company has extensive copper-zinc holdings including an 85% interest in the McFauld’s Lake copper-
zinc deposits/occurrences and a 75% interest in the Butler properties copper-zinc occurrences. As well the company has a 100%
interest in two nickel-copper-platinum group metal discoveries known as “Eagle Two” and “Blue Jay”; an iron-vanadium-titanium
discovery known as “Thunderbird”; a shear-hosted gold occurrence called “Triple J”, the very prospective Sanderson nickel properties
and other diamond exploration properties.

In September 2017, the Company also staked an additional 150 claims in the Ring of Fire to cover areas considered prospective for
gold mineralization.

Noront now holds interest, mineral, and exploration rights to approximately 140,875 hectares of ground in Ontario and 8,730 hectares
in New Brunswick.

In New Brunswick, Noront holds a 49% interest in the Burnt Hill tin-tungsten-molybdenum property and a 100% interest in the Golden
Ridge gold property.

OBJECTIVES

The Company’s primary objectives for fiscal 2018 are:

 Continue providing technical, environmental and organizational support to the First Nation proponents of the all-season access roads
to the Ring of Fire project area in order to get project descriptions and draft terms of references filed to allow for the environmental
assessments to be completed;



Engage the primary First Nation communities in the Company’s project area to advance negotiations of a pre-development
agreement in support of the Eagle’s Nest Project while maximizing training and employment opportunities for their community
members;

Evaluate and decide upon the most compelling site proposal received for the Company’s Ferrochrome Production Facility (FPF)
and begin preliminary layout work and community engagement;

 Conduct an ongoing systematic exploration program in the Ring of Fire, funded internally or through partnerships, focused on the

copper / zinc and gold potential in the Ring of Fire; and



Pursue and acquire production / development stage properties and businesses that leverage the skill set of management and are
complementary to the Company’s current asset base.

52017 Management's Discussion and Analysis

STRATEGY

Ring of Fire Regional Development

On August 21, 2017, the Provincial Government of Ontario agreed to fund two First Nation led infrastructure proposals to provide
industrial access to the Ring of Fire as well as road access to their communities. Industrial access along either of the two road projects
being advanced would be sufficient for the Company’s Eagle’s Nest project and/or its first stage chromite project. The Company’s
strategy is to work with the proponents of both projects with a focus on the road project that has the ability to advance to construction
on a faster timeline.

The Company is working closely with Marten Falls First Nation (MFFN) to advance their planned North-South road which will
connect north of Nakina, Ontario to the community of MFFN and the Ring of Fire. The Company has recently signed a data sharing
agreement with MFFN to allow them to use the Company’s environmental assessment (EA) and engineering data it acquired as part of
the acquisition of Cleveland-Cliffs Inc. (Cliffs) Ring of Fire chromite assets. Additional data acquisition to supplement the Noront data
is underway.

Management continues to work with the MFFN owners team to help them navigate the road permitting process. MFFN is working
towards having a terms of reference submitted on its road project in the second quarter of 2018 after which the formal environmental
assessment will commence. Noront estimates completion of the EA to be in mid-2019 with the project ready to be constructed by in
2021.

The Company has started negotiating a pre-development agreement (the “PDA”) with MFFN. The PDA will include reference to
project advancement approaches and milestones and define the scope of the Impact Benefit Agreement (IBA). The Company plans to
negotiate the IBA once road construction commences.

Chromite Projects

The Company has a controlling interest in 96% of the known Chromite resources in the Ring of Fire that have NI 43-101 measured and
indicated resources. The Company’s chromite resources are of a sufficient size to support mining in the region over multiple
generations.

The Company’s chromite strategy is to initially develop its Blackbird chromite deposit which is proximal to the Eagle’s Nest nickel,
copper, platinum, palladium deposit and can therefore share the same surface infrastructure. The Company is planning on mining
between 550 – 750 thousand tonnes of high grade material per annum and direct shipping the ore to a yet to be constructed
Ferrochrome Production Facility(FPF) built by Noront in Ontario. The Company believes the ore mined will be of a sufficiently high
grade to feed it directly into the FPF without needing to upgrade with a concentrator. It is anticipated this process will produce between
200 – 285 thousand tonnes of high grade ferrochrome which is sufficient to supply approximately half of the North American market.
Final rates will be dependent on specific marketing, technical and site selection decisions.

The upgrading of chrome ore to ferrochrome is required to serve the North American market since there are no existing ferrochrome
producers in North America. The Company conducted a process in 2017 to invite certain Northern Ontario cities to submit site
proposals for the Company’s FPF. The Company received proposals for sites proximal to the cities of Sudbury, Timmins, Sault Ste.
Marie and Thunder Bay. Management is currently evaluating the proposals with the objective of making a final decision, starting
preliminary site layout work and community engagement in 2018.

The Company can increase chromite production by developing its Black Thor chromite project. This expansion would supply the sea
borne market primarily in China and Europe and would be undertaken if market conditions are favourable. An analysis to expand the
existing FPF would be completed at this time.

The market for chrome ore and ferrochrome is strong and prices are at a level that the Company believes provides an estimated internal
rate of return sufficient to develop the first stage of its chrome projects.

62017 Management's Discussion and AnalysisExploration

The Company firmly believes in the continued exploration prospectivity of the Ring of Fire and to this end has added considerably to
its project portfolio over the past three years with the addition of Cliffs’ chromite and VMS properties, MacDonald Mines’ Butler VMS
and Sanderson nickel-copper-PGE properties, and most recently through staking of an additional 150 claims covering geological
structures believed to be prospective for gold. Through advancing a quality pipeline of multi-commodity projects at various stages of
exploration and development, as per our five-year exploration plan below, the company will be well positioned to remain a leader in the
Ring of Fire with a sustainable future of quality development assets.

Five Year Exploration Plan

2016

2017

2018

2019

2020

Nickel-Copper-PGE

Exploration & Discovery

Resource Delineation

Copper-Zinc

Target
Generation

Exploration & Discovery

Gold

Compilation

Target Generation

Exploration & Discovery

Given the success of our VMS programs in 2017, exploration efforts in 2018 will focus heavily on the VMS potential at the McFaulds
Lake and Butler Lake properties, where the company believes there is good potential for discovery of additional copper-zinc rich
sulphide bodies. At McFaulds Lake, exploration programs will focus on following up recent drill intersections on the McFaulds No.8
and No. 9 discoveries as well as generating additional drill targets through ground geophysical surveying at the McFaulds No. 4, No. 3-
south and No. 6 VMS occurrences. On the Butler property, the company will focus on following up soil geochemical anomalies with
mapping and review of historic drill core, potentially followed by ground geophysical surveying and drilling in the 2nd half of the year.

The Company remains committed to advancing its nickel-copper-PGE targets and will be submitting an early exploration permit
application for the Sanderson property in 2018 with the goal of testing this large ultramafic target with ground geophysics and drilling
in the 2nd half of the year. In addition, the Company will review results of the 2017 RAB program in the Area 7 magmatic corridor with
a view to determining follow-up work in 2018.

The Company views the gold potential in the Ring of Fire to be exceptional, and throughout 2017 advanced its gold compilation
program culminating in the fall of 2017 with the staking of 150 claims covering major structures thought to be highly prospective for
gold. In 2018 the Company will focus on bringing in the right partner to help advance these gold properties through a three-year
strategic alliance, with the goal being discovery of one or more multi-million-ounce high-grade gold deposits. Potential gold partners
must be well financed, technically strong in gold exploration, and have an appreciation for Noront’s long standing relationships with
the surrounding First Nation communities in the Ring of Fire.

An added benefit of our exploration programs is the ability of the Company to engage and train a local First Nation work force in
advance of development of the Eagle’s Nest project. Throughout 2017, two-thirds of the field program staff were hired from the local
communities in the region providing much needed employment and a glimpse of the future benefits and opportunities afforded by the
development of the Ring of Fire.

Business Development

The Company’s objective is to be an owner, operator of high quality mining projects within and outside of the Ring of Fire. The
Company’s management team has significant experience successfully building and operating large scale base metal mines which the
Company views as a competitive advantage. Management will therefore look for opportunities to acquire high quality advanced
development or production assets outside the Ring of Fire that leverage the skill set of management.

SIGNIFICANT EVENTS

Ring of Fire Development

72017 Management's Discussion and Analysis

The Ontario provincial government has agreed to support and fund the following road proposals put forward by the First Nations which
will connect First Nation communities and the Ring of Fire:



a north-south access road which is being planned by Marten Falls First Nation for construction to the Ring of Fire (the
“North-South Road”); and

an east-west road connecting the Webequie and Nibinamik First Nations communities to the provincial highway network
north of Pickle Lake (the “East-West Road”). This road will continue from the Community of Webequie to the Ring of Fire.

The proponents have engaged engineering firms to complete the project descriptions which are required in order to start the
environmental assessments. The project descriptions and terms of reference, scheduled to be completed in 2018, will include the
specific road routing, project scope and road specifications. An environmental assessment of both the East-West Road and the North
South Road is expected to begin shortly after the project descriptions are filed, followed by commencement of construction work in
2019, pending all necessary approvals. This timeframe allows the Company to advance its pre-development work and ready itself for
the three-year construction of its Eagle’s Nest nickel, copper, platinum group metal mine.

Noront has started the pre-development agreement negotiations with the traditional land user in the region. The pre-development
agreement defines items which will be included in the Impact Benefit Agreement. The company continues to collaborate with its First
Nation partners on the road projects providing input into the technical industrial road specifications and on its development plans with
respect to its mining projects.

Ferrochrome Production Site

In 2017, the Company invited certain Northern Ontario Communities to participate in a process to select the site of the Company’s
planned Ferrochrome Production Site. The Ferrochrome Production Site will upgrade chromite from the Company’s chromite deposits
in the Ring of Fire to sell initially into the North American Market. The Company envisions that the site will be expandable to allow
for increased production to expand into the seaborne market once it has established itself in the North American Market.

On February 2, 2018 the Company received site proposals from Sault Ste. Marie, Sudbury, Thunder Bay and Timmins. The Company
has engaged Hatch, a Mississauga, Ontario-based engineering and consulting company to assist in adjudicating the bids. Next steps
include calculating indicative capital and operating costs and reviewing these alongside community and First Nations support; site
appropriateness; environmental factors; access to a skilled workforce and other elements.

Exploration

The most significant exploration event in 2017 was the discovery of the McFaulds No. 8 copper-zinc sulphide lens on the Company’s
first ever drill program on the McFaulds property. Initial work began in early 2017 with a major core re-logging program and
acquisition of a high resolution airborne magnetic survey to better resolve the stratigraphy and deposit geology of the known
occurrences. The company received exploration permits in June and in July executed a ground EM survey northeast of the McFaulds
No. 1 deposit (figure 1). Unfortunately, no significant conductors were identified in this area. In August, drill and geophysical crews
were mobilized to site to drill three holes to test the down-plunge continuity of the McFaulds No. 3 deposit to the southwest as well as
any significant bore-hole EM conductors identified in historic holes being surveyed. Drilling down-plunge to the southwest of
McFaulds No. 3 encountered the exhalative horizon but failed to intersect any significant sulphides. However, a borehole EM survey
northeast of McFaulds No. 3 identified a significant conductor 35m off-hole and 175m into the footwall of McFaulds No. 3. Drilling of
this target in late August intersected 18m of copper-zinc mineralization, including 9.0m grading 2.0% copper, 3.6% zinc, 7.8 g/t
silver from 557m depth in massive sulphide (figure 2). In October the company drilled a follow-up hole 88m up-dip of MCF-17-88
and intersected 10.9m of massive sulphide grading 1.1% copper, 1.7% zinc and 10.9g/t silver from 486m depth in MCF-17-89. In
addition to the McFaulds No. 8 target, the borehole EM surveys identified a second-high priority conductor (McFaulds No. 9 target)
located 500m east of McFaulds No. 8 (figure 1) which the company plans to drill test in 2018.

In winter 2017, the company advanced its nickel-copper-PGE projects with a first ever Rotary Air Blast (RAB) drill program designed
to confirm the ultramafic source to numerous discrete magnetic anomalies within a northeast trending structural corridor (Area 7) five
kilometers northwest of Eagle’s Nest (figure 3). These targets resemble the size and form of the host intrusion to the Eagle’s Nest
nickel-copper-PGE deposit, and have potential to host sulphide mineralization. Of the fifteen holes drilled in Area 7, nine returned
ultramafic lithologies favorable for nickel-sulphide mineralization, including one hole which returned highly anomalous PGE values
(0.8 ppm Pt + Pd). Follow-up ground EM surveying over these targets failed to identify any significant conductors, however, the newly
defined corridor trends for ~19km and requires much more work to fully test the nickel-copper-PGE potential.

82017 Management's Discussion and AnalysisIn spring 2017, the Company acquired a high-resolution airborne magnetic survey on its Sanderson property over a large magnetic
anomaly, the Pinay target, located in the footwall to the large ‘Big Mac’ ferrogabbro intrusion. The Pinay target measures 4.5km long
by up to 800m wide and is believed to be an ultramafic intrusion similar in scale to the host intrusion of the Black Thor chromite
deposit. The target has never been drill tested or subject to ground EM surveying. The company plans on submitting an early
exploration permit to explore the Pinay target in 2018.

Figure 1: McFaulds VMS property and 2017 exploration work locations

92017 Management's Discussion and Analysis

Figure 2: McFaulds No. 8 copper-zinc rich massive sulphide discovery (MCF-17-88)

Figure 3: Area 7 RAB drill hole locations and results

102017 Management's Discussion and Analysis

Figure 4: Pinay target magnetic response, Sanderson Property

Other Significant Events

On April 10, 2017, the Company appointed the Honourable Greg Rickford, former federal Canadian Minister of Natural Resources,
Jean-Paul (JP) Gladu, President and CEO of the Canadian Council for Aboriginal Business (CCAB) and Bo Liu, Senior Manager,
Global Resource Development, Baosteel Resources International to the Board of Directors. Mr. Rickford specializes in natural
resources, Indigenous & health matters and has lived and worked in Indigenous communities in northwestern Ontario and across
Canada. Mr. Gladu has more than two decades of experience in the natural resources sector working with Aboriginal communities and
organizations, environmental groups, industry and government. Mr. Bo Liu has held several senior positions since he joined Baosteel in
2001, a world leader in steel and stainless steel products.

Mr. Rickford announced his resignation from the Company’s Board of Directors on December 20, 2017 after he announced his
candidacy for Member of the Provincial Parliament in the Kenora-Rainy River district.

On June 8, 2017, the Company appointed John Pollesel, former Senior Vice-president Mining at Finning Canada. Mr. Pollesel has over
25 years of mining, operations and finance experience. Prior to his most current role he was the Chief Operating Officer and Director of
Base Metals Operations for Vale’s North Atlantic Operations, with responsibility for Sudbury, Voisey’s Bay and Manitoba operations
along with other mining and metallurgical assets.

On September 15, 2017, the Company announced the closing of a private placement of 9,239,000 flow-through shares at a price of
$0.40 per flow-through share for gross proceeds of $3,695,600. The funds are being used to fund the Company’s exploration program
in the Ring of Fire.

On October 12, 2017, the Company announced the closing of a non-brokered private placement of 3,400,000 common shares at a price
of $0.3675 per share with RCF V Annex Fund L.P. for gross proceeds of $1,249,500. Proceeds from the private placement are being
used to support the negotiation of a Pre-Development Agreement (PDA) for the Eagle’s Nest nickel, copper, platinum, palladium mine
with our First Nation Partners. At the same time, the Company also entered into a third amending agreement with Resource Capital
Fund V L.P. (“RCF V”), an affiliate of RCF V Annex (together “RCF”) to extend the term of its existing US$15 million convertible

112017 Management's Discussion and Analysis

debenture (the “Convertible Debenture”). The maturity date of the Convertible Debenture was extended until June 30, 2018 (previously
December 31, 2017) with all other terms and conditions remaining the same.

Pursuant to the loan agreement entered into between Noront and RCF (a major shareholder and related party with a 20.39% ownership
position in the Company), dated February 26, 2013, the Company has satisfied the payment of interest for each quarter of calendar
2017 by delivery of the following common shares of the Company (the “Interest Shares”):

a) 1,636,383 Interest Shares to RCF on January 13, 2017, at an effective price of $0.2464 per Interest Share.

b) 1,682,346 Interest Shares to RCF on April 10, 2017 at an effective price of $0.2379 per Interest Share.

c) 1,103,593 Interest Shares to RCF on July 13, 2017, at an effective price of $0.3535 per Interest Share.

d) 1,160,906 Interest Shares to RCF on October 11, 2017, at an effective price of $0.3223 per Interest Share.

e) 1,214,981 Interest Shares to RCF on January 25, 2017, at an effective price of $0.3104 per Interest Share

EAGLE’S NEST

The Company completed a Feasibility Study in accordance with the requirements of NI 43-101, with an effective date of September 4,
2012, by Independent Consultants1 under the supervision of Micon International. In accordance with NI 43-101 the Company classifies
the Eagle’s Nest Deposit as a reserve and resource. The feasibility study entitled “NI 43-101 Technical Report – Feasibility Study –
McFaulds Lake Property, Eagle’s Nest Project, James Bay Lowlands, Ontario, Canada” is available on www.sedar.com.

The Feasibility Study is based on annual production of approximately 150,000 tonnes of high grade nickel-copper concentrate
containing approximately 34 million pounds (15 thousand tonnes) of nickel, 19 million pounds (8.5 thousand tonnes) of copper, 23
thousand ounces of platinum and 89 thousand ounces of palladium with estimated operating costs (including road access fees) of $97
per tonne. The mineral reserves support a mine life of 11 years at a mining rate of one million tonnes of ore per annum. Given the high-
grade nature of the Eagle’s Nest deposit and significant by-products of copper, platinum and palladium, the Company anticipates that
Eagle’s Nest, once in production, will be one of the lowest cost nickel sulphide mines in the world.

The Company plans to update its Feasibility Study and complete project permitting once the environmental assessment for the shared
transportation corridor to the Ring of Fire formally commences with an approved terms of reference from the Provincial Government of
Ontario and necessary financing is arranged. Management has identified certain opportunities to reduce the capital cost related to the
mine and mill project including locating the process plant on surface as opposed to underground and simplifications to the mine design.

Eagle’s Nest has the following royalty obligations:



a 1% Net Smelter Royalty (NSR) which may be purchased by the Company at any time upon payment of the sum of
$500,000 and/or at the Company’s option, issuance of an equivalent number of commons shares of the Company; and

a 1% NSR, half of which may be repurchased by the Company for US$3.125 million until June 14, 2018.

CHROMITE PROJECTS

The Company has the following chromite resources2:

1 The feasibility study was completed by Micon International and included technical input from: Tetra Tech WEI, Cementation Canada Ltd., Knight Piesold
Ltd., Penguin ASI, SGS Canada Inc., Outotec, Ausenco, Nuna Logistics, and Golder Associates.

2 Resource estimates for Blackbird from “National Instrument 43-101 Technical Report Feasibility Study McFaulds Lake Property, Eagle’s Nest Project,
James Bay Lowlands, Ontario, Canada” dated September 4, 2012, (page 96) completed by Micon International. Resource estimates for Black Thor, Black
Label and Big Daddy from “National Instrument 43-101 Technical Report, Black Thor, Black Label and Big Daddy Chromite Deposits, McFaulds Lake

122017 Management's Discussion and Analysis

A cut-off grade of 20% Cr2O3 was used in the above tables except for the Blackbird Resource which was estimated using a 30% cut-off
grade

The Company has a 70% interest in the Big Daddy Chromite deposit with the other 30% held by Canada Chrome Mining Corporation,
a wholly owned subsidiary of KWG Resources Inc.

The Blackbird deposit is less than 1 km from the Company’s Eagle’s Nest project and is conducive to bulk underground mining. The
Company anticipates that the Blackbird deposit will be developed once Eagle’s Nest is in production and will share the same surface
infrastructure. The Company is planning for the mine to produce approximately 550 – 750 thousand tonnes of ore which would
produce approximately 200 – 280 thousand tonnes of ferrochrome which represents approximately 40% - 50% of the North American
Market. The ferrochrome smelter is planned to be constructed at a yet to be determined brown-fields site in Ontario.

The Black Thor, Black Label and Big Daddy Chromite deposits are 5 to 8 km away from Eagle’s Nest. These deposits come to surface
and are conducive for bulk mining with chromite lenses averaging between 40 and 80 metres in true width (with maximum widths at
Black Thor reaching up to 130 metres).

A larger scale chromite development supported by the Black Thor and Big Daddy Deposits will follow the Blackbird Development
with a timeline that is dependent upon the seaborne ferrochrome market. The larger scale project has the potential to produce up to 1.5
million tonnes of concentrate and 600,000 tonnes of ferrochrome.

The Black Thor Chromite deposit has a 3% Gross Smelter Royalty (GSR) and the Blackbird and Black Label Chromite deposits have a
2% GSR. There is no royalty on the Company’s interest in the Big Daddy Chromite deposit.

McFAULD’S LAKE VMS DEPOSITS

The two McFauld’s deposits are volcanogenic massive sulphide (VMS) type occurrences and are the centerpiece of a 71 claim property
held 85% by the Company and 15% held by KWG Resources. In August 2008, a NI-43-101 report was filed by Spider Resources Inc.
and UC Resources Limited, former Joint Venture partners with KWG Resources Inc., with the following resources3:

Area, Ontario, Canada, Porcupine Mining Division, NTS 43D16, Mineral Resource Estimation Technical Report” dated July 27th, 2015, prepared by
Alan Aubut, P.Geo., of the Sibley Basin Group.

3 Resource estimates from “Updated Technical Report on the McFaulds Lake Project, Porcupine Mining Division, James Bay Lowland, Ontario,
Canada” dated August 30th, 2008, prepared by Deep Search Exploration Technologies Inc.

DepositClassificationTonnes (Millions)Cr2O3 %BlackbirdMeasured Resources9.3037.44Indicated Resources11.2034.36Meas. + Ind. Resources20.5035.76Inferred Resources23.5033.14Black ThorMeasured Resources107.6032.20Indicated Resources30.2028.90Meas. + Ind. Resources137.7031.50Inferred Resources26.8029.30Black LabelMeasured Resources------Indicated Resources5.4025.30Meas. + Ind. Resources5.4025.30Inferred Resources0.9022.80Big DaddyMeasured Resources23.3032.10Indicated Resources5.8030.10Meas. + Ind. Resources29.1031.70Inferred Resources3.4028.10132017 Management's Discussion and Analysis

Mineral resources were estimated using a cut-off grade of 1.5% Cu

The Company believes there is significant opportunity for discovery of additional VMS mineralization along this favorable 10 km
horizon.

RING OF FIRE REGIONAL EXPLORATION

In fall 2017 The Company added significantly to its stable of exploration properties through staking of 150 claims (figure 5) bringing
Noront’s Ring of Fire land holdings to 576 claims totaling 134,932 hectares. These properties cover geological structures in three
principle target zones believed to be highly prospective for gold mineralization. Target Zone 1 covers a significant portion of the
Webequie fault, a major shear zone which transects and dextrally displaces the northern margin of the Butler property and which shows
early signs of gold endowment in lake sediment samples. Target Zone 2 covers a significant portion of the South Kenyan fault zone, a
regional shear zone with significant displacement and attenuation of mixed sedimentary and volcanic lithologies, akin to major
structural breaks observed in the Abitibi gold camp. Target Zone 4, which covers a younger sedimentary basin, the Tappan geological
assemblage, which is presumed to lie in unconformable contact with older volcanic units of the Attawapiskat assemblage. The Tappan
sedimentary assemblage displays evidence of tight folding of banded iron formation as interpreted by the Ontario Geological Survey in
the airborne magnetic map of the area. The Company has outlined a staged regional exploration program to advance all three target
zones for gold exploration and is actively searching for the right partner to advance these properties, with the goal of beginning field
work in late 2018 or early 2019.

In fall 2017, the Company executed a MMI soil sampling program on the Butler property, with the aim of identifying areas of copper-
zinc anomalism between the Butler No. 3 and No.4 VMS occurrences. Results are encouraging, and the Company will be following up
on this work with outcrop mapping and core relogging on the Butler property in 2018. Noront believes the Butler mineralization, in
conjunction with its McFaulds copper-zinc resources, represents a compelling district-wide exploration opportunity for VMS deposits.
Previous work on the Butler property identified four zinc-copper VMS occurrences (Butler No. 1, 2, 3 and 4) along a 12 kilometre
trend of felsic volcanic rocks. Some of the more promising drill intersections to date include:

Butler Mineralization Drill Intersections

Area

Hole

Butler 1
Butler 1
Butler 2
Butler 3
Butler 3
Butler 3
Butler 4
Butler 4

MN06-20
MN06-21
MN10-102
MN10-104
MN10-131
BP12-CU14
MN07-47
BP13-CU22

Width
(m)
3.6 m
5.7 m
15.0 m
9.0 m
7.0 m
12.5 m
3.0 m
3.0 m

Zinc
(%)

Copper
(%)

Lead
(%)

Silver
(g/t)

7.5
0.2
0.5
3.3
6.2
8.5
10.6
7.5

0.2
1.2
1.1

0.4

3.7

30.7
16.2
6.7

6.2
115

The Company staked a discrete magnetic anomaly referred to as the Muketei North property, in September 2017. The anomaly, located
mid-way between the Pinay target to the north, and the Blue Jay nickel-copper-PGE occurrence to the south, is 1kilometre in diameter
and is believed to represent an ultramafic intrusion with potential to host nickel-copper-PGE mineralization. The edge of the anomaly
was drilled in 1996 by KWG resources targeting diamond mineralization at the time. The drill log reports mafic gneiss but the form of
the magnetic anomaly suggests a mafic-ultramafic intrusive. Initial work, including MMI soil sampling over the target, will be
performed in 2018.

Figure 5: Noront Ring of Fire Claim Map

DepositClassificationTonnesGrade (% Cu)Grade (% Zn)McFaulds 3Indicated Resource802,0003.751.1McFaulds 1Inferred Resource279,0002.130.58142017 Management's Discussion and AnalysisThere is a 2% GSR on any chromite production and a 2% NSR on all other mineral production from the Company’s Ring of Fire
Regional Exploration properties, excluding the Company’s Eagle’s Nest deposit, its McFauld’s Lake VMS deposit and the newly
acquired Butler and Sanderson Properties.

There is a 2% NSR over six claims which comprise part of the Butler Property.

OTHER PROPERTIES

Other Ring of Fire Properties

Eagle Two

Eagle Two is a second nickel, copper sulphide occurrence located 2 kilometres southwest of Eagle’s Nest. The mineralization occurs in
a series of pyrrhotite – magnetite – chalcopyrite – pentlandite-bearing massive sulphide veins. No resource estimate or technical report
has been released on this property;

152017 Management's Discussion and Analysis

Blue Jay (AT12)

Blue Jay is a third nickel, copper sulphide occurrence located 9.5 kilometres northeast of Eagle’s Nest and is a potential feeder zone to
Black Thor. This deposit contains pervasive, low grade nickel and copper occurring as finely disseminated pyrrhotite, chalcopyrite and
pentlandite constrained within an ultramafic dike measuring on average 1,400 metres in length by 200 metres in width by 600 metres in
breadth and plunging to the south-southwest at 65 to 70 degrees. No resource estimate or technical report has been released on this
property;

Triple J Gold Zone

The Triple J Gold Zone is a zone of gold mineralization related to the sheared contact between the talc-altered peridotite hosting the
Blackbird and Eagle Two discoveries and the hanging wall granodiorite. Triple J ranges in thickness from several centimetres to tens of
metres with a strike length currently defined at 1 kilometre and to a depth of 300 metres. The zone is interpreted as a large, low grade
gold occurrence flanking the Blackbird and Eagle Two deposits. No resource estimate or technical report has been released on this
property.

Thunderbird

Thunderbird is a potential large tonnage iron-vanadium-titanium deposit, currently classified as an occurrence. The zone is located 12
kilometres northeast of the Eagle’s Nest deposit, and 2 kilometres east of the Blue Jay occurrence. It is demarcated by a magnetic high
which trends north-south as part of a magnetic anomaly that is 7 kilometres long, and 3 kilometres wide. No resource estimate or
technical report has been released on this property;

Kyle Kimberlite

Kyle Kimberlite is a kimberlitic body that was discovered in 1993 and was acquired by Noront in 2015 through the purchase of Cliffs
Natural Resources assets in the Ring of Fire. It is located approximately 70 kilometres east of Eagle’s Nest and is a joint venture
between Noront (50%) and Debut Diamonds (50%). It has been tested for diamonds and was found to contain promising contents of
micro- and macro-diamonds of varying carats. No resource estimate or technical report has been released on this property; and

Other Non-Ring of Fire Properties

MacFadyen Kimberlites

The MacFadyen Kimberlites are four kimberlitic bodies that were discovered between 1995 and 1996 and were acquired by Noront in
2015 through the purchase of Cliffs Natural Resources assets in the Ring of Fire. They are not located within the Ring of Fire itself,
rather, they are located approximately 7 km north of the De Beers Victor Diamond Mine and are a joint venture between Noront (30%)
and Debut Diamonds (70%). All kimberlites have been tested for diamonds and were found to contain promising contents of micro-
and macro-diamonds of varying carats. No resource estimate or technical report has been released on this property.

Burnt Hill, New Brunswick

The Burnt Hill Tungsten properties straddle the Southwest Miramachi River some 70 km NW of Fredericton, New Brunswick. The
properties contain tungsten, molybdenum and tin mineralization mainly in quartz veins that cut argillic sediments on the periphery of
granitoid plutons. The Company has a 49% interest in the property with Cadillac Ventures Inc. On September 26, 2017, the Company
amended its option agreement on this property with Cadillac Ventures. Cadillac has the option to increase its ownership position from
51% to 65% by making three payments over two years to Noront totaling $500,000 in a combination of shares and cash. The Company
has received the first and second payment of $100,000 ($50,000 in cash and $50,000 in shares) and $150,000 respectively. Cadillac can
earn the remaining 35% in the project by making a $1.3 million ($650,000 in cash and $650,000 in shares) payment to Noront within
two years from earning its 65% interest.

Sungold, Ontario

The Sungold property lies just east of Quetico Provincial Park in northwestern Ontario, approximately 125 kilometres west of Thunder
Bay, in the Shebandowan Greenstone Belt of the Archean Superior Province. This property was acquired as a result of the transaction
with Cliffs Natural Resources and is a 100% owned property that currently consists of 30 claims covering an area of 4,736 hectares.

162017 Management's Discussion and AnalysisIt contains the massive sulphide Wye Lake occurrence and the southeast extension of the Hamlin IOCG (iron oxide-copper-gold-
uranium) deposit, currently owned by Glencore. Exploration targets on this property include shear-hosted gold, volcanic-hosted copper-
zinc (VMS), and IOCG. The Company has no activity planned for these properties for the current fiscal year.

Bull Lake, Ontario

The Bull Lake property lies within the East Bull Lake Intrusive Suite of northwestern Ontario, approximately 60 kilometres west of
Sudbury, in the Archean Superior Province. This property was acquired as a result of the transaction with Cliffs Natural Resources and
is a 100% owned property that consists of only 3 claims covering an area of 256 hectares. The project has exploration potential to host
nickel-copper and PGE deposits. The Company has no activity planned for these properties for the current fiscal year.

Golden Ridge, New Brunswick

The Golden Ridge property is located in York County, western New Brunswick, Canada, approximately 30 kilometres south-southwest
of Woodstock and 90 kilometres west of the provincial capital of Fredericton, along the Maine border. This property was acquired as a
result of the transaction with Cliffs Natural Resources and the Company has a 40% interest in the property with Rockport Mining
Corporation. The Golden Ridge gold deposit occurs on the property, on which a mineral resource estimate has been completed (in
2013). This deposit contains 520,200 ounces of gold at a grade of 0.91g/t, however, the deposit only contains Inferred resources. The
cut-off grade is 0.35g/t. Recently, Rockport Mining Corporation and its parent corporation, Tri-Star Resource plc. (London, UK),
stopped its Canadian exploration programs and most likely will divest its interest in this project. Noront has no activity planned for
these properties for the current fiscal year.

SELECTED FINANCIAL INFORMATION

The following financial data are derived from the Company’s financial statements for the years ended December 31, 2017, December
31, 2016 and December 31, 2015 which have been prepared in accordance with IFRS:

(1) Working capital includes all current assets and current liabilities, excluding non-cash repayment options and flow-through share liability (See Non-IFRS Financial
Performance Measures).

(expressed in $ thousands except per share amounts)201720162015Development and exploration expenditures6,8026,133 5,014Office and general3,2852,852 4,128Amortization337391 486Share-based compensation1,002814 920Interest income4835 17Finance expense(4,199) (4,257) (3,317) Gain on sale of mineral property100 - Gain on sale of investments- - 142 Loss on loan extinguishment - (3,339) - Re-measurement of Repayment Options 98 6,952 (1,278) Gain on sale of royalty- 2,057 4,149 Accretion expense(4,674) (3,314) (2,352) Net loss(15,722) (9,980) (19,431) Cash and cash equivalents6,72211,480 3,099Assets34,10839,215 31,872Non-Current Liabilities33,47430,413 26,334Working Capital (1)(12,372) (6,631) (23,142) Year EndedDecember 31,172017 Management's Discussion and Analysis

Year Ended December 31, 2017 Compared to Year Ended December 31, 2016

Development and Exploration Expenditures

Owner’s Costs

Owner’s costs consist of the Company’s project personnel and consultants. In 2017, these costs were significantly lower than the
comparable year due to a reduction in the use of consultants.

Camp Operations & Exploration Expenditure

During the year ended December 31, 2017, $2.4 million was spent on camp operations in support of exploration activities and $3.4
million was spent on direct exploration. This compared to $2.4 million spent on camp operations and $2.7 million spent on exploration
in the prior year. The increase in direct exploration spend during the current period was due to higher drilling activity and higher fuel
costs.

Permitting and Community Engagement

Permitting expenses consists of costs related to environmental base-line field work and First Nation community engagement. In 2017,
costs were higher than the comparable year as the Company continued to engage in pre-development negotiations and community
engagement activities.

Engineering, Staking & Other

Engineering expenses in 2017 primarily consisted of costs associated with technical engineering and gold staking activities.
Engineering work was predominantly related to the Company’s process to select a site for it ferrochrome processing facility. There
were no Engineering/Site and Road Geotechnical costs incurred during the year ended December 31, 2016 due to a deferral of
engineering work. In 2016, the clean-up of the Butler Lake property which was acquired during the year is included in these costs.

Office and General

General Administration

General administration expenses were lower in the comparable year due to a decrease in salaries and benefits as a result of a reduction
in personnel, a suspension in director’s fees in the first half of the year and a reduction in donation and sponsorship expenses.

(expressed in $ thousands)20172016Owner's cost352$ 654$ Camp operations and exploration expense5,756 5,167 Community engagement & permitting233 175 Engineering, staking & other461 137 Total6,802$ 6,133$ Year EndedDecember 31,(expressed in $ thousands)20172016General administration $ 2,531 $ 2,105 Professional fees 456 467 Communications and travel 298 280 $ 3,285 $ 2,852 Total Year EndedDecember 31,182017 Management's Discussion and Analysis

Professional fees

Professional fees include legal and audit costs related to compliance, government relations, personnel and communications consultants as
well as other legal costs related to business development initiatives.

For the year ended December 31, 2017, professional fees were comparable to the prior year.

Communications and travel

For the year ended December 31, 2017, communications and travel costs were higher than the prior year due to increased business
development activities.

Finance Expense

Finance expense consists of quarterly interest payments on the Company’s loan facilities and other transaction costs. During year ended
December 31, 2017, the Company satisfied the payment of interest of $1.6 million on the RCF convertible loan by issuing 5,583,228
common shares of the Company. Subsequent to year end, the Company satisfied the payment of interest to RCF of $0.4 million through
issuance of 1,214,981 common shares of the Company.

During the year ended December 31, 2016, the Company satisfied the payment of interest of $1.6 million on the RCF convertible loan,
the RCF bridge loan and the loan extension fee by issuing of 6,351,975 common shares of the Company.

For the year ended December 31, 2017 the company accrued $2.6 million in interest for the Long-Term Loan to Franco-Nevada
Corporation in accordance with the loan agreement. Interest on the Franco-Nevada loan is accrued and not payable until the end of the
loan term being April 15, 2020.

SUMMARY OF CASH FLOWS

Operating Activities

For the year ended December 31, 2017, the Company had a cash outflow from operations of $9.5 million compared to a cash outflow
of $7.9 million in the prior year. In the prior year comparable period, there was a reduction in corporate expenditures and a cash inflow
of $1.4 million related to the sale of the tax benefits of flow-through shares issued compared to $0.7 million in the current year.

Investing Activities

For the year ended December 31, 2017, the Company had cash inflows of $0.05 million. This is due to the proceeds from the sale of
mineral properties related to the Burnt Hill Project Amended Option Agreement with Cadillac Ventures Inc. For the year ended
December 31, 2016, the Company had cash inflows of $0.05 million due to the sale of a 1% Net Smelter Royalty over the Eagle’s Net
deposit for $0.62 million offset by a cash outflow of $0.55 million for the payment of transaction costs related to the Cliffs transaction
incurred in the prior year and other costs.

(expressed in $ thousands)20172016Cash used in operating activities(9,467)$ (7,882)$ Cash provided by investing activities50 46 Cash provided by financing activities4,660 16,223 (4,757)$ 8,387$ Year EndedDecember 31,192017 Management's Discussion and Analysis

Financing Activities

For the year ended December 31, 2017 proceeds of $4.8 million, net of transaction costs, were provided by way of a private placement
of flow-through shares and a private placement financing. $0.7 million of the net financing proceeds is related to the sale of tax benefits
associated with the issuance of flow-through shares and is presented in operating activities. Cash was also provided from the exercise
of stock options and warrants in the amount of $0.6 million. For the year ended December 31, 2016, cash was provided primarily by
way of prospectus offerings and private placement offerings in the amount of $18.1 million, net of transaction costs. $1.4 million of
the net financing proceeds was related to the sale of tax benefits associated with the issuance of flow-through shares and was presented
in operating activities. Cash was also provided from the exercise of stock options in the amount of $0.3 million. A cash outflow of $0.7
million in the prior period was related to the payment of prior transaction costs associated with the Company’s loan facilities
amounting to $0.3 million and the settlement of an embedded derivative amounting to $0.4 million.

SUMMARY OF QUARTERLY RESULTS AND REVIEW OF THREE MONTHS ENDED DECEMBER 31, 2017

(1) Working capital includes all current assets and current liabilities, excluding non-cash repayment options and flow-through share liability (See Non-IFRS Financial
Performance Measures)

The quarterly variation in expenses is mainly attributable to timing of technical studies, exploration drill programs, and stock option
expense which is recognized in accordance with the vesting provisions. The working capital is negative due to the presentation of the
convertible loan facility (the “Convertible Loan”) with RCF as a current liability. During the second and third quarters of 2016, the
RCF loan was classified as a non-current liability when the terms of the Convertible Loan were extended to December 31, 2017. On
October 4, 2017 the Convertible Loan was further extended to June 30, 2018.

The Company has also recorded a gain on the re-measurement of the repayment option available under the Convertible Loan of $7.0
million for year ended December 31, 2016. This gain reflects the reductions in the fair value of the liability for the previous repayment
option from $2.2 million at December 31, 2015 to nil on the date that the Convertible Loan was amended as well as a fair value
adjustment to the value established at the date of the loan extension.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s cash position (cash and cash equivalents) at December 31, 2017 was $6.7 million compared to $11.5 million as at
December 31, 2016.

At December 31, 2017, the Company had not yet achieved profitable operations, had an accumulated deficit of $260.9 million since
inception (December 31, 2016 – $245.2 million), expects to incur further losses in the development of its business, and has a net working
capital of deficit of $12.4 million (December 31, 2016 – negative working capital of $6.6 million). At December 31, 2017 and December
31, 2016, the Company had negative working capital as a result of the RCF loan being classified as current.

On October 4, 2017 the Company entered into a third amending agreement with RCF to extend the terms of its existing US$15.0
million loan. The maturity date of the loan has been extended to June 30, 2018. The Company’s expectation is that RCF will either
convert the debt to equity or extend the term of the convertible debenture prior to June 30, 2018.

(expressed in $ thousands except per share amounts)20172017201720172016201620162016Oct-DecJul-SepApr-JunJan-MarOct-DecJul-Sept Apr-JunJan-MarExpenses 4,842 5,046 4,610 5,801 4,900 4,873 3,9294,059Gain on sale of marketable securities - - - - - - - Gain on sale of mineral property 100 - - 674 1,850Loss on loan extinguishment - - - - - (3,339) - Gain on sale of royalty - - - - - - 2,057Re-measurement of repayment options (950) 3,112 (3,012) 948 1,555 3,235 3621,800Foreign exchange gain (loss) (227) 1,872 1,186 411 (2,312) 633 2302,727Net income (loss) (5,721) 287 (6,283) (4,005) (4,667) (2,008)(6,467) 3,162 Net earnings (loss) per share – basic (0.05) - (0.02) (0.01) (0.01) (0.01)(0.02) 0.01Net earnings (loss) per share – diluted (0.05) - (0.02) (0.01) (0.01) (0.01)(0.02) 0.00Cash and cash equivalents 6,722 8,345 6,689 8,684 11,480 11,275 5,8613,339Working Capital(1)(12,372) (10,545) (11,959) (10,027) (6,631) 9,678 3,743 (14,187) Assets 34,108 35,646 34,067 36,255 39,215 39,335 33,10236,031Long-term Liabilities 33,474 31,851 31,851 31,329 30,413 48,526 49,17725,891202017 Management's Discussion and Analysis

During the year ended December 31, 2017, the Company completed a private placement of flow-through shares for gross proceeds of
$3.7 million and a private placement of common shares for gross proceeds of $1.3 million. Subsequent to the year ended December 31,
2017, the Company completed a private placement of flow-through shares for gross proceeds of $4.2 million. Proceeds from the
private placements are being used to fund the Company’s exploration program and for working capital purposes.

Noront’s financial instruments consist of cash and cash equivalents, investments, accounts payable, accrued liabilities, repayment
options and long-term debt. Noront estimates that the fair value of its financial instruments (in the case of long-term debt, excluding
transaction costs) approximate its carrying values.

The Company will need to raise sufficient capital to further develop its properties and projects and to repay or refinance its current and
long-term debt. The timing and ability to do so will depend on, among others, the state of the financial markets as well as the
acceptance of investors to finance resource based junior companies, in addition to the results of the Company’s exploration programs
and development activities and the acquisition of additional projects. At this time, the Company will rely on its ability to obtain equity
or debt financing for the foreseeable future. Although the Company has been successful in the past in obtaining financing or
restructuring its debt, there is no assurance that it will be able to obtain adequate financing or refinance its debt in the future or that
such financing will be on terms advantageous to the Company. See also the discussion under the heading “Risks and Uncertainties” in
this MD&A.

These material uncertainties cast significant doubt upon the Company’s ability to realize its assets and discharge its liabilities in the
normal course of business and, accordingly, the appropriateness of the use of accounting principles applicable to a going concern. The
Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its ongoing
corporate overhead expenditures, discharge its liabilities as they come due and advance the development of its projects in the Ring of
Fire.

CONTRACTUAL OBLIGATIONS AND CONTINGENCIES

The contractual obligations for the ensuing five-year period can be summarized as follows:

Contractual Obligations

Operating lease obligations represent future minimum annual rentals under non-cancellable operating leases for Noront’s mining lease,
office space, vehicles and equipment.

Contingencies

The Company has an obligation as at December 31, 2017 to spend $2.3 million on flow-through eligible exploration expenditures by
December 31, 2018.

The Company currently has agreements with some contractors that include provisions where the contractors provide up-front work
with the understanding that if the Eagle’s Nest Project proceeds into the construction stage, they will be granted a contract for the
agreed scope of services. In some cases, the contractor may be reimbursed for the time incurred, or an amount agreed up front, if the
Project does not go ahead. As at December 31, 2017, the amount of this contingent liability is approximately $250,000.

(expressed in $ thousands)Contractual ObligationsTotalLess than 1 year2 -3 years4 - 5 yearsAfter 5 yearsOperating Leases 1,334 259 390 494 192 Provision for Environmental Expenditure 2,010 - - - 2,010 Other Commitments - - - Debt Agreements with Related Party 18,818 18,818 - - - Long Term Debt 44,134 - 44,134 - - Total Contractual Obligations 66,295 19,077 44,523 494 2,202 212017 Management's Discussion and Analysis

DISCLOSURE CONTROLS AND PROCEDURES

Management has established processes, which are in place to provide them with sufficient knowledge to support management
representations that they have exercised reasonable diligence that:

(i)

the interim filings do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that
is necessary to make a statement not misleading in light of the circumstances under which it is made, with respect to the periods
covered by the interim filings; and

(ii) the interim financial statements together with the other financial information included in the interim filings of the Company fairly
present in all material respects the financial condition, results of operations and cash flows of the Company, as of the date of and
for the periods presented by the interim filings.

In contrast to the certificate required of non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’
Annual and Interim Filings (“NI 52-109”), the Company utilizes the Venture Issuer Basic Certificate which does not include
representations relating to the establishment and maintenance of disclosure controls and procedures (“DC&P”) and internal control
over financial reporting (“ICFR”), as defined in NI 52-109. In particular, the certifying officers filing the Certificate are not making any
representations relating to the establishment and maintenance of:

(i) controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in

its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized
and reported within the time periods specified in securities legislation; and

(ii) a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements

for external purposes in accordance with the issuer’s GAAP.

The certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the
representations they are making. Investors should be aware that inherent limitations on the ability of certifying officers of a venture
issuer, such as the Company, to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in
additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under
securities legislation.

CRITICAL ACCOUNTING ESTIMATES

Deferred Mining Property Acquisition

Noront capitalizes mining property acquisition costs which are to be amortized when production is attained or the balance thereof written
off should the property be disproven through exploration or abandoned. On an ongoing basis, the Company evaluates deferred
expenditures relating to each property to assess whether there has been impairment in value. The Company recognizes write-downs for
impairment where the carrying value of the mining property exceeds its estimated long-term net recoverable value. Recoverable value is
estimated based upon current exploration results and upon the Company's assessment of the future probability of positive cash flows
from the property or from the sale of the property.

Future Site Restoration Costs

The Company has an obligation for future site restoration costs. The Company records the fair value of an asset retirement obligation as
a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from
the acquisition, construction, development and/or normal use of the assets. The fair value of the liability is added to the carrying amount
of the associated asset and this additional carrying amount is depreciated over the life of the asset. Subsequent to the initial measurement
of the asset retirement of the asset retirement obligation, the obligation is adjusted at the end of each period to reflect the passage of time
and changes in the estimated future cash flows underlying the obligation. If the obligation is settled for other than the carrying amount
of the liability, the Company will recognize a gain or loss on settlement.

222017 Management's Discussion and Analysis

Stock Options and Warrants

The Black-Scholes option valuation model used by the Company to determine fair values for stock-based compensation was developed
for use in estimating the fair value of freely traded options. This model requires input of highly subjective assumptions including future
stock volatility and expected time until exercise. Changes in the subjective input assumptions can materially affect the fair value estimate.

Repayment Options

The Company’s convertible debt agreement with RCF contains embedded derivatives related to the Company’s prepayment option
(expired in February 2014) and the lender’s convertible feature (“Repayment Options”). The fair value assigned to the Repayment Options
uses level 2 assumptions with the main inputs to the valuation being credit spreads of the Company, historical prices of the underlying
stock, USD discount curve and CAD/USD foreign exchange rates. The most significant assumption is the probability of the loan being
repaid prior to reaching the conversion date, which was estimated by obtaining credit spreads for an index of comparable companies
residing in the same industry.

RISKS AND UNCERTAINTIES

Noront’s business of exploring mineral resources involves a variety of operational, financial and regulatory risks that are typical in the
natural resource industry. The risk factors include risks summarized below, risk factors referenced at page 1 herein, and risk factors
disclosed under the heading “Risk Factors” in the Company’s most recent AIF, available electronically on SEDAR at www.sedar.com.
The Company attempts to mitigate these risks and minimize their effect on its financial performance, but there is no guarantee that the
Company will be profitable in the future, and an investment in Noront common shares should be considered speculative. The risks
described herein, or in documents incorporated herein by reference, are not the only risks facing the Company. Additional risks and
uncertainties not currently known to the Company, or that the Company currently considers immaterial, may also materially and adversely
affect its operating results, properties, business and condition (financial or otherwise).

Mineral Exploration

The business of exploration for minerals and mining involves a high degree of risk. A relatively small proportion of properties that are
explored are ultimately developed into producing mines. At present, there are no known bodies of commercial ore on any of the mineral
properties in which the Company holds interest or intends to acquire an interest and the proposed exploration program is an exploratory
search for ore. Unusual or unexpected formations, formation pressures, fires, power outages, labour disruptions, flooding, cave-ins,
landslides and the inability to obtain suitable or adequate machinery, equipment or labour are other risks involved in the conduct of
exploration programs. The Company has limited experience in the development and operation of mines and has relied on and may
continue to rely upon consultants and others for exploration and operating expertise. The economics of developing gold, base metal and
other mineral properties is affected by many factors including the cost of operations, variation of the grade of ore mined, and fluctuations
in the price of any minerals produced.

Additional Funding Requirements and Potential Dilution

Noront has no current or foreseeable prospect of generating significant revenues. Accordingly, the success of the Company is dependent,
among other things, on obtaining sufficient funding to enable the Company to explore and develop its properties. There can be no
assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing will be favourable.
Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and development of its
projects with the possible loss of such properties.

The Company will require new capital to continue to operate its business and to continue with exploration on its mineral properties, and
there is no assurance that capital will be available when needed, if at all. It is likely such additional capital will be raised through the
issuance of additional equity, which will result in dilution, possibly substantial, to the Company’s present and prospective shareholders.
The Company cannot predict the size of future issues of common shares or securities convertible into common shares.

As of April 17, 2018, the Company had 358,759,308 common shares outstanding, 22,939,536 stock options outstanding with a weighted
average exercise price of $0.31 expiring between 2017 and 2023, 3,000,000 Performance Share Units with an expected life between 2
and 5 years and 665,483 Restricted Share Units with an expected life of 1 year. In addition, RCF has certain conversion rights under the
terms of the Convertible Loan. The issuance of common shares of the Company upon the exercise of options, Performance Share,
Restricted Share Units or on conversion of the Convertible Loan will dilute the ownership of the Company’s current shareholders. Noront
may also issue additional securities convertible into common shares of Noront in the future, the conversion of which would result in
further dilution to the shareholders of the Company.

232017 Management's Discussion and AnalysisDebt and Liquidity

The Company's ability to make scheduled payments of the principal of, to pay interest on or to refinance its existing indebtedness
(including without limitation the Facility) depends on the Company's future performance, which is subject to economic, financial,
competitive and other factors many of which are not under the control of the Company. Liquidity risk is the risk that the Company will
not be able to meet its financial obligations as they become due, including, among others, debt repayments, interest payments and
contractual commitments.

The Company may not generate cash flow (if any) from operations in the future sufficient to service its existing or future debt and make
necessary capital expenditures. If the Company is unable to generate such cash flow, it may be required to adopt one or more alternatives,
such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. The
Company's ability to refinance its indebtedness will depend on the capital markets and its financial condition at such time. The Company
may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on its
debt obligations.

The terms of the Facility and the terms of the Loan Agreement require the Company to satisfy various affirmative and negative covenants.
These covenants limit, among other things, the Company's ability to incur further indebtedness, create certain liens on assets or engage
in certain types of transactions. There are no assurances that, in the future, the Company will not, as a result of these covenants, be limited
in its ability to respond to changes in its business or competitive activities or be restricted in its ability to engage in mergers, acquisitions
or dispositions of assets. Furthermore, a failure to comply with these covenants would result in an event of default that may allow a lender
to accelerate the repayment obligations or enforce its security.

Continuation of Operating Losses

The Company does not have a long historical track record of operating upon which investors may rely. Consequently, investors will have
to rely on the expertise of the Company’s management. Further, the Company’s properties are in the exploration stage and are not
commercially viable at this time. The Company has not commenced commercial production on any of its mineral projects. There can be
no assurance that significant losses will not occur in the near future or that the Company will be profitable in the future. The Company
does not have a history of earnings or the provision of return on investment, and there is no assurance that it will produce revenue, operate
profitably or provide a return on investment in the future. The Company expects to continue to incur losses unless and until such time as
it enters into commercial production and generates sufficient revenues to fund its continuing operations. The development of any of the
Company’s mineral properties will require the commitment of substantial resources to conduct time-consuming development. There can
be no assurance that the Company will generate any revenues or achieve profitability.

Title to Mineral Properties (Ownership Rights)

Although title to the properties has been reviewed by or on behalf of Noront, no assurances can be given that there are no title defects
affecting the properties. Title insurance generally is not available for mining claims in Canada and Noront’s ability to ensure that it has
obtained secure claim to individual mineral properties or mining concessions may be limited. Noront has not conducted surveys of the
claims in which it holds direct or indirect interests; therefore, the precise area and location of such claims may be in doubt. It is possible
that the properties may be subject to prior unregistered liens, agreements, transfers or claims, including native land claims and title may
be affected by, among other things, undetected defects. In addition, Noront may be unable to operate the properties as permitted or to
enforce its rights with respect to its properties.

Mineral Resource and Mineral Reserve Estimates

The mineral resources and mineral reserves presented in this document are estimates and no assurance can be given that the anticipated
tonnages and grades will be achieved or that the expected level of recovery will be realized. Such figures have been determined based
upon assumed metal prices. Future production, if any, could differ dramatically from estimates due to mineralization or formations
different from those predicted by drilling, sampling and similar examinations or declines in the market price of the metals may render
the mining of some or all of the mineral resources as uneconomic.

The estimation of mineralization is a subjective process and the accuracy of estimates is a function of quantity and quality of available
data, the accuracy of statistical computations, and the assumptions and judgments made in interpreting engineering and geological
information. No assurance can be given that any particular level of recovery of gold or other minerals from resources will in fact be
realized or that an identified mineral deposit will ever qualify as a commercially mineable (or viable) ore body which can be economically
exploited. In particular, the inferred mineral resources included in this AIF are considered too speculative geologically to have the
economic considerations applied to them that would enable them to be categorized as mineral reserves, and, due to the uncertainty that
may be attached to inferred mineral resources, it cannot be assumed that all or any part of an inferred mineral resource will be upgraded
to an indicated or measured mineral resource as a result of continued exploration.

242017 Management's Discussion and Analysis

Adequate Infrastructure

Mining, processing, development and exploration activities depend, to a substantial degree, on adequate infrastructure. Reliable roads,
bridges, power sources and water supply are important determinants affecting capital and operating costs. Unusual or infrequent weather
phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect the
operations, financial condition and results of operations of the Company.

Economic

Factors beyond the control of the Company may affect the marketability of any mineral products discovered or produced. The prices of
mineral products have historically fluctuated widely, are sometimes subject to rapid short-term changes and are affected by numerous
factors beyond the Company’s control, including international, economic and political trends, expectations for inflation, currency
exchange fluctuations, interest rates, global or regional consumption patterns, speculative activities and worldwide production levels.
The effect of these factors cannot accurately be predicted, but any one of, or any combination of, these factors may result in the Company
not receiving an adequate return on invested capital and a loss of all or part of an investment in securities of the Company may result.

Commodity Price Risk

The ability of the Company to develop its mining properties and the future profitability of the Company is directly related to the market
price of base and precious metals. Historically, commodity prices have fluctuated widely and are affected by numerous external factors
beyond the Company's control, including industrial and retail demand, central bank lending, sales and purchases of gold, forward sales
of gold by producers and speculators, production and cost levels in major producing regions, short-term changes in supply and demand
because of speculative hedging activities, confidence in the global monetary system, expectations of the future rate of inflation, the
strength of the United States dollar (the currency in which the price of gold is generally quoted), interest rates, terrorism and war, and
other global or regional political or economic events. Resource prices have fluctuated widely and are sometimes subject to rapid short-
term changes because of speculative activities. The exact effect of these factors cannot be accurately predicted, but any one of, or any
combination of, these factors may result in the Company not receiving an adequate return on invested capital and a loss of all or part of
an investment in securities of the Company may result.

Competition

The mining industry is intensely competitive in all its phases. The Company competes with many companies possessing greater financial
resources and technical facilities than itself for the acquisition of mineral interests as well as for the recruitment and retention of qualified
employees, contractors and consultants. The ability of the Company to acquire properties in the future will depend not only on its ability
to develop its present properties, but also on its ability to select and acquire suitable properties or prospects for mineral exploration. There
is no assurance that the Company will be able to compete successfully with its competitors in acquiring such properties or prospects.

Environmental

The Company’s operations are subject to environmental regulations promulgated by local, provincial and federal government agencies
from time to time. Environmental legislation provides for restrictions and prohibitions of spills, releases or emissions of various
substances produced in association with certain mining industry operations, such as seepage from tailing disposal areas, which could
result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties. In addition, certain
types of operations require submissions to and approval of environmental impact assessments. Environmental legislation is evolving in
a manner, which means stricter standards and enforcement, and fines and penalties for non-compliance are more stringent. Environmental
assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers and employees. The
cost of compliance with changes in governmental regulations has a potential to reduce the profitability of operations. The Company
intends to fully comply with all environmental regulations.

Failure to comply with applicable laws, regulations, and permitting requirements may result in enforcement actions, including orders
issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring
capital expenditures, installation of additional equipment, or remedial actions. Parties engaged in mining operations may be required to
compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed
for violations of applicable laws or regulations and, in particular, environmental laws. In addition, environmental legislation is evolving
in a manner requiring stricter standards, and enforcement, fines and penalties for non-compliance are more stringent. The cost of
compliance with changes in governmental regulations has the potential to reduce the profitability of operations.

Although variable, depending on location and the governing authority, land rehabilitation requirements are generally imposed on mineral
exploration companies, as well as companies with mining operations, in order to minimize long term effects of land disturbance.
Rehabilitation may include requirements to control dispersion of potentially deleterious effluents and to reasonably re-establish pre-
disturbance land forms and vegetation. In order to carry out rehabilitation obligations imposed on the Company in connection with its
mineral exploration, the Company must allocate financial resources that might otherwise be spent on further exploration and/or
development programs.

252017 Management's Discussion and AnalysisFirst Nations

Noront is committed to working in partnership with our local communities and First Nations in a manner which fosters active participation
and mutual respect. Noront works towards minimizing negative project impacts, encouraging certain joint consultation processes,
addressing certain decision making processes and towards maintaining meaningful ongoing dialogue not only for the Company but for
all participants in the Ring of Fire region.

Many of Noront’s contractors and suppliers live and work in the local communities. The Company regularly consults with communities
proximal to the Company’s exploration activities to advise them of plans and answer any questions they may have about current and
future activities. The objective is to operate to the benefit of the shareholders and the local communities using the resources and the
environment today without compromising the long-term capacity to support post exploration and ultimately post mining land uses.

First Nations in Ontario are increasingly making lands and rights claims in respect of existing and prospective resource projects on lands
asserted to be First Nation traditional or treaty lands. Should a First Nation make such a claim in respect of the Properties and should
such claim be resolved by government or the courts in favour of the First Nation, it could materially adversely affect the business of
Noront. In addition, consultation issues relating to First Nation interests and rights may impact the Company's ability to pursue
exploration, development and mining at its projects and could results in costs and delays or materially restrict Noront's activities.

Government Regulations

The Company’s mineral exploration and planned development activities are subject to various federal, provincial and local government
laws and regulations governing, among other things, acquisition of mining interests, maintenance of claims, tenure, expropriation,
prospecting, development, mining, production, price controls, taxes, labour standards, occupational health, waste disposal, toxic
substances, water use, land use, treatment of indigenous peoples, environmental protection and remediation, endangered and protected
species, mine safety and other matters. Although the Company’s exploration and planned development activities are currently believed
by the Company to be carried out in accordance with all applicable rules and regulations, no assurance can be given that new rules and
regulations will not be enacted or that existing rules and regulations will not be applied or amended in a manner that could have a material
adverse effect on the business, financial condition and results of operations of Noront, including changes to government mining laws and
regulations or changes in taxation rates.

The operations of the Company may require licenses and permits from various local, provincial and federal governmental authorities.
The costs and delays associated with obtaining and complying with necessary licences and permits as well as applicable laws and
regulations could stop or materially delay or restrict Noront from proceeding with the development of an exploration project. In addition,
such licenses and permits are subject to change in regulations and in various operating circumstances. Any failure to comply with
applicable laws, regulations or licencing and permitting requirements, even if inadvertent, may result in enforcement actions thereunder,
including orders issued by regulatory or judicial authorities causing interruption or closure of exploration, development or mining
operations or material fines, penalties or other liabilities. There can be no assurance that the Company will be able to obtain all necessary
licenses and permits that may be required to carry out exploration, development, or mining operations, at its projects and there is no
assurance that the Company will be able to comply with any such necessary license and permit requirements in an economically viable
manner.

The Company attempts to mitigate these risks and minimize their effect on its financial performance, but there is no guarantee that the
Company will be profitable in the future, and Noront common shares should be considered speculative.

Joint Ventures and Option Agreements

Noront enters into option agreements and joint ventures as a means of gaining property interests and raising funds. Any failure of any
partner to meet its obligations to Noront or other third parties, or any disputes with respect to third parties’ respective rights and
obligations could have a material adverse effect on such agreements. In addition, Noront may be unable to exert direct influence over
strategic decisions made in respect to properties that are subject to the terms of these agreements.

Litigation

The Company is subject to litigation risks. All industries, including the mining industry, are subject to legal claims, with and without
merit. Defence and settlement costs of legal claims can be substantial, even with respect to claims that have no merit. Due to the inherent
uncertainty of the litigation process, the resolution of any particular legal proceeding to which the Company is or may become subject
could have a material effect on its financial position, results of operations or the Company’s mining and project development operations.

Legal

Amendments to current laws, regulations and permits governing operations and activities of mining companies, or more stringent
implementation thereof, could have a material adverse impact on Noront and cause increases in expenditures or exploration or
development costs or reduction in levels of activities on our exploration or development projects, or require abandonment or delays in
the development of new exploration or development properties.

262017 Management's Discussion and AnalysisUninsurable Risks

The mining industry is subject to significant risks that could result in damage to, or destruction of, mineral properties, personal injury or
death, environmental damage, delays in exploration, and monetary losses and possible legal liability. Where Noront considers it practical
to do so, it maintains insurance in amounts believed to be reasonable, including coverage for directors’ and officers’ liability and fiduciary
liability and others.

Such insurance, however, contains exclusions and limitations on coverage. Accordingly, Noront’s insurance policies may not provide
coverage for all losses related to Noront’s activities (and specifically do not cover environmental liabilities and losses). The occurrence
of losses, liabilities or damage not covered by such insurance policies could have a material and adverse effect on Noront’s results of
operations and financial condition. Noront cannot be certain that insurance will be available to the Company, or that appropriate insurance
will be available on terms and conditions acceptable to the Company. In some cases, coverage is not available or considered too expensive
relative to the perceived risk.

Dependence on Key Employees, Contractors and Management

Noront is dependent on a number of key personnel, including the services of certain key employees and contractors, and certain critical
resources such as industry consultants, engineering firms and technical experts. Noront does not maintain key person life insurance.
Accordingly, the loss of the services of one or more of such key management personnel could have a material adverse effect on the
Company.

The mining industry has been impacted by increased worldwide demand for critical resources including industry consultants, engineering
firms and technical experts. These shortages have caused increased costs and delays in planned activities. Noront is also dependent upon
a number of key personnel, including the services of certain key employees and contractors. Noront’s ability to manage its activities, and
hence its success, will depend in large part on the efforts of these individuals. Noront faces intense competition for qualified personnel,
and there can be no assurance that Company will be able to attract and retain such personnel. If the Company is unable to attract or retain
qualified personnel as required, it may not be able to adequately manage and implement its business plan. As the Company’s business
grows, it will require additional key financial, administrative, mining, marketing and public relations personnel as well as additional staff
for operations.

Labour and Employment

Relations between the Company and its employees may be affected by changes in the scheme of labour relations that may be introduced
by the relevant governmental authorities in whose jurisdictions the Company carries on business. Changes in such legislation or in the
relationship between the Company and its employees may have a material adverse effect on the Company’s business, results of operations
and financial condition.

Conflict of Interest

Certain directors or proposed directors of the Company are also directors, officers or shareholders of other companies that are similarly
engaged in the business of acquiring, developing and exploiting natural resource properties. Such associations may give rise to conflicts
of interest from time to time. The directors of the Company are required by law to act honestly and in good faith with a view to the best
interests of the Company and to disclose any interest, which they may have in any project opportunity of the Company. If a conflict of
interest arises at a meeting of the board of directors, any director in a conflict will disclose his interest and abstain from voting on such
matter. In determining whether or not the Company will participate in any project or opportunity, the directors will primarily consider
the degree of risk to which the Company may be exposed and its financial position at that time.

Share Price

The market price of a publicly traded stock is affected by many variables not directly related to the success of the Company. In recent
years, the securities markets have experienced a high level of price and volume volatility, and the market price of securities of many
companies, particularly those considered to be exploration or development stage companies, has experienced wide fluctuations which
have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. There can be no
assurance that such fluctuations will not affect the price of the Company’s securities, which may result in losses to investors. In addition,
there can be no assurance that an active market for the Company's securities will be sustained.

Securities class action litigation often has been brought against companies following periods of volatility in the market price of their
securities. The Company may in the future be the target of similar litigation. Securities litigation could result in substantial costs and
damages and divert management’s attention and resources.

Current Global Financial Conditions

Current global financial conditions have been subject to increased volatility, and access to public financing, particularly for junior
resource companies, has been negatively impacted. These factors may impact the ability of the Company to obtain equity or debt financing

272017 Management's Discussion and Analysisin the future and, if obtained, such financing may not be on terms favourable to the Company. If increased levels of volatility and market
turmoil continue, the Company's operations could be adversely impacted, and the value and price of the Company's securities could be
adversely affected.

No Guarantee of Positive Return on Investment

There is no guarantee that an investment in the securities of Noront will earn any positive return in the short term or long term. The
mineral exploration business is subject to numerous inherent risks and uncertainties, and any investment in the securities of Noront should
be considered a speculative investment. Past successful performance provides no assurance of any future success. The purchase of
securities of Noront involves a high degree of risk and should be undertaken only by investors whose financial resources are sufficient
to enable them to assume such risks. An investment in the securities of Noront is appropriate only for investors who have the capacity to
absorb a loss of some or all of their investment.

Cyber Security

The Company and its operations rely heavily on various operating financial systems and data. A breach of the Company’s information
or operational technology systems may result in disruption of business activities, loss of confidential or proprietary data, failure of internal
controls over financial reporting failure to meet obligations and reputational damage. Such a breach may also expose the Company to
legal and regulatory action. Policies and procedures are maintained to ensure the security of its information technology systems, and data
and system security controls are regularly tested and audited. The Company also relies on third-party service providers for the storage
and processing of various data. There can be no assurance, however that the Company will not suffer a business disruption or loss or
corruption of proprietary data, whether inadvertent or otherwise.

Growth Strategy

We evaluate growth opportunities and continue to consider the acquisition and disposition of exploration and development properties
and mineral assets to achieve our strategy. We, from time to time, engage in discussions in respect of both acquisitions and dispositions,
and other business opportunities, but there can be no assurance that any such discussions will result in a successfully completed
transaction.

NON-IFRS FINANCIAL PERFORMANCE MEASURES

This MD&A contains references to “Working Capital” which is a non-IFRS financial performance measure. The Working Capital is
calculated as the value of total current assets less the value of total current liabilities, excluding repayment options and flow-through
share liability. The term Working Capital does not have any standardized meaning according to IFRS and therefore many not be
comparable to similar measures presented by other companies. The Company believes that this measure of Working Capital provides
information useful to its shareholders in the understanding the Company’s performance and may assist in the evaluation of the Company’s
business relative to that of its peers.

OUTSTANDING SHARE INFORMATION

ADDITIONAL INFORMATION

Additional information relating to Noront is available on the Internet at the SEDAR website www.sedar.com, and is available on the
Company’s website located at www.norontresources.com.

As at April 17, 2018Authorized Unlimited Issued and outstanding shares358,759,308 Options outstanding22,939,536 Warrants 42,011,778 Performance Share Units outstanding3,000,000 Restricted Share Units outstanding665,483 Convertible Debt56,157,353 Fully diluted483,533,458 282017 Management's Discussion and AnalysisMANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

The accompanying consolidated financial statements of Noront Resources Ltd. (the "Company") were prepared by management in
accordance with International Financial Reporting Standards. Management acknowledges responsibility for the preparation and
presentation of the consolidated financial statements, including responsibility for significant accounting judgments and estimates and
the choice of accounting principles and methods that are appropriate to the Company’s circumstances. The significant accounting
policies of the Company are summarized in Note 3 to these consolidated financial statements.

Management has established processes, which are in place to provide them sufficient knowledge to support management
representations that they have exercised reasonable diligence that (i) the consolidated financial statements do not contain any untrue
statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading
in light of the circumstances under which it is made, as of the date of and for the periods presented by the consolidated financial
statements and (ii) the consolidated financial statements fairly present in all material respects the financial condition, results of
operations and cash flows of the Company, as of the date of and for the periods presented in the consolidated financial statements.

The Board of Directors is responsible for ensuring that management fulfills its financial reporting responsibilities and for reviewing and
approving the consolidated financial statements together with other financial information. An Audit Committee assists the Board of
Directors in fulfilling this responsibility. The Audit Committee meets with management to review the internal controls over the financial
reporting process and the consolidated financial statements together with other financial information of the Company. The Audit
Committee reports its findings to the Board of Directors for its consideration in approving the consolidated financial statements together
with other financial information of the Company for issuance to the shareholders.

Management recognizes its responsibility for conducting the Company’s affairs in compliance with established financial standards, and
applicable laws and regulations, and for maintaining proper standards of conduct for its activities.

(Signed) "Alan Coutts"
Alan Coutts
President & Chief Executive Officer

(Signed) "Greg Rieveley"
Greg Rieveley, CPA, CA
Chief Financial Officer

2017 Consolidated Financial Statements29April 17, 2018

Independent Auditor’s Report

To the Shareholders of
Noront Resources Ltd.

We have audited the accompanying consolidated financial statements of Noront Resources Ltd. and its
subsidiaries, which comprise the consolidated statement of financial position as at December 31, 2017 and
December 31, 2016 and the consolidated statements of loss and comprehensive loss, changes in
shareholders’ deficit, and cash flows for the years then ended, and the related notes, which comprise a
summary of significant accounting policies and other explanatory information.

Management’s responsibility for the consolidated financial statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with International Financial Reporting Standards, and for such internal control
as management determines is necessary to enable the preparation of consolidated financial statements
that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with Canadian generally accepted auditing standards. Those
standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order
to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a
basis for our audit opinion.

PricewaterhouseCoopers LLP
PwC Tower, 18 York Street, Suite 2600, Toronto, Ontario, Canada M5J 0B2
T: +1 416 863 1133, F: +1 416 365 8215

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

2017 Consolidated Financial Statements30Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of Noront Resources Ltd. and its subsidiaries as at December 31, 2017 and December 31, 2016 and
their financial performance and their cash flows for the years then ended in accordance with International
Financial Reporting Standards.

Emphasis of matter
Without qualifying our opinion, we draw attention to note 1 in the consolidated financial statements which
describes matters and conditions that indicate the existence of a material uncertainty that may cast
significant doubt about the company’s ability to continue as a going concern.

(Signed) “PricewaterhouseCoopers LLP”

Chartered Professional Accountants, Licensed Public Accountants

2017 Consolidated Financial Statements31Noront Resources Ltd.
Consolidated Statement of Financial Position
(Expressed in Canadian dollars)

Assets
Current Assets

Cash and cash equivalents
Taxes and other receivables
Supplies inventory
Prepaid expenses

Total Current Assets

Non-Current Assets

Equipment
Mineral properties
Investments

Total Non-Current Assets

Total Assets

Note

7
8

Liabilities and Shareholders' Equity
Current Liabilities

Accounts payable and accrued liabilities
Loan Facilities - due to Resource Capital Funds V L.P.
Repayment option
Flow-through share liability

9
10a
10c

Total Current Liabilities

Non-Current Liabilities

Provision for environmental obligations
Loan Facilities - due to Franco-Nevada Corporation

11
10b

Total Non-Current Liabilities

Total Liabilities

Shareholders' Deficit

Capital stock
Warrants
Contributed surplus
Deficit

Total Shareholders' Deficit

12b
12d

As at
December 31,
2017

As at
December 31,
2016

6,721,808
60,993
82,679
106,556

11,480,077
129,760
226,878
104,634

6,972,036

11,941,349

1,427,783
25,418,065
290,600

27,136,448

34,108,484

1,051,455
18,292,595
2,046,359
463,426

1,614,692
25,418,065
240,600

27,273,357

39,214,706

1,397,458
17,174,433
2,144,371
813,267

21,853,835

21,529,529

1,852,310
31,622,186

33,474,496

55,328,331

1,662,031
28,750,976

30,413,007

51,942,536

$ 201,181,223
2,205,734
36,279,458
(260,886,262)

$ 194,758,699
2,334,489
35,343,243
(245,164,261)

$ (21,219,847)

$ (12,727,830)

Total Shareholders' Deficit and Liabilities

34,108,484

39,214,706

Nature of Business and Going Concern (Note 1)
Commitments and Contingencies (Note 15)
Subsequent Events (Note 18)

Approved on behalf of the Board of Directors:

(Signed) "Paul Parisotto"
Director

(Signed) "John Pollesel"
Director

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements32Noront Resources Ltd.
Consolidated Statement of Loss and Comprehensive Loss
(Expressed in Canadian dollars)

Note

Expenses

Development and exploration expenditures 17a
Office and general
17b
Amortization
Share-based compensation

12c, e

Loss before finance items and other gains

Interest income
Finance expense
Flow-through share premium
Gain on sale of mineral property
Loss on loan extinguishment
Gain on sale of royalty
Accretion expense
Re-measurement of repayment option
Re-measurement of embedded derivative
Foreign exchange gain
Other

Net loss and comprehensive loss

10a(i)

10c

Year Ended

December 31,
2017

December 31,
2016

6,801,721
3,285,004
336,957
1,002,145

6,133,340
2,851,688
391,388
813,510

$ (11,425,827)
48,430
(4,198,792)
1,088,961
100,000

-
-

(4,674,342)
98,012
-

3,241,557

$ (10,189,926)
34,983
(4,257,152)
909,291

(3,339,422)
2,057,046
(3,313,630)
6,952,319
(133,972)
1,277,798
22,500

$ (15,722,001)

$ (9,980,165)

Loss per share - basic and diluted

(0.05) $

(0.03)

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements33Noront Resources Ltd.
Consolidated Statement of Changes in Shareholders' Deficit
(Expressed in Canadian dollars, unless otherwise indicated)

Balance, December 31, 2015
Issue of shares
Exercise of options
Issuance of interest shares
Issue of warrants
Flow-through share premium
Share-based compensation
Net loss for the year

Common
Shares

255,857,623
61,341,429
841,666
6,351,975

-
-
-
-

Capital
Stock

176,756,027
17,124,720
253,625
2,063,530

(1,439,203)

-
-

Warrants

62,859
-
-
-

2,271,630

-
-
-

Contributed
Surplus

34,616,275

-
(86,542)
-
-
-
813,510
-

Deficit

Total

$ (235,184,096)
-
-
-
-
-
-

(9,980,165)

$ (23,748,935)
17,124,720
167,083
2,063,530
2,271,630
(1,439,203)
813,510
(9,980,165)

Balance, December 31, 2016

324,392,693

194,758,699

2,334,489

35,343,243

$ (245,164,261)

$ (12,727,830)

Common
Shares

Capital
Stock

Warrants

Contributed
Surplus

Balance, December 31, 2016
Issue of shares (Note 12b)
Exercise of options
Exercise of warrants
Expiry of warrants (Note 12d)
Issuance of interest shares (Note 10,12b)
Share-based compensation (Note 12c,e)
Net loss for the year

324,392,693
12,856,381
1,500,000
729,359
-

5,583,228

-
-

194,758,699
4,084,106
497,000
273,678
-

1,567,740

-
-

2,334,489

35,343,243

-
-
(22,685)
(106,070)

-
-
-

(172,000)

-
106,070
-

1,002,145

Deficit

Total

$ (245,164,261)
-
-
-
-
-
-

(15,722,001)

$ (12,727,830)
4,084,106
325,000
250,993
-

1,567,740
1,002,145
(15,722,001)

Balance, December 31, 2017

345,061,661

201,181,223

2,205,734

36,279,458

$ (260,886,262)

$ (21,219,847)

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements34Noront Resources Ltd.
Consolidated Statement of Cash Flows
(Expressed in Canadian dollars)

Operating activities
Net loss for the year
Amortization
Share-based compensation
Accretion expense
Flow-Through share premium
Issuance of interest and extension fees shares
Re-measurement of repayment option
Settlement of embedded derivative
Accrued interest on long term debt
Loss on loan extinguishment
Write off Cliff's remediation
Gain on sale of mineral property
Gain on sale of royalty
Unrealized foreign exchange gain
Net change in non-cash working capital:

Taxes and other receivables
Supplies inventory
Prepaid expenses
Accounts payable and accrued liabilities

Flow-Through share proceeds on sale of tax benefits

Note

12c,e

10b

Year Ended

December 31,
2017

December 31,
2016

$ (15,722,001)
336,957
1,002,145
4,674,342
(1,088,961)
1,567,740
(98,012)
-

2,617,618

-
-

(100,000)

(3,244,729)

68,767
144,199
(1,922)
(362,389)
739,120

$ (9,980,165)
391,388
813,510
3,313,630
(909,291)
2,126,717
(6,952,319)
133,972
2,494,491
2,919,571
(22,500)
-

(2,057,046)
(1,279,305)

145,402
(90,993)
83,804
(451,711)
1,439,203

Net cash used in operating activities

$ (9,467,126)

$ (7,881,642)

Investing activities

Acquisition of mineral properties including transaction costs
Acquisition of equipment
Proceeds on sale of mineral properties
Proceeds on sale of royalties, net of costs

-
-
50,000
-

(545,175)
(30,151)
-

621,099

Net cash provided by investing activities

50,000

45,773

Financing activities

Prospectus equity issuance, net of costs and sale of tax benefits
Private placement, net of costs and sale of tax benefits
Proceeds from exercise of options
Proceeds from exercise of warrants
Loan facility, net of costs
Long term loan, net of costs
Settlement of embedded derivative
Finance lease

Net cash provided by financing activities

Change in cash and cash equivalents
Effect of foreign exchange rates on cash and cash equivalents
Cash and cash equivalents, beginning of period

4,084,106
325,000
250,993

-
-
-
-

12,280,568
4,463,505
167,083

(254,518)
(22,778)
(408,720)
(1,990)

4,660,099

$ 16,223,150

$ (4,757,027)
(1,242)
11,480,077

8,387,281
(6,501)
3,099,297

Cash and cash equivalents, end of period

6,721,808

$ 11,480,077

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements35Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

Nature of Business and Going Concern

Noront Resources Ltd. (the "Company" or "Noront") is a resource Company listed on tier 1 of the TSX Venture Exchange
(“TSX-V”) involved in the exploration, development and acquisition of properties prospective in base and precious metals,
including: nickel, copper, platinum group metals, precious metals, chromite, and vanadium. The Company's assets consist of
its flagship Eagle's Nest nickel-copper-platinum-palladium deposit, deposits of high grade chromite and copper-zinc volcanic
massive sulphide (VMS) deposits which are part of the Company's McFauld's Lake Project. The assets are located primarily
in the area known as the Ring of Fire (“ROF”) in the James Bay Lowlands, Ontario. Eagle's Nest is the Company's most
advanced mining project in the ROF and is the first of several mineral discoveries that have been made since 2007. The
address of Noront's head office is 212 King Street West, Suite 501, Toronto, ON, Canada, M5H 1K5.

The Company is a development stage entity that does not generate operating revenues and has limited financial resources.
The Company is subject to risks and challenges similar to companies in a comparable stage of development. These risks
include the availability of capital and risks inherent in the mining industry related to development, exploration and operations
as well as global economic and commodity price volatility. The underlying value of the Company’s mineral properties and the
recoverability of the related capitalized costs are entirely dependent on the Company’s ability either to obtain the necessary
permits to operate and secure the required financing to complete development of and establish future profitable production
from its mineral assets, or the proceeds from the disposition of its mineral properties.

These consolidated financial statements have been prepared using International Financial Reporting Standards ("IFRS"), as
issued by the International Accounting Standards Board on a going concern basis, which assumes the Company will be able
to meet its obligations and continue its operations for the next twelve months from December 31, 2017. At December 31,
2017, the Company had not yet achieved profitable operations, had an accumulated deficit of $260.9 million since inception
(December 31, 2016, – $245.2 million) and expects to incur further losses in the development of its business, and had a net
working capital deficit of $12.4 million as a result of the $18.3 million convertible loan facility which is due on June 30, 2018.
Net working capital includes all current assets and current liabilities, excluding the non-cash repayment option of $2.0 million
and the flow-through share liability of $0.5 million. The Company also has a flow-through commitment to spend $2.3 million on
Canadian Exploration Expenditures by December 31, 2018. The Company will need to raise funds, negotiate an extension on
the terms of its convertible loan facility or the holder has to convert the loan to equity as it does not have the cash nor cash
flow to repay the facility.

The Company’s ability to continue as a going concern is dependent upon its ability to repay or refinance its short term and
long term debt facilities, obtain the necessary financing to meet its ongoing corporate overhead expenditures as well as
advance the exploration of its claims and development of its projects in the Ring of Fire. During the year ended December 31,
2017 the Company negotiated an extension on the terms of its convertible loan facility. The maturity date has been extended
to June 30, 2018. The Company also completed a private placement of flow-through shares with gross proceeds of $3.7
million and a private placement of common shares with gross proceeds of $1.3 million. Although the Company has been
successful in the past in refinancing its debt and obtaining financing, there is no assurance that it will be able to do so in the
future or that such arrangements will be on terms advantageous to the Company. These material uncertainties cast significant
doubt upon the Company’s ability to realize its assets and discharge its liabilities in the normal course of business and,
accordingly, the appropriateness of the use of accounting principles applicable to a going concern.

These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the
reported expenses and balance sheet classifications that would be necessary if the Company were unable to realize its assets
and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.

Basis of Preparation

These consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS),
as issued by the International Accounting Standards Board (IASB).

These consolidated financial statements have been prepared on a going concern basis, under historical cost convention,
except for certain financial instruments that have been measured at fair value. The principal accounting policies and critical
estimate and judgments, used when compiling these consolidated financial statements are set out below. These consolidated
financial statements were approved by the Board of Directors on April 17, 2018.

2017 Consolidated Financial Statements36Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

Significant Accounting Policies

Principles of Consolidation

These consolidated financial statements include the accounts of Noront Resources Ltd. and its wholly-owned subsidiaries,
Noront Resources 2008 Ltd., Noront Mexico S.A de C.V. and Noront Muketei Minerals Ltd. (NMM). NMM was formed as result
of the acquisition of chromite assets. All intercompany balances and transactions have been eliminated upon consolidation.

Functional and Presentation Currency

Items included in the consolidated financial statements are measured using the currency of the primary economic
environment in which the Company operates (the "functional currency"), which was determined to be Canadian dollars for all
entities including the new subsidiary, NMM, that has expenses primarily in Canadian dollars. The consolidated financial
statements are presented in Canadian dollars, which is the Company's presentation currency. Transactions in currencies
other than the Canadian dollar are translated at rates of exchange at the time of the transactions as follows:

ii)

iii)

Monetary assets and liabilities are translated at current rates of exchange with the resulting gains or losses recorded
in foreign exchange gain/loss in the statement of loss and comprehensive loss;

Non-monetary items are translated at historical exchange rates;

Expense items are translated at the average rates of exchange with any gains or losses recognized within foreign
exchange gain/loss in the statements of loss and comprehensive loss.

Cash and Cash Equivalents

Cash and cash equivalents have original maturities of less than 90 days.

Financial Instruments

The Company's financial instruments consist of cash and cash equivalents, investments, embedded derivatives, accounts
payable and accrued liabilities, loan facilities and related repayment option.

The Company has classified its cash and cash equivalents as loans and receivables which are measured at amortized cost.
The carrying value of these instruments approximates their fair values due to their short-term nature.

Investments in publicly traded companies, which do not trade in an active market, are designated as available-for-sale and
are recorded in the consolidated financial statements of financial position at fair value. Fair value is based on the market
values of comparable companies, if such information is readily available, or by reference to recent transactions involving
assets held by a comparable Company with adjustments for differences in mineral resources for the assets.

The three levels of fair value hierarchy are:

Level 1 -
Level 2 -

Level 3 -

Unadjusted quoted prices in active markets for identical assets or liabilities;
Inputs other than quoted prices that are observable for assets or liabilities, either directly
or indirectly; and
Inputs for assets or liabilities that are not based on observable market data

The repayment option is measured at fair value and classified as Level 2 (Note 10c).

Investments are classified as Level 3.

2017 Consolidated Financial Statements37Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

Significant Accounting Policies (Continued)

Financial liabilities classified as other financial liabilities are initially recognized at fair value net of transaction costs and are
subsequently measured at amortized cost using the effective interest rate method. Accounts payable and accrued liabilities
and the loan facilities are classified as other financial liabilities. Other financial liabilities are classified as current liabilities
unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the statement
of financial position date. The carrying value of the Company's accounts payable and accrued liabilities and loan facilities with
Resource Capital Funds V L.P ("RCF") approximates the fair values of those financial instruments, due to the short-term
maturity of such instruments. The carrying values of the Company's loan facility with Franco-Nevada Corporation, exclusive of
transaction costs, approximate fair value as there has not been a significant change in circumstances since this facility was
recorded at fair value on initial recognition.

Taxes and Other Receivables

Taxes and other receivables consists primarily of HST receivable from government authorities in Canada in respect of the
Company's expenses and cost reimbursement from third parties.

Supplies Inventory

Supplies inventory is comprised of diesel fuel and jet fuel and is valued at the lower of cost and net realizable value. Cost
includes the cost of fuel and transportation to ship the supplies inventory to the site and is determined using the first-in, first-
out method. Net realizable value is the estimated selling price to a third party in the event the Company would need to dispose
of the fuel.

Equipment

Equipment is recorded at cost less accumulated amortization and accumulated impairment loss. Amortization is provided
over the related assets' estimated useful lives using the following methods and annual rates:

Equipment
Furniture and fixtures
Leasehold improvements

20% - 30% declining balance
20% declining balance
20% declining balance

Mineral Properties, Development and Exploration Expenditures

Mineral property acquisition costs are capitalized and the balance is written off should the property be disproven by
exploration or abandoned. These assets are recorded at cost. The carrying value of these assets is dependent, among other
things upon: the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing
to complete exploration and development, and upon future profitable production or proceeds from disposition of such
properties. The assets are evaluated each quarter for indications of impairment or when events occur that would require
assessment.

Where the Company considers that there is an impairment indicator such as significant decrease in resource and reserve
estimates, expiration or permanent cancellation of rights, impairment is assessed and if necessary, recognised for the amount
by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of fair value less cost to
dispose or value in use. An impairment loss is recognized whenever the carrying amount of these assets or its cash
generating unit (which is the property) exceeds its recoverable amount. Impairment losses are recorded in the consolidated
statement of net loss.

Development and exploration expenditures are the costs incurred in the initial search for mineral deposits with economic
potential. Exploration expenditures typically include costs associated with prospecting, sampling, mapping, diamond drilling
and other work involved in searching for ore. Development expenditures are the costs related to the technical, environmental,
permitting and consultation in support of the Company's pre-development work.

All development and exploration expenditures are expensed as incurred. Development and exploration expenditures will be
capitalized when management determines that future economic benefits will be generated as a result of the expenditures.

2017 Consolidated Financial Statements38Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

Significant Accounting Policies (Continued)

Sale of Royalties on a Mineral Property

The sale of royalties on a mineral property are recorded as a reduction in the carrying value of the mineral property. Any
excess proceeds on the sale of royalties over the carrying value of the mineral property are recorded as a gain on sale of
royalties and reflected on the statement of loss and comprehensive loss. The reduction in the carrying value of the mineral
property or the gain on sale of royalties is recorded net of transaction costs.

Leases

Leases of property, plant and equipment are classified as finance leases when the lessee retains substantially all of the risks
and rewards of ownership. Leases in which a significant portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases.

Finance leases are capitalized at the lower of the fair value of the leased property and the present value of the minimum lease
payments. The corresponding lease obligations, net of finance charges, are recorded as interest-bearing liabilities. Each
lease payment is allocated between liability and finance cost when paid.

Provision for Environmental Obligations

Both legal and constructive obligations associated with the retirement of long-lived assets are recorded as a provision for
environmental expenditure when there is a probability of an outflow of resources embodying economic benefits to settle the
obligation. The amount of the provision is measured at the best estimate of the expenditure needed to settle the present
obligation. It is possible that the Company's estimates of its provision for environmental expenditure could change as a result
of changes in regulations, the extent of environmental remediation required and the means of reclamation or cost estimates.
Changes in estimates are accounted for prospectively from the period these estimates are revised.

Significant judgments and estimates are involved in forming expectations of future activities and the amount and timing of the
associated cash flows. Those expectations are formed based on existing environmental and regulatory requirements or, if
more stringent, the Company's environmental policies which give rise to constructive obligations. The cash flows are
discounted using the current real risk-free pre-tax discount rate.

Joint Ventures

A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to
joint control. Joint control is the contractually agreed sharing of control such that significant operating and financial decisions
require the unanimous consent of the parties sharing control. The Company's joint ventures consist of jointly controlled assets
("JCAs"). The balances related to JCA's are not material.

A JCA is a joint venture in which the venturers have joint control and ownership over the assets contributed to or acquired for
the purposes of the joint venture. JCAs do not involve the establishment of a corporation, partnership or other entity. The
participants in a JCA derive benefit from the joint activity through a share of production and bears an agreed share of
expenses incurred as opposed to receiving a share of the net operating results. The Company's proportionate interest in the
assets, liabilities, expenses, and cash flows of the JCAs are incorporated into the consolidated financial statements under the
appropriate headings.

Loss per Common Share

The basic loss per share is calculated based upon the weighted-average number of common shares outstanding during the
period. Stock options and warrants outstanding are not included in the computation of diluted loss per share if their inclusion
would be anti-dilutive.

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements39Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

Significant Accounting Policies (Continued)

Share-based Compensation

The Company grants stock options, performance share units and restricted share units to certain employees and non-
employees under the terms of the Company's Stock Option Plan or Share Awards Plan.

Stock options: Each tranche in an option award is considered a separate award with its own vesting period and grant date fair
value. The fair value of each tranche is measured at the date of grant using the Black-Scholes option pricing model. The
Black-Scholes option pricing model requires estimates for the expected life of options and stock price volatility which can
materially affect the fair value estimate. Volatility and expected life of option is estimated based on an analysis of factors such
as the Company's historical price trends, history of option holder activity, and peer and industry benchmarks for similar
transactions.

Performance share units: The fair value of each tranche is measured at the date of grant using a method incorporating the
current market value of the underlying common shares, the performance conditions and the vesting provisions.

Restricted share units: The fair value of restricted share units are based on the terms of the individual tranche incorporating
the market price of the underlying common shares and vesting terms.

Share-based compensation expense is recognized over the vesting period of the grant by increasing contributed surplus
based on the number of awards expected to vest. This number is reviewed at least annually, with any change in estimate
recognized immediately in share-based compensation expense with a corresponding adjustment to contributed surplus.

Income Taxes

Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying values of
assets and liabilities and their respective income tax bases (temporary differences), and losses carried forward.

Deferred income tax is determined on a non-discounted basis using tax rates and laws that have been enacted or
substantively enacted at the balance sheet date and are expected to apply when the deferred tax asset is realized or liability is
settled. Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against
which the deductible temporary differences can be used.

The determination of the ability of the Company to use tax loss carry-forwards to offset deferred tax payable involves judgment
and certain assumptions about the future performance of the Company. Assessment is required about whether it is "probable"
that the Company will benefit from the prior losses and other deferred tax assets. Changes in economic conditions, metal
prices and other factors could result in revisions to the estimates of the benefits to be realized or the timing of using the
losses.

Flow-through Shares

The Company has adopted a policy whereby flow-through proceeds are allocated between the offering of the common shares
and the sale of tax benefits when the flow-through common shares are offered. The allocation is made based on the
difference ("premium") between the quoted price of the common shares and the amount the investor pays for the flow-through
shares. A liability is recognized for the premium paid by the investors and is then derecognized in the period the eligible
expenditures are incurred, which is recorded in the consolidated statement of loss.

Segment Disclosure

The Company's chief operating decision maker is responsible for allocating resources and assessing performance of the
operations according to strategic decisions. The Company's operations comprise of a reporting segment engaged in the
exploration and development of minerals in Canada.

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements40Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

Significant Accounting Policies (Continued)

New and Amended Standards Adopted by the Company

The following standard was effective and implemented as of January 1, 2017. The Company did not have to change its
accounting policies or make retrospective adjustments as a result of adopting the new standard.

Disclosure Initiative - Amendments to IAS 7 Statement of Cash Flows

The Company has adopted the amendments to IAS 7 Statement of Cash Flows, in its year-ended December 31, 2017 financial
statements. On first application, the Company is not required to provide comparative information in respect of preceding
periods.

The amendment requires disclosure of changes in financial liabilities and financial assets arising from financing activities.
These are liabilities and assets for which cash flows were, or future cash flows will be, classified in the statement of cash flows
from financing activities. The adopted standard has no material impact as the Company had previously disclosed the changes
in its financial liabilities.

New Accounting Standards Issued But Not Yet Applied

IFRS 9 Financial Instruments

IFRS 9 addresses the classification, measurement and de-recognition of financial assets and financial liabilities, introduces
new rules for hedge accounting and introduces a new impairment model for financial assets. The complete version of IFRS 9
was issued in July 2014. It replaces the guidance in IAS 39, Financial Instruments: Recognition and Measurement.

The Company will adopt IFRS 9 on January 1, 2018. The Company is completing its assessment of the impact of IFRS 9 on
the consolidated financial statements. A summary of these impacts is provided below.

The Company intends to apply the irrevocable election available under IFRS 9 to designate equity investments as financial
assets at fair value through other comprehensive income. This election will be applied to all equity investments held upon
adoption. No adjustment is expected as a result of this election.

The Company has determined that the classification of certain other financial assets will change conform to the revised model
for classifying financial assets; however, there will be no impact on the recognition or measurement of the Company's other
financial assets.

The new impaiment model applies a forward-looking credit loss model. The adoption of the expected credit loss model is not
expected to have a significant impact on the Company's financial statements.

For the Company's financial liabilities, there is not expected to be any significant impact on classification. The adoption of
IFRS 9 is not expected to impact the measurement of the Loan Facility due to Franco-Nevada or the Repayment option
associated with the Company's Loan Facility due to RCF. However, the measurement of the Loan Facility due to RCF will be
impacted by the adoption of IFRS 9 because the accounting for the amendment of the facility in October 2017 will change on
adoption.

The amendment of the Loan Facility with RCF in October 2017 was a non-substantial modification of the loan facility under
both IAS 39 and IFRS 9. Under IAS 39, there is no amount recorded in the statement of loss on the date of modification;
however under IFRS 9 when a financial liability at amortized cost is modified, and such modification does not result in de-
recognition, the carrying value of the financial liability is adjusted to reflect the amended cash flows discounted at the original
effective interest rate. This adjustment is recorded in the statement of loss. On transition from IAS 39 to IFRS 9 as at January
1, 2018, the Company will be required to make an adjustment to reduce the carrying value of the Loan Facility with RCF by
$0.9 million, with a corresponding reduction in Deficit.

The Company does not apply hedge accounting.

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements41Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

Significant Accounting Policies (Continued)

New Accounting Standards Issued But Not Yet Applied (Continued)

IFRS 16 Leases

IFRS 16 was issued in January 2016. It will result in almost all leases being recognized on the balance sheet, as the
distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased
item) and a financial liability to pay rentals are recognized. The only exceptions are short-term and low-value leases.

The accounting for lessors will not significantly change.

The standard will affect primarily the accounting for the Company’s operating leases. The Company’s non-cancellable
operating lease commitments as at reporting date are disclosed in Note 16. The Company has not yet determined to what
extent these commitments will result in the recognition of an asset and a liability for future payments and how this will affect
the Company’s profit and classification of cash flows.

Some of the commitments may be covered by the exception for short-term and low-value leases and some commitments may
relate to arrangements that will not qualify as leases under IFRS 16.

The standard is mandatory for financial years commencing on or after 1 January 2019. At this stage, the Company does not
intend to adopt the standard before its effective date.

Critical Accounting Estimates and Judgments

The preparation of these consolidated financial statements requires management to make certain estimates, judgments and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported
amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.

These consolidated financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates
are pervasive throughout the consolidated financial statements, and may require accounting adjustments based on future
occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future
periods if the revision affects both current and future periods. These estimates are based on historical experience, current and
future economic conditions and other factors, including expectations of future events that are believed to be reasonable under
the circumstances.

Significant assumptions about the future that management has made that could result in a material adjustment to the carrying
amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate, but are not limited to,
the following:

Mineral Properties

Noront capitalizes mining property acquisition costs which are to be amortized when production is attained or the balance
thereof written off should the property be disproven through exploration or abandoned. On an ongoing basis, the Company
evaluates deferred expenditures relating to each property to assess whether there has been impairment in value. The
Company recognizes write-downs for impairment where the carrying value of the mining property exceeds its estimated long
term net recoverable value. Recoverable value is estimated based upon the Company's assessment of the future probability
of positive cash flows from the property, current exploration results for properties without a defined resource or estimated
proceeds from a potential sale of the property.

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements42Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

Significant Accounting Policies (Continued)

Critical Accounting Estimates and Judgments

Provision for Environmental Obligations

The Company has a provision for future environmental obligations. The Company records the fair value of this provision as a
liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result
from the acquisition, construction, development and/or normal use of the assets. The fair value of the provision is added to the
carrying amount of the associated asset and this additional carrying amount is depreciated over the life of the asset.
Subsequent to the initial measurement of the provision for environmental obligation, the provision is adjusted at the end of
each period to reflect the passage of time and changes in the estimated future cash flows underlying the provision. If the
provision is settled for other than its carrying amount, the Company will recognize a gain or loss on settlement.

Stock Options, Warrants

The Black-Scholes option valuation model used by the Company to determine fair values for stock-based compensation was
developed for use in estimating the fair value of freely traded options. This model requires input of highly subjective
assumptions including future stock volatility and expected time until exercise. Changes in the subjective input assumptions
can materially affect the fair value estimate.

Repayment Option

The Company's convertible debt agreement contains an embedded derivative related to the Lender's convertible feature
("Repayment Option"). The fair value assigned to the Repayment Option uses level 2 assumptions with the main inputs to the
valuation being credit spread of the Company, historical prices of the underlying stock, USD discount curve and CAD/USD
foreign exchange rates. The most significant assumption regarding the lender's convertible feature is the probability of the
loan being repaid prior to reaching the conversion date. This was estimated by obtaining credit spreads for an index of
comparable companies residing in the same industry, which has an impact on the probability that the bridge loan will be
repaid at maturity. Refer to Note 10c for further information on the Repayment Option.

Loan Facility and Royalty Interests

The Company granted royalty interests on the mineral claims it acquired through the acquisition of certain subsidiary
companies of Cliffs Natural Resources (the “Royalty Interests”). These Royalty Interests are over potential future projects
which have not yet been defined. As a result, the Company has determined the fair value of the Royalty Interests by
estimating the fair value of the consideration received. The Company received what management considers to be a below
market loan as consideration for the royalty interests. Management estimated the fair value of the Royalty Interests by
calculating the difference between the present value of the future payment stream using management's estimate of a market
interest rate of approximately 15% and the face value of the loan being USD$25 million and the stated interest rate of the loan
(7%). The loan was also initially recorded at its fair value as determined by the above fair value calculation. See note 10(b).

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements43Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

Capital Management

The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in
order to support the acquisition, exploration and development of mineral properties. The Board of Directors does not establish
quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management to
sustain future development of the business. The Company defines capital to include its capital stock, warrant, and option
components of its shareholders' equity.

The properties in which the Company currently has an interest are in the early development and early exploration stage; as
such the Company is dependent on external financing to fund its activities. In order to carry out the planned development
activity and pay for administrative costs, the Company will spend its existing working capital and raise additional amounts as
needed. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels
there is sufficient geologic or economic potential and if it has adequate financial resources to do so.

Management has chosen to mitigate the risk and uncertainty associated with raising additional capital within current economic
conditions by:

i)
ii)
iii)

minimizing discretionary disbursements;
reducing or eliminating expenditures which are of limited strategic value; and
exploring alternative sources of liquidity.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the
relative size of the Company, is reasonable. There were no changes in the Company's approach to capital management
during the year ended December 31, 2017. The Company is not subject to externally imposed capital requirements.

Property and Financial Risk Factors

Property Risk

The Company's major mineral property is the McFauld's Lake Property in the "Ring of Fire" (Note 8). Unless the Company
acquires or develops additional material properties, the Company will be mainly dependent upon its existing property. Any
adverse development affecting the Company's major mineral property would have a materially adverse effect on the
Company's financial condition and results of operations.

Financial Risk

The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including interest
rate, foreign exchange rate, and commodity price risk).

Risk management is carried out by the Company's management team with guidance from the Audit Committee under policies
approved by the Board of Directors. The Board of Directors also provides regular guidance for overall risk management.

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements44Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

Property and Financial Risk Factors (Continued)

Financial Risk

Credit Risk

Credit risk is the risk of loss associated with a counterparty's inability to fulfil its payment obligations. The Company's credit
risk is primarily attributable to cash and cash equivalents. Cash and cash equivalents consist of cash on hand, term deposits
and savings accounts with reputable financial institutions with strong credit ratings which are closely monitored by
management.

Liquidity Risk

The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due.
As at December 31, 2017, the Company had cash and cash equivalents and taxes receivable balances of $6,782,801
(December 31, 2016 - $11,609,837) to settle current liabilities of $21,853,835 (December 31, 2016 - $21,529,529) which
includes a loan facility of $18,292,595 and a repayment option of $2,046,359. The loan is convertible into equity with a
conversion price of $0.34 per share at the option of RCF anytime prior to June 30, 2018. All of the Company's accounts
payable and accrued liabilities have contractual maturities of less than 30 days and are subject to normal trade terms. The
Company remains dependent upon financing from capital markets, RCF converting its loan facility to equity or the Company's
ability to repay or refinance the convertible loan (see Note 1).

Market Risk

Market risk is the risk of loss that might arise from changes in market factors such as interest rates, foreign exchange rates,
and commodity and equity prices.

Interest Rate Risk

The Company has cash balances and a loan facility with a fixed interest rate. The Company's current policy is to invest excess
cash in investment-grade short-term deposit certificates and deposit accounts managed by its banking institutions. The
Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks.

ii)

Foreign Currency Risk

The Company is exposed to foreign currency risk as a result of its loan facilities held in a currency other than its functional
currency, the Canadian dollar. The majority of the Company's expenses are denominated in Canadian dollars. The Company
does not currently have any plans for exploration or development activities in foreign jurisdictions.

At December 31, 2017, the Company had monetary assets and liabilities denominated in U.S. dollars as follows:

Cash
Loan Facilities

iii)

Price Risk

December 31, 2017

December 31, 2016

US $
US

14,072
(39,789,961)

79,001
(36,873,749)

US $ (39,775,889)

$ (36,794,748)

The Company is exposed to price risk with respect to commodity and equity prices. The Company closely monitors commodity
prices as it relates to the value and the future outlook of the Company's mineral properties and equity prices to determine the
appropriate course of action to be taken for current and future projects.

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements45Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

Property and Financial Risk Factors (Continued)

Sensitivity Analysis

Based on management's knowledge and experience of the financial markets, the Company believes the following movements
are "reasonably possible" over a twelve month period.

The Company has cash balances and a loan facility in foreign currencies that give rise to exposure to foreign exchange
risk. Sensitivity to a 1% change in the foreign currency exchange rate would have affected the net loss by approximately
$0.5 million for the year ended December 31, 2017 (December 31, 2016 - $0.4 million).

ii) Commodity price risk could adversely affect the Company. In particular, the Company's future profitability and viability
from mineral exploration depends upon the world market price of valuable minerals. Commodity prices have fluctuated
significantly in recent years. There is no assurance that, even as commercial quantities of minerals may be produced in
the future, a profitable market will exist for them. As of December 31, 2017, the Company is not a producer of valuable
minerals. As a result, commodity price risk may affect the completion of future equity transactions such as equity
offerings. This may also affect the Company's liquidity and its ability to meet its ongoing obligations.

Cash and Cash Equivalents

Cash and cash equivalents consist of:

December 31, 2017

December 31, 2016

Cash deposits and restricted cash
Guaranteed investment certificate

6,621,299
100,509

11,376,173
103,904

6,721,808

11,480,077

Restricted cash consists of $51,435, which is money held in trust for donations to First Nation communities.

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements46Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

Equipment

December 31, 2017

Cost
Accumulated Amortization

Closing Net Book Value

Opening Net Book Value
Re-measurement of provision 2
Amortization

Equipment

$ 4,825,892
(3,424,971)

$ 1,400,921

$ 1,581,115
150,048
(330,242)

Furniture &
Fixtures

Leasehold
Improvements

Total

115,027
(101,836)

13,191

16,489

-
(3,298)

200,287
(186,616)

$ 5,141,206
(3,713,423)

13,671

$ 1,427,783

17,088

-
(3,417)

$ 1,614,692
150,048
(336,957)

Closing Net Book Value

$ 1,400,921

13,191

13,671

$ 1,427,783

December 31, 2016

Cost
Accumulated Amortization

Closing Net Book Value

Opening Net Book Value
Additions1
Re-measurement of provision 2
Amortization

Equipment

Furniture &
Fixtures

Leasehold
Improvements

Total

$ 4,675,842
(3,094,727)

$ 115,027
(98,538)

$ 200,287
(183,199)

$ 4,991,156
(3,376,464)

$ 1,581,115

$ 1,797,652
234,509
(68,050)
(382,996)

16,489

20,611

-
-
(4,122)

17,088

$ 1,614,692

21,360

-
-
(4,272)

$ 1,839,623
234,509
(68,050)
(391,390)

Closing Net Book Value

$ 1,581,115

16,489

17,088

$ 1,614,692

1Included in additions for the year ended December 31, 2016 is $204,357 relating to the Butler Lake asset retirement
obligation.

2A re-measurement of the McFauld's Lake and Butler Lake property asset retirement obligations was recognized due
to changes in the estimated future cash flows and discount rate used to calculate the obligation as further described
in Note 11.

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements47Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

Mineral Properties

(i) McFauld's Lake Property - "Ring of Fire",

James Bay Lowlands, Northeastern Ontario

Opening balance
Sale of 1% NSR royalty to RCF

(ii)

Butler and Sanderson Properties - "Ring of Fire",
James Bay Lowlands, Northeastern Ontario

Opening balance
Acquisition of mineral assets
Acquisition costs

Sale of 1% NSR royalty to RCF

December 31, 2017

December 31, 2016

24,654,708
-

26,092,812
(1,438,104)

24,654,708

763,357
-
-

763,357

-
750,000
13,357

763,357

25,418,065

Big Daddy, Black Thor, Black Label and Other Properties
On April 28, 2015, the Company acquired mineral properties including the Black Thor, Big Daddy and Black Label
chromite deposits, the McFauld's Lake volcanic massive sulphide (VMS) deposits and other various claims for USD$27.3
million (CAD$32.9 million). The value of the royalties granted against these properties reduced the amount capitalized.
The Company has granted the following royalties to Franco Nevada Corporation ("Franco Nevada"):
a)

2% Gross Smelter Royalty (GSR) on all of the Company's chromite properties, except for Black Thor for which there is a
3% GSR and the Big Daddy deposit which is not subject to a royalty.
2% NSR over all other minerals of the Company's properties, excluding the Company's Eagle's Nest deposit and its
McFauld's Lake VMS deposit.

McFauld's Lake

Eagle's Nest, Nickel, Copper, PGM Deposit

Condor/Greenstone retains a 1% Net Smelter Royalty (NSR) on the Eagle's Nest nickel, copper, PGM deposit which may
be purchased by the Company at any time upon payment of the sum of $500,000 and/or at the Company's option,
issuance of an equivalent number of common shares of the Company.

In addition, on January 14, 2016 the Company closed the sale of a 1% NSR over the Eagle's Nest deposit to RCF for a
sum of US$2.5 million. The agreement contains a buy back provision whereby Noront can repurchase 50% of the royalty
for US$3.1 million for a period of 30 months from closing. The proceeds from this transaction were used to extinguish the
US$2.0 million bridge loan payable to RCF and for working capital. The sale of the royalty was recorded as a reduction in
the carrying value of mineral property to the extent of previously capitalized acquisition costs for the Eagle's Nest deposit
($1.4 million) and the remaining proceeds, net of transaction costs, was recorded as a gain on sale of royalty as reflected
in the statement of income (loss) in the amount of $2.1 million.

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements48Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

Mineral Properties (Continued)

Butler and Sanderson Properties

On August 24, 2016 the Company issued common shares with a value of $750,000 to MacDonald Mines Ltd.
("MacDonald") for a 75% interest in its Ring of Fire properties including its flagship Butler and Sanderson Properties.
MacDonald will have a 25% carried interest until the issuance of a NI 43-101 compliant resource on one of the properties,
at which time MacDonald will have the option to convert the carried interest into a 1% NSR (the Conversion Right). If
MacDonald does not elect to exercise its conversion right, the Company can elect to buy back MacDonalds 25% interest
for $3 million (the Buy-back Right), payable in cash or shares at the option of the Company. If neither the Conversion Right
nor Buy-back Right are exercised, a Joint Venture arrangement will be formed between the parties to develop the
properties. There is a 2% NSR over six claims which comprise part of the Butler Property held by third parties.

Accounts Payable and Accrued Liabilities

Accounts payable
Accrued liabilities
Accrued interest payable
Payable - Other

10(a)(ii)

10.

Loan Facilities

December 31, 2017

December 31, 2016

97,646
525,244
377,130
51,435

395,735
598,493
403,230
-

1,051,455

1,397,458

December 31, 2017

December 31, 2016

Current portion of loan facilities

Debt agreement with related party - February 26, 2013 (a)(i)
Repayment option (c)

18,292,595
2,046,359

17,174,433
2,144,371

Long term portion of loan facilities
Long term loan (b)

20,338,954

31,622,186

19,318,804

28,750,976

Total Loan Facilities

51,961,140

48,069,780

(i)

Loan Facilities with Related Party - Resource Capital Funds V L.P.

On February 26, 2013, the Company entered into a loan facility with Resource Capital Funds V L.P. (“RCF” or "the Lender"),
which as of December 31, 2017 owns approximately 20.13% of the Company's common shares, in the aggregate principal
amount of US$15.0 million (the “Facility”). The Facility was a one year bridge loan (the”Bridge Loan”) which matured on
February 25, 2014. Since the Facility was not repaid prior to the Bridge Loan maturity date, it automatically rolled into a
convertible loan (the “Convertible Loan”) with a maturity date of December 31, 2015 which was then extended to June 30,
2016.

On June 30, 2016 the Company entered into an amending agreement with the Lender to extend the terms of the Convertible
Loan. The Convertible Loan was extended to December 31, 2017. The Convertible Loan may be converted into common
shares of the Company at the option of RCF at a price of $0.34 cents per share (previously $0.45 cents per share) at any time
prior to December 31, 2017 (the “Conversion Rights”). An extension fee of 2% of the principal amount of the Convertible Loan
was paid to RCF in common shares of the Company with such shares valued using the volume weighted average trading
price for the twenty days prior to June 30, 2016 (the "Extension Fee Shares"). All other terms and conditions of the
Convertible Loan remained the same.

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements49Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

10.

Loan Facilities (Continued)

As the terms of the amendment to the Convertible Loan were substantially different from the terms of the then existing
Convertible Loan, the amendment was considered to be an extinguishment of the debt. As a result, a loss on debt
extinguishment of $3.3 million was recorded for the difference between the carrying value of the Convertible Loan at the date
of the amendment and the fair value of the cash flows under the amended terms. This loss on debt extinguishment includes
the extension fee for the amendment.

On October 4, 2017 the Company entered into a third amended agreement with the Lender to extend the terms of the
Convertible Loan to June 30, 2018. All other terms and conditions of the Convertible Loan remain the same.

The Company has determined that the new extended terms of the Convertible Loan represent a non-substantial modification
of the existing loan facility and therefore the amendment is treated as a loan modification in these consolidated financial
statements. The Convertible Loan is carried at amortized cost.

Original loan facility

Balance, beginning of period
Foreign exchange (gain) loss
Extinguishment of Loan

Balance, end of period

Amended loan facility

Beginning balance
Foreign exchange (gain) loss
Transaction costs - cash
Accretion of loan facility

Balance, end of period

December 31, 2017

December 31, 2016

-
-
-

20,760,001
(1,384,500)
(19,375,501)

December 31, 2017

December 31, 2016

17,174,433
(1,195,260)
(16,388)
2,329,810

15,337,322
652,340
-

1,184,771

18,292,595

17,174,433

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements50Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

10.

(ii)

Loan Facilities (Continued)

Loan Facilities with Related Party - Resource Capital Funds V L.P.

On January 13, 2017, the Company satisfied the payment of interest of $403,230 for the fourth quarter of 2016 through
issuance of 1,636,383 common shares of the Company. The Interest Shares were subject to a four month hold period, which
expired on May 14, 2017.

On April 10, 2017, the Company satisfied the payment of interest of $400,230 for the first quarter of 2017through issuance of
1,682,346 common shares of the Company. The Interest Shares were subject to a four month hold period, which expired on
August 11, 2017.

On July 13, 2017, the Company satisfied the payment of interest of $390,120 for the second quarter of 2017 through issuance
of 1,103,593 common shares of the Company. The interest Shares were subject to a four month hold period, which expired on
November 14, 2017.

On October 11, 2017, the Company satisfied the payment of interest of $374,160 through issuance of 1,160,906 common
shares of the Company. The Interest Shares were subject to a four month hold period, which expired on February 12, 2018.

As at December 31, 2017, the Company accrued interest in the amount of $377,130 for the fourth quarter of 2017. On
January 25, 2018, the Company satisfied the payment of interest of $377,130 through issuance of 1,214,981 common shares
of the Company. The Interest Shares are subject to a four month hold period, which expires on May 26, 2018.

Loan Facilities - Due to Franco-Nevada Corporation

On April 28, 2015, Noront Muketei Minerals Ltd, a 100% owned subsidiary of the Company, entered into a Loan Agreement
with Franco-Nevada in order to fund the acquisition of a subsidiary of Cliffs Natural Resources which holds chromite deposits
and other mining interests in the Ring of Fire (the “Cliffs Transaction”). The Franco-Nevada Loan is a US$25 million five year
loan with interest compounding quarterly at an annual interest rate of 7%. Interest is accrued on a quarterly basis and
presented as part of the Long Term Loan. Payment of both principal and accrued interest is due at the end of the five year
term. The loan is secured against the assets acquired in the Cliffs transaction with limited recourse to the parent Company. At
initial recognition, the Long Term Loan was recorded at fair value less transaction costs at a value of $19.7 million.
Subsequent to initial recognition, the Long Term Loan is carried at amortized cost.

In connection with the Long Term Loan, the Company granted Franco-Nevada certain royalties over the mineral properties
acquired through the Cliffs Transaction (see Note 8 - Mineral Properties).

Balance, beginning of period
Foreign exchange gain
Accrued loan interest
Accretion of loan facility

Balance, end of period

December 31, 2017

December 31, 2016

28,750,976
(2,050,710)
2,617,618
2,304,302

24,842,032
(680,549)
2,494,491
2,095,002

31,622,186

28,750,976

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements51Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

10.

Loan Facilities (Continued)

Repayment Option

The Company's convertible debt agreement contains an embedded derivative related to the Lender's convertible feature
("Repayment Option"). The fair value assigned to the convertible feature is valued with the main inputs to the valuation being
the USD discount curve, the credit spread of the Company, the historical prices of the Company's underlying stock in order to
calculate the volatility, and the forward CAD/USD foreign exchange rates.

The fair value of the convertible feature under the terms of the Company’s convertible debt agreement prior to amendment
declined to $NIL as at June 30, 2016 when the convertible feature was due to expire. This resulted in a gain on the re-
measurement of the convertible feature of $2.2 million which was recognized in the consolidated statement of loss. Upon
extinguishment of the liability for the pre-amendment convertible debt agreement and recognition of a new liability under the
terms of the amended convertible debt agreement, the Company extinguished the pre-amendment conversion feature with a
carrying value of $NIL.

At December 31, 2017, the fair value attributed to the convertible feature was $2,046,359 (December 31, 2016 - $2,144,371).

11.

Provision for Environmental Obligations

McFauld's Lake and Butler Lake

The Company has established a provision of $1,652,245 and $200,065 representing the estimated present value of its future
environmental expenditure for McFauld's Lake and Butler Lake respectively. These costs are not expected to be incurred
within the next twelve months.

The provision is based upon the following estimates and assumptions:
a) Total undiscounted future demobilization cost is $2,013,258 for McFaulds Lake (December 31, 2016 - $1,787,655) and

$243,788 for Butler Lake (December 31, 2016 - $238,346).

b) Nominal risk-free pre-tax discount rate of 2.22% (December 31, 2016 - 2.21%)
c) Demobilization cost expected to be incurred in 10 years (December 31, 2016 - 10 years)

A summary of the changes in the site remediation provision is set out below:

Balance, beginning of period
Butler Lake provision addition
Accretion expense for the period
Re-measurement of provision

December 31, 2017

December 31, 2016

1,662,031

-
40,231
150,048

1,491,868
204,357
33,856
(68,050)

Balance, December 31, 2017

1,852,310

1,662,031

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements52Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

12.

(a)

(b)

Capital Stock

Authorized - Unlimited common shares without par value.

Issued

Balance, January 1, 2016

Prospectus offering, net of costs
Private placement, net of costs
Flow-through share premium
Issue of shares
Warrant allocation
Issue of interest shares
Exercise of options

Balance, December 31, 2016

Private placement, net of costs
Issue of flow-through shares, net of costs
Flow through share premium
Issue of interest shares (Note 10(a))
Exercise of options
Exercise of warrants

Number of Shares

Value

255,857,623
41,213,930
16,328,833

3,798,666

6,351,975
841,666

324,392,693
3,400,000
9,456,381

5,583,228
1,500,000
729,359

176,756,027
13,026,224
5,131,832
(1,439,203)
1,245,289
(2,278,625)
2,063,530
253,625

194,758,699
1,246,029
3,577,197
(739,120)
1,567,740
497,000
273,678

Balance, December 31, 2017

345,061,661

201,181,223

On September 15, 2017, the Company closed a private placement financing raising total gross proceeds of $3.7 million (net
proceeds after transaction costs and flow-through share premium - $2.8 million) through the issuance of 9,239,000 flow-
through shares at a price of $0.40 per flow-through share. In connection with the offering, the agents received a cash finders'
fee equal to 5% of the gross proceeds up to $2.5 million and a finder's fee paid in shares, of 6% of the gross proceeds in
excess of $2.5 million. 217,381 common flow-through shares were issued at a price of $0.33 per common share in satisfaction
of the share component of the finder's fee. The flow-through shares are subject to a statutory hold period of four months and
one day which expired on January 16, 2018.

On October 12, 2017, the Company closed a private placement of 3,400,000 common shares at a price of $0.3675 per share
with RCF, the Company's largest shareholder, for gross proceeds of $1.3 million (net proceeds after transaction costs - $1.2
million). The common shares are subject to a statutory hold period of four months and one day which expired on February 13,
2018.

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements53Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

12.
(c)

Capital Stock (continued)
Stock Options

Under the provisions of the Company's 2007 Incentive Stock Option Plan, an aggregate maximum of 10% of the issued and
outstanding common shares may be issued for granting of options to directors, senior officers, full time employees of the
Company, affiliates or subsidiaries, or any consultants to the Company. The terms of the awards under the Plan are
determined by the Board of Directors.

For the year ended December 31, 2017, share-based compensation of $810,224 was charged to net income (December 31,
2016 - $668,809).

(i)

On February 24, 2017, the Company granted 5,003,417 incentive stock options to directors and employees of the
Company at an exercise price of $0.25. The share price on February 24, 2017 was $0.25.

The fair value assigned was estimated using the following assumptions:

Dividend yield
Expected volatility
Risk free interest rate
Expected life
Forfeiture rate

0%
69.06%
0.72%
5 years
3%

The stock options were assigned a value of $710,485.

(ii)

On April 7, 2017, the Company granted 600,000 incentive stock options to directors of the Company at an exercise
price of $0.23. The share price on April 7, 2017 was $0.23.

The fair value assigned was estimated using the following assumptions:

Dividend yield
Expected volatility
Risk free interest rate
Expected life
Forfeiture rate

0%
68.82%
0.76%
5 years
3%

The stock options were assigned a value of $78,000.

(iii)

On June 7, 2017, the Company granted 600,000 incentive stock options to directors of the Company at an exercise
price of $0.35. The share price on June 7, 2017 was $0.35.

The fair value assigned was estimated using the following assumptions:

Dividend yield
Expected volatility
Risk free interest rate
Expected life
Forfeiture rate

0%
70.52%
0.71%
5 years
3%

The stock options were assigned a value of $121,200.

(iv)

On November 14, 2017, the Company granted 400,000 incentive stock options to employees of the Company at an
exercise price of $0.28. The share price on November 14, 2017 was $0.28. The fair value assigned was estimated
using the following assumptions:

Dividend yield
Expected volatility
Risk free interest rate
Expected life
Forfeiture rate
The stock options were assigned a value of $63,600.

0%
69.97%
1.44%
5 years
3%

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements54Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

12.

(c)

Capital Stock (Continued)

Stock Options

The weighted-average remaining contractual life and weighted average exercise price of options outstanding and options
exercisable as at December 31, 2017 are as follows:

Number of
Stock Options
Outstanding

Black-Scholes
Value

Exercise
Price

Remaining
Contractual
Life (Years)

Number of
Stock Options
Exercisable

1,216,667
1,500,000
3,000,000
1,271,667
400,000
925,000
1,500,000
300,000
1,608,333
400,000
416,253
4,403,417
300,000
600,000
400,000

164,250
202,500
450,000
108,092
34,000
285,825
367,500
59,100
313,625
76,000
74,509
625,285
39,000
121,200
63,600

18,241,337

2,984,486

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

0.25
0.25
0.30
0.17
0.17
0.55
0.44
0.35
0.34
0.33
0.31
0.25
0.23
0.35
0.28

0.30

0.52
0.52
0.75
0.95
0.95
2.25
2.47
2.65
3.23
3.49
4.52
4.16
4.27
4.44
4.88

2.41

1,216,667
1,500,000
3,000,000
1,271,667
400,000
925,000
1,500,000
200,000
1,072,222
266,667
416,253
2,626,289
100,000
200,000
133,333

14,828,098

Expiry Date

July 2018
July 2018
October 2018
December 2018
December 2018
March 2020
June 2020
August 2020
March 2021
April 2021
July 2021
February 2022
April 2022
June 2022
November 2022

The following table summarizes the stock option transactions for the year ended December 31, 2017.

December 31, 2016
Granted
Exercised
Expired
Forfeited

Balance, December 31, 2017

Number
of Options

Weighted-Average
Exercise Price

16,904,587
6,603,417
(1,500,000)
(2,866,667)
(900,000)

18,241,337

$0.32
$0.26
$0.22
$0.37
$0.28

$0.30

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements55Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

12.

(d)

Capital Stock (Continued)

Warrants

The following table lists the Company's warrants as at December 31, 2017.

At December 31, 2016
Prospectus and Private Placement Warrants
Compensation Warrants

Balance, December 31, 2016
Exercise of Warrants
Expiry of Warrants

Balance, December 31, 2017

Number
of Warrants

Weighted-Average
Exercise Price

42,877,949
2,828,407

45,706,356
(729,359)
(2,964,719)

$
$

$
$
$

0.45
0.38

0.44
0.34
0.41

42,012,278

0.45

On March 17, 2016, 15,730,446 warrants were issued as a result of the prospectus and 2,183,334 warrants were
issued as a result of the private placement including compensation warrants. On September 23, 2016, 23,338,789
warrants were issued as a result of the prospectus and 3,000,000 warrants were issued as a result of the private
placement including compensation warrants.

The fair value of the warrants was calculated using the following assumptions:

Warrants issued under March prospectus
Expected volatility
Risk free interest rate
Expected life

40%
0.58%
3 Years

Warrants issued to agents
Expected volatility
Risk free interest rate
Expected life

40%
0.58%
1 Year

Warrants issued under March private placement
Expected volatility
Risk free interest rate
Expected life

40%
0.56%
3 Years

Warrants issued under September prospectus
Expected volatility
Risk free interest rate
Expected life

50%
0.52%
3 Years

Warrants issued to agents
Expected volatility
Risk free interest rate
Expected life

50%
0.52%
1 Year

Warrants issued under September private placement
Expected volatility
Risk free interest rate
Expected life

50%
0.51%
3 Years

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements56Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

12.

(e)

Capital Stock (Continued)

Performance Share Units (PSUs) and Restricted Share Units (RSUs)

For the year ended December 31, 2017, share-based compensation of $191,921 was charged to net income for PSUs and
RSUs (year ended December 31, 2016 - $144,701).

The following tables list the Company's PSUs and RSUs as at December 31, 2017. During the year ended December 31,
2017, no PSUs or RSUs expired.

Performance Share Units

Number of
PSUs

Fair Value

At December 31, 2017 and December 31, 2016

3,000,000

455,095

Restricted Share Units

At December 31, 2016
Issued February 24 2017

Number of
RSUs

335,000
665,000

At December 31, 2017 and December 31, 2016

1,000,000

Fair Value

77,050
166,250

243,300

On February 24, 2017, 665,000 Restricted Share Units ("RSUs") were granted to senior officers of the Company. The share
price on February 24, 2017 was $0.25. The RSUs were assigned a value of $166,250.

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements57Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

13.

Income Taxes

A reconciliation between the tax expense and the product of accounting loss multiplied by the Company's domestic tax rate is
as follows:

Statutory tax rate

Year Ended
December 31,
2017

Year Ended
December 31,
2016

26.50 %

Loss before recovery of income taxes

$ (15,722,001)

(9,980,165)

Expected income tax recovery
Permanent differences
True-ups and other
ITC's
Renounced expenditures
Share issuance costs booked through equity
Benefits of tax attributes not recognized

(4,166,330)
(23,006)
330,991
-

1,518,229
(36,099)
2,376,215

(2,644,744)
456,542
523,749
350,997
1,350,191
(394,368)
357,633

Total tax recovery

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements58Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

13.

Income Taxes (Continued)

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off the current tax assets
and current tax liabilities or deferred tax assets and liabilities and they relate to taxes levied by the same tax authority.

The tax benefit of the following unused tax losses and deductible temporary differences have not been recognized in the
consolidated financial statements due to the unpredictability of future earnings.

Deductible Temporary Differences

Mineral properties and capital assets
Provision for environmental expenditure
Capital losses
Loss-carryforwards
Share issue costs
Loan facility and unaccreted amounts
ITC's

Year Ended
December 31,
2017

Year Ended
December 31,
2016

$ 271,905,757
1,852,310
4,473,000
81,683,767
1,556,273
11,461,735
25,417,902

$ 272,652,856
1,662,031
4,370,298
73,211,659
1,958,891
10,187,993
25,417,902

$ 398,350,744

$ 389,461,630

At December 31, 2017, the Company had unclaimed non-capital income tax losses that expire as follows:

2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037

395,894
1,003,520
1,105,611
1,352,175
5,817,488
3,634,907
1,179,805
7,160,174
9,157,409
6,804,658
8,385,059
7,238,483
6,248,292
5,524,743
2,295,957
5,196,635
9,182,957

81,683,767

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements59Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

14.

Loss Per Share

Loss attributable to common

shareholders

Weighted average shares
outstanding - basic and diluted

Loss per share - basic and diluted

Year Ended

December 31,
2017

December 31,
2016

$ (15,722,001)

$ (9,980,165)

332,530,579

287,147,586

(0.05)

(0.03)

As a result of the net loss for the year ended December 31, 2017 and for the year ended December 31, 2016, the potential
effects of the exercise of stock options and the conversion of the RCF loan facility were anti-dilutive. Thus, basic loss per
share and diluted loss per share are equal for these periods.

15.

Commitments and Contingencies

a) Pursuant to the terms of the flow-through share agreements, the Company is in the process of complying with its flow-

through contractual obligations with subscribers with respect to the Income Tax Act (Canada) requirements for flow-
through shares. As at December 31, 2017, the Company is committed to incurring approximately $2.3 million in
Canadian Exploration Expenditures by December 31, 2018.

b) Under the terms of leases including Noront's mining lease, office space, vehicles and equipment, the Company is

obligated to minimum annual rent and lease payments as follows:

2018
2019
2020
2021
2022
2023
2024 to 2033

$
259,458
192,996
196,619
248,145
245,436
68,553
12,301

As at December 31, 2017, the Company currently has agreements with several contractors that include provisions where
the contractors provide up-front time with the understanding that if the Eagle's Nest Project proceeds into the
construction stage, they will be granted a contract for the agreed scope of services. In some cases, the constructor may
be reimbursed for the time incurred, or an amount agreed up front, if the Project does not go ahead. As at December 31,
2017, the amount of this contingent liability is approximately $250,000.

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements60Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

16.

Compensation of Key Management

Salaries, benefits and directors' fees
Share-based compensation

Year Ended

December 31,
2017

December 31,
2016

1,689,968
957,411

2,647,379

1,452,651
782,650

2,235,301

Key management includes the 7 directors and 6 members of the executive management team (year ended December 31,
2016 - 7 directors and 6 members of the executive management team). Three members of key management are allocated
to Development and Exploration Expenditures under Owner's Costs and three members of key management and the
directors are included in Office and General. Certain members of key management took a voluntary decrease in cash
compensation from February to May 2016 and director's fees were suspended in Q4 2015 and reinstated in June 2016.

17.

Supplementary Expense Information

Development and Exploration Expenditures

Owner's costs
Camp operations & exploration expense
Community engagement & permitting
Engineering, road geotechnical & other

Year Ended

December 31,
2017

December 31,
2016

351,828
5,756,254
232,536
461,103

653,586
5,166,933
175,661
137,160

6,801,721

6,133,340

Included in development and exploration expenditures expenses for the year ended December 31, 2017 is $2,487,464 of
salaries and benefits (year ended December 31, 2016 - $2,678,796) and $707,940 of fuel expenses (year ended
December 31, 2016 - $434,866).

Office and General:

Salaries, benefits and directors' fees
Employee severance
Donations & sponsorships
Administrative and other expenses
Professional fees
Communications & travel

Year Ended

December 31,
2017

December 31,
2016

1,831,124
21,417
11,145
667,453
455,627
298,238

1,342,361

-
40,202
721,625
467,351
280,149

3,285,004

2,851,688

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements61Noront Resources Ltd.
Notes to Consolidated Financial Statements
(Expressed in Canadian dollars, unless otherwise noted)
For the years ended December 31, 2017 and December 31, 2016

18.

Subsequent Events

On April 9, 2018 the Company announced the closing of a private placement of 10,000,000 flow-through shares at a price of
$0.42 per flow-through share for gross proceeds of $4.2 million. The Company intends to use the proceeds for its exploration
program in the Ring of Fire. The flow-through shares will be “flow-through” shares pursuant to the Income Tax Act (Canada).
The flow-through shares are subject to a statutory hold period of four months plus one day which will expire on August 10,
2018. In connection with the offering, the agent received a cash finder’s fee equal to 5% of the gross proceeds of the Flow-
Through up to $1.3 million, a finder's fee paid in shares, of 6% of the gross proceeds in excess of $2.5 million to a maximum
of $4.0 million and a corporate finance fee of $10,750. 414,801 common shares were issued at a price of $0.37 per common
share in satisfaction of the share component of the finder's fee. The common shares are subject to a statutory hold period of
four months plus one day which will expire on August 10, 2018.

On April 9, 2018 the Company also announced the issuance of 311,111 common shares to Marten Falls First Nation as part
of an exploration and pre-development agreement with its First Nation partner announced on April 13, 2017. The common
shares are subject to a statutory hold period of four months plus one day which will expire on August 10, 2018.

On April 10, 2018 the Company satisfied the payment of interest of $387,000 to RCF for the first quarter of 2018 through
issuance of 1,022,457 common shares at an effective price of $0.3785 per Interest Share. The Interest Shares are subject to
a four month hold period, expiring on August 11, 2018.

The accompanying notes are an integral part of these consolidated financial statements.

2017 Consolidated Financial Statements62