Chamber of Mines News Briefs – January 19 - 21, 2013 [Note: News Headlines Are Hyperlinked to Their Stories in This Document.] NWT News

Chamber of Mines News Briefs – January 19 - 21, 2013 [Note: News headlines are hyperlinked to their stories in this document.] NWT News..................................................................................................................................................... 1 Too Close for Comfort? ............................................................................................................................. 1 Resource Development and Energy News .................................................................................................... 2 Mining News Nuggets ............................................................................................................................... 2 Nunavut board to review Bathurst Inlet port and road project ............................................................... 4 Baffinland talks with communities ........................................................................................................... 4 Baffinland project needs speedy green light ............................................................................................ 5 There’s a New Diamond Player in Town ................................................................................................... 6 NWT NEWS Too Close for Comfort? Up Here Business – December 2012 Guy Quenneville Standing on the front deck at Blachford Lake Lodge last winter, a visitor from China peered into the sky, training his eyes on a glowing pool of light hovering under low clouds. “Oh, there it is on the horizon!” he cooed, referring, he thought, to the dazzling Northern Lights that attract more than 7,000 tourists to the Northwest Territories every year. But Mike Freeland, owner and operator of the remote fly-in lodge, had some bad news for him. “No, that’s not aurora,” Freeland reported to his client, nor was it the glow from Yellowknife, located 90 kilometres of the southeast. “That’s the light from Avalon’s project,” he said. The complaints about the sky-altering glow started trickling in three to four years ago, says Freeland. That’s about the time Toronto-based Avalon Rare Metals began aggressively developing the Nechalacho rare earth deposit a mere seven kilometres from Blachford. The lodge dates back to the mid-70s and, thanks to the millions Freeland has invested in it, offers the comforts of any prestige getaway spot: cozy log cabins, delicious dishes, the obligatory outdoor hot tub. But its main selling point, especially with aurora viewers (“a big chunk of our business”), has long been its utter dislocation from the outside world. In a September 2010 letter to the Mackenzie Valley Environmental Impact Review Board, Freeland didn’t mince words. “Bluntly,” he wrote, “a fly-in wilderness resort and a rapidly expanding mining development within seven kilometres of each other are not compatible!” Besides the light pollution, Freeland is worried about noise: the revving of plan engines, the pounding of exploration drills. “It takes away from the wilderness,” he says. “We need those things minimized in the future… but we’re also pushing for increased business from that development so we get some revenues from it.” Once the mind undergoes construction, Freeland figures, why couldn’t Avalon house workers at his plus resort? Avalon is aware of Freeland’s concerns and has met with him three times. It’s even offered to deliver Blachford’s bulk fuel. Discussions have been cordial so far, according to both Freeland and David Swisher, Avalon’s vice president of operations.” …we will absolutely continue to utilize the lodge when we can,” says Swisher. As for what Avalon can do to minimize its impact on Blachford, Swisher didn’t get Chamber News Briefs 1 into specifics – though Freeland has some ideas. “There’s certainly things that they or anyone can do with new lighting [by] reflecting any light downwards onto a road…” Theoretically speaking, if Freeland grew dissatisfied, he could file a claim of private nuisance under the law of tors, according to Fred Kozak, an attorney with Edmonton-based Reynolds Mirth Richards and Farmer. Freeland would have to prove that Avalon’s use of nearby land is both a “substantial and unreasonably interference,” says Kozak. That, as with many things, is very much dependent on context. Still, adds Kozak, a lodge located in an industrial heartland “would have a much harder time proving that extra noise from a nearby mining camp would constitute a nuisance than a lodge located in pristine wilderness.” And even if the review board ultimately recommends Nechalacho move forward, that wouldn’t put an end to Freeland’s (again theoretical) cause. A positive environmental assessment doesn’t prevent or determine a nuisance claim, says Kozak. It may very well never come to that, though. Freeland says the lodge has been in talks for two years now with a local aboriginal-owned development corporation about granting it an equity stake in Blachford. He won’t say which company, but since the lodge sits on leased federal land within the traditional (and unsettled) territory of the Yellowknives Dene, that First Nation’s Det-on Cho Corporation is a likely suspect. Such a partnership might help raise Blachford’s profile in the eyes of Avalon. After all, as Swisher says, the company prizes its closely cultivated relationship with local First Nations. “Any discussions we have with Blachford are always on the premise that we are in Chief Drygeese territory, and with that, it’s important that Avalon, first and foremost, is going to work through its Yellowknives partners first.” RESOURCE DEVELOPMENT AND ENERGY NEWS Mining News Nuggets Northwest Territories GOLD – Nighthawk Gold Corp. Jan. 16 reported additional assay results from six holes drilled by Royal Oak Mines Inc. in 1997 within the Colomac sill on Nighthawk’s Colomac gold property in Northwest Territories. The company said the results and previously reported results in December further validate the historic assay results and confirm the high-grade nature of Zone 3.5 and its continuity to depth. To date 13 historic holes have been reported from a total of 20 historic holes being assayed. Results from the seven remaining historic holes that were drilled north of this area will be released as they are finalized. Highlights of the latest results include 9.15 meters of 3.38 grams per metric ton gold, including 3.66 meters of 5.58 g/t gold intersected in hole 97-04; 31.09 meters of 2.27 g/t gold, including 8.83 meters of 3.73 g/t gold, and 0.60 meters of 32.84 g/t gold intersected in hole 97-07; 45.72 meters of 1.84 g/t gold including 0.91 meters of 23.07 g/t gold, 12.19 meters of 3.24 g/t gold and 4.27 meters of 8.44 g/t gold intersected in hole 97-08; and 23.47 meters of 2.12 g/t gold including 10.67 meters of 3.86 g/t gold and 4.57 meters of 8.60 g/t gold, and 0.92 meters of 27.91 g/t gold intersected in hole 97-11. In 1997, Royal Oak drilled 21 holes (7,884 meters) within the Colomac sill to explore the dimensions of high-grade zones 3.0 and 3.5. These holes were not included in Nighthawk’s previously announced resource estimate as certain required information was lacking at the time. In August, Nighthawk re- logged and re-assayed drill core from 20 of these holes in order to meet the necessary quality assurance and quality control requirements. As a result, the historic holes are now eligible to be included in an updated resource estimate for the Colomac property. Chamber News Briefs 2 The holes reported herein were drilled within the southern portion of Zone 3.5, south of Nighthawk’s subvertical hole (C12-15) that intersected 203.4 meters of 2.49 g/t gold, including 25.75 meters of 7.78 g/t gold, and immediately south of the seven historic holes previously reported for Zone 3.5. This drilling has extended Zone 3.5 further south. The zone remains open along strike and to depth. Royal Oak also drilled a single 1,000-meter hole (Z3.5-97-08) to test the sill at depth beneath Zone 3.5. Gold intersections were reported to a downhole depth of 965 meters highlighted by 45.72 meters of 1.84 g/t gold, including 4.27 meters of 8.44 g/t gold. Deep drilling has established that the mineralized sill continues uninterrupted to great depths and validates this untested potential along its seven kilometer length. Results from the seven remaining historic holes that were drilled north of this area will be released as they are finalized. CLARIFICATIONS – Tyhee Gold Corp. Jan. 14 said that as a result of a review by the British Columbia Securities Commission, it was issuing clarifications to its disclosure record. SRK Consulting, Knight Piésold and Lyntek Inc. completed an independent feasibility study on the company’s Yellowknife Gold Project in August, which is filed on SEDAR that included the results from the feasibility study reported Aug. 15, Oct. 1 and Dec. 17 in news releases, in a Nov. 9 corporate investor presentation, in its corporate fact sheet dated September 2012 and updated in November 2012 and on its website. When Tyhee previously disclosed the results of the economic analysis from the feasibility study, it only disclosed pre-tax numbers. To ensure shareholders understand the value of the Yellowknife gold project and to provide balanced disclosure, the company would like to present the economic analysis with both pre-tax and post-tax numbers: This $1,400-per-ounce base-case gold price is calculated based on the 36- month trailing average gold price as of Aug. 1, 2012. Tyhee also revised its corporate presentation and corporate fact sheet and updated its website disclosure to present its economic analysis with pre-tax and post-tax numbers. The company retracted its disclosure of gold price sensitivity analysis, and in particular, the sensitivity analysis based on the then-current gold price of $1,770/oz., found in its Oct. 1 news release. To provide a more balanced disclosure of the sensitivity analysis, the company has updated its disclosure to highlight the use of the $1,400/oz. base-case gold price, and to present the gold price sensitivity analysis disclosed in accordance with data presented in the NI 43-101 technical report “NI 43- 101 Technical Report Yellowknife Gold Project, Northwest Territories, Canada, effective date Sept.

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