Northcliff Releases Positive Feasibility Study for Sisson Tungsten-Molybdenum Project

Canada's bulk-tonnage Sisson mine could become the largest tungsten producer outside China

VANCOUVER, Jan. 29, 2013 - Northcliff Resources Ltd. ("Northcliff" or the "Company") announces completion of a positive Feasibility Study for its 100%-owned Sisson Project ("Sisson") located in New Brunswick ("NB"), Canada, confirming the long-life open pit tungsten and molybdenum development as a technically and economically robust project.

Undertaken by Samuel Engineering, Inc. of Denver, Colorado, the Sisson Project Feasibility Study reports a pre-tax net present value ("NPV") of $714 million at an 8% discount rate, an internal rate of return ("IRR") of 20.4% and a 4.1-

year payback on initial capital expenditures of $579 million at long term metal prices of US$350/mtu for ammonium paratungstate ("APT") and US$15/lb for molybdenum. On a post-tax basis, Sisson has a $418 million NPV (equal to $5.40 per outstanding Northcliff share based on 77,399,245 current issued and outstanding shares), a 16.3% IRR and a 4.5 year payback on initial capital. All values are expressed in Canadian dollars unless otherwise noted.

"In just two years, Northcliff has advanced Sisson from an exploration and early-stage development project to achieve this important project milestone. We have significantly de-risked the project and now have one of the largest tungsten reserves outside China," said Northcliff President & CEO Chris Zahovskis. "We are confident that Sisson is on track to earn the necessary environmental and construction permits from federal and provincial regulators in 2014, and Northcliff will be pursuing partnerships with global companies interested in the Sisson Project  or tungsten off-take agreements, positioning Northcliff to achieve the financing necessary to initiate project construction in 2014 and commissioning by 2016."

Feasibility Study Highlights

    Located 100 km by road northwest of Fredericton, NB, the Sisson property hosts a 334 million tonne proven and probable mineral reserve containing 22.2 million metric tonne units ("mtu") of tungsten trioxide ("WO3") and 154.8 million pounds of molybdenum ("Mo") at an $8.83/t Net Smelter Return ("NSR") cut-off. The life-of-mine ("LOM") plan, based on this mineral reserve, has an average NSR value of $26.24/t and an average NSR value over the first five years of production of $30.75/t processed.

    Sisson will be developed as an efficient bulk tonnage operation with mine-site facilities to include: an open pit; ore processing plants; tailings storage facility; and ancillary buildings including offices, shops and warehouses.

    Northcliff will undertake value-added processing of tungsten concentrates produced at Sisson by constructing and operating an APT plant at the project site which adds significant economic value to the Sisson Project.

    Access to the Sisson Project site will be facilitated via existing highways and roads. Power will be provided by provincial power utility NB Power via a new 138 kiloVolt ("kV") transmission line alongside an existing 345 kV line at an expected cost of $0.066 per kilowatt-hour ("kWh").

    The Sisson Project will directly employ 300 people in New Brunswick and up to 500 during the construction phase. The project workforce will be drawn from surrounding towns and cities; no permanent work camp will be required.

    Initial capital expenditures to construct the Sisson mine, processing facilities, primary and secondary infrastructure are estimated at $579 million (including a 15% contingency). Construction of the Sisson Project facilities is expected to take 24 months to complete.

    Mill throughput at Sisson is expected to average 30,000 tonnes per day (or 10.5 Mt per year) for a total of 281 Mt of ore processed over 27 years of operation. Average effective strip ratio is low at 1:1.

    The average LOM head grade is estimated to be 0.073% WO3 and 220 ppm Mo.  Average LOM recoveries are estimated to be 77% for tungsten and 82% for molybdenum.  Average head grade over the first five years of production is estimated to be 0.093% WO3 and 240 ppm Mo.  Concentrator recoveries for this five year period are estimated to be 81% for tungsten and 82% for molybdenum after ramp-up of the facility.

 Mineral Resource and Reserve Information

The Sisson deposit is one of the largest undeveloped tungsten reserves in the world, containing 22.2 million mtu of WO3 and 154.8 million lbs of Mo. The LOM plan based on this mineral reserve has an average NSR (net smelter return) value of $26.24/t milled and an average NSR value over the first five years of production of $30.75/t milled.
 Note that the mine plan employs a variable cut-off grade strategy to maximize financial returns. Of the 334 Mt in reserves, 281 Mt are in the feasibility study LOM plan.

Long-term Metal Prices

The Sisson Project Feasibility Study utilizes average long-term metal prices of $350/mtu for APT and $15/lb for Mo, and concludes that Sisson will be a stable and profitable producer of tungsten and molybdenum concentrate, as well as ammonium paratungstate, at both current and long-term forecast metal prices. The selected tungsten price falls in the low-to-medium range of estimates provided in a marketing study completed for Northcliff by the Roskill Consulting Group of London, U.K. ("Roskill").

According to Roskill, "based on forecasts for demand, the tungsten market should fluctuate around an equilibrium level in both the base-case and pessimistic demand scenarios assuming that the majority of planned projects reach production and current output at existing operations is maintained. Long-term, tungsten prices are expected to increase irrespective of the supply/demand balance. Tungsten production costs have been rising globally and Chinese producers are now more sensitive to tungsten prices than in the past because of rising energy, labour, equipment and reagent costs. In real price terms, APT prices are forecast to average $383/mtu in the period 2012 to 2025, reaching $433/mtu in 2025."

Mine Operations and Facilities

Infrastructure and facilities at the Sisson mine site will include an open pit, crushing, conveying, ore stockpile, ore concentrator, APT plant, tailings storage facility, and ancillary buildings including offices, shops and warehouses.

Conventional, modern mining equipment will be used, including 16.5 m3 electric-hydraulic shovels, 136 tonne capacity haul trucks and 165 mm diameter hydraulic drills. The mine will deliver 10.5 Mt of mill feed annually to the primary crusher located adjacent to the pit, which will then be conveyed approximately 1 km to the concentrator. Lower grade and non-mineralized material will be stored within the tailings storage facility. The low strip ratio, bulk-tonnage style mining and consolidated footprint of the mine design all contribute to low unit operating costs for the Sisson Project.

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