Duluth Metals Announces an Updated Mineral Resource Estimate Confirming Large Increases to Twin Metals Contained Metal, Grade and Indicated Tonnage

• Amongst the world's largest Cu-Ni-PGM polymetallic sulphide deposits with contained metals (using a 0.3% Cu cut-off) of 13.7 billion lbs copper, 4.4 billion lbs nickel, and 21.2 million ozs palladium+platinum+gold (TPM)¹ in the Indicated category and 11.8 billion lbs copper, 4.0 billion lbs nickel, and 12.8 million ozs TPM¹ in the Inferred category, representing an average 19% increase from the June 2012 interim AMEC Report.
• Using a base case 0.3% Cu cut-off, AMEC estimated an Indicated Mineral Resource of 1.17 billion tons² and an Inferred Mineral Resource of 1.26 billion tons on the three deposits (Birch Lake, Maturi and Spruce Road) occurring on approximately 11% of the footprint of the prospective portion of the Twin Metals Minnesota (TMM) property block, representing a 60% increase in Indicated Tons and a 9% increase in Inferred Tons from the June 2012 interim report.
• The S3 Subunit (which is a subset of the base case mineral resource estimate for the Maturi Deposit) using a higher 0.5% Cu cut-off contains 622 million tons in the Indicated category and 198 million tons in the Inferred category. This material may have potential to provide higher-grade mill feed for the early stages of any planned mining operation.
• Exploration Target areas include additional potential resources of between 1.4 and 2.2 billion tons contiguous to the boundaries of the three deposits. These Exploration Target areas occur on approximately 12% of the footprint of the prospective portion of the TMM property block.
• The AMEC updated mineral resource estimate highlights a growing Platinum Group Metal (PGM) and gold resource of 21.2 million ozs Indicated and 12.8 million ozs Inferred in the Maturi and Birch Lake deposits. A decline of 3.0 million ozs contained in the Inferred Resource from the June 2012 interim report is offset by a 9.1 million ozs (75%) increase in the Indicated Resource. The TMM project has one of the world's largest palladium and platinum resources outside of South Africa.

Duluth Metals Limited ("Duluth") (TSX: DM) (TSX:DM.U) today announced that Twin Metals Minnesota LLC (TMM) has received a draft NI 43-101 Technical Report on the consolidated mineral resources for the Twin Metals Minnesota Project in Northeastern Minnesota prepared by an AMEC E&C Services Inc. (AMEC) team led by Dr. Harry Parker. This final study utilizes 867 drill holes and 308 wedge offsets to confirm the Twin Metals Minnesota Project to be one of the largest base and precious metal deposits in the world of this type. In addition, the PGM resource estimate confirms the project to be one of the largest palladium and platinum resources outside of South Africa. The final NI 43-101 compliant Technical Report will be delivered by AMEC and filed on SEDAR within 45 days from today's date.

Vern Baker, President of Duluth Metals, commenting on the report stated: "This final AMEC report confirms the impressive nature of the deposits, with very large qualified resources on only 11% of the Twin Metals Minnesota property. All key parameters including grade, tonnage, and contained metal have grown substantially since the June 2012 interim report. The updated resource statement provides greater clarity on continuous zones of higher grade mineralization for TMM's ongoing prefeasibility study. Mine planning will focus on utilizing the higher grade areas for initial mine sequencing, potentially improving the business/ economic model significantly."

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¹ Values for the Pt, Pd and Au components of TPM are shown in Table 5 and Table 6.
² All tonnages are reported as short tons.

Significant Increase in the TMM Global Resource

The study includes three mineral resources in close proximity to one another within the Twin Metals Minnesota Project referred to as the Maturi, Birch Lake and Spruce Road Deposits:

• Using a base case 0.3% Cu cut-off, the Maturi Deposit** contains 1065 million tons of Indicated Mineral Resources grading 0.59% copper, 0.19% nickel, 0.60 parts per million TPM (TPM = Pt + Pd + Au), plus an additional 542 million tons of Inferred Mineral Resources grading 0.51% copper, 0.17% nickel, 0.53 parts per million TPM. (Maturi Deposit tonnages do not include 139 million tons of mineralized material excluded from the underground resource in a safety pillar)
• Using a base case 0.3% Cu cut-off, the Birch Lake Deposit** contains 99.7 million tons of Indicated Mineral Resources grading 0.52% copper, 0.16% nickel, 0.86 parts per million TPM, plus an additional 239.2 million tons of Inferred Mineral Resources grading 0.46% copper, 0.15% nickel, 0.64 parts per million TPM
• Using a base case 0.3% Cu cut-off, the Spruce Road Deposit** contains 480 million tons of Inferred Mineral Resources grading 0.43% copper, 0.16% nickel.*

* Note - The Spruce Road resource was estimated using Inco legacy assay data. Platinum, palladium, and gold were not assayed by Inco, and the core is not available for re-assay.

** Note - These mineral resource estimates include 100% of the estimated resource in each deposit, and include mineral resources acquired as a part of TMM's acquisition of Franconia Minerals Corporation in 2011. Franconia's principal assets are a 70% interest in the Birch Lake, 'old' Maturi and Spruce Road deposits in northeastern Minnesota through the Birch Lake Joint Venture. Franconia announced in November, 2010 its intention to increase its ownership at the Birch Lake Joint Venture to 82%; see Franconia's company profile at www.SEDAR.com for Technical Reports. TMM's ownership of the resource will be factored by these percentages where applicable.

Higher Grade core delineated in the Maturi Deposit - Potential Earlier Economic Mining Opportunities

The current Maturi Deposit resource estimate is based on a refined geological model. One geological subunit within the Maturi Deposit, known as the S3, hosts a higher-grade area that is a subset of the base case mineral resource estimate that may have potential as an early start-up area. AMEC estimated that the S3 Subunit in the Maturi Deposit, using a 0.5% Cu cut-off, contains 622 million tons grading 0.69% Cu, 0.22% Ni and 0.76 ppm TPM of Indicated Mineral Resources and 198 million tons grading 0.65% Cu, 0.21% Ni and 0.82 ppm TPM in the Inferred category. This material is a higher grade sub-set of the global resources estimated for Maturi. Within the Maturi Deposit, the bulk of mineralization is hosted by two subunits of the Basal Mineralized Zone (BMZ). The S2 and S3 subunits are stratiform, with the S3 subunit overlying the S2 subunit. Both subunits are laterally extensive, and are present over the vast majority of the deposit footprint. Within the Indicated Mineral Resource areal footprint, the S3 subunit ranges in vertical thickness from 0 to 355 feet, averaging 108 feet thick (0 to 276 feet, average 91 feet true thickness) and within the Indicated Mineral Resource areal footprint, the S2 subunit ranges in vertical thickness from 0 to 423 feet, averaging 72 feet thick (0 to 329 feet, averaging 59 feet true thickness). Table 1 shows tabulation range of sensitivity cases at different copper cut-off grades for the S3 Subunit of the Maturi Deposit. The base case subset estimate at a 0.3% Cu cut-off grade for the unit is shown in bold, and the 0.5% Cu cut-off grade sensitivity case subset is indicated in italics.

Table 1 - Maturi Deposit S3 Subunit Sensitivity case Indicated and Inferred Mineral Resources

Significant Increase in Contained Metals from June 2012:

Contained metals in the new resources are shown in Table 2:

Table 2 - CONTAINED METALS IN THE TMM RESOURCE*

* Note - Based on mineral resources estimated at base case 0.3% copper cut-off grade.
** Note - Contained ounces of platinum, palladium, and gold in the Inferred category do not include the Spruce Road deposit.

One of largest Platinum Group and Gold Resources Outside of South Africa

The updated AMEC resource statement highlights a growing platinum group metals (PGM) and gold resource of 21.2 million ozs. Indicated TPM and 12.8 million ozs. Inferred TPM, which is one of the world's largest palladium and platinum resources outside of South Africa. A detailed contained metal tabulation for platinum and palladium in the TMM resource is shown in Table 3:

Table 3 - PRECIOUS METALS CONTAINED IN INDICATED AND INFERRED MINERAL RESOURCES

Updated Mineral Resources

Twin Metals Minnesota LLC, is the joint venture company between Duluth Metals Limited (60% ownership interest) and Antofagasta plc (40% ownership interest). In 2011, Twin Metals Minnesota LLC acquired Franconia Minerals Corporation. Franconia`s principal assets are a 70% interest in the Birch Lake, "old Maturi" (not including former Nokomis property) and Spruce Road deposits through the Birch Lake Joint Venture, with Beaver Bay Resources owning the remaining 30%. Franconia announced in November, 2010 its intention to increase its ownership at the Birch Lake Joint Venture to 82% upon commencement of production. All of the forgoing Indicated and Inferred Mineral Resources, and Exploration Target tonnages are expressed as a 100% ownership position.

The Mineral Resource estimate for the Maturi deposit incorporate assay data from 444 drill holes and 154 wedge off-set holes totalling 1,328,000 feet drilled on the Maturi deposit between 2006 and 2012, in addition to information from 99 legacy holes also in the geologic data base. The Birch Lake deposit resource estimate incorporates assay data from 97 drill holes and 146 wedge off-set holes totalling 297,000 feet drilled between 2000 and 2012, and information from an additional 17 legacy drill holes and 8 wedge off-set holes. The Spruce Road deposit resource estimate incorporates assay data from 210 legacy holes. The effective date of the mineral resource estimate is September 15, 2012.

Figure 1 is a map showing the Indicated and Inferred boundaries and the Exploration Target Areas which can be found as part of this press release on the Company website at www.duluthmetals.com.

The November 2012 Resource Estimates for the Maturi, Birch Lake and Spruce Road deposits are based on a 0.3% copper cut-off grade to define the resource model. Based on AMEC`s review of metal prices, process recoveries, refining costs and underground mine operating costs likely to apply at the Twin Metals site, the 0.3% copper cut-off grade (highlighted) is considered the base case for the statement of Indicated and Inferred Mineral Resources at this time. The estimates at the cut-off grades higher and lower than the base case are provided to show sensitivity of the estimates to cut-off grade.

Detailed Resource Tabulations

Tables of the updated resource tons and grades for various cut-offs are shown below for each deposit. The base case (0.3% Cu cut-off) is highlighted. The remaining cases are included to show the sensitivity of the estimates to changes in cut-off grades:

Table 4 - MATURI DEPOSIT INDICATED AND INFERRED MINERAL RESOURCES

Table 5 - BIRCH LAKE DEPOSIT INDICATED AND INFERRED MINERAL RESOURCES

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³ Maturi Deposit tonnages do not include 139 million tons of mineralized material excluded from the underground resource in a safety pillar.
⁴ CIM Definition Standards (2010) were followed for Mineral Resource estimation and classification.
⁵ TPM is defined as Au + Pt + Pd.

Table 6 - SPRUCE ROAD DEPOSIT INFERRED MINERAL RESOURCE

Exploration Target Area Tonnage and Grade Ranges

Similar to the June 2012 interim report, AMEC has again highlighted additional potential resources outside of the three mineral resources which occur on an additional 12% of the footprint of the Twin Metals Minnesota property. In addition to the TMM global resource, Exploration Targets have been outlined for four areas surrounding and adjacent to the Maturi and Birch Lake deposits. The grade and tonnage ranges of the four exploration targets are based on limited drill hole results. The potential quantity and grade of the Exploration Targets are conceptual in nature, and there has been insufficient exploration to define the target as a mineral resource, and it is uncertain if further exploration will result in the target being delineated as a mineral resource.

Maturi

The area inside the Maturi model perimeter surrounding the boundary of the Mineral Resource estimate was divided into two exploration targets, Maturi North and Maturi South. An additional exploration target, Maturi West, lies outside and to the west of the current model area. The tonnage and grades of the Maturi North exploration target could range from 290 to 435 million tons grading 0.41 to 0.61% Cu, 0.14 to 0.21 %Ni, 0.10 to 0.14 ppm Pt, 0.24 to 0.34 ppm Pd, and 0.07 to 0.07 ppm Au. The tonnage and grades of the Maturi South exploration target could range from 330 to 500 million tons grading 0.42 to 0.62 %Cu, 0.13 to 0.19 %Ni, 0.14 to 0.21 ppm Pt, 0.31 to 0.45 ppm Pd, and 0.07 to 0.10 ppm Au. The tonnage and grades of the Maturi West exploration target could range from 600 to 980 million tons grading 0.41 to 0.52 %Cu, 0.15 to 0.18 %Ni, 0.10 to 0.14 ppm Pt, 0.27 to 0.31 ppm Pd, and 0.07 to 0.07 ppm Au. The ranges of PGE values stated for Maturi West are based on regression formulas.

Birch Lake

The Birch Lake exploration target includes the area inside the Birch Lake model perimeter surrounding the Indicated and Inferred Mineral Resources. The tonnage and grades of the Birch Lake exploration target could range from 222 to 334 million tons grading 0.33 to 0.50 %Cu, 0.11 to 0.16 %Ni, and 0.39 to 0.58 ppm TPM.

About the Resource Estimates

The figures for resources presented herein, including the anticipated tonnages and grades that may be achieved or the indicated level of recovery that may be realized, are estimates, and no assurances can be given that they will be realized during production. Such estimates are, in large part, based on interpretations of geological data obtained from drill holes and other sampling techniques. Actual mineralization or favourable host rock units may be different from those predicted. It may also take many years from the initial phase of drilling before production is possible, and during that time the economic feasibility of exploiting a deposit may change.

The Company's business of mineral exploration has a high level of inherent risk. Although the Company is optimistic about the potential of many of its projects, there is no guarantee that any mineral deposits will be economically feasible and that these deposits will be put into production. The Company's exploration and development activities may also be affected by a number of risks, including environmental, metallurgical, financing, permitting, approval, legislative and other government risks which are normal to the industry and are referenced in greater detail in the Company's Annual Information Form.

For the purposes of assessing reasonable prospects of economic recovery and appropriate cut-off grade, the following assumptions were used:

• Average mining costs: $16/t (all underground mining; long hole open stoping with backfill)
• Average process costs: $12/t (flotation concentrate followed by hydrometallurgical processing using Teck Resources Limited ("Teck") CESL™ process⁶)
• G&A costs: $2/t

Underground potentially mineable shapes were constrained by geology and the mine modeling software used was Vulcan™. The Maturi resource was estimated using Ordinary Kriging with a maximum block size of 25 x 25 x 15 feet. Indicated Mineral Resources generally extend 250 feet from well-drilled areas showing continuity in NSR values and geological geometry. Areas defined by only legacy drilling are not included within the Indicated Mineral Resource outline. The Inferred Mineral Resource boundary typically extends 500 feet from well-drilled areas showing continuity in NSR values and geological geometry. A variable tonnage factor was used, but the average tonnage factor was 10.5 ft³/t. The metal prices used in the NSR calculation were mutually agreed upon by TMM, Antofagasta and AMEC on December 7, 2011 and have not changed for this estimate. Assumed metal prices and metallurgical recoveries are presented in Tables 7a and 7b.

Table 7a - NSR calculation parameters, Maturi Deposit

Table 7b - NSR calculation parameters, Birch Lake Deposit

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⁶ Teck has developed a hydrometallurgical process named CESL™, that effectively recovers copper, nickel and PGM's from bulk copper-nickel-PGM concentrates, which Duluth and Twin Metals are considering as a concentrate processing alternative. Concentrate from the Maturi group of deposits has been successfully processed at bench and pilot scale at Teck's hydrometallurgical facility in Richmond, BC with average recovery of metal from concentrate into saleable product form as reported in Table 7a and Table 7b.

For the non-legacy assay data utilized in these resource estimates, half core samples were prepared at ALS Minerals laboratories in Thunder Bay and then shipped to the ALS analytical facilities in Vancouver. Samples were analyzed for Au, Pt, and Pd using a 30g standard fire assay with an ICP-AES finish. An additional 33 elements were analyzed for using a four acid (near total) digestion and a combination of ICP-MS and ICP-AES. ICP over-limits for copper and nickel are re-analyzed using dissolution four acid (near total) digestion followed by ICP-AES or AAS. The remaining half core samples are being stored in Minnesota. A system of blanks, standards and quarter-core duplicates were added to the sample stream by Twin Metals Minnesota LLC to verify accuracy and precision of assay results, supplementing and verifying a variety of internal QA/QC tests performed by ALS Minerals.

All data verification and quality assurance/quality control procedures of Twin Metals Minnesota LLC were applied specifically to the results contained in this press release, and the data herein has been verified by Phillip Larson, P. Geo., Senior Geologist with Duluth Metals and a Qualified Person under NI 43-101, in accordance with the procedures of the Company. The data verification procedures and quality assurance/control procedures adopted by the Company and applied to the work being reported in this press release can be found in Section 11 of the "NI 43-101 Technical Report on the Maturi, Birch Lake, and Spruce Road Copper-Nickel-PGE Projects, Ely, Minnesota, USA", with an effective date of June 15, 2012, and dated July 27, 2012. The Technical Report was filed on SEDAR under the Company's profile on July 27, 2012 (www.sedar.com).

Dr. Harry Parker, SME, Registered Member, Technical Director of AMEC, is the Independent Qualified Person who prepared the Resource Estimate and is responsible for the mineral resource estimates summarized in this press release. Dr. Parker is a licensed Professional Geologist in the State of Minnesota. Phillip Larson, P. Geo. is the Qualified Person for Duluth Metals and Senior Geologist for Duluth Metals, in accordance with NI 43-101 of the Canadian Securities Administrators, and reviewed and approved the technical content of this press release.

About Duluth Metals Limited

Duluth Metals Limited is committed to acquiring, exploring and developing copper, nickel and platinum group metal (PGM) deposits. Duluth Metals has a joint venture with Antofagasta plc on the Twin Metals Project, located within the rapidly emerging Duluth Complex mining camp in north-eastern Minnesota. The Duluth Complex hosts one of the world's largest undeveloped repositories of copper, nickel and PGMs, including the world's third largest accumulation of nickel sulphides, and one of the world's largest accumulations of polymetallic copper and platinum group metals. Aside from the joint venture, Duluth Metals retains a 100% position on approximately 40,000 acres of mineral interests on exploration properties adjacent to and nearby the Twin Metals Minnesota LLC joint venture.

About Twin Metals Minnesota LLC

Twin Metals Minnesota, LLC, is a joint venture company, 60 percent owned by Duluth Metals Limited and 40 percent by Antofagasta plc. Twin Metals was formed in 2010 to pursue the development and operation of a copper, nickel and platinum group metals (strategic metals) underground mining project within the Duluth Complex in northeastern Minnesota. Twin Metals holds mineral and land assets of approximately 32,000 acres of leased and permitted land, including mineral resources prepared in compliance with the requirements of NI 43-101.

This press release contains forward-looking statements (including "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the US Private Securities Litigation Reform Act of 1995) relating to, among other things, the results of drilling operations of Duluth Metals and exploration and mine development. Generally, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Duluth Metals has relied on a number of assumptions and estimates in making such forward-looking statements, including, without limitation, the prices of copper, nickel and platinum group metals (PGMs) and the costs associated with continuing exploration and mining development. Such assumptions and estimates are made in light of the trends and conditions that are considered to be relevant and reasonable based on information available and the circumstances existing at this time. A number of risk factors may cause actual results, level of activity, performance or outcomes of such exploration and/or mine development to be materially different from those expressed or implied by such forward-looking statements including, without limitation, whether such discoveries will result in commercially viable quantities of such mineralized materials, the possibility of changes to project parameters as plans continue to be refined, the ability to execute planned exploration and future drilling programs, possible variations of copper, nickel and PGM grade or recovery rates, the need for additional funding to continue exploration efforts, changes in general economic, market and business conditions, and those other risks set forth in Duluth Metals' most recent annual information form under the heading "Risk Factors" and in its other public filings. Statements related to "reserves" and "resources" are deemed forward-looking statements as they involve the implied assessment, based on realistically assumed and justifiable technical and economic conditions, that an inventory of mineralization will become economically extractable. Forward-looking statements are not guarantees of future performance and such information is inherently subject to known and unknown risks, uncertainties and other factors that are difficult to predict and may be beyond the control of Duluth Metals. Although Duluth Metals has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors and risks that cause actions, events or results not to be as anticipated, estimated or intended. Consequently, undue reliance should not be placed on such forward-looking statements. In addition, all forward-looking statements in this press release are given as of the date hereof. Duluth Metals disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, save and except as may be required by applicable securities laws. The forward-looking statements contained herein are expressly qualified by this disclaimer.

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

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

Webpage: www.duluthmetals.com

Image with caption: "Figure 1 - Map of Twin Metals Minnesota Indicated Resources, Inferred Resources, and Exploration Target Areas. (CNW Group/Duluth Metals Limited)". Image available at: http://photos.newswire.ca/images/download/20121204_C5810_PHOTO_EN_21493.jpg

SOURCE: Duluth Metals Limited