Northisle Announces Positive PEA for the North Island Project Which Confirms it is One of the Most Attractive Cu-Au Projects in Canada

Press Release

February 4, 2021

Highlights

• The 2021 PEA confirms that the North Island Project is one of the most attractive copper-gold porphyry projects in Canada:

o Long mine life of 22 years with average annual production of 176 mm lbs Cu Eq. over the first 6 years, including 112 mm lbs of copper, 112 koz of gold and 2.7mm lbs of molybdenum

o Average annual after tax free cash flow of $321 million during the first 6 years and $224 million over the life of the operation

o First quartile AISC of $0.77/lb Cu (net of by-products) and $2.01/lb Cu Eq. over first 6 years o Attractive economics with $1.1 billion After-tax NPV (8%) and 19% After-tax IRR

o Attractive payback of 3.9 years driven by modest capex of $1.4 billion due to excellent infrastructure from historical mining and other industrial activity

• Northisle is committed to sustainable mine development:
• Northisle will pursue a collaborative, inclusive approach to consultation in order to develop a project which creates benefits for First Nations, local communities, shareholders and project stakeholders
• The Project benefits from renewable BC power and the Company will investigate multiple opportunities to reduce overall impact including electrified mining operations as part of trade-off studies
• Multiple opportunities to further improve the Project through optimization and exploration with prospective targets at Pemberton Hills, Red Dog and Hushamu planned for 2021 drilling

Vancouver, B.C. – Northisle Copper and Gold Inc. (TSX-V: NCX) (“Northisle” or the “Company”) is pleased to announce that the positive results from a Preliminary Economic Assessment (the “2021 PEA”) for its 100% owned North Island Project confirm it is one of the most attractive copper-gold porphyry projects in Canada.

The 2021 PEA is based on the Company’s 100% owned Red Dog and Hushamu deposits and has been developed with a focus on processing a target of 600MT of mineralized material within estimated mineable pit shells. The PEA contemplates a low strip ratio open pit mining operation which incorporates a 75,000 t/d concentrator and is anticipated to produce a high-quality copper concentrate with a significant gold by-product as well as a high-grade molybdenum concentrate.

Key performance indicators are summarized in Table 1 below.

Table 1: Summary Project Metrics

Production

AISC

After-tax Avg.

After-tax

After-

GHG Emissions

Free Cash Flow

NPV (8%)

tax IRR

(kg CO2e/lb)

Cu

Au

Cu Eq.

Cu

Cu Eq.

$ mm

$ mm

%

Cu

Cu Eq.

(mm lbs)

(koz)

(mm lbs)

($/lb)

($/lb)

First 6 years average

112.1

111.8

177.5

$0.77

$2.01

321

Life of mine (“LOM”)

95.9

99.9

155.9

$0.90

$2.14

224

1,059

19.0

0.66

0.41

average

Note: Cu Eq. based on Base Case metal prices and includes molybdenum. See Table 3 for details.

Sam Lee, President and CEO of Northisle commented, “I am delighted with the progress we have made in demonstrating that the North Island Project is one of the most attractive copper and gold development projects today.

The 2021 PEA illustrates a significant improvement in the potential of the North Island Project. Copper and gold production increased materially resulting in a significant increase in NPV and IRR, while all-in sustaining costs remain in the first quartile and initial capital is modest for a long-life and significant copper and gold asset. The concentrate planned to be produced by the North Island Project is anticipated to be a premium product which would be highly attractive to global smelters. Furthermore, the significant gold production is anticipated to provide several options for lower cost capital financings. We are excited to be advancing what we believe is one of the most attractive Canadian copper projects during the start of a new mining super cycle.

There exists a multitude of opportunities to develop a mine that is truly sustainable in all respects. We are excited to continue our consultation work with First Nations, local communities, governments, and key project stakeholders as we advance this important and compelling project. We have direct access to clean power in British Columbia that will drive our project towards becoming a lower carbon emissions operation. Over the coming months, we will continue to optimize key project parameters to create additional value for shareholders while focusing on reducing the impact of the North Island Project.

Exploration activities will also be reactivated in 2021 with an initial drill program focusing on three main areas: Red Dog, Pemberton Hills, and Hushamu. Program objectives include increasing tonnage and grade for the North Island Project, confirming the existence of a larger, higher grade copper-gold porphyry system at Pemberton Hills, and exploring multiple targets over our vast 33,000 ha property.

Our leadership team is fully committed to realizing our vision of making Northisle Canada’s leading sustainable resource development company.”

The Company will host a conference call and webcast on Thursday, February 4, 2021 at 11:00 AM Eastern time (8:00 AM Pacific time). Details to access the call can be found below.

2021 PEA Summary

The 2021 PEA was prepared in accordance with National Instrument 43-101 (“NI43-101”) by M3 Engineering & Technology Corp. (“M3”) in conjunction with an updated mine plan prepared by John Nilsson, an updated Mine Waste Facility (“MWF”) design prepared by Golder Associates Ltd. (Golder) and updated metallurgical testwork performance by SGS Canada Inc. (“SGS”). The team was led by Cam Brown, P. Eng. (Nova Scotia) on behalf of Northisle. The Company plans to file the complete 2021 PEA report on SEDAR at www.sedar.com within 45 days of this press release. The 2021 PEA updates the previously published study on the North Island Project, titled “North Island Copper and Gold Project, NI43-101 Technical Report, Preliminary Economic Assessment” and dated October 24, 2017 (the “2017 PEA”). Table 2 summarizes the key findings of the 2021 PEA.

Table 2: 2021 PEA Economic Highlights

	Base Case Economics	Units	Pre-tax	After-tax
	Net Present Value (NPV 8%)	$ millions	1,494	1,059
	Net Present Value (NPV 8%)	US$ millions	1,121	795
	Internal Rate of Return	%	21.7%	19.0%
	Payback	Years	3.9	3.9
	Initial Capital Cost	$ millions		1,442
	Sustaining Capital Cost	$ millions		197
	Economic Assumptions	Units		Base Case
	Copper	US$/lb		$3.25
	Gold	US$/oz		$1,650
	Molybdenum	US$/lb		$10.00
	Rhenium	US$/kg		$1,256
	CAD:USD Exchange Rate	US$/C$		0.75
	Financial Metrics	Units	First 6 years	LOM
	Average Annual Revenue	$ millions	740	649
	Average Annual Operating Costs	$ millions	340	301
	Avg. Ann. Free Cash Flow (after tax)	$ millions	321	224

The 2021 PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the project described in the 2021 PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Table 3 provides a summary of the key operating metrics from the 2021 PEA.

Table 3: 2021 PEA Operating Highlights

Operating Statistics	Units	Avg. First 6 years	Avg. LOM
Mine Life	Years		22
Tonnes Processed	MT	27,060	27,289
Strip Ratio	W:O	1.04	0.71
Production
Copper	mm lbs	112,1	95.8
Gold	koz	111.8	99.9
Molybdenum	klbs	2,726	2,954
Cu Eq.	mm lbs	175.6	154.1
Cash Cost – Cu with by-products	$/lb	$0.75	$0.81
Cash Cost – Cu Eq	$/lb	$2.00	$2.09
AISC – Cu with by-products	$/lb	$0.77	$0.90
AISC – Cu Eq	$/lb	$2.01	$2.14

By-products and Cu Eq. calculated at Base Case metal prices

Economic Sensitivity

Table 4 summarizes the after-tax sensitivities of NPV and IRR to metal prices.

IBF4