UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

As at August 18, 2015

Commission File Number: 001-32210

NORTHERN DYNASTY MINERALS LTD.
(Translation of registrant's name into English)

15th Floor - 1040 W. Georgia St.
Vancouver, British Columbia
Canada V6E 4H1

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

[ x ] Form 20-F   [   ] Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [           ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [           ]


SUBMITTED HEREWITH

Exhibits

  99.1 Condensed Consolidated Interim Financial Statements June 30, 2015
     
  99.2 Management's Discussion and Analysis
     
  99.3 Form 52-109F2 Certification of Interim Filings - Full Certificate - CEO
     
  99.4 Form 52-109F2 Certification of Interim Filings - Full Certificate - CFO

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  Northern Dynasty Minerals Ltd.
  (Registrant)
     
Date: August 18, 2015 By: /s/ Marchand Snyman
   
    Marchand Snyman
  Title: Director, Chief Financial Officer

 






CONDENSED CONSOLIDATED INTERIM
 FINANCIAL STATEMENTS

 

THREE AND SIX MONTHS ENDED
JUNE
30, 2015

 

(Expressed in thousands of Canadian Dollars)

(Unaudited)



Northern Dynasty Minerals Ltd.
Condensed Consolidated Interim Statements of Financial Position
(Unaudited - Expressed in thousands of Canadian Dollars)

        June 30     December 31  
    Notes   2015     2014  
                 
ASSETS                
                 
Non-current assets                
   Mineral property, plant and equipment   3 $  132,891   $  123,608  
Total non-current assets       132,891     123,608  
                 
Current assets                
   Available-for-sale financial assets   4   167     287  
   Amounts receivable and prepaid expenses   5   523     962  
   Restricted cash   6 (b)   1,233     1,206  
   Cash and cash equivalents   6 (a)   814     9,447  
Total current assets       2,737     11,902  
                 
                 
Total Assets     $  135,628   $  135,510  
                 
EQUITY                
                 
Capital and reserves                
   Share capital   7 $  399,888   $  389,227  
   Reserves       86,344     84,031  
   Deficit       (357,319 )   (345,295 )
Total Equity       128,913     127,963  
                 
LIABILITIES                
                 
Non-current liabilities                
   Deferred income taxes           1,514  
Total non-current liabilities           1,514  
                 
Current liabilities                
   Payable to a related party   8 (b)   275     383  
   Trade and other payables   9   6,440     5,650  
Total current liabilities       6,715     6,033  
                 
Total Liabilities       6,715     7,547  
                 
                 
Total Equity and Liabilities     $  135,628   $  135,510  

Continuance of Operations (note 1)
Commitments (note 12)

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

These condensed consolidated interim financial statements are signed on the Company's behalf by:

/s/ Ronald W. Thiessen /s/ Peter Mitchell
   
Ronald W. Thiessen Peter Mitchell
Director Director

Page 2



Northern Dynasty Minerals Ltd.
Condensed Consolidated Interim Statements of Comprehensive Loss
(Unaudited - Expressed in thousands of Canadian Dollars, except for share information)

      Three months ended June 30     Six months ended June 30  
        2015     2014     2015     2014  
    Notes         (note 2 (b))         (note 2 (b))
                             
Expenses                            
   Exploration and evaluation expenses   11 $  1,484   $  2,952   $  3,558   $  6,980  
   General and administrative expenses   11   1,567     2,150     3,383     4,820  
   Legal, accounting and audit       2,922     1,281     6,170     1,436  
   Share-based compensation   7 (c)   41     699     401     2,798  
Loss from operating activities       6,014     7,082     13,512     16,034  
   Foreign exchange loss (gain)       23     (55 )   107     (285 )
   Interest income       (63 )   (48 )   (81 )   (289 )
Loss before tax       5,974     6,979     13,538     15,460  
   Deferred income tax recovery       (196 )   (108 )   (1,514 )   (126 )
Loss for the period     $  5,778   $  6,871   $  12,024   $  15,334  
                             
Other comprehensive loss (income)                            
Items that may be reclassified subsequently to loss                            
   Foreign exchange translation loss (gain)   7 (d)   1,864     4,164     (9,318 )   (239 )
   Decrease in fair value of available-for-sale financial assets   4   28         120      
Other comprehensive loss (income) for the period     $  1,892   $  4,164   $  (9,198 ) $  (239 )
                             
Total comprehensive loss for the period     $  7,670   $  11,035   $  2,826   $  15,095  
                             
Basic and diluted loss per common share   10 $  0.04   $  0.07   $  0.09   $  0.16  

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

Page 3



Northern Dynasty Minerals Ltd.
Condensed Consolidated Interim Statements of Cash Flows
(Unaudited - Expressed in thousands of Canadian Dollars)

      Six months ended June 30  
    Notes   2015     2014  
                 
Cash flows from operating activities                
   Loss for the period     $  (12,024 ) $  (15,334 )
   Adjustments for items not affecting cash or operating activities:                
       Depreciation       131     143  
       Deferred income tax recovery       (1,514 )   (126 )
       Foreign exchange loss (gain)       104     (301 )
       Interest received on cash held       (81 )   (156 )
       Interest receivable on loan prior to settlement           (133 )
       Loss on disposal of plant and equipment       5     59  
       Share-based compensation       401     2,798  
   Changes in non-cash working capital items                
       Restricted cash   6 (b)   61     12  
       Amounts receivable and prepaid expenses       448      
       Trade and other payables       550     (178 )
       Payable to related party       (108 )   (243 )
                 
                 
Net cash used in operating activities       (12,027 )   (13,459 )
                 
Cash flows from investing activities                
   Acquisition of plant and equipment   3   (28 )    
   Disposal of equipment   3   70      
   Interest received on cash held       81     156  
Net cash from investing activities       123     156  
                 
Cash flows from financing activity                
Special Warrants issued, net of issuance costs   7 (b)   3,375      
Net cash from financing activity       3,375      
                 
Net decrease in cash and cash equivalents       (8,529 )   (13,303 )
   Effect of exchange rate fluctuations on cash held       (104 )   69  
   Cash and cash equivalents at beginning of the period       9,447     25,795  
                 
Cash and cash equivalents at end of the period   6 (a) $  814   $  12,561  
                 
Non-cash investing and financing activities:                
   The Company converted Special Warrants on a one-for-one basis into common shares at no additional cost to holder (note 7(b))  
   The Group received title to mineral claims in settlement of a loan receivable in 2014 (note 3)        

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

Page 4



Northern Dynasty Minerals Ltd.
Condensed Consolidated Interim Statements of Changes in Equity
(Unaudited - Expressed in thousands of Canadian Dollars, except for number of shares)

    Share capital     Reserves              
                      Foreign                          
                Equity settled     currency                          
                share-based     translation       Investment     Special              
    Number of           payments     reserve     revaluation     Warrants              
    shares     Amount     reserve     (note 7(d))     reserve     (note 7(b))      Deficit     Total equity  
                                                 
Balance at January 1, 2014   95,009,864   $  389,227   $  51,417   $  7,234   $  (2 ) $  –   $  (313,948 ) $  133,928  
Share-based compensation           2,798                     2,798  
   Loss for the period                           (15,334 )   (15,334 )
   Other comprehensive income for the period               239                 239  
Total comprehensive loss                                             (15,095 )
                                                 
Balance at June 30, 2014   95,009,864   $  389,227   $  54,215   $  7,473   $  (2 ) $  –   $  (329,282 ) $  121,631  
                                                 
Balance at January 1, 2015   95,009,864   $  389,227   $  55,294   $  17,179   $  6   $  11,552   $  (345,295 ) $  127,963  
Conversion of Special Warrants into common shares   25,684,721     10,661                 (10,661 )        
Special Warrants issued, net of transaction costs                       3,375         3,375  
Share-based compensation           401                     401  
   Loss for the period                           (12,024 )   (12,024 )
   Other comprehensive income (loss) for the period               9,318     (120 )           9,198  
Total comprehensive loss                                             (2,826 )
                                                 
Balance at June 30, 2015   120,694,585   $  399,888   $  55,695   $  26,497   $  (114 ) $  4,266   $  (357,319 ) $  128,913  

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

Page 5



Northern Dynasty Minerals Ltd.  
Notes to the Condensed Consolidated Interim Financial Statements  
For the three and six months ended June 30, 2015 and 2014
(Unaudited – Expressed in thousands of Canadian Dollars, unless otherwise stated, except per share or option)

1.

NATURE AND CONTINUANCE OF OPERATIONS

Northern Dynasty Minerals Ltd. (the "Company") is incorporated under the laws of the Province of British Columbia, Canada, and its principal business activity is the exploration of mineral properties. The Company is listed on the Toronto Stock Exchange ("TSX") under the symbol "NDM" and on the New York Stock Exchange-MKT ("NYSE-MKT") under the symbol "NAK". The Company’s corporate office is located at 1040 West Georgia Street, 15th floor, Vancouver, British Columbia.

The condensed consolidated interim financial statements ("Financial Statements") of the Company as at and for the period ended June 30, 2015, include financial information for the Company and its subsidiaries (note 2(c)) (together referred to as the "Group" and individually as "Group entities"). The Company is the ultimate parent. The Group operates in a single and geographical reportable operating segment which is the acquisition, exploration and development of its core mineral property interest, the Pebble Copper-Gold-Molybdenum Project (the "Pebble Project") located in Alaska, United States of America ("USA" or "US").

The Group is in the process of exploring and developing the Pebble Project and has not yet determined whether the Pebble Project contains mineral reserves that are economically recoverable. The Group’s continuing operations, and the underlying value and recoverability of the amounts shown for the Group’s mineral property interest, are entirely dependent upon the existence of economically recoverable mineral reserves; the ability of the Group to obtain financing to complete the exploration and development of the Pebble Project; the Group obtaining the necessary permits to mine; and future profitable production or proceeds from the disposition of the Pebble Project.

As at June 30, 2015, the Group had 0.8 million in cash and cash equivalents for its operating requirements. After the reporting period, on August 10, 2015, the Group announced that it intends to raise up to $20.0 million through a combination of an equity financing of $10-$15 million through the issuance of Special Warrants and an acquisition of an inactive TSX Venture listed entity whose primary asset is cash of $4.7 million (note 13). The Group has prioritized the allocation of these funds to meet key corporate and Pebble Project expenditure requirements in the near term and additional financing will be required in order to progress material expenditures at the Pebble Project in 2016. Additional financing may include any of or a combination of debt, equity and/or contributions from possible new Pebble Project participants. There can be no assurances that the Group will be successful in obtaining additional financing. If the Group is unable to raise the necessary capital resources and generate sufficient cash flows to meet obligations as they come due, the Group may, at some point, consider reducing or curtailing its operations. As such there is material uncertainty that casts substantial doubt about the Company’s ability to continue as a going concern. Management has concluded that going concern is appropriate in the presentation of these Financial Statements due to the anticipated financing discussed above.

In July 2014, the United States Environmental Protection Agency (the "EPA") announced a proposal under Section 404(c) of the Clean Water Act to restrict and impose limitations on all discharges of dredged or fill material ("EPA Action") associated with mining the Pebble deposit. The Company believes that the EPA does not have the statutory authority to impose conditions on the development at Pebble prior to the submission of a detailed development plan and its thorough review by federal and state agencies, including review under the National Environmental Protection Act ("NEPA"). The Pebble Limited Partnership (the “Pebble Partnership”), a wholly-owned subsidiary of the Company, along with the State of Alaska and the Alaska Peninsula Corporation, an Alaska Native village corporation with extensive land holdings in the Pebble Project area, filed for an injunction to stop the EPA Action with the US Federal Court in Alaska (the "Court"). However, the Court has deferred judgment thereon until the EPA has issued a final determination. The Company has appealed the Court’s decision to the 9th Circuit Court of Appeals. The appeal was denied in May 2015. The Pebble Partnership still holds the option to pursue its statutory authority case in the instance that EPA finalizes a pre-emptive regulatory action under the Clean Water Act 404(c). In September 2014, the Pebble Partnership initiated a second action against the EPA in federal district court in Alaska charging that the EPA violated the Federal Advisory Committee Act ("FACA"). In November 2014, the U.S. federal court judge in Alaska granted, in relation to the FACA case, the Pebble Partnership’s request for a preliminary injunction, which, although considered by the Company as a significant procedural milestone in the litigation, does not resolve the Pebble Partnership’s claims that the EPA Actions with respect to the Bristol Bay Assessment and subsequent 404(c) regulatory process, violated FACA. In June 2015, in a U.S. federal court decision, the EPA’s motion to dismiss the FACA case was rejected and as a result the FACA case will move forward. The Company expects its legal rights will be upheld by the Court and that the Company will ultimately be able to apply for the necessary permits under NEPA. On October 14, 2014, the Pebble Partnership filed suit in the federal district court in Alaska charging that the EPA has violated the Freedom of Information Act by improperly withholding documents related to the Pebble Project, the Bristol Bay Watershed Assessment and consideration of a pre-emptive 404(c) veto under the Clean Water Act. The EPA has moved for summary judgment claiming that its search for and disclosure of documents was adequate. The Pebble Partnership has opposed the motion pointing out several deficiencies in the EPA’s search parameters and pointing out the agency’s overly broad assertion of the deliberative process privilege to withhold documents.

 Page 6



Northern Dynasty Minerals Ltd.  
Notes to the Condensed Consolidated Interim Financial Statements  
For the three and six months ended June 30, 2015 and 2014
(Unaudited – Expressed in thousands of Canadian Dollars, unless otherwise stated, except per share or option)

2.

SIGNIFICANT ACCOUNTING POLICIES


(a)

Statement of Compliance

   

These Financial Statements have been prepared in accordance with IAS 34, Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB") and interpretations issued by the IFRS Interpretations Committee ("IFRIC"s). They do not include all of the information required by International Financial Reporting Standards ("IFRS") for complete annual financial statements, and should be read in conjunction with the Group’s consolidated financial statements as at and for the year ended December 31, 2014, which were filed. Accordingly, accounting policies applied other than as noted in (e) below are the same as those applied in the Group’s annual financial statements. These Financial Statements were authorized for issue by the Audit and Risk Committee of the Board of Directors on August 13, 2015.

   
(b)

Basis of Preparation

   

These Financial Statements have been prepared on a historical cost basis using the accrual basis of accounting, except for cash flow information and for financial instruments classified as available-for-sale, which are stated at their fair value.

   

Comparative information in the statement of loss and comprehensive loss has been reclassified to separately reflect legal, accounting and audit expenditures, which line item is predominantly comprised of legal costs incurred by the Group in response to the EPA’s activities surrounding the Pebble Project. These expenditures were previously included under general and administrative expenditures. There is no impact of the expense reclassification on loss and comprehensive loss for the period or basic and diluted loss per share. Statements of financial position, cash flows and changes in equity are not affected.

   
(c)

Basis of Consolidation

   

These Financial Statements incorporate the financial statements of the Company, the Company’s subsidiaries and entities controlled by the Company and its subsidiaries listed below:

Page 7



Northern Dynasty Minerals Ltd.  
Notes to the Condensed Consolidated Interim Financial Statements  
For the three and six months ended June 30, 2015 and 2014
(Unaudited – Expressed in thousands of Canadian Dollars, unless otherwise stated, except per share or option)

  Place of    
Name of Subsidiary Incorporation Principal Activity Ownership
0796412 BC Ltd.
British Columbia,
Canada
Not active. Wholly-owned
subsidiary of the Company.
100%
3537137 Canada Inc.1

Canada

Holding Company. Wholly-
owned subsidiary of the
Company.
100%

Pebble Services Inc.

Nevada, USA

Management and services
company. Wholly-owned
subsidiary of the Company.
100%

Northern Dynasty Partnership

Alaska, USA

Holds 99.9% of the Pebble
Limited Partnership ("PLP") and
100% of Pebble Mines Corp.
100%
(indirect)
Pebble Limited Partnership

Alaska, USA

Holding Company and
Exploration of the Pebble
Project.
100%
(indirect)
Pebble Mines Corp.
Delaware, USA
General Partner. Holds 0.1% of
PLP.
100%
(indirect)
Pebble West Claims Corporation 2
Alaska, USA
Holding Company. Wholly-
owned subsidiary of PLP.
100%
(indirect)
Pebble East Claims Corporation 3
Alaska, USA
Holding Company. Wholly-
owned subsidiary of PLP.
100%
(indirect)
U5 Resources Inc.4

Nevada, USA

Holding Company. Wholly-
owned subsidiary of the
Company.
100%

Notes to the table above:

  1.

Holds 20% interest in the Northern Dynasty Partnership. The Company holds the remaining 80% interest.

  2.

Holds certain of the Pebble Project claims.

  3.

Holds certain of the Pebble Project claims and claims located south and west of the Pebble Project claims. In January 2015, two of the Company’s wholly-owned subsidiaries, Kaskanak Inc. and its wholly-owned parent, Kaskanak Copper LLC, were merged with Pebble East Claims Corporation, with the latter surviving the merger.

  4.

Holds certain mineral claims located north of the Pebble Project claims.


(d)

Significant Accounting Estimates and Judgments

   

There was no change in the use of estimates and judgments during the current period as compared to those described in Note 2 in the Group’s Consolidated Financial Statements for the year ended December 31, 2014.

   
(e)

Amendments, Interpretations, Revised and New Standards Adopted by the Group

   

As of January 1, 2015 the Group has not adopted any new amendments, interpretations, revised and new standards.

Page 8



Northern Dynasty Minerals Ltd.  
Notes to the Condensed Consolidated Interim Financial Statements  
For the three and six months ended June 30, 2015 and 2014
(Unaudited – Expressed in thousands of Canadian Dollars, unless otherwise stated, except per share or option)

(f)

Accounting Standards, Amendments and Revised Standards Not Yet Effective

     

Effective for annual periods commencing on or after January 1, 2018

     
  • IFRS 9, Financial Instruments ("IFRS 9"), replaces IAS 39, Financial Instruments: Recognition and Measurement, in its entirety. The standard incorporates a number of improvements: a) includes a logical model for classification and measurement (IFRS 9 provides for principle-based approach to classification which is driven by cash flow characteristics and the business model in which an asset is held); b) includes a single, forward-looking "expected loss" impairment model (IFRS 9 will require entities to account for expected credit losses from when financial instruments are first recognized and to recognize full lifetime expected losses on a timely basis); and c) includes a substantially-reformed model for hedge accounting with enhanced disclosures about risk management activity (IFRS 9’s new model aligns the accounting treatment with risk management activities). IFRS 9 is effective for annual periods beginning on or after 1 January 2018 with early adoption permitted.

         

    The Group anticipates that the adoption of IFRS 9 will have no material impact on its financial statements given the extent of its current use of financial instruments in the ordinary course of business.

         
  • IFRS 15, Revenue from Contracts with Customers ("IFRS 15"), which was issued by the IASB in May 2014, supersedes IAS 11, Construction Contracts, IAS 18, Revenue, IFRIC 13, Customer Loyalty Programs, IFRIC 15, Agreements for the Construction of Real Estate, IFRIC 18, Transfers of Assets from Customers, and SIC 31, Revenue Barter Transactions involving Advertising Services. IFRS 15 establishes a single five-step model framework for determining the nature, amount, timing and certainty of revenue and cash flows arising from a contract with a customer. IFRS 15 is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. In May 2015, the IASB issued an exposure draft for comments on the proposal to defer the effective date of IFRS 15 by one year. On July 22, 2015, following a public consultation, the IASB confirmed the one year deferral.

         

    The Group anticipates that the adoption of IFRS 15 is unlikely to have a material impact on its financial statements given the extent of revenue from contracts with customers in the ordinary course of business.

    Page 9



    Northern Dynasty Minerals Ltd.  
    Notes to the Condensed Consolidated Interim Financial Statements  
    For the three and six months ended June 30, 2015 and 2014
    (Unaudited – Expressed in thousands of Canadian Dollars, unless otherwise stated, except per share or option)

    3.

    MINERAL PROPERTY, PLANT AND EQUIPMENT

    The Group’s exploration and evaluation assets are comprised of the following:

    Six months ended June 30, 2015   Mineral property     Plant and     Total  
        interest     equipment        
    Cost                  
    Beginning balance $  112,541   $  1,155   $  113,696  
    Additions       28     28  
    Disposals       (151 )   (151 )
    Ending balance $  112,541   $  1,032   $  113,573  
                       
    Accumulated depreciation                  
    Beginning balance $  –   $  (278 ) $  (278 )
    Charge for the period       (131 )   (131 )
    Reversal of accumulated depreciation on disposal       76     76  
    Ending balance $  –   $  (333 ) $  (333 )
                       
    Foreign currency translation difference   19,484     167     19,651  
                       
    Net carrying value – Ending balance $  132,025   $  866   $  132,891  

    Year ended December 31, 2014   Mineral property     Plant and     Total  
        interest     equipment        
    Cost                  
    Beginning balance $  106,697   $  1,222   $  107,919  
    Additions (1)   5,844         5,844  
    Disposals       (67 )   (67 )
    Ending balance $  112,541   $  1,155   $  113,696  
                       
    Accumulated depreciation                  
    Beginning balance $  –   $  –   $  –  
    Charge for the period       (282 )   (282 )
    Eliminated on disposal       4     4  
    Ending balance $  –   $  (278 ) $  (278 )
                       
    Foreign currency translation difference $  10,095   $     $    
              95     10,190  
                       
    Net carrying value – Ending balance $  122,636   $  972   $  123,608  

      (1)

    Additions to mineral property interest represent the transfer to the Group of a 100% interest in certain mineral claims located north and north west of the Pebble Project in settlement of a loan to a third party.

    The Group’s mineral property represents the Pebble Project and adjacent mineral claims, located in southwest Alaska, 19 miles (30 kilometers) from the villages of Iliamna and Newhalen, and approximately 200 miles (320 kilometers) southwest of the city of Anchorage. Mineral rights relating to the Pebble Project were acquired by the Group in 2001. In July 2007, the Group established the Pebble Limited Partnership (the "Pebble Partnership") to advance the Pebble Project toward the feasibility stage. The Group’s contribution to the Pebble Partnership was the Pebble Project. Until December 2013, the Pebble Partnership was under joint control and funded by the Group`s partner who provided approximately $595 million (US$573 million) in funding. The Group reacquired a 100% interest in the Pebble Partnership and control of the Pebble Project in December 2013.

    Page 10



    Northern Dynasty Minerals Ltd.  
    Notes to the Condensed Consolidated Interim Financial Statements  
    For the three and six months ended June 30, 2015 and 2014
    (Unaudited – Expressed in thousands of Canadian Dollars, unless otherwise stated, except per share or option)

    4.

    AVAILABLE-FOR-SALE FINANCIAL ASSETS

    The Group’s available-for-sale financial asset is comprised of investments in marketable securities of Canadian publicly listed companies.

          June 30     December 31  
          2015     2014  
              $    
      Marketable securities $  167     287  

    The Group has determined the fair value of the marketable securities that comprise its available-for-sale financial assets using their quoted market prices, which are level 1 inputs in the fair value hierarchy.

    5.

    AMOUNTS RECEIVABLE AND PREPAID EXPENSES


          June 30     December 31  
          2015     2014  
              $    
      Sales tax receivable $  56     70  
      Amounts receivable   194     143  
      Prepaid expenses   273     749  
              $    
      Total $  523     962  

    6.

    CASH AND CASH EQUIVALENTS AND RESTRICTED CASH


    (a)

    Cash and Cash Equivalents


          June 30     December 31  
          2015     2014  
        $     $    
      Business and savings accounts   814     9,130  
      Guaranteed investment certificates       317  
        $     $    
      Total   814     9,447  

    (b)

    Restricted Cash

       

    At June 30, 2015, restricted cash in the amount of $1,233 (December 31, 2014 – $1,206) was held by the Pebble Partnership for certain equipment demobilization expenses relating to its activities undertaken when it was subject to joint control. This cash is not available for general use by the Group. The Group has a current obligation (note 9) to refund to Anglo American any unutilized balance upon the earlier of (i) 60 days from the date of completion of demobilization and (ii) December 31, 2015.


          Page 11



    Northern Dynasty Minerals Ltd.  
    Notes to the Condensed Consolidated Interim Financial Statements  
    For the three and six months ended June 30, 2015 and 2014
    (Unaudited – Expressed in thousands of Canadian Dollars, unless otherwise stated, except per share or option)

    7.

    CAPITAL AND RESERVES


    (a)

    Authorized Share Capital

       

    At June 30, 2015, the Company’s authorized share capital comprised an unlimited (2014 – unlimited) number of common shares with no par value. All issued shares are fully paid.

       
    (b)

    Special Warrants

       

    In December 2014, the Company initiated a private placement financing (the “Private Placement”) of 35,962,735 share purchase warrants (the "Special Warrants") at a price of $0.431 per Special Warrant for gross proceeds of approximately $15,500, of which $11,905 was received in December 2014 and $3,595 was received in January 2015. The Group incurred a total of $573 in advisory, finders, regulatory, and legal fees on the Private Placement, of which $353 was incurred in December 2014 and $220 in the period ended June 30, 2015.


      Continuity of Special Warrants   Number  
      Balance at January 1, 2015   27,622,642  
      Issued January 2, 2015   1,160,093  
      Issued January 12, 2015   7,180,000  
      Conversion into the Company’s common shares on a one–for–one basis   (25,684,721 )
      Balance at June 30, 2015 (i)   10,278,014  

      (i)

    On July 3, 2015, these outstanding Special Warrants were converted into an equivalent number of common shares in the Company.

    Each Special Warrant was convertible, without payment of any additional consideration by the holder, into one common share of the Company, either at the option of the holder or automatically within a maximum of a two year period from the issuance date. Of the total number of Special Warrants converted as of June 30, 2015, 15,741,132 were converted during the three month period ended June 30, 2015.

    The Special Warrants did not confer on their holders any right as a shareholder of the Company, including but not limited to any right to vote at any meeting of shareholders or any other proceedings of the Company, other than meetings by holders of Special Warrants, or any right to receive any dividend or other distribution.

    (c)

    Share Purchase Option Compensation Plan

       

    The following reconciles share purchase options ("Options") outstanding for the six months ended June 30, 2015 and 2014:


          2015     2014  
                Weighted           Weighted  
                average           average  
                exercise           exercise  
          Number of     price     Number of     price  
      Continuity of Options   Options     ($/Option)     Options     ($/Option)  
      Balance at beginning of period   7,687,000     1.95     3,735,700     4.13  
         Granted           5,675,100     1.59  
         Expired   (1,241,800 )   3.00     (1,839,600 )   5.12  
         Forfeited   (202,500 )   2.43     (2,600 )   1.77  
      Balance at end of period   6,242,700     1.72     7,568,600     1.99  

    Page 12



    Northern Dynasty Minerals Ltd.  
    Notes to the Condensed Consolidated Interim Financial Statements  
    For the three and six months ended June 30, 2015 and 2014
    (Unaudited – Expressed in thousands of Canadian Dollars, unless otherwise stated, except per share or option)

    For the Options granted during the six month period ended on June 30, 2014, the weighted average fair value was estimated at $0.77 per option and was based on the Black-Scholes option pricing model using the following weighted average assumptions:

    Assumptions      
    Risk-free interest rate   1.53%  
    Expected life   4.55 years  
    Expected volatility   68%  
    Grant date share price   $1.47  
    Expected dividend yield   Nil  

    The following table summarizes information about Options outstanding at June 30, 2015:

        Options outstanding           Options exercisable  
                    Weighted           Weighted     Weighted  
              Weighted     average                 average  
              average     remaining           average     remaining  
    Exercise   Number of     exercise     contractual     Number of     exercise     contractual  
    prices   Options     price     life     Options     price     life  
    ($)   outstanding     ($/Option)     (years)     exercisable     ($/Option)     (years)  
    0.72   200,000     0.72     4.21     66,667     0.72     4.21  
    0.89   1,180,500     0.89     3.70     745,166     0.89     3.72  
    1.77   4,360,200     1.77     3.16     4,360,200     1.77     3.16  
    3.00   475,000     3.00     2.00     475,000     3.00     2.00  
    15.44   27,000     15.44     0.71     27,000     15.44     0.71  
        6,242,700     1.72     3.20     5,674,033     1.81     3.14  

    (d)

    Foreign Currency Translation Reserve

       

    The foreign currency translation reserve represents accumulated exchange differences arising on the translation of the results and net assets of two of the Company’s subsidiaries – the Pebble Partnership and U5 Resources Inc. – from their functional currency (US dollar), to the Group’s reporting currency (Canadian dollar).


    8.

    RELATED PARTY BALANCES AND TRANSACTIONS

    Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation (note 2(c)). Details of transactions and balance with other related parties are disclosed below:

    (a)

    Transactions and Balances with Key Management Personnel

       

    The aggregate value of transactions with key management personnel, being directors and senior management including the Senior Vice President, Corporate Development, Vice President ("VP") Corporate Communications, VP, Engineering, VP, Public Affairs, Pebble Partnership Chief Executive Officer and VP, Public Affairs and Pebble Mines Corp. Chairman, for the three and six months ended June 30, 2015 and 2014 was as follows:

    Page 13



    Northern Dynasty Minerals Ltd.  
    Notes to the Condensed Consolidated Interim Financial Statements  
    For the three and six months ended June 30, 2015 and 2014
    (Unaudited – Expressed in thousands of Canadian Dollars, unless otherwise stated, except per share or option)

          Three months ended June 30,     Six months ended June 30,  
      Compensation   2015     2014     2015     2014  
      Short-term employee benefits (i) $  1,338   $  1,011   $  1,946   $  2,004  
      Share-based compensation   33     512     299     1,999  
      Total $  1,371   $  1,523   $  2,245   $  4,003  

      (i)

    Short-term employee benefits include salaries, directors’ fees and amounts paid to HDSI (see (b)(i)) for services provided to the Group by certain HDSI personnel who serve as executive directors and officers for the Group.


    (b)

    Transactions and Balances with other Related Parties

       

    The aggregate value of transactions and outstanding balances with other related parties for the three and six months ended June 30, 2015 and 2014 were as follows:


          Three months ended June 30,     Six months ended June 30,  
      Transactions   2015     2014     2015     2014  
      Entity with significant influence (i)                        
                          $    
      Services rendered to the Group $  972   $  1,252   $  2,110     2,696  
      Reimbursement of third party expenses incurred on behalf of the Group   140     162     138     460  
                          $    
      Total paid by the Group $  1,112   $  1,414   $  2,248     3,156  

          June 30     December 31  
      Balances payable to related parties   2015     2014  
      Entity with significant influence over the Group (i) $  275   $  383  
      Total $  275   $  383  

      (i)

    Hunter Dickinson Services Inc. ("HDSI"), a private company, provides geological, corporate development, administrative and management services to the Group and its subsidiaries at annually set rates pursuant to a management services agreement. HDSI also incurs third party costs on behalf of the Group which are reimbursed by the Group at cost. The Group may make pre- payments for services under terms of the services agreement. Several directors and other key management personnel of HDSI, who are close business associates, are also key management personnel of the Group.


    9.

    TRADE AND OTHER PAYABLES


          June 30     December 31  
      Falling due within the year   2015     2014  
      Trade $  5,207   $  4,444  
      Other (note 6(b))   1,233     1,206  
      Total $  6,440   $  5,650  

    Page 14



    Northern Dynasty Minerals Ltd.  
    Notes to the Condensed Consolidated Interim Financial Statements  
    For the three and six months ended June 30, 2015 and 2014
    (Unaudited – Expressed in thousands of Canadian Dollars, unless otherwise stated, except per share or option)

    10.

    BASIC AND DILUTED LOSS PER SHARE

    The calculation of basic and diluted loss per share was based on the following for the three and six months ended June 30, 2015 and 2014:

          Three months ended June 30,     Six months ended June 30,  
          2015     2014     2015     2014  
      Loss attributable to common shareholders $  5,778   $  6,871   $  12,024   $  15,334  
      Weighted average number of common shares outstanding and common share equivalents (000s)   130,973     95,010     130,529     95,010  

    Due to their mandatory conversion requirements with no additional payments, Special Warrants (note 7(b)) are included in the calculation of basic loss per share. Diluted loss per share does not include the effect of all share purchase options outstanding as they are anti-dilutive.

    11.

    EMPLOYMENT COSTS

    The amount of salaries and benefits included in expenses for the three and six months ended June 30, 2015 and 2014 are as follows:

          Three months ended June 30,     Six months ended June 30,  
          2015     2014     2015     2014  
      Exploration and evaluation expenses $  901   $  1,297   $  1,408   $  2,775  
      General and administration expenses   1,215     1,272     2,592     2,688  
      Share-based compensation   41     699     401     2,798  
      Total $  2,157   $  3,268   $  4,401   $  8,261  

    12.

    COMMITMENTS AND CONTINGENCIES


    (a)

    Leases

       

    The Group has the following commitments as of June 30, 2015:


          2015              
          (After June 30 )   2016     Total  
          (000s )   (000s )   (000s )
      Anchorage office lease (i) US$ 240   US$ 407   US$ 647  
      Anchorage communication lease (ii)   12         12  
      Pebble Project site lease (iii)   48     32     80  
      Total US$ 300   US$ 439   US$ 739  
      Total in Canadian dollars (iv) $  375   $  548   $  923  

      (i)

    Original term of 5 years expires on October 31, 2016.

      (ii)

    Lease term expires on July 31, 2015.

      (iii)

    Lease for hanger at site, expires on May 1, 2016.

      (iv)

    Converted at closing rate of $1.2490/US$ on June30, 2015, as per Bank of Canada.

    Page 15



    Northern Dynasty Minerals Ltd.  
    Notes to the Condensed Consolidated Interim Financial Statements  
    For the three and six months ended June 30, 2015 and 2014
    (Unaudited – Expressed in thousands of Canadian Dollars, unless otherwise stated, except per share or option)

    The Group has a sub-lease agreement in respect of a portion of the Anchorage office space subject to the operating lease for an average annual rent of approximately US$218,000 ($273). The term of the sub-lease expires on October 31, 2016.

       
    (b)

    Property Rentals

       

    State rentals for the Pebble Project and adjacent claims in the amount of US$990,390 ($1,237) are payable in November 2015.

       
    (c)

    Other

       

    As a result of a recent ruling from the Alaska Supreme Court ("Court"), in which the Court in the appeal case reversed a decision of a lower court and remanded the case back to the lower court, the Group, through the Pebble Partnership, has a contingent liability for its share of the award of attorneys' fees and other amounts that the lower court may impose. The Group is unable to estimate reliably the total amount of these costs.


    13.

    EVENTS AFTER THE REPORTING PERIOD

    On August 10, 2015, the Company announced that it intended to raise up to $20 million through (a) the issuance of $10–$15 million worth of Special Warrants, exercisable into the Company’s common shares at a price of $0.399 per Special Warrant, and (b) the acquisition of 100% of Cannon Point Resources Ltd. ("Cannon Point"), a TSX Venture Exchange listed entity, whose primary asset is cash of $4.7 million, through the issuance of approximately 12.9 million common shares of the Company.

    Issuance of the Special Warrants is subject to the filing of a prospectus in applicable Canadian provinces, and a registration statement in the United States.

    The acquisition of Cannon Point is conditional upon at least $10 million being raised in the Special Warrant offering, and is subject to the preparation of definitive agreements, and a 2/3 majority vote of Cannon Point shareholders. Cannon Point has agreed to provide a secured credit facility available to the Group, bearing interest at 15% per annum prepaid in six month periods. The amounts borrowed are to be repayable 180 days after termination if the acquisition of Cannon Point does not proceed.

    Both the Special Warrant offering and the acquisition of Cannon Point are subject to customary regulatory and judicial approvals.

    Page 16






    MANAGEMENT'S DISCUSSION AND ANALYSIS

    THREE AND SIX MONTHS ENDED JUNE 30, 2015



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    Table of Contents

    1.1 DATE   2
    1.2 OVERVIEW   5
      1.2.1 PEBBLE PROJECT 6
        1.2.1.1 TECHNICAL PROGRAMS 6
        1.2.1.2 LEGAL MATTERS 9
      1.2.2 FINANCING 13
      1.2.3 MARKET TRENDS 14
    1.3 SELECTED ANNUAL INFORMATION 15
    1.4 SUMMARY AND DISCUSSION OF QUARTERLY RESULTS 15
    1.5 RESULTS OF OPERATIONS 16
    1.6 LIQUIDITY 18
    1.7 CAPITAL RESOURCES 19
    1.8 OFF-BALANCE SHEET ARRANGEMENTS 19
    1.9 TRANSACTIONS WITH RELATED PARTIES 19
    1.10 FOURTH QUARTER 20
    1.11 PROPOSED TRANSACTIONS 20
    1.12 CRITICAL ACCOUNTING ESTIMATES 20
    1.13 CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION 21
    1.14 FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS 21
    1.15 OTHER MD&A REQUIREMENTS 22
      1.15.1 DISCLOSURE OF OUTSTANDING SHARE DATA 22
      1.15.2 DISCLOSURE CONTROLS AND PROCEDURES 22
      1.15.3 MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING 22
      1.15.4 CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING 23
      1.15.5 LIMITATIONS OF CONTROLS AND PROCEDURES 23
      1.15.6 RISK FACTORS 23

    1.1

    Date

    This Management’s Discussion and Analysis ("MD&A") should be read in conjunction with the unaudited interim financial statements ("Interim Financial Statements") for the three and six months ended June 30, 2015 and the audited consolidated financial statements and MD&A of Northern Dynasty Minerals Ltd. ("Northern Dynasty" or the "Company") for the year ended December 31, 2014 as publicly filed under the Company’s profile on SEDAR at www.sedar.com.

    The Company reports in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IASB") and interpretations of the IFRS Interpretations Committee (together, "IFRS"). The following disclosure and associated Financial Statements are presented in accordance with IFRS. This MD&A is prepared as of August 13, 2015. All dollar amounts herein are expressed in Canadian dollars, unless otherwise specified.

    Page 2


    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    This discussion includes certain statements that may be deemed "forward-looking statements" or "forward looking information" within the meaning of Canadian and United States securities law. Wherever possible, words such as “plans”, “expects”, or “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, have been used to identify forward-looking information.

    Forward-looking information may include, but is not limited to,

    • our expectations regarding permitting of a mine at the Pebble Project;
    • our expected financial performance in future periods;
    • our plan of operations, including our plans to carry out exploration and development activities;
    • our ability to raise capital for exploration and development activities;
    • our expectations regarding the exploration and development potential of the Pebble Project; and
    • factors relating to our investment decisions.

    Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. We believe that the assumptions and expectations reflected in such forward-looking information are reasonable.

    Key assumptions upon which the Company’s forward-looking information are based include:

    • that the Company will ultimately be able to demonstrate that a mine at the Pebble Project can be developed and operated in an environmentally sound and socially responsible manner, meeting all relevant federal, state and local regulatory requirements;
    • that we will be ultimately able to obtain permitting for a mine at the Pebble Project;
    • that the market prices of copper and gold will not decline significantly nor for a lengthy period of time;
    • that we will be able to secure sufficient working capital necessary for the continued environmental assessment and permitting activities and engineering work which is a precondition to any potential development of the Pebble Project which would then require engineering and financing for ultimate construction;
    • the cost of carrying out exploration and development activities on the Pebble Project;
    • that key personnel will continue their employment with us;
    • our ability to obtain the necessary expertise in order to carry out our exploration and development activities within the planned time periods; and
    • our ability to obtain adequate financing on acceptable terms.

    Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used.

    Some of the risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements include:

    • ability to obtain permitting for a mine at the Pebble Project;
    • ability to continue to fund the exploration and development activities;
    • the speculative nature of the mineral resource exploration business;
    • the exploration stage of the Pebble Project;
    • the lack of known reserves on the Pebble Project;
    • inability to establish that the Pebble Project contains commercially viable deposits of ore;
    • ability to recover the financial statement carrying values of the Pebble Project if the Company ceases to continue on a going concern basis;
    • loss of the services of any of the Company’s executive officers;
    • a history of financial losses;
    • ability to continue on a going concern basis;

    Page 3



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    • the volatility of gold, copper and molybdenum prices;
    • the inherent risk involved in the exploration, development and production of minerals;
    • changes in, or the introduction of new, government regulations relating to mining, including laws and regulations relating to the protection of the environment;
    • the presence of unknown environmental hazards at the Pebble Project;
    • potential claims by third parties against the Pebble Project;
    • inability to insure our operations against all risks;
    • the highly competitive nature of the mining business;
    • litigation risks and the inherent uncertainty of litigation;
    • the historical volatility in the Company’s share price;
    • potential conflicts of interest relating to the Company’s directors and officers;
    • the potential dilution to current shareholders due to any future equity financings;
    • the loss of services of independent contractors; and
    • the potential dilution to current shareholders from the exercise of share purchase options to purchase the Company’s shares.

    This list is not exhaustive for the factors that may affect any of the Company’s forward-looking statements or information. Forward-looking statements or information are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements or information due to a variety of risks, uncertainties and other factors, including, without limitation, the risks and uncertainties described above.

    Our forward-looking statements are based on the reasonable beliefs, expectations and opinions of management on the date of this MD&A. Although we have attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There is no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information.

    Since Northern Dynasty acquired the Pebble Project in 2001, the Company and subsequently the Pebble Limited Partnership completed significant exploration programs, resource estimates, environmental data collection and technical studies, and engineering of various possible mine development models and related infrastructure, power and transportation systems. As a consequence of several factors, including the US Environmental Protection Agency opposition to the Pebble Project, the withdrawal of Anglo American plc from the project and the passage of time, previous technical and engineering studies related to mine-site and infrastructure development are considered to have very uncertain and perhaps little value at this time. Environmental baseline studies and data collection remain a significant legacy asset of the Company from this period.

    For more information on the Company, investors should review the Company’s annual information form and home jurisdiction filings that are available on SEDAR at www.sedar.com and the Company’s annual report on Form 20-F filed with the United States Securities Exchange Commission (the "SEC") at www.sec.gov.

    The Company reviews its forward looking statements on an ongoing basis and updates this information when circumstances require it.

    Page 4



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    Cautionary Note to Investors Concerning Estimates of Measured and Indicated Resources
     
    The following section uses the terms "measured resources" and "indicated resources". The Company advises investors that although those terms are recognized and required by Canadian regulations, the SEC does not recognize them. Investors are cautioned not to assume that all or any part of mineral deposits in these categories will ever be converted into reserves.

    Cautionary Note to Investors Concerning Estimates of Inferred Resources
     
    The following section uses the term "inferred resources". The Company advises investors that although this term is recognized and required by Canadian regulations, the SEC does not recognize it. "Inferred resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of a mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of economic studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred resource exists, or is economically or legally mineable.

    1.2

    Overview

    Northern Dynasty is a mineral exploration company which, via its subsidiaries, holds a 100% interest in mining claims on State of Alaska land in southwest Alaska, USA ("US") that are part of or in the vicinity of the Pebble Copper-Gold-Molybdenum Project (the "Pebble Project" or “Pebble”).

    The Pebble Project is an initiative to develop one of the world’s most important mineral resources when measured by aggregate contained metals. Current mineral resources in the Pebble deposit at a 0.30% copper equivalent (CuEQ)1 cut-off grade comprise:

    • 6.44 billion tonnes of Measured and Indicated Mineral Resources grading 0.40% copper, 0.34 g/t gold, 240 ppm molybdenum and 1.66 g/t silver, containing 57 billion pounds of copper, 70 million ounces of gold, 3.4 billion pounds of molybdenum and 344 million ounces of silver; and

    • 4.46 billion tonnes of Inferred Mineral Resources grading 0.25% copper, 0.26 g/t gold, 222 ppm molybdenum and 1.19 g/t silver, containing 24.5 billion pounds of copper, 37 million ounces of gold, 2.2 billion pounds of molybdenum and 170 million ounces of silver.

    Mineralization indicating the presence of the Pebble deposit was discovered by a prior operator in 1987, and by 1997 an initial outline of the copper, gold and molybdenum deposit had been identified. Northern Dynasty acquired the right to earn an interest in the Pebble property in 2001. Exploration since that time has led to significant expansion of the Pebble deposit, including the discovery of a substantial volume of higher grade mineralization in the eastern part of the deposit. In addition, other occurrences of copper, gold and molybdenum were identified along the extensive northeast-trending mineralized system that underlies the property. Comprehensive deposit delineation, environmental, socioeconomic and engineering studies of the Pebble deposit began in 2004.

    Some $801 million has been invested to advance the Pebble Project since 2001, of which approximately $595 million (US$573 million) was provided by a wholly-owned subsidiary of Anglo American plc which participated in the Pebble Limited Partnership (the "Pebble Partnership") from 2007 to 20132, and the remainder by Northern Dynasty.

    _____________________________________________
    1
    For additional details, see section 1.2.1 below.
    2 During the period 2007 to 2013, the Pebble Partnership expended several hundred million dollars on the Pebble Project, a major portion of which was spent on exploration programs, resource estimates, environmental data collection and technical studies, with a significant portion spent on engineering of various possible mine development models, as well as

    Page 5



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    In February 2014, the US Environmental Protection Agency (the "EPA") announced the initiation of a regulatory process under the Clean Water Act to consider restriction or a prohibition on mining activities associated with the Pebble deposit. The Company’s efforts since that time have been focused around providing information and responses to this action through the Pebble Partnership.

    In 2015, the Company is:

    • engaging in a multi-dimensional strategy, described in section 1.2.1.2 below, to address the EPA’s pre-emptive regulatory process under Section 404(c) of the Clean Water Act and otherwise prepare documentation to position the Pebble Project to initiate federal and state permitting under National Environmental Policy Act ("NEPA");

    • continuing to maintain an active corporate presence in Alaska to advance relationships with political and regulatory offices of government, Alaska Native partners and other stakeholder groups; and

    • working to advance a transaction with a potential partner(s) to further advance the project.

    Site maintenance and environmental monitoring activities and community engagement were carried out at the Pebble Project site during the quarter and will continue throughout the year.

    At June 30, 2015, Northern Dynasty had $0.8 million in cash and cash equivalents available for its operating requirements. However, the Company announced subsequent to the end of the quarter, that it intends to raise up to $20 million through a combination of an equity financing of between $10-$15 million through the issuance of Special Warrants and the purchase of a TSX Venture listed entity, whose primary asset is cash of $4.7 million. With the receipt of these funds, the Company will prioritize the allocation of the available financial resources in order to meet key corporate and Pebble Project expenditure requirements in the near term. The Company will continue to seek additional financing in order to progress any material programs. Additional financing may include any of or a combination of, debt, equity and/or contributions from possible new Pebble Project participants.

    There can be no assurances that the Company will be successful in obtaining additional financing. If the Company is unable to raise the necessary capital resources to meet obligations as they come due, the Company will at some point have to reduce or curtail its operations.

    1.2.1

    Pebble Project

    The Pebble property ("Pebble") is located in southwest Alaska, approximately 17 miles (27 kilometers) from the villages of Iliamna and Newhalen, and approximately 200 miles (320 kilometers) southwest of the city of Anchorage. The property consists of 2,402 mineral claims. Situated approximately 1,000 feet above sea-level and 65 miles from tidewater on Cook Inlet, the site conditions are favorable for sound mine site and infrastructure development.


    related infrastructure, power and transportation systems. As a consequence of several factors, including the EPA opposition to the Pebble Project, the withdrawal of Anglo American plc from the project and the passage of time, technical and engineering studies related to mine-site and infrastructure development are considered to have very uncertain and perhaps little value at this time. Environmental baseline studies and data collection remains a significant legacy asset of the Company from this period.

    Page 6



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    1.2.1.1

    Technical Information

    In early 2015, a Technical Report in accordance with National Instrument ("NI") 43-101 (the "2014 Technical Report") was completed which updates information on the mineral resources and metallurgy for the project. The technical report, entitled "2014 Technical Report on the Pebble Project, Southwest Alaska, USA," effective date December 31, 2014 and authored by J. David Gaunt, PGeo., James Lang, PGeo., Eric Titley, PGeo., and Ting Lu, PEng., is filed under the Company’s profile at www.sedar.com.

    Mineral Resources

    The current estimate of the mineral resources in the Pebble deposit incorporated in the 2014 Technical Report is based on drilling to the end of 2013, and includes approximately 59,000 assays obtained from 699 drill holes. The resource was estimated using ordinary kriging by David Gaunt, P.Geo., a qualified person who is not independent of Northern Dynasty.

    The mineral resource tabulation, as shown below, uses copper equivalency that incorporates the contribution of copper, gold and molybdenum. Although the estimate includes silver, it was not used as part of the copper equivalency calculation in order to facilitate comparison with previous estimates which did not consider the silver content or its potential economic contribution. A base case cut-off of 0.3% CuEq is highlighted.

    Pebble Project Mineral Resources

    Cut-off
    CuEq %
    CuEq
    %

    Tonnes
    Cu
    (%)
    Au
    (g/t)
    Mo
    (ppm)
    Ag
    (g/t)
    Cu
    Blbs
    Au
    Moz
    Mo
    Blbs
    Ag
    Moz
    Measured
    0.3 0.65 527,000,000 0.33 0.35 178 1.66 3.83 5.93 0.21 28.13
    0.4 0.66 508,000,000 0.34 0.36 180 1.68 3.80 5.88 0.20 27.42
    0.6 0.77 279,000,000 0.40 0.42 203 1.84 2.46 3.77 0.12 16.51
    1.0 1.16 28,000,000 0.62 0.62 302 2.27 0.38 0.56 0.02 2.04
    Indicated
    0.3 0.77 5,912,000,000 0.41 0.34 245 1.66 53.42 64.62 3.20 315.50
    0.4 0.82 5,173,000,000 0.45 0.35 260 1.75 51.31
    58.21
    2.97
    291.05
    0.6 0.99 3,450,000,000 0.55 0.41 299 1.99 41.82
    45.47
    2.27
    220.71
    1.0 1.29 1,411,000,000 0.77 0.51 343 2.42 23.95 23.14 1.07 109.79
    Measured + Indicated
    0.3 0.76 6,439,000,000 0.40 0.34 240 1.66 56.76
    70.38
    3.40
    343.63
    0.4 0.81 5,681,000,000 0.44 0.35 253 1.75 55.09
    63.92
    3.17
    319.62
    0.6 0.97 3,729,000,000 0.54 0.41 291 1.98 44.38 49.15 2.39 237.37
    1.0 1.29 1,439,000,000 0.76 0.51 342 2.42 24.11
    23.60
    1.08
    111.97
    Inferred
    0.3 0.54 4,460,000,000 0.25 0.26 222 1.19 24.55 37.25 2.18 170.49
    0.4 0.68 2,630,000,000 0.33 0.30 266 1.39 19.14 25.38 1.55 117.58
    0.6 0.89 1,290,000,000 0.48 0.37 291 1.79 13.66 15.35 0.83 74.28
    1.0 1.20 360,000,000 0.69 0.45 377 2.27 5.41 5.14 0.30 25.94

    Notes to above table:

    These resource estimates have been prepared in accordance with NI 43-101 and the CIM Definition Standards. Inferred Mineral Resources are considered to be too speculative to allow the application of technical and economic parameters to support mine planning and evaluation of the economic viability of the project. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, or economic studies, except for Preliminary Economic Assessments as defined under 43-101. It cannot be assumed that all or any part of the Inferred Resources will ever be upgraded to a higher category.

    Page 7



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    Copper equivalent calculations used metal prices of $1.85/lb for copper, $902/oz for gold and $12.50/lb for molybdenum, and recoveries of 85% for copper 69.6% for gold, and 77.8% for molybdenum in the Pebble West zone and 89.3% for copper, 76.8% for gold, 83.7% for molybdenum in the Pebble East zone.

    Contained metal calculations are based on 100% recoveries.

    A 0.30% CuEQ cut-off is considered to be appropriate for porphyry deposit open pit mining operations in the Americas.

    All mineral resource estimates, cut-offs and metallurgical recoveries are subject to change as a consequence of more detailed economic analyses that would be required in pre-feasibility and feasibility studies.

    The resource estimate is constrained by a conceptual pit that was developed using a Lerchs-Grossman algorithm and is based on the parameters set out below:

                           Parameter Units Cost ($) Value
    Metal Price

    Gold $/oz - 1540.00
    Copper $/lb - 3.63
    Molybdenum $/lb - 12.36
    Metal Recovery

    Copper % - 89
    Gold % - 72
    Molybdenum % - 82
    Operating Cost





    Mining (mineralized material or waste) $/ton mined 1.01 -
    Added haul lift from depth $/ton/bench 0.03 -
    Process
    – Process cost adjusted by total crushing energy $/ton milled 4.40 -
    – Transportation $/ton milled 0.46 -
    – Environmental $/ton milled 0.70 -
    – G&A $/ton milled 1.18 -
    Block Model Current block model ft - 75 x 75 x 50
    Density Mineralized material and waste rock - - Block model
    Pit Slope Angles degrees - 42

    Environmental and Socioeconomic

    Environmental Baseline Studies

    Extensive environmental baseline data collection was initiated in 2004, with close and ongoing attention given to designing and planning a project that protects clean water, healthy fish and wildlife populations and other natural resources in the region.

    In January 2012, the Pebble Partnership publicly released the 27,000-page Environmental Baseline Document ("EBD") for the Pebble Project, characterizing a broad range of environmental and social conditions in southwest Alaska – including climate, water quality, wetlands, fish and aquatic habitat, wildlife, land and water use, socioeconomics and subsistence activities. The purpose of the EBD is to provide the public, regulatory agencies and the Pebble Partnership with a detailed compendium of pre-development environmental and socioeconomic conditions in the project area. Research for the Pebble EBD was conducted by more than 40 respected independent research firms, utilizing over 100 scientific experts and engineering groups, laboratories and support services. Researchers were selected for their specific areas of expertise and Alaskan experience, with cooperating government agencies participating in several studies.

    Page 8



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    Information for the EBD was gathered through field studies, laboratory tests, review of government records and other third-party sources, and interviews with Alaska residents. The EBD study is available at www.pebbleresearch.com.

    The Pebble Partnership facilitated a four-day workshop with federal and state regulatory agencies in January 2012 to present the EBD findings. The workshop was broadcast publicly via the Internet. A series of public presentations was also coordinated in more than 20 communities throughout southwest Alaska and elsewhere around the State to present the EBD findings. Public and expert review of the EBD was facilitated under the Keystone initiative3.

    Environmental baseline data reports through 2014 are being integrated with the database from the EBD so that this information can be shared with state/federal agencies and the public as part of the future permitting process under NEPA. Environmental monitoring at reduced levels continues in 2015.

    Community Engagement

    An active program of stakeholder outreach has also been undertaken at Pebble, which has included community meetings, stakeholder visits, presentations and event appearances, as well as stakeholder tours to the Pebble Project site and to operating mines in the United States and Canada. The focus of these outreach activities is to update stakeholders on the Pebble Project, to receive feedback on stakeholder priorities and concerns and to advise participants about modern mining practices.

    Stakeholder outreach and community engagement is ongoing, although at a reduced scale commensurate with other project activities. As the Pebble Project advances toward the completion of a Project Description and preparation for project permitting under NEPA, it is expected that the Pebble Partnership will initiate further stakeholder engagement programs to involve stakeholders in the planning process.

    1.2.1.2

    Legal Matters

    Environmental Protection Agency and Bristol Bay Watershed Assessment

    In February 2011, the EPA announced it would undertake a Bristol Bay Watershed Assessment study focusing on the potential effects of large-scale mine development in Bristol Bay and, specifically the Nushagak and Kvichak area drainages. This process was ostensibly initiated in response to calls from persons and groups opposing the Pebble Project for the EPA to pre-emptively use its asserted authority under Section 404(c) of the Clean Water Act to prohibit discharges of dredged or fill material in waters of the US within these drainages; however, evidence exists that EPA may have been considering a Section 404(c) veto of the Pebble Project at least as far back as 2008 – two years before it received a petition from several Alaska Native tribes.

    The EPA’s first draft Bristol Bay Watershed Assessment ("BBWA") report was released on May 18, 2012.

    In the opinions of Northern Dynasty and the Pebble Partnership, after review with consultants, the draft report is a fundamentally flawed document. By the EPA’s own admission, it evaluated the effects of a "hypothetical project" that has neither been defined nor proposed by the Pebble Partnership, and for which key environmental mitigation strategies have not yet been developed and so would not as yet be known. It is believed by the Company that the assessment was rushed because it was based on studies conducted over only one year in an area of 20,000 square miles. In comparison, the Pebble Project has studied the ecological and social environment surrounding Pebble for more than a decade. The EPA also failed to adequately consider the comprehensive and detailed data that the Pebble Partnership provided as part of its 27,000-page Environmental Baseline Document.

    ___________________________________________
    3
    An independent stakeholder dialogue process concerning the Pebble Project initiated in late 2010 by the Keystone Center – a non-profit organization specializing in facilitating stakeholder-driven consultation processes concerning contentious, science-based issues.

    Page 9



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    The EPA called for public comment on the quality and sufficiency of scientific information presented in the draft BBWA report. In response, the Pebble Partnership and Northern Dynasty made submissions on the draft report. Northern Dynasty made a presentation highlighting the shortcomings at public hearings held in Seattle, Washington, on May 31, 2012 and in Anchorage, Alaska, on August 7, 2012. In response to the EPA’s call for public comment, Northern Dynasty also submitted a 635-page written critique of the draft report in July 2012 and called upon the EPA to cease such unwarranted actions until such time as a definitive proposal for the development of the Pebble deposit is submitted into the rigorous National Environmental Policy Act (“NEPA”) permitting process.

    Concerns about the reasonableness of the basis of risk assessment in the draft EPA report were stated by many of the independent experts on the peer review panel assembled to review the BBWA, as summarized in a report entitled "External Peer Review of EPA's Draft Document: An Assessment of Potential Mining Impacts on Salmon Ecosystems of Bristol Bay, Alaska" released in November 2012. In a wide-ranging critique of the draft report's methodology and findings, many peer review panellists called the EPA's effort to evaluate the effects of a "hypothetical mining scenario" on the water, fish, wildlife and cultural resources of Southwest Alaska "inadequate", "premature", "unreasonable", “suspect" and "misleading".

    On April 26, 2013, the EPA released a draft of a new version of the BBWA report, approximately twice the length of the original version with significant new information, and announced another public comment and Peer Review period. The Pebble Partnership and Northern Dynasty made submissions on the new version. In late May 2013, Northern Dynasty filed a 205-page submission on the new version which describes the same major shortcomings as the original report published in May 2012.

    In mid-January 2014, the EPA released the final version of its BBWA. The report still contains many of the same fundamental shortcomings as the earlier drafts.

    On February 28, 2014, the EPA announced the initiation of a regulatory process under Section 404(c) of the Clean Water Act to consider restriction or a prohibition on mining activities associated with the Pebble deposit in order to protect aquatic resources in southwest Alaska. In late April 2014, the Pebble Partnership submitted a comprehensive response to the EPA’s February 28, 2014 notification letter.

    In late May 2014, the Pebble Partnership filed suit in the U.S. District Court for Alaska and sought an injunction to halt the regulatory process initiated by the EPA under the Clean Water Act, asserting that, in the absence of a permit application, the process exceeds the federal agency’s statutory authority and violates the Alaska Statehood Act among other federal laws. The State of Alaska and Alaska Peninsula Corporation, an Alaska Native village corporation with extensive land holdings in the Pebble Project area, later joined in the Pebble Partnership’s lawsuit against the EPA as co-plaintiffs (the "plaintiffs"). On September 26, 2014, U.S. federal court in Alaska granted EPA’s motion to dismiss the case. This ruling did not judge the merits of the statutory authority case, it only deferred that hearing and judgment until after a final Section 404(c) determination has been made by the EPA.

    The Pebble Partnership appealed the US federal court’s decision to grant EPA’s motion to dismiss to the 9th Circuit Court of Appeals. That appeal was denied in May 2015. The Pebble Partnership still holds the option to pursue its statutory authority case in the instance that EPA finalizes a pre-emptive regulatory action under the Clean Water Act 404(c).

    On July 18, 2014, EPA Region 10 announced a ’Proposed Determination’ to restrict the discharge of dredged or fill material associated with mining the Pebble deposit in a 268 square mile area if that disposal would result in any of the following: loss of five or more miles of streams with documented salmon occurrence; loss of 19 or more miles of streams where salmon are not documented but that are tributaries of streams with documented salmon occurrence; the loss of 1,100 or more acres of wetlands, lakes, and ponds that connect with streams with documented salmon occurrence or tributaries of those streams; and stream flow alterations greater than 20 percent of daily flow in nine or more linear miles of streams with documented salmon occurrence. Northern Dynasty and Pebble Partnership management do not accept that the EPA has the statutory authority to impose conditions on development at Pebble, or any development project anywhere in Alaska or the US, prior to the submission of a detailed development plan and its thorough review by federal and state agencies including development of an Environmental Impact Statement ("EIS") and review under NEPA.

    Page 10



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    On September 19, 2014, the Pebble Partnership submitted a comprehensive legal and technical response to EPA Region 10’s ‘Proposed Determination.’ Northern Dynasty and the Pebble Partnership believe the Proposed Determination is unsupported by the administrative record as established by the Bristol Bay Assessment, and is therefore arbitrary and capricious.

    On September 3, 2014, the Pebble Partnership initiated a second action against EPA in federal district court in Alaska charging that EPA violated the Federal Advisory Committee Act ("FACA") due to its close interactions with, and the undue influence of Environmental Non-Governmental Organizations ("ENGOs") and anti-mining activists in developing the Bristol Bay Watershed Assessment, and with respect to its unprecedented pre-emptive 404c regulatory process under the Clean Water Act. On September 24, 2014, the US federal court judge in Alaska released an order recognizing that the EPA agreed not to take the next step to advance its 404(c) regulatory process with respect to southwest Alaska’s Pebble Project until at least January 2, 2015.

    However, in advance of that date on November 24, 2014, the U.S. federal court judge in Alaska granted the Pebble Partnership’s request for a Preliminary Injunction ("PI") in relation to the FACA case. While the PI does not resolve the Pebble Partnership’s claims that EPA’s actions with respect to the Bristol Bay Watershed Assessment and subsequent 404(c) regulatory process violated FACA, the decision permits the further discovery process of the underlying facts to enable the court to issue a final decision on the merits of the FACA case. On June 4, 2015, the federal court in Alaska issued an order denying the EPA’s motion to dismiss this case.

    Discovery has now commenced in the FACA case. The Pebble Partnership has filed requests for production of documents and notices of dispositions for EPA employees and relevant third parties. Should the Pebble Partnership prevail in its FACA litigation against the EPA, the federal agency may be unable to rely upon the Bristol Bay Watershed Assessment as part of the administrative record for any regulatory action at the Pebble Project.

    On October 14, 2014, the Pebble Partnership filed suit in federal district court in Alaska charging that EPA has violated the Freedom of Information Act by improperly withholding documents related to the Pebble Project, the Bristol Bay Watershed Assessment and consideration of a pre-emptive 404(c) veto under the Clean Water Act. EPA has moved for summary judgment claiming that its search for and disclosure of documents was adequate. Pebble has opposed the government’s motion pointing out several deficiencies in EPA’s search parameters and pointing out the agency’s overly broad assertion of the deliberative process privilege to withhold documents.

    Counsel for Northern Dynasty and the Pebble Partnership has submitted numerous letters to the independent Office of the EPA Inspector General ("IG") since January 2014 raising concerns of bias, process irregularities and undue influence by environmental organizations in the EPA's preparation of the Bristol Bay Watershed Assessment. In response to Congressional and other requests, on May 2, 2014, the IG’s office announced that it would initiate a review of the EPA’s conduct in preparing the BBWA. A team of IG investigators was assigned "to determine whether the EPA adhered to laws, regulations, policies and procedures in developing its assessment of potential mining impacts in Bristol Bay, Alaska."

    On March 24, 2015, it was announced that Former Defense Secretary William S. Cohen and his firm, The Cohen Group, assisted by law firm DLA Piper, had been retained by the Pebble Partnership to conduct an independent review of whether the EPA acted fairly in connection with its evaluation of potential mining in the Bristol Bay watershed. Secretary Cohen will evaluate the fairness of EPA's actions and decisions in this matter based upon a thorough assessment of the facts and relying on his experience as Secretary of Defense as well as his 24 years as a member of the US House of Representatives and Senate. He will have full discretion, within regulatory limitations, as to the means and manner of carrying out this review to ensure that it is thorough and unbiased.

    Page 11



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    In summary, the Pebble Partnership is advancing a multi-dimensional strategy to address the EPA’s preemptive regulatory process under Section 404(c) of the Clean Water Act, and is working to position the Pebble Project to initiate federal and state permitting under NEPA unencumbered by any extraordinary development restrictions imposed by the EPA. The strategy involves three discrete pieces of litigation against the EPA as well as independent reviews of EPA actions, including:

    • challenging the EPA’s statutory authority to pre-emptively impose development restrictions at the Pebble Project under Section 404(c) of the Clean Water Act prior to the Pebble Partnership submitting a proposed development plan for the project or the development of an EIS under NEPA;
    • alleging that the EPA violated FACA in the course of undertaking the BBWA and subsequent Section 404(c) action under the Clean Water Act;
    • alleging that the EPA is unlawfully withholding relevant documentation and other information sought by the Pebble Partnership under the Freedom of Information Act ("FOIA");
    • appealing to the Office of the EPA Inspector General to investigate the conduct of the agency in relation to the BBWA; and,
    • initiating a third party investigation by The Cohen Group.

    While the process of litigation and independent review are inherently uncertain, and it is difficult to predict with confidence the length of time that each of the initiatives described above will take to advance to specific milestone events or final conclusion, Northern Dynasty expects:

    • a final decision by a federal court judge in Alaska on the Pebble Partnership’s FACA case sometime in the next 18 months;

    • a decision in the Pebble Partnership’s FOIA litigation against the EPA in the latter half of 2015;

    • the independent Office of the EPA Inspector General to complete its investigation and publish a final report on EPA actions with respect to the BBWA and the EPA’s subsequent regulatory process under Section 404(c) of the Clean Water Act in the first quarter of 2016; and,

    • the Cohen Group to complete its investigation and publish a final report on EPA actions with respect to the BBWA and the EPA’s subsequent regulatory process under Section 404(c) of the Clean Water Act in the third quarter of 2015.

    Northern Dynasty cannot predict the outcome of its various challenges to what it sees as improper, preemptory attempts by the EPA to prevent or otherwise restrict mineral development at Pebble. If these challenges all fail and the EPA continues to oppose the Pebble Project by all legal means, it may have a material adverse effect on the Company.

    Nunamta Aulukestai

    In October 2011, a lawsuit filed in July 2009 by the Trustees for Alaska (an environmental law firm) on behalf of Nunamta Aulukestai – an organization established and funded to oppose development of the Pebble Project - was rejected by the Anchorage Superior Court. The lawsuit alleged that the Alaska Department of Natural Resources had violated the state constitution by granting exploration and temporary water use permits to the Pebble Partnership, and exploration activities had caused harm to vegetation, water, fish and wildlife. The Pebble Partnership actively participated in the trial proceedings after being granted intervener status. Superior Court Judge Aarseth denied each of the allegations made by Nunamta Aulukestai, and ruled that no evidence of environmental harm was presented. The plaintiffs filed an appeal and a ruling was made on May 29, 2015. The Alaska Supreme Court agreed that there was no evidence of environmental damage but ruled that the land use permits conveyed an interest in land and, as such should have been preceded by public notice. The decision does not change the status of current permits held by the Pebble Partnership, although drilling permits applied for in future may necessitate additional public notice and comment requirements. The case has been remanded back to the trial court and there may be further litigation as to whether the plaintiffs are entitled to an award of attorney’s fees and other amounts from the Pebble Partnership.

    Page 12



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    Lake and Peninsula Borough

    In November 2011, voters in southwest Alaska’s Lake & Peninsula Borough approved, by a narrow margin, a ballot measure sponsored by anti-Pebble activists that proposed to restrict future development that affects more than one square mile of land within the 31,000 square mile borough. The initiative was opposed by a broad spectrum of Alaskan interests. The Pebble Partnership and the State of Alaska filed legal challenges to the ballot initiative in the Alaska Superior Court, and on March 19, 2014 the court issued a permanent injunction barring the law from going into effect. The court ruled in favor of the Pebble Partnership, agreeing that the Alaska constitution and Alaska statutes preempted local governments from interfering with resource development on State lands. The ballot sponsors appealed to the Alaska Supreme Court, which issued a decision on July 17, 2015, confirming the lower court’s ruling.

    1.2.2

    Financings

    December 2014/January 2015

    In the first quarter of 2015, Northern Dynasty completed a private placement financing initiated late in the 2014 fiscal year, which consisted of 35,962,735 share purchase warrants each priced at $0.431, for gross proceeds of $15.5 million. Pursuant to the private placement financing, the Company issued 27,622,642 share purchase warrants in December 2014 and 8,340,093 share purchase warrants in January 2015. The Company filed a prospectus in certain Canadian provinces to qualify the conversion of the share purchase warrants and a registration statement with the SEC in the United States to qualify the resale of common shares in the Company ("Common Shares") by U.S. investors.

    As of the date of this MD&A, all the share purchase warrants have been converted into the same number of Common Shares.

    August 2015

    Subsequent to the end of the second quarter, Northern Dynasty announced that it intends to raise up to $20 million through a combination of an issuance of $10-$15 million worth of Special Warrants, exercisable into Common Shares on a one for one basis, at a price of $0.399 per Special Warrant (the "August 2015 Special Warrants"), together with the acquisition of 100% of Cannon Point Resources Ltd. ("Cannon Point"), a TSX Venture listed entity, whose primary asset is cash of $4.7 million.

    Under the terms of issuance of the August 2015 Special Warrants, the Company has agreed to file a prospectus in certain Canadian provinces to qualify the conversion of the August 2015 Special Warrants and a registration statement in the United States to qualify the resale of Common Shares by U.S. investors. The August 2015 Special Warrants will convert on exercise into Common Shares on a one-for-one basis, subject to certain restrictions, without payment of any additional consideration. The August 2015 Special Warrants are subject to automatic conversion provisions, which depend on the country of residence of a holder of the August 2015 Special Warrants and the total number of the Common Shares that a holder of the August 2015 Special Warrants will own after such conversion, and, in any event, all outstanding August 2015 Special Warrants will be automatically converted on the second anniversary of their issuance date.

    Page 13



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    The August 2015 Special Warrants do not confer on their holders any right as a shareholder of the Company, including but not limited to any right to vote at any meeting of shareholders or any other proceedings of the Company or any right to receive any dividend or other distribution.

    Based on a letter agreement, the Company expects to acquire 100% of Cannon Point for approximately 12.9 million common shares of the Company, subject to the approval of a special 2/3 majority vote of Cannon Point shareholders as well as customary regulatory and judicial approvals. The acquisition is not subject to Company shareholder approval. During the merger process, which will be by conventional statutory plan of arrangement, Cannon Point has agreed to make a secured credit facility for $4.25 million available to the Company. The amounts borrowed would bear interest at 15% per annum, with 6 months of interest to be prepaid, be repayable after 30 days if due to a Northern Dynasty breach and 180 days from termination if the merger does not complete for any other reason. Holders of approximately 21% of Cannon Point Shares have agreed to support the merger transaction, including shareholders associated with Fiore Management & Advisory Corp. The acquisition of Cannon Point is subject to negotiation of a definitive agreement, which will be filed on SEDAR at www.sedar.com when executed which is anticipated to occur within the next 30 days. The private placement of Special Warrants is not conditional on the Cannon Point acquisition, but the Cannon Point acquisition is conditional on at least $10 million of Special Warrants being sold.

    Completion of both financing transactions is subject to execution of definitive agreements, TSX and NYSE MKT approvals and other customary closing conditions. The Special Warrants offering is expected to close by late August 2015 and the Cannon Point acquisition within 120 days.

    1.2.3

    Market Trends

    Copper prices increased from early 2009 until late 2011. From that time, prices have been variable and weakened overall. The recent closing price is US$2.34/lb.

    The average annual gold price steadily increased from 2008 to 2012. Gold prices trended lower in 2013, and have been variable but weakening overall in 2014 and 2015. The recent closing price is US$1,116/oz.

    Molybdenum prices were variable, but improving in 2010 and 2011, variable in 2013, and then began an uptrend that extended through the end of June 2014. Prices have, largely, been on a downtrend since that time with a recent closing price of US$6.17/lb.

    An upward trend in silver prices began in 2010, and continued to late September 2011; prices reached as high as $43/oz in 2011, resulting in the highest average annual price since 2008. Prices ranged between $26/oz and $35/oz between October 2011 and December 2012, and trended downward in 2013. Silver prices have been variable in 2014 and 2015, with an overall decrease in the average price. The recent closing price is US$15.33/oz.

    Average annual prices since 2010 as well as the average prices so far in 2015 for copper, gold, molybdenum and silver are shown in the table below:

    Page 14



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015


    Year
    Average metal price
    Copper
    US$/lb
    Gold
    US$/oz
    Molybdenum
    US$/lb
    Silver
    US$/oz
    2010 3.42 1,228 15.87 20.24
    2011 4.00 1,572 15.41 35.25
    2012 3.61 1,669 12.81 31.16
    2013 3.32 1,410 10.40 23.80
    2014 3.14 1,276 11.91 19.08
    2015 (to the date of the MD&A) 2.64 1,188 7.61 16.24

    Source: LME Official Cash Price as provided at www.metalprices.com

    1.3

    Selected Annual Information

    Not required for interim MD&A.

    1.4

    Summary and Discussion of Quarterly Results

    All monetary amounts are expressed in thousands of dollars except per share amounts and where otherwise indicated. Minor differences are due to rounding.

    Excerpts from                                                
    Statements of   Jun 30     Mar 31     Dec 31     Sep 30     Jun 30     Mar 31     Dec 31     Sep 30  
    Comprehensive Loss   2015     2015     2014     2014     2014     2014     2013     2013  
    (Income)                                                
    Expenses                                                
    Exploration and evaluation $  1,484   $  2,074   $  3,461   $  2,436   $  2,952   $  4,028   $  1,076   $  270  
    General and administrative(i)   1,567     1,816     2,118     2,120     2,150     2,670     1,596     1,510  
    Legal, accounting and audit(i)   2,922     3,248     4,933     1,957     1,281     155     214     42  
    Share-based compensation   41     360     522     557     699     2,099          
    Other items (ii)   (236 )   (1,252 )   (1,109 )   (982 )   (211 )   (489 )   (412 )   (120 )
    Equity accounting adjustment (iii)                           (5,062 )    
    Loss (income) for the quarter   5,778     6,246     9,925     6,088     6,871     8,463     (2,588 )   1,702  
                                                     
    Basic and diluted loss (income) per common share $  0.04   $  0.05   $  0.10   $  0.06   $  0.07   $  0.09   $  (0.03 ) $  0.02  

    (i)

    From Q1-2015 onward, in presenting its statement of loss and comprehensive loss, the Company has separately reflected legal, accounting and audit expenditures, which line item is predominantly comprised of legal costs incurred by the Group in response to the EPA’s activities surrounding the Pebble Project. These expenditures were previously included under general and administrative expenditures. Quarterly results for all previous quarters presented in the above table have been adjusted to conform with the classification of expenditures adopted in the current year’s fiscal quarters.

    (ii)

    Other items include interest income, exchange gain and loss, and deferred income tax.

    (iii)

    Represents a gain recorded upon discontinuance of equity method for accounting for the investment in the Pebble Limited Partnership when the Company reacquired control in Q4 of 2013.

    Discussion of Quarterly Trends

    Since late Q3 of 2013, the Company has funded 100% of evaluation work on the Pebble Project following the withdrawal of the project partner. Exploration and evaluation expenses ("E&E") included costs for Native community engagement, select environmental monitoring programs, annual fees for claims (in Q4 of 2014), site leases for accommodation, land access agreements and technical studies, some of which were incurred at the beginning of the respective year.

    Page 15



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    General and administrative expenses ("G&A"), which exclude legal, accounting and audit expenses as per the revised presentation of the statement of loss and comprehensive loss adopted by the Company in fiscal year 2015, have fluctuated based on the level of corporate activities undertaken. As a result of the added costs associated with the management and administration of the Pebble Partnership, G&A trended higher initially in 2014 then declined to a quarterly average of approximately $2.2 million. In 2015, G&A has trended downwards due in part to lower corporate activities as the Company prioritized expenditures to conserve cash.

    Legal, accounting and audit expenses are comprised primarily of legal costs incurred by the Group in response to the EPA’s activities surrounding the Pebble Project and have fluctuated in line with ongoing activities to advance the Company’s strategy to address the EPA’s pre-emptive regulatory process as discussed in Section 1.2.1.2 Legal Matters.

    Share-based compensation expense ("SBC") has fluctuated due to the timing of share purchase option grants and the vesting periods associated with these grants. In 2013 and 2015 there were no new grants and as such SBC related to the graded vesting of share purchase option grants from prior years (in Q3 and Q4 of 2013, all share purchase options were fully vested). In 2014, SBC related to new grants by the Company and the graded vesting of these share purchase options during the year.

    1.5

    Results of Operations

    The following financial data has been prepared in accordance with IFRS effective for the period ended June 30, 2015.

    The Company’s operations and business are not driven by seasonal trends, but rather are driven towards the achievement of project milestones relating to the Pebble Project such as the achievement of various technical, environmental, socio-economic and legal objectives, including obtaining the necessary permits, the completion of pre-feasibility and final feasibility studies, preparation of engineering designs, as well as receipt of financings to fund these objectives along with mine construction.

    1.5.1

    Results of Operations for the Three Months Ended June 30, 2015 vs. 2014

    The Company recorded a decrease in loss of $1.1 million to $5.8 million from a loss of $6.9 million in 2014.

    E&E decreased by $1.5 million as the Company prioritized the allocation of available financial resources in order to meet key corporate and Pebble Project expenditure requirements relating to ongoing activities around the EPA’s initiatives as discussed in Section 1.2.1.2 Legal Matters. E&E activities during the quarter included Native community engagement, environmental monitoring and site leases for accommodation.

    The following table provides a breakdown of E&E incurred during the period:

    E&E (expressed in thousands of dollars)   Three months ended June 30  
        2015     2014  
    Engineering $  64   $  368  
    Environmental   201     621  
    Site activities   321     815  
    Socio-economic   822     1,053  
    Other activities and travel   76     95  
    Total $  1,484   $  2,952  

    Page 16



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    G&A excluding legal, accounting and audit decreased $0.6 million to $1.6 million due primarily to the Company reducing office costs and management and administration. Legal, accounting and audit costs increased by $1.6 million due primarily to increased legal costs incurred as the Company, through the Pebble Partnership, advances key legal objectives to address the EPA’s pre-emptive regulatory process (see Section 1.2.1.2 Legal Matters), as well as additional audit fees incurred relating to the filing of the Company’s 2014 annual form on Form 20-F.

    The following table provides a breakdown of G&A incurred during the period:

    G&A (expressed in thousands of dollars)   Three months ended June 30  
        2015     2014  
    Conference and travel $  95   $  66  
    Consulting   73     137  
    Insurance   93     111  
    Office costs   252     434  
    Management and administration   792     1,113  
    Shareholder communication   170     233  
    Trust and filing   92     56  
    General and administrative   1,567     2,150  
    Legal, accounting and audit   2,922     1,281  
    Total $  4,489   $  3,431  

    SBC decreased to $ 41,000 from $0.7 million in 2014 as the Company did not grant any options in the current period (2014 – 1.2 million options were granted).

    1.5.2

    Results of Operations for the Six Months Ended June 30, 2015 vs. 2014

    The Company recorded a decrease in loss of $3.3 million to $12.0 million.

    E&E decreased by $3.4 million as the Company prioritized the allocation of available financial resources in order to meet key corporate and Pebble Project expenditure requirements relating to ongoing activities around the EPA’s initiatives as discussed in Section 1.2.1.2 Legal Matters. E&E activities during the six months ended June 30, 2015 included Native community engagement, environmental monitoring and site leases for accommodation.

    The following table provides a breakdown of E&E incurred during the period:

    E&E (expressed in thousands of dollars)   Six months ended June 30  
        2015     2014  
    Engineering $  137   $  1,297  
    Environmental   488     1,249  
    Site activities   892     1,896  
    Socio-economic   1,925     2,334  
    Other activities and travel   116     204  
    Total $  3,558   $  6,980  

    G&A, excluding legal, accounting and audit decreased $1.4 million due to the Company reducing office costs and management and administration. Legal, accounting and audit increased by $4.7 million due primarily to increased legal costs incurred as the Company, through the Pebble Partnership, advances key legal objectives to address the EPA’s pre-emptive regulatory process (see Section 1.2.1.2 Legal Matters).

    Page 17



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    The following table provides a breakdown of G&A incurred during the period:

    G&A (expressed in thousands of dollars)   Six months ended June 30  
        2015     2014  
    Conference and travel $  180   $  176  
    Consulting   234     165  
    Insurance   190     218  
    Office costs   662     1,131  
    Management and administration   1,514     2,495  
    Shareholder communication   353     438  
    Trust and filing   250     197  
    General and administrative   3,383     4,829  
    Legal, accounting and audit   6,170     1,436  
    Total $  9,553   $  6,265  

    SBC decreased by $2.4 million as the Company did not grant any options in the current period (2014 – 5.7 million options were granted).

    1.6

    Liquidity

    The Company's major sources of funding has been the issuance of equity securities for cash, primarily through private placements to sophisticated investors and institutions and the issue of common shares pursuant to the exercise of share purchase options. The Company's access to financing is always uncertain. There can be no assurance of continued access to significant equity funding.

    As at June 30, 2015, the Company’s cash and cash equivalents were $0.8 million, down from $9.5 million at December 31, 2014 as the Company used $12.0 million of its cash in its operating activities (see Section 1.5.1) and raised $3.4 million from the portion of the special warrant financing that closed in January 2015 (see Section 1.2.2 Financings). As of the date of this MD&A, the Company announced that it intends to raise up to $20 million through a combination of an issuance of $10-$15 million worth of Special Warrants, exercisable into Common Shares on a one for one basis, at a price of $0.399 per Special Warrant, together with the acquisition of 100% of Cannon Point Resources ("Cannon Point"), a TSX Venture listed entity, whose primary asset is cash of $4.7 million. The Company has prioritized the allocation of these funds to meet key corporate and Pebble Project expenditure requirements and additional financing will be required in order to progress any material expenditures at the Pebble Project in 2016. There can be no assurances that the Company will be successful in obtaining additional financing. If the Company is unable to raise the necessary capital resources to meet obligations as they come due, the Company will at some point have to reduce or curtail its operations.

    The Company has no "Purchase Obligations", defined as any agreement to purchase goods or services that is enforceable and legally binding on the Company that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The Company is responsible for maintenance payments on the Pebble Project claims which includes rental fees of approximately US$1.0 million due in November 2015 for existing claims and routine office and site leases (refer to Note 12 in the notes to Interim Financial Statements which accompany this MD&A).

    Page 18



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    1.7

    Capital Resources

    The Company’s capital resources consist of its cash reserves. As of June 30, 2015, the Company had no long term debt or commitments for material capital expenditures other than what has been disclosed in the Financial Statements.

    The Company has no lines of credit or other sources of financing.

    1.8

    Off-Balance Sheet Arrangements

    There are none.

    1.9

    Transactions with Related Parties

    Transactions with Hunter Dickinson Services Inc. ("HDSI")

    Hunter Dickinson Inc. ("HDI") and its wholly owned subsidiary, HDSI are private companies established by a group of mining professionals engaged in advancing and developing mineral properties for a number of private and publicly-listed exploration companies, one of which is the Company.

    Many of the current directors of the Company – namely, Scott Cousens, Robert Dickinson, Russell Hallbauer, Marchand Snyman and Ronald Thiessen – are active members of the HDI Board of Directors. Other key management personnel of the Company – Doug Allen, Stephen Hodgson, Bruce Jenkins, Sean Magee and Trevor Thomas – are members of HDI’s senior management team.

    The business purpose of the related party relationship

    HDSI provides technical, geological, corporate communications, regulatory compliance, administrative and management services to the Company, on an as-needed and as-requested basis from the Company. HDSI also incurs third party costs on behalf of the Company. Such third party costs include, for example, directors and officers insurance, travel, conferences, and technology services.

    As a result of this relationship with HDSI, the Company has ready access to a range of diverse and specialized expertise on a regular basis, without having to engage or hire full-time experts. The Company benefits from the economies of scale created by HDSI.

    The measurement basis used

    The Company procures services from HDSI pursuant to an agreement (the "Services Agreement") dated July 2, 2010 whereby HDSI agreed to provide technical, geological, corporate communications, administrative and management services to the Company. A copy of the Services Agreement is publicly available under the Company’s profile at www.sedar.com.

    Services from HDSI are provided on a non-exclusive basis as required and as requested by the Company. The Company is not obligated to acquire any minimum amount of services from HDSI. The fees for services is determined based on an agreed upon charge-out rate for each employee performing the service and the time spent by the employee. The charge-out rate also includes overhead costs such as office rent, information technology services and administrative support. Such charge-out rates are agreed and set annually in advance.

    Third party expenses are billed at cost, without any markup.

    Page 19



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    Ongoing contractual or other commitments resulting from the related party relationship

    There are no ongoing contractual or other commitments resulting from the Company’s transactions with HDSI, other than the payment for services already rendered and billed. The agreement may be terminated upon 60 days’ notice from either the Company or HDSI.

    The following summarizes the transactions with HDSI for the three and six months ended June 30:

        Three months     Six months  
    Transactions   2015       2014       2015       2014  
     Services rendered by HDSI $  1,077     $  1,374     $  2,110     $  2,941  
     Technical   354       440       656       1,005  
         Engineering   53       147       155       355  
         Environmental   178       157       351       341  
         Socioeconomic   1       84       1       195  
         Other technical services   122       52       149       114  
     General and administrative   723       934       1,454       1,936  
         Management, financial & administration   433       637       878       1,343  
         Provision of IT services   105       122       219       245  
         Shareholder communication   185       175       357       348  
                                   
    Reimbursement of third party expenses   26       40       138       215  
         Conference and travel   30       39       71       134  
         Insurance   1             51       63  
         Office supplies and other   (5 )     1       16       18  
                                   
    Total paid by the Company $  1,103     $  1,414     $  2,248     $  3,156  

    Key Management Personnel

    The required disclosure for the remuneration of the Company’s key management personnel is provided in Note 8(a) in the notes to the Interim Financial Statements which accompany this MD&A and which are available under the Company’s profile at www.sedar.com.

    1.10

    Fourth Quarter

    Not applicable.

    1.11

    Proposed Transactions

    There are no proposed asset or business acquisitions or dispositions, other than those in the ordinary course, before the Board of Directors for consideration.

    1.12

    Critical Accounting Estimates

    There was no change in the use of estimates and judgments during the current period from those described in Note 2 in the Group’s Consolidated Financial Statements for the year ended December 31, 2014 available under the Company’s profile at www.sedar.com.

    Page 20



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    1.13

    Changes in Accounting Policies including Initial Adoption

    The Company has disclosed information and potential impact thereof in Note 2 in the notes to the Financial Statements which accompany this MD&A.

    1.14

    Financial Instruments and Other Instruments

    The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

    Credit Risk

    Credit risk is the risk of potential loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to its liquid financial assets, including cash and cash equivalents, restricted cash and amounts receivable. The Company limits the exposure to credit risk by only investing its cash and cash equivalents and restricted cash with high-credit quality financial institutions in business and saving accounts, guaranteed investment certificates, and in government treasury bills which are available on demand by the Group as and when required. There has been no change in the Company’s objectives and policies for managing this risk except for changes in the carrying amounts of financial assets exposed to credit risk, and there was no significant change to the Company’s exposure to credit risk during the year ended December 31, 2014. Amounts receivable include receivable balances with government agencies and refundable deposits. Management has also concluded that there is no objective evidence of impairment to its amounts receivable.

    Liquidity Risk

    Liquidity risk is the risk that the Company will not be able to meet its financial obligations when they become due. There has been no change in the Company’s objectives and policies for managing this risk. The Company’s liquidity position has been discussed in Section 1.6 Liquidity.

    Foreign Exchange Risk

    The Company is subject to both currency transaction risk and currency translation risk: the Pebble Partnership and U5 Resources Inc. have the US dollar as functional currency; and certain of the Company’s corporate expenses are incurred in US dollars. The fluctuation of the US dollar in relation to the Canadian dollar has an impact upon the losses incurred by the Company as well as the value of the Company’s assets and total shareholders’ equity as the Company’s functional and presentation currency is the Canadian dollar. The Company has not entered into any agreements or purchased any instruments to hedge possible currency risks at this time.

    There has been no change in the Company’s objectives and policies for managing this risk, except for the changes in the carrying amounts of the financial assets exposed to foreign exchange risk, and there was no significant change to the Company’s exposure to foreign exchange risk during the year ended December 31, 2014.

    Interest rate risk

    The Company is subject to interest rate risk with respect to its investments in cash and cash equivalents. There has been no change in the Company’s objectives and policies for managing this risk and no significant change to the Company’s exposure to interest rate risk during the period ended June 30, 2015.

    Page 21



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015

    Commodity price risk

    While the value of the Company’s Pebble Project, held through its interest in the Pebble Partnership, is related to the price of gold, copper and molybdenum and the outlook for these minerals, the Company currently does not have any operating mines and hence does not have any hedging or other commodity based risks in respect of its operational activities.

    Gold, copper, and molybdenum prices have fluctuated widely historically and are affected by numerous factors outside of the Company's control, including, but not limited to, industrial and retail demand, central bank lending, forward sales by producers and speculators, levels of worldwide production, short-term changes in supply and demand because of speculative hedging activities, and certain other factors related specifically to gold.

    Capital Management

    The Company's policy is to maintain a strong capital base so as to maintain investor and creditor confidence and to sustain future development of the business. The capital structure of the Company consists of equity, comprising share capital, reserves and special warrants, net of accumulated deficit.

    There were no changes in the Company's approach to capital management during the period. The Company is not subject to any externally imposed capital requirements.

    1.15

    Other MD&A Requirements

    Additional information relating to the Company, including the Company's 2014 Annual Information Form, is available under the Company’s profile on SEDAR at www.sedar.com.

    1.15.1

    Disclosure of Outstanding Share Data

    The capital structure of the Company as of the date of this MD&A is shown in the following table:

        Total  
    Common shares issued and outstanding   130,972,599  
    Share options (weighted average exercise price per option: $1.72)   6,194,900  

    1.15.2

    Disclosure Controls and Procedures

    The Company has disclosure controls and procedures in place to provide reasonable assurance that any information required to be disclosed by the Company under securities legislation is recorded, processed, summarized and reported within the applicable time periods and that required information is gathered and communicated to the Company's management so that decisions can be made about timely disclosure of that information.

    1.15.3

    Management’s Report on Internal Control over Financial Reporting

    The Company's management, including the CEO and the CFO, is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting ("ICFR") is a process designed by, or under the supervision of, the Company's principal executive and principal financial officers and effected by the Company's Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with IFRS. The Company's ICFR includes those policies and procedures that:

    Page 22



    Northern Dynasty Minerals Ltd.
    Management's Discussion And Analysis
    Three and six months ended June 30, 2015
    • pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

    • provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the company; and

    • provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the consolidated financial statements.

    1.15.4

    Changes in Internal Control over Financial Reporting

    There has been no change in the design of the Company’s ICFR that has materially affected, or is reasonably likely to materially affect, the Company’s ICFR during the period covered by this MD&A.

    1.15.5

    Limitations of Controls and Procedures

    The Company’s management, including its CEO and CFO, believe that any system of disclosure controls and procedures or ICFR, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Furthermore, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty and breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.

    1.15.6

    Risk Factors

    Please refer to "Risk Factors" discussed in Item 5 in the Company’s 2014 annual information form for the year ended December 31, 2014 filed under the Company’s profile on SEDAR at www.sedar.com.

    Page 23





    NORTHERN DYNASTY MINERALS LTD.

    Form 52-109F2

    Certification of Interim Filings - Full Certificate

    I, Ronald W. Thiessen, President and Chief Executive Officer of Northern Dynasty Minerals Ltd., certify the following:

    1.

    Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Northern Dynasty Minerals Ltd. (the “issuer”) for the interim period ended June 30, 2015.

    2.

    No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a 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 was made, with respect to the period covered by the interim filings.

    3.

    Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

    4.

    Responsibility: The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (“DC&P”) and internal control over financial reporting (“ICFR”), as those terms are defined in National Instrument 52-109, Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

    5.

    Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer and I have, as at the end of the period covered by the interim filings


    (a)

    designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

       

    (i)

    material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

       

                       

    (ii)

    information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

       

    (b)

    designed ICFR, or caused it to be designed under our supervision, 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.


    5.1 Control framework: The control framework the issuer’s other certifying officer and I used to design the issuer’s ICFR is the Internal Control Integrated Framework 2013 published by The Committee of Sponsoring Organizations of the Treadway Commission.
     
    5.2 ICFR material weakness relating to design: N/A
     
    5.3 Limitation on scope of design: N/A



    6.

    Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2015 and ended on June 30, 2015 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

    Date: August 14, 2015

    /s/ R.W. Thiessen  
    Ronald W. Thiessen  
    President and Chief Executive Officer  

    2





    NORTHERN DYNASTY MINERALS LTD.

    Form 52-109F2

    Certification of Interim Filings - Full Certificate

    I, Marchand Snyman, Chief Financial Officer of Northern Dynasty Minerals Ltd., certify the following:

    1.

    Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Northern Dynasty Minerals Ltd. (the “issuer”) for the interim period ended June 30, 2015.

     

    2.

    No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a 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 was made, with respect to the period covered by the interim filings.

     

    3.

    Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

     

    4.

    Responsibility: The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (“DC&P”) and internal control over financial reporting (“ICFR”), as those terms are defined in National Instrument 52-109, Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

     

    5.

    Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer and I have, as at the end of the period covered by the interim filings


    (a)

    designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that


    (i)

    material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

       
    (ii)

    information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and


    (b)

    designed ICFR, or caused it to be designed under our supervision, 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.


    5.1

    Control framework: The control framework the issuer’s other certifying officer and I used to design the issuer’s ICFR is the Internal Control Integrated Framework 2013 published by The Committee of Sponsoring Organizations of the Treadway Commission.

             

    5.2

    ICFR material weakness relating to design: N/A

    5.3

    Limitation on scope of design: N/A




    6.

    Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2015 and ended on June 30, 2015 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

    Date: August 14, 2015

    /s/ M. Snyman  
    Marchand Snyman  
    Chief Financial Officer  

    2


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