Northern Continental Resources Inc.
TSX VENTURE : NCR

Northern Continental Resources Inc.

January 21, 2008 10:07 ET

Northern Continental's Directors Continue to Recommend Shareholders Reject Hathor's Hostile Bid

Special Committee Advises Hathor's "Notice of Variation" Fails to Correct Deficient Disclosure

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 21, 2008) - Northern Continental Resources Inc. (TSX VENTURE:NCR) announced today that its Special Committee of independent directors has reviewed Hathor Exploration's Notice of Variation dated January 11, 2008 to its hostile takeover bid for Northern Continental.

The Notice of Variation was prepared to address numerous deficiencies in Hathor's original offer ("the Offer") to Northern Continental shareholders dated November 16, 2007. Hathor has not changed the terms of its unsolicited bid, except to extend it.

The special committee has concluded that while Hathor's Notice of Variation addresses some of the deficiencies in the Offer, it fails to address any of the deficiencies in respect of the material properties of Hathor.

The committee has concluded that, in fact, the Notice of Variation identifies the Midwest Northeast Property, Russell Lake Property and Russell South Property as Hathor's material properties but provides no new information about the properties to address the missing information in the Offer.

"Northern Continental shareholders do not have to do anything in order to reject Hathor's inadequate Offer. They can just throw it away," NCR's President Alan Crawford said.

As previously announced on December 4, 2007, the Board of Directors, based on the recommendation of its Special Committee of independent directors, unanimously recommended that Northern Continental shareholders reject the unsolicited offer by Hathor to acquire all of the outstanding common shares of Northern Continental (including any shares that may become issued and outstanding prior to the expiry of the offer upon the exercise of options of warrants) on the basis of 0.40 of a common share of Hathor for each share.

After careful consideration, including consultation with its financial and legal advisors, Northern Continental's Board concluded that Hathor's Offer is financially inadequate and not in the best interests of Northern Continental's shareholders.

In its Directors' Circular, dated November 30, 2007, Northern Continental's Board of Directors recommends that all Northern Continental shareholders reject the Offer and not tender their shares to Hathor.

In making a decision to accept or reject the Offer shareholders are urged to consider the following factors:

- The Offer is at a discount to the closing price of Northern Continental Shares on the date of the Offer and on November 29, 2007, the last trading day immediately prior to date of the Directors' Circular.

- The Offer substantially undervalues the 60% controlling interest of Northern Continental in the Russell Lake Property.

- The Offer will significantly dilute the economic interest of Northern Continental Shareholders in the Russell Lake Property from a 60% controlling interest to a 17% minority interest.

- None of the Northern Continental directors or senior officers intend to tender their Northern Continental Shares to the Offer.

- Based on the opinion of Northern Continental's independent financial expert, Stephen W. Semeniuk, CFA, the Offer is financially inadequate.

- The Offer is highly conditional with 16 conditions required to complete the Offer.

- The Offer is at a substantial discount to the previously implied value of $0.70 per Northern Continental share proposed by Hathor in a previous unsolicited overture to Northern Continental.

- The Offer discriminates against and may be taxable to Northern Continental's U.S. shareholders.

- The market for Hathor shares may be adversely affected by Hathor's "selling agent" selling Hathor shares in the market on behalf of Northern Continental's U.S. shareholders or by future tax-loss selling of Hathor shares.

- The Offer is substantially less than the value Hathor has attributed in its financial statements to its own 40% interest in the Russell Lake Property.
For these and other reasons described in the Directors' Circular, the Board of Directors unanimously recommends that Northern Continental shareholders reject the Offer and not tender their shares to the Offer.

The Board believes that the Russell Lake Property exhibits the potential for discovering significant uranium deposits, based on local geology, historical work and recent geophysics.

The Offer appears to be a clear attempt to take control of the Russell Lake Property before Northern Continental has the opportunity to complete the exploration aimed at revealing the significant upside potential of the Russell Lake Property.

On the release of any significant positive exploration results, the Northern Continental shareholders will stand to benefit the most because Northern Continental is the holder of the majority interest in the Russell Lake Property.

The Offer is a strategic and opportunistic attempt to position Hathor and its shareholders to be the sole beneficiaries of any future positive exploration results.

MORE INFORMATION AND WHERE TO FIND IT

Northern Continental has filed a Directors' Circular with applicable Canadian securities regulatory authorities with the respect to the Offer. Investors and shareholders are strongly advised to read the Directors' Circular, as well as any amendments and supplements to those documents, because they contain important information.

Investors and shareholders may obtain a free copy of the Directors' Circular at www.sedar.com. Free copies of this document can also be obtained by sending a request to Northern Continental Resources Inc. at Suite 789 West Pender Street, Vancouver, British Columbia V6C 1H2 or by calling the company at (604) 685-9255.

YOU SHOULD READ THE DIRECTORS' CIRCULAR CAREFULLY BEFORE MAKING A DECISION CONCERNING THE OFFER.

NORTHERN CONTINENTAL RESOURCES INC.

Charlie O'Sullivan, Chairman of the Board

Shareholders are urged to read the Directors' Circular posted on the company's website at www.northerncontinental.ca It is also available on SEDAR's website at www.sedar.com.

The TSX Venture Exchange has not reviewed, and does not accept responsibility for the adequacy or accuracy of the contents of this news release.

Contact Information

  • Northern Continental Resources Inc.
    Douglas Hickey
    VP Corporate Communications
    (604) 685-9255 or Toll Free: 1-800-449-4435
    Website: www.northerncontinental.ca