Northern Continental Resources Inc.
TSX VENTURE : NCR

Northern Continental Resources Inc.

December 04, 2007 15:26 ET

Northern Continental Directors List Eleven Reasons Why Shareholders Should Reject Hathor's Hostile Bid

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 4, 2007) - Northern Continental Resources Inc. (TSX VENTURE:NCR) today announced that its Board of Directors, based on the recommendation of its Special Committee of independent directors, unanimously recommends that Northern Continental shareholders reject the unsolicited offer by Hathor Exploration Ltd. (TSX VENTURE:HAT) to acquire all of the outstanding common shares of Northern Continental (the "Shares") (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 Exploration Ltd. for each Share.

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

In its Directors' Circular, filed today with securities regulators, Northern Continental's Board recommends that all Northern Continental shareholders reject the Offer and not tender their shares.

In making a decision regarding Hathor's Offer, shareholders are urged to consider the following factors:

1. 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.

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

3. 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.

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

5. Based on the opinion of Northern Continental's independent Certified Financial Analyst, Stephen W. Semeniuk, the Offer is financially inadequate.

6. The Offer is highly conditional with 16 conditions required to complete the Offer, as listed in Section 4 of the Offer.

7. 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.

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

9. The Offer has not been made in accordance with the Securities Act (Quebec).

10. 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.

11. 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.

Northern Continental is managing a major winter drilling program on the Russell Lake Property. Two drilling rigs have been secured and a highly capable geological team engaged. The winter program, consisting of 21 holes totalling 10,500 metres, will complete work left unfinished by Hathor last summer and explore several other target zones as well. THE NORTHERN CONTINENTAL BOARD IS FIRMLY OF THE OPINION THAT THIS PROGRAM IS THE BEST MEANS TO UNLOCK THE TRUE VALUE OF THE RUSSELL LAKE PROPERTY FOR NCR SHAREHOLDERS.

MORE INFORMATION AND WHERE TO FIND IT

Northern Continental has today 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 directing a request to Northern Continental Resources Inc. at Suite 789 West Pender Street, Vancouver, British Columbia V6C 1H2, telephone (604) 685-9255. YOU SHOULD READ THE DIRECTORS' CIRCULAR CAREFULLY BEFORE MAKING A DECISION CONCERNING THE OFFER.

NORTHERN CONTINENTAL RESOURCES INC.

Alan Crawford, President

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
    Toll Free: 1-800-449-4435 or (604) 685-9255
    Website: www.northerncontinental.ca