Northern Spirit Resources Inc.
TSX VENTURE : NS

December 16, 2011 07:45 ET

Northern Spirit Resources Inc. Announces Closing of Business Combination With Cascade Resources Inc.

CALGARY, ALBERTA--(Marketwire - Dec. 16, 2011) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.

Northern Spirit Resources Inc. ("Northern Spirit" or the "Corporation") (TSX VENTURE:NS) is pleased to announce that it has completed its previously announced acquisition (the "Acquisition") all of the issued and outstanding common shares (the "Cascade Shares") of Cascade Resources Inc. ("Cascade"), a private Alberta company actively engaged in oil and gas development and exploration activities in east central Alberta and west central Saskatchewan. For further details on the Acquisition and related matters, please see the Filing Statement of Northern Spirit dated November 29, 2011 (the "Filing Statement") available for review at www.sedar.com under the Corporation's profile. Final approval of the Acquisition, and the resumption of trading of the common shares of the Corporation ("Northern Spirit Shares") on the TSX Venture Exchange ("TSXV"), will occur upon the issuance by the TSXV of its Final Exchange Bulletin (as defined in the policies of the TSXV), which is expected to occur during the week of December 19, 2011. Upon the issuance of the Final Exchange Bulletin, the Corporation will be classified as a Tier 1 Oil and Gas issuer on the TSXV and the Northern Spirit Shares will continue to trade on the TSXV under the symbol "NS". The Acquisition constitutes a reverse takeover of Northern Spirit by Cascade as defined in the policies of the TSXV.

New Board of Directors and Management

Northern Spirit is pleased to announce that Mr. Robert G. Jennings has been appointed a director of the Corporation, in conjunction with the closing of the Acquisition. Mr. Jennings is the former Chairman and Chief Executive Officer of Jennings Capital Inc. The board of directors of Northern Spirit now consists of: Kevin R. Baker, Q.C., Robert G. Jennings, Sheldon B. Kasper, R. Bruce Allford and Patrick G. Bell. The senior officers of Northern Spirit are now: Kevin R. Baker Q.C. - President and Chief Executive Officer, John H. Cassels - Vice President Finance, Chief Financial Officer and Secretary, Sheldon B. Kasper - Vice President, Operations, Eric O. Boechler - Vice President, Exploration and James Long - Vice President, Land.

The Acquisition

Pursuant to the Acquisition, Northern Spirit acquired all of the Cascade Shares by way of a "three-cornered" amalgamation in which Northern Spirit Acquisition Inc. ("AcquisitionCo"), a wholly-owned subsidiary of Northern Spirit, amalgamated with Cascade. In connection with the Acquisition, Northern Spirit issued 9.0 Northern Spirit Shares for each one (1) Cascade Share issued and outstanding immediately prior to the Acquisition, for an aggregate of 221,400,000 Northern Spirit Shares being issued to former shareholders of Cascade. All outstanding Cascade share purchase options were exercised in connection with the Acquisition, with the Cascade Shares issued on such exercise being acquired by Northern Spirit. Of the outstanding 850,000 options to purchase Northern Spirit Shares outstanding prior to the closing of the Acquisition, 739,800 of such options were terminated, for nominal consideration, in connection with the closing of the Acquisition and 110,200 options were exercised prior to closing, at an exercise price of $0.20 per share, for aggregate proceeds of $22,040.

Post-Transaction Share Capital

Pursuant to the Acquisition, and including the acquisition of the Cascade Shares issued upon the exercise of all Cascade share purchase options, Northern Spirit issued an aggregate of 221,400,000Northern Spirit Shares at a deemed price of $0.1045 per share. Of the 221,400,000 Northern Spirit Shares issued in the Acquisition, 97,224,879 shares will be subject to a Value Security Escrow Agreement pursuant to the policies of the TSXV and 39,510,000 shares will be subject to a one year TSXV hold period (the "TSXV Hold Period"). The TSXV Hold Period provides for releases of 20% of the applicable Northern Spirit Shares every 3 months with the initial release occurring on the issuance of the Final Exchange Bulletin. A total of 36,810,000 Northern Spirit Shares that are subject to the TSXV Hold Period are also subject to the Value Escrow Agreement and, accordingly, such shares will remain subject to the Value Escrow Agreement upon being released from the TSXV Hold Period. Northern Spirit currently has 237,498,056 shares issued and outstanding, inclusive of the Northern Spirit Shares issued on the Acquisition and issued pursuant to the exercise of Northern Spirit share purchase options prior to closing.

Cautionary Statements

The Qualifying Transaction is subject to the final approval of the Exchange.

The TSXV has in no way passed upon the merits of the Acquisition and has neither approved or disapproved the contents of this press release.

Except for statements of historical fact, this news release contains certain "forward-looking information" and "forward- looking statements" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. These forward-looking statements sometimes include words to the effect that management of Northern Spirit or Cascade, as applicable, believes or expects a stated condition or result. All estimates and statements that describe Northern Spirit's and Cascade's future plans are forward-look statements. Forward-looking statements such as the date of issuance of the Final Exchange Bulletin are based on the opinions and estimates at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. There are uncertainties inherent in forward-looking information, including factors beyond Northern Spirit's control. Northern Spirit undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. Additional information identifying risks and uncertainties that could affect financial results is contained in Northern Spirit's filings with Canadian securities regulators, which filings are available at www.sedar.com.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Northern Spirit Resources Inc.
    Kevin R. Baker Q.C.
    President & Chief Executive Officer
    (403) 476-7010

    Northern Spirit Resources Inc.
    John H. Cassels
    Vice President Finance, Chief Financial Officer & Secretary
    (403) 476-7008

    Northern Spirit Resources Inc.
    850, 396 - 11th Avenue SW
    Calgary, Alberta T2R 0C5
    (403) 269-1715 (FAX)