News Column

Update on Proposed Acquisition and Offering, Second Quarter Operations and Declaration of Second Quarter Dividend

June 23, 2014

CALGARY, June 23, 2014 /CNW/ - Northern Frontier Corp. (TSXV: FFF) (the "Corporation" or "NorthernFrontier") is providing an update on the proposed Central Water & Equipment Services Ltd. ("Central Water") acquisition and related offering, its second quarter operations and the declaration of its second quarter 2014 dividend.

Update on Proposed Central Water Acquisition and Financing

As previously announced on May 21, 2014, Northern Frontier agreed to acquire Central Water (the "Acquisition") and was pursuing a $75.0 million private placement offering (the "Offering") of senior secured second lien notes to finance the Acquisition. To date, Northern Frontier has received varied forms of interest and options for the Offering including a combination of senior, subordinated and mezzanine financing structures. Management has determined that some of these options present a better cost of capital and benefits to our shareholders. Consequently, the Corporation has terminated the Offering so that it can pursue these alternative options.

Northern Frontier is focused on completing the Acquisition to add client and services diversification as well as the accretive cash flow that Central Water will generate to support our growth strategy. Management has commenced negotiations to complete the financing ("Financing") to acquire Central Water and anticipates that it will close the Acquisition in the third quarter of 2014.  Furthermore, the vendors of Central Water have agreed to work with Northern Frontier within the expected timeline to complete the Financing.

Update on Second Quarter Operations

Overall, operating activities to date for the second quarter of fiscal 2014 have been impacted by high levels of rain and inclement weather in the Conklin area. A number of projects planned for the second quarter have been delayed awaiting an improvement in weather conditions conducive to Northern Frontier's civil activities. A combination of revenue mix and customer project deferrals resulting from the wet ground conditions are expected to have an adverse impact on Northern Frontier's second quarter financial results. In addition, the termination of the Offering and delay in the anticipated closing of the Acquisition will result in the Corporation incurring additional non-operating expenses and not benefiting from the contributions of Central Water's operating activities for June 2014.

Northern Frontier has experienced an increase in operating activities through the month of June, and current indicators suggest a strong level of activity in the third quarter to accommodate deferred client projects.

Dividend Declaration

In light of the current status of the Acquisition, Financing, preliminary expectations of operating and financial performance for the second quarter and other considerations, the Board has decided to declare a dividend-in-kind of 0.0191 of one common share in the capital of the Corporation (a "Share") on each outstanding Share of the Corporation, payable on July 15, 2014 to holders of record at the close of trading on July 3, 2014 (ex-dividend June 30, 2014). The determination of the amount per Share was based upon $0.065 divided into the closing share price on June 23, 2014 of $3.40 per Share.  In accordance with the applicable rules of the TSX Venture Exchange, "ex-dividend" trading procedures will be applied in connection with the payment of the dividend.

The board of directors (the "Board") remains committed to the dividend policy it instituted and believes that, at present, it is in the Corporation's best interests to preserve its cash until Northern Frontier completes the Acquisition and finalizes its capital structure.

Conference Call

Management of Northern Frontier will hold a conference call on Tuesday, June 24 at 9:00 a.m.Calgary / 11:00 a.m.Toronto time. The call will feature remarks from Chris Yellowega, President and CEO and Monty Balderston, Executive Vice President and CFO and will be followed by a question and answer session.

Conference dial-in instructions are as follows:

Toronto: 416.764.8688

North America: 888.390.0546

Conference ID: 66308534

A replay of the call will be available 24 hours after the event until 11:59 p.m. EST on July 1, 2014. To access the archived conference call, please dial 416.764.8677 or 888.390.0541 and enter passcode 308534.

Reader Advisory

Securities Law Matters

This news release does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offering, solicitation or sale would be unlawful.

Forward-Looking Statements

This news release includes certain statements that constitute forward-looking statements under applicable securities legislation. All statements other than statements of historical fact are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", or the negative of these terms or other comparable terminology.  These forward-looking statements include, among other things, statements in respect of:

completion of the Acquisition and the Financing;use of net proceeds from the Financing;terms of the Financing;anticipated benefits of completing the Acquisition and the Financing;expectations of future financial performance of the Corporation; and declaration and form of payment of dividends.



These statements are only predictions and are based upon current expectations, estimates, projections and assumptions, which the Corporation believes are reasonable but which may prove to be incorrect and therefore such forward-looking statements should not be unduly relied upon. In making such forward-looking statements, assumptions have been made regarding, among other things, industry activity, the state of financial markets, business conditions, continued availability of capital and financing, future oil and natural gas prices and the ability of the Corporation to obtain necessary regulatory approvals. Although the Corporation believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.

By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur. These risks and uncertainties include: the possibility that the parties will not proceed with the Acquisition and the Financing, that the ultimate terms of the Acquisition and the Financing will differ from those that are currently contemplated, that the Acquisition and the Financing will not be successfully completed for any reason (including the failure to obtain the required approvals from regulatory authorities), that the Corporation's financial performance does not transpire as expected, that the Corporation declares any future dividends or the form of payment thereof and regulatory changes. Investors are cautioned that forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements.  The Corporation has no obligation to update any forward-looking statements set out in this news release, except as required by applicable law.

About Northern Frontier Corp.

Northern Frontier's strategic objective is to create a large industrial and environmental services business through a buy and build growth strategy. Currently, the Corporation provides civil construction and excavation services to the industrial industry, primarily in the in situ Oilsands region south of Fort McMurray, Alberta.  Through providing these services to large industrial customers in the steam assisted gravity drainage ("SAGD") region of northeastern Alberta, the Corporation focuses on the ongoing demand for services to support operating facilities, sustaining capital expenditures to maintain production levels of those facilities and the development of new production capacity.

The Corporation's common shares and common share purchase warrants are listed on the TSX Venture Exchange under the trading symbol "FFF" and "FFF.WT", respectively.

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

SOURCE Northern Frontier Corp.


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