Objectives and Strategies

When Horizon North came into existence in June 2006, the objective was to build a profitable, growth-oriented company to provide services to remote resource development projects in Canada. The strategy established to achieve this objective has the following elements:

Acquire full cycle businesses that provide services required by projects located in remote regions of Canada;
Establish safety standards that meet and exceed the expectations of customers that work in remote locations;
Diversify the revenue stream so as not to be overly exposed to any one industry, in any one location and to minimize seasonality;
Establish and maintain relationships with the aboriginal communities on whose land we work, allowing for meaningful aboriginal participation in projects undertaken by Horizon North;
Maintain a conservative balance sheet to allow the continued pursuit of growth opportunities whether they be in the form of additional acquisitions or internal growth projects; and
Focus on maintaining and strengthening the team of employees and management to ensure the continued success and longevity of the organization.

On start up, Horizon North’s initial asset base consisted of base camps, staging areas, tugboats, barges and road and site construction equipment located in the Northwest Territories – most of which were underutilized or not operating at all. In keeping with our strategy, the Company has undertaken the following transactions and activities since June 2006:

Issued 68.5 million common shares to raise net cash proceeds of $200.9 million to finance business acquisitions.
Established the Camps & Catering segment through the acquisition of Shanco Camp Services Ltd. (“Shanco”), Legacy Industrial Camps Inc. (“Legacy”), and Fortier & Associates Camp Catering Inc. (“Fortier”) in 2006 and Ready Oilfield Services Inc. (“Ready”), Northern Trailer Ltd. (“Northern”), and Pioneer Site Services Ltd. (“Pioneer”) in late 2007. With Shanco and Legacy, Horizon North established a full-cycle camp and catering business that included camp manufacturing, rental, sales, installation, maintenance and catering, primarily to the oil and gas industry. The acquisition of Fortier brought another established catering business with personnel experienced in servicing large camps accommodating over 500 people. The addition of Ready increased Horizon North’s fleet of transportable power generation units which complement the camp rental fleet. The impetus behind the Northern acquisition was to expand manufacturing capacity in a different labour market and to diversify the revenue stream into the mining sector. The acquisition of Pioneer met Horizon North’s strategy of providing services to remote northern resource development projects, while working closely with, and providing benefits to, the Inuit residents in Nunavut. The camp management and catering operations of Shanco, Legacy and Fortier have been merged under one management group and the manufacturing operations of Shanco in Grande Prairie, Alberta and Northern in Kamloops, British Columbia are beginning to work together to maximize production capacity and efficiency.
Established the Matting segment through the acquisition of Swamp Mats Inc. in 2006, which is also a full cycle business that manufactures, rents, sells and installs heavy duty oak mats.
Implemented a company-wide safety program, the basis for which is outlined in the program’s slogan “Stop, Think and Go”. The program continually reinforces the safety awareness that is required to meet our own and our customers’ high safety standards and provides training on hazard identification, safe work practices and incident reporting and management.
Undertook internal growth projects including the construction of our 500 bed BlackSand Executive Lodge near Fort McMurray, Alberta which was completed in the third quarter of 2008 and expansion of our mat manufacturing capacity by moving to a new facility in Grande Prairie, Alberta and opening a plant in the Fort McMurray region. The BlackSand Executive Lodge will serve customers involved in the development of large oil sands projects thus serving to diversify Horizon North’s revenue stream away from the seasonal and more volatile conventional oil and gas industry. The mat manufacturing plant near Fort McMurray is located on aboriginal lands and employs members of the local aboriginal bands.
Renegotiated the Company’s credit facilities in August 2008 to provide for $80.0 million of total borrowing capacity.

These activities have created a solid foundation of profitable, well financed businesses that are ready to pursue growth opportunities associated with natural resource development such as expansion of oil sands production, and numerous mining projects that are being proposed or planned. Horizon North does not plan to expand outside of the core services it now provides, with future investments aimed at expanding the capacity of existing operations or adding complimentary products and services.