EarthFirst Canada Inc. - Fifth Default Status Report



    
    /NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES WIRE
    SERVICES/
    

    CALGARY, Jan. 19 /CNW/ - EarthFirst Canada Inc. ("EarthFirst" or the
"Company") (TSX: EF, EF.WT) provides its fifth bi-weekly Default Status Report
under National Policy 12-203 - Cease Trade Orders for Continuous Disclosure
Defaults, pursuant to which EarthFirst announced that its financial statements
for the third quarter ended September 30, 2008 would not be filed by November
14, 2008. EarthFirst reports that since announcing the original Notice of
Default on November 10, 2008 there have not been any material changes to the
information contained therein; nor any failure by EarthFirst to fulfill its
intentions as stated therein, and there are no additional defaults or
anticipated defaults subsequent to such announcement. Further, there have been
no additional material changes respecting EarthFirst and its affairs which
have not been previously disclosed or are not disclosed below. EarthFirst
intends to file its next Default Status Report on Monday, February 2, 2009.
    On November 4, 2008, EarthFirst and WestLB AG entered into a forbearance
agreement in respect of the indebtedness owed WestLB AG by EarthFirst
agreeing, among other things, that WestLB AG would be exempted from the stay
in the CCAA initial order but would forbear from enforcing it's claim under
the negotiated terms of the agreement and to other matters relating to the
conduct of EarthFirst during the period of CCAA protection. This forbearance
agreement expired on January 4, 2009. EarthFirst and WestLB AG are continuing
to negotiate an extension to this agreement and EarthFirst will provide
further disclosure of the result of these negotiations as information is known
to the Company.
    On December 18, 2008, EarthFirst received a number of bids to purchase
some or all of the Company and/or EarthFirst's Dokie I project. In addition,
EarthFirst has also commenced processes to potentially sell some or all of the
wind turbines it has acquired for the Dokie I project and some or all of its
development projects. EarthFirst is continuing to work with certain of the
bidders and other interested parties in an effort to consummate a transaction
with one of them by late January or early February, 2009 .If one of these
transactions does not close, or if EarthFirst can not obtain some other form
of funding prior to the end of February, 2009, EarthFirst will not have
sufficient funding to continue to operate.
    EarthFirst is pleased to announce that it has successfully completed a
production test for one of its CRCE turbines. EarthFirst does not intend to
complete any additional testing until its interconnection is completed late in
the first quarter of 2009.

    Certain statements included in this news release constitute
"forward-looking information" within the meaning of applicable securities
legislation including the timing and continuance of CCAA protection, the
timing of filing of EarthFirst's interim financial statements, management's
discussion and analysis and related CEO and CFO certifications for the third
quarter ended September 30, 2008 and EarthFirst's funding for operations. Such
forward-looking information involves known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of EarthFirst to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
information.
    Specifically, some of the material risks include not being able to
acquire required permits, delays in construction timing or turbine delivery,
not being able to obtain financing, the uncertainty involved in the Court
proceedings and the implementation of a Plan under the CCAA and the
uncertainty of the results of EarthFirst's on-going corporate and asset sale
initiatives.
    The forward-looking information contained in this news release represents
the expectations of EarthFirst as at January 19, 2009, and, accordingly, is
subject to change after such date. However, EarthFirst expressly disclaims any
intention or obligation to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise, except as
required by applicable law.





For further information:

For further information: Brian Trypka, Chief Restructuring Officer,
EarthFirst Canada Inc., Tel: (403) 513-0780, Toll Free: (877) 513-0777,
E-mail: btrypka@earthfirstcanada.com; Derren Newell, VP, Finance and Chief
Financial Officer, EarthFirst Canada Inc., Tel: (403) 513-0766, Toll Free:
(877) 513-0777, E-Mail: dnewell@earthfirstcanada.com

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EARTHFIRST CANADA INC.

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