NORTHERN RESTATES INTERIM FINANCIAL STATEMENTS RELATED TO CONTINGENT GAIN

NORTHERN FINANCIAL CORPORATION
(TSX: NFC)

TORONTO, Dec. 21 /CNW/ - Northern Financial Corporation (TSX: NFC) ("Northern" or the "Company") announced that, as a result of accounting requirements applicable to contingent gains, it has restated its interim financial statements for the three months ended June 30, 2010 and the six months ended September 30, 2010, resulting in a $568,820 increase in its loss. The restatement relates only to the treatment of the contingent gain described below and the Company fully expects to receive the contingent gain of $568,820 in January 2011 which will offset the increased loss.  

The contingent gain relates to a final and binding judgment in favour of Northern Securities Inc. ("Northern Securities"), the Company's wholly owned subsidiary, issued by the Ontario Superior Court of Justice. The court ordered Zaruma Resources Inc. ("Zaruma") to pay Northern Securities damages in the amount of USD $440,000 plus interest and costs for a total amount of $568,820. The judgment was issued in the quarter ended June 30, 2010. 

Zaruma did not appeal the decision and has undertaken to pay the judgment to Northern Securities from the proceeds of a financing that Zaruma is in the process of completing. A portion of the proceeds of Zaruma's financing will be used to fund its copper project in Mexico. Zaruma has recognized the judgment in its financial statements as a liability and Northern expects the judgment to be paid as early as January 2011. 

The Company recognized the amount of the judgment as income in the period ended June 30, 2010. Subsequently, the Company determined that, due to the contingent nature of the gain, the award should be recognized as income on receipt of funds as opposed to on the expiry of the appeal period.  Accordingly, the Company has adjusted its financial statements to remove the impact of the gain.  The Company continues to have every expectation that it will receive the full amount of the judgment and will record it as income upon receipt. 

About Northern Financial Corporation

Northern Financial Corporation wholly owns Northern Securities Inc., a full service investment dealer that provides financial advisory services to retail and institutional clients and investment banking services to small capitalization companies.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this news release. This press release may contain forward-looking statements with respect to the Company, its operations, strategy, financial performance and condition. These statements generally can be identified by use of forward looking words such as "may", "will", "expect", "estimate", "anticipate", intends", "believe" or "continue" or the negative thereof or similar variations. The actual results and performance of the Company discussed herein could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulations and the factors described under "Risk Factors" in the Management's Discussion and Analysis and Filing Statement of the Company which are available at www.sedar.com. The cautionary statements qualify all forward-looking statements attributable to the Company and persons acting on their behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release and the Company has no obligation to update such statements.

SOURCE Northern Financial Corporation

For further information: For further information:

Vic Alboini   or   Doug Chornoboy
Chairman and CEO      Senior Vice President and CFO
(416) 644-8110      (416) 644-8150  

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Northern Financial Corporation

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