International Frontier Resources Announces 2016 Fourth Quarter and Year-End Financial and Operating Results

International Frontier Resources Corporation (TSXV:IFR,OTCQB:IFRTF) is pleased to report its financial and operating results for the three months and year ended December 31, 2016. Selected financial and operational information is set out below and should be read in conjunction with IFR’s December 31, 2016 audited annual financial statements and the related management’s discussion and analysis (“MD&A”). In addition, the Corporation today announces the filing of its Annual Information Form (“AIF”) for the year ended December 31, 2016, which contains the Corporation’s reserves and other oil and natural gas information, as required under National Instrument 51-101 Standards of Disclosure of Oil and Gas Activities. The AIF, financial statements and MD&A are available for review at www.sedar.com and on the Corporation’s website at www.internationalfrontier.com. All figures are in Canadian dollars.
Highlights
2016 was a transformative year, with IFR achieving several strategic objectives. With an increased focus on Mexico’s Energy Reform, IFR successfully executed on its strategy to be a first mover and built a solid foundation from which to emerge as an energy leader in Mexico together with joint venture company Tonalli Energia.
IFR’s achievements in the fourth quarter and year ended 2016 include the following:

• The Company’s joint venture company Tonalli Energia, was notified in May by the Mexico Comision Nacional de Hidrocarburos (CNH) that it had been awarded the onshore oil and gas development Block 24, referred to as “Tecolutla.” Tecolutla was awarded to Tonalli as part of the first round and third call of Mexico’s oil and natural gas “mature fields” bid round (“Round 1.3”), the first in almost 80 years. In August, Tonalli signed a license contract with CNH granting Tonalli the right to develop and produce hydrocarbons for 35 years, subject to certain extensions.
• In June, IFR completed a non-brokered private placement for gross proceeds of $1,600,000.
• The Company made executive and board changes, including the addition of two new board members, Ignacio Quesada and Colin Mills.
• In October, the Company commenced trading in the United States on the OTCQB Marketplace under the symbol IFRTF.
• In November, Tonalli formally assumed operatorship of the Tecolutla block from PEMEX and identified high interest development targets.

Financial Highlights ‐ Fourth Quarter 2016 and Year Ended December 31, 2016

• The Company reported a consolidated net loss of $1,690,950 ($0.02 loss per share) for the three months ended December 31, 2016 compared to a net loss of $3,410,420 ($0.05 per share) for the same period in 2015.
• In Q4 2016, the Company had negative cash flow from continuing operations of ($641,195) which excluded a $787,000 non-cash impairment charge.
• The impairment charge at December 31, 2016 of $787,000 is related to its properties in the Central Mackenzie Valley, Northwest Territories, Canada and is comprised of $597,000 of historic seismic costs and $190,000 for a license that IFR planned to relinquish. Subsequent to year end, IFR proceeded to relinquish this license.
• The loss from operations in the period included $582,680 in general and administrative costs and $65,040 incurred during the period in respect to the Company’s Mexico project.
• General and administrative costs for the quarter were higher than previous quarters mainly because of general and administrative expenses related to increased activities and development focused on Mexico as well as certain non-recurring corporate costs that were incurred in the period.
• Assets held for sale at December 31, 2016 totaled $502,150 relating to the sale of Company properties in Southeast Alberta in April 2017.
• The net loss from discontinued operations in Q4 2016 of $87,070 is related to the Company’s Alderson property in Southeast Alberta. The property was sold subsequent to year end.
• The Company recorded a consolidated net loss for the year ended December 31, 2016 of $3,252,130 ($0.03 per share) compared to a net loss of $4,394,775 ($0.06 per share) at December 31, 2015.
• In 2016, the Company had a negative cashflow from continuing operations of $1,543,580 including the impairment charge of $787,000 and a loss attributed to the Company’s investment in its Mexican joint venture, Tonalli Energia, of $258,435.
• During the year, the Company had capital contributions of $484,430 for its 50% share to fund the Company’s joint venture in Mexico.
• Working capital before assets and liabilities held for sale, at December 31, 2016 was $1,713,535, including $1,944,420 of cash and cash equivalents.
• In March 2017, the Company closed a private placement and raised gross proceeds of $5,059,085 ($4,911,340 net of commissions), which consisted of the sale of 18,068,160 common shares at a price of CAD$0.28 per common share.

Financial Results

Operations Update
IFR’s joint venture company, Tonalli Energia, has made significant progress towards obtaining the regulatory approvals required to begin to resume production operations and to implement development activities at Tecolutla. Tonalli is currently engaged with regulatory agencies in Mexico including CNH, SENER and ASEA, to obtain the major permits and authorizations required to commence field operations.
IFR intends to submit the final applications for these permits and authorizations by the end of April 2017. Once submitted, each application will undergo a final review process by the applicable Mexican regulatory authority. Although this initial regulatory process has been intensive thus far, we have been satisfied with our interactions with the Mexican authorities. Approval of these applications will also allow Tonalli to obtain the drilling permit for the first well to be drilled at Tecolutla since 1973. Tonalli expects to commence drilling operations at Tecolutla in Q3 2017, subject to regulatory approvals. In the near term, however, we expect to conduct wellhead servicing in preparation for the workover of an existing well.
Tonalli continues to engage service and equipment suppliers in Mexico. All services required to drill, complete and equip wells are available in Mexico at competitive rates. We expect all capital costs to remain within budgeted estimates.
All required field work has been completed and reviewed by independent technical groups. Tonalli has finalized surveying of the extensions of the existing drill sites to accommodate new drilling and has minor road upgrades underway. A logistics and measurement plan has been developed to move production from the Tecolutla asset through existing infrastructure in Mexico’s Poza Rica area. A measurement skid is currently being engineered and going through a procurement process for its construction.
Our internal technical evaluation continues to confirm our original assessments that Tecolutla has the potential to be a highly economic project at current commodity prices. Tonalli believes that improved drilling technology and production techniques will enable it to increase the recovery factor of its Tecolutla asset.
Round 2.3
As per the press release dated January 19, 2017, Tonalli has accessed the CNH data room for the onshore third tender of round two of Mexico’s oil and gas energy reform. Tonalli is in process of analyzing and assessing block data and intends to finalize the prequalification application in early May. The Mexican government announced the third tender of round two on November 14, 2016, which will be the eighth upstream bid round in Mexico since the energy reform began. Fourteen onshore blocks, averaging 185 km2 (72 sections) are available nationwide: six in the Southeastern Basin, four in the Burgos Basin, three in the Veracruz Basin and one block in the Tampico-Misantla Basin, which offsets the Tecolutla Block. Covering a total of 2,595 km2, these development and exploration blocks contain 25 oil and gas fields with existing 3D or 2D seismic coverage. The Mexican government has estimated that together the blocks contain prospective exploration resources of approximately 251 million barrels of crude equivalent and remaining original extraction volumes of approximately 328 million barrels of crude oil equivalent.
About International Frontier Resources
International Frontier Resources Corporation (IFR) is a Canadian publicly traded company with a demonstrated track record of advancing oil and gas projects. Through its Mexican subsidiary, Petro Frontera S.A.P.I de CV (Frontera) and strategic joint ventures, it is advancing the development of petroleum and natural gas assets in Mexico. The Company also has projects in Canada and the United States, including the Northwest Territories, Alberta and Montana.
The Company’s shares are listed on the TSX Venture, trading under the symbol IFR and on the OTCQB under the symbol IFRTF. For additional information please visit www.internationalfrontier.com.
Forward Looking Statements
This press release contains forward‐looking statements and forward‐looking information (collectively “forward‐looking information”) within the meaning of applicable securities laws relating to the Company’s plans, strategy, business model, focus, objectives and other aspects of IFR’s anticipated future operations and financial, operating and drilling and development plans and results, including, expected future production, production mix, reserves, drilling inventory, net debt, cash flow, operating netbacks, decline rate and decline profile, product mix, capital expenditure program, capital efficiencies, commodity prices, tax pools and targeted growth. In addition, and without limiting the generality of the foregoing, this press release contains forward‐looking information regarding: anticipated cost savings and operational efficiencies; anticipated capital cost estimations; the focus and allocation of IFR’s 2017 capital budget; anticipated production rates, available free cash flow, management’s view of the characteristics and quality of the opportunities available to the Company; and other matters ancillary or incidental to the foregoing.
Forward‐looking information typically uses words such as “anticipate”, “believe”, “project”, “target”, “guidance”, “expect”, “goal”, “plan”, “intend” or similar words suggesting future outcomes, statements that actions, events or conditions “may”, “would”, “could” or “will” be taken or occur in the future. The forward‐looking information is based on certain key expectations and assumptions made by IFR’s management, including expectations concerning prevailing commodity prices, exchange rates, interest rates, applicable royalty rates and tax laws; capital efficiencies; decline rates; future production rates and estimates of operating costs; performance of existing and future wells; reserve and resource volumes; anticipated timing and results of capital expenditures; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; the timing, location and extent of future drilling operations; the state of the economy and the exploration and production business; results of operations; performance; business prospects and opportunities; the availability and cost of financing, labour and services; the impact of increasing competition; ability to market oil and natural gas successfully and IFR’s ability to access capital.
Statements relating to “reserves” are also deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and that the reserves can be profitably produced in the future.
Although the Company believes that the expectations and assumptions on which such forward‐looking information is based are reasonable, undue reliance should not be placed on the forward‐looking information because IFR can give no assurance that they will prove to be correct. Since forward‐looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties. The Company’s actual results, performance or achievement could differ materially from those expressed in, or implied by, the forward‐looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward‐looking information will transpire or occur, or if any of them do so, what benefits that the Company will derive there from. Management has included the above summary of assumptions and risks related to forward‐looking information provided in this press release in order to provide security holders with a more complete perspective on IFR’s future operations and such information may not be appropriate for other purposes.
Readers are cautioned that the foregoing lists of factors are not exhaustive. Additional information on these and other factors that could affect IFR’s operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).
These forward‐looking statements are made as of the date of this press release and IFR disclaims any intent or obligation to update publicly any forward‐looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.
“Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility or accuracy of this release”. The Company seeks Safe Harbor.
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