CN sells its northern Manitoba network to OmniTRAX.

WINNIPEG, Manitoba--(BUSINESS WIRE)--Nov. 15, 1996--CANADIAN NATIONAL RAILWAY -- (ME; TSE: CNR.IR) (NYSE: CNI) -- Canadian National Railway Company will sell its 10-mile northern Manitoba network to OmniTRAX, a Colorado-based operator of shortline railroads, the companies announced today.

The sale is expected to close in May of next year. Terms were not disclosed.

Paul M. Tellier, president and chief executive officer of CN, said that the OmniTRAX bid was one of several received, and the strongest from both operational and financial standpoints.

"The climate and geography of northern Manitoba present unique challenges for railroaders," Tellier said. "We therefore sought a buyer with proven railway operating experience and oriented towards service. OmniTRAX combines these characteristics with the financial wherewithal to suggest that it will become an effective long-term partner of Canadian National and of northern Manitoba shippers and communities. We are delighted that our efforts have been successful in maintaining rail service to northern Manitoba."

The OmniTRAX bid assumes the continuation of VIA Rail passenger service to all northern communities, Tellier said.

Patrick Broe, an industrialist and chairman and chief executive officer of the Broe Companies, Inc. of which OmniTRAX is part, said that the U.S. firm had long been looking to establish itself in Canada. The Broe Companies, in addition to its interest in OmniTRAX, has significant investments in a broad spectrum of industries and has grown rapidly over the past several years through strategic acquisitions.

"We think the railway shortline industry in Canada will mature into a significant business sector, as it has in the United States. Today's acquisition, and those to come, positions OmniTRAX to share in this anticipated growth in synergy with Canada's largest Class I railroad, and in a province whose economy is highly dependent on efficient and effective railway operations," said Dwight Johnson, President of OmniTRAX.

The 810-mile network is comprised of three separate lines, all of which were built in the late 1920's. The lines connect the Manitoba communities of Flin Flon, Lynn Lake and Churchill with the CN network at The Pas. A 30-mile spur connecting the Churchill line with Thompson was built in 1969. All lines will be included in the sales as will the CN rail yard located in The Pas.

In aggregate the line moved 1.2 million revenue tons of freight in 1995. Primary commodities were grain, forest products and minerals. Major customers situated on the lines are Hudson Bay Mining and Smelting, Repap and Inco.

OmniTRAX said it will spend the next six months meeting with industries who provide supplies to northern Manitoba and shippers who originate traffic on the lines, to discuss service specifics.

CN and OmniTRAX will also use this period to meet with CN employees who work on the lines being sold, and to their union representatives to discuss options for the 121 employees who may be affected by the sale.

The sale represents the single largest transaction in CN's efforts to reduce its network of secondary lines by 4,000 miles by the turn of the century. Once completed, the sale will bring the miles completed to date to 2,500. Most of this mileage has been sold to companies such as OmniTRAX, shortline operators who are able to function with lower overheads and improve service by making more productive use of crews and equipment.

NORTHERN MANITOBA RAIL LINES HISTORICAL SUMMARY __________________

Flin Flon Subdivision

The Flin Flon subdivision joins The Pas and Flin Flon, Manitoba. The line is approximately 87 miles long and was completed in 1928. The main commodities handled on the line are forest products, raw minerals and finished copper anodes from the Hudson Bay Mining and Smelting plant in Flin Flon.

Sherridon Subdivision

The Sherridon subdivision connects with the Flin subdivision 53 miles outside of The Pas. The 185 mile line was built in two stages. In 1929, it reached the gold deposit at Sherridon, then twenty five years later it was extended to the gold, nickel and copper concentrate deposits near Lynn Lake.

The Bayline

The Bayline, between The Pas and Churchill, Manitoba, contains four subdivisions; Wekusko, Thompson, Thicket and Herchmer. The line is approximately 540 miles long.

Construction of the line began in The Pas in 1911 and was completed as far as Kettle Rapids by 1918. In 1926, the Government of Canada decided to complete the line to Churchill and the first passenger train reached Churchill in September, 1929. On January 1, 1958, the government transferred the line to CN. The thirty mile Thompson subdivision was added to the line by CN in 1969.

Fast Facts: Northern Manitoba _____________________________

Six subdivisions:

Name Miles Location

Flin Flon 87.3 The Pas to Flin Flon Sherridon 184.8 Sherritt Junction to Lynn lake Wekusko 136.4 The Pas to Wabowden Thompson 30.5 Thompson Junction to Thompson Thicket 189.7 Wabowden to Gillam Herchmer 183.7 Gillam to Churchill

Major commodities:

- Minerals

Copper concentrate from the Ruttan Mine at Leaf Rapids terminates at the Hudson Bay Mining and Smelting smelter at Flin Flon. Outbound copper, zinc and nickel from both Hudson Bay Mining and Smelting at Flin Flon and Inco at Thompson are then transported throughout North America.

- Forest products

Logs originate on the Sherridon subdivision and terminate at The Pas. Lumber, pulp and paper from The Pas are transported throughout North America.

- Grain

Grain sold by the Canadian Wheat Board is exported through the Port of Churchill during the Port's typical 14 week annual shipping season. Grain has been moved in 40-foot "Buffalo" boxcars since the mid-1970's. CN recently tested aluminum covered hopper cars on the Bayline. These tests proved successful, therefore, beginning in 1997, full trains of aluminum hoppers will be in service. This will improve the efficiency of grain loading and handling both in the country and at the Port.

Number of employees:

There are 121 employees in northern Manitoba, 116 unionized and 5 management.

OmniTRAX Inc. manages 11 short line railroad subsidiaries, as well as a leasing and locomotive repair company, real estate companies and other non-railroad subsidiaries. OmniTRAX provides management services for the subsidiaries in such areas as relations with Class I carriers, strategic planning, negotiations of acquisitions or mergers, establishment of capital and operating budgets, public relations, monitoring of legislative affairs, sales and marketing, and accounting.

OmniTRAX provides management services for:

Central Kansas Railway (CKRY)

Chicago Rail Link (CRL)

Georgia Woodlands Railroad (GWRC)

Great Western Railway of Colorado (GWR)

Great Western Railway of Iowa CBGR)

Great Western Railway of Oregon (GWR)

Kansas Southwestern Railway (KSW)

Manufacturers' Junction Railway (MJ)

Newburgh and South Shore Railroad (NSR)

Northern Ohio and Western Railway (NOW)

Panhandle Northern Railroad (PNR)

In addition, OmniTRAX owns OmniTRAX Equipment, Inc., a locomotive leasing company with over 400 locomotives in its fleet, OmniTRAX Switching Services, OmniTRAX Logistics, CKR Realty, RKC Realty, and a number of other non-railroad subsidiaries. OmniTRAX offices are in Denver and Chicago.

Dwight Johnson is President of OmniTRAX. Other management team members include Mike Ogborn, Managing Director; Steve Selby, Executive Vice President, Acquisitions; Dennis McDougal, Vice President, Operations; Stephen Gregory, Vice President, Business Development; Dennis Lindberg, Vice President, Research and Analysis; Clark Robertson, Vice President, Real Estate; and James Mogen, Controller.

CONTACT: Canadian National

Scott Roberts, 403/421-6338

INTERNET: http://www.cn.ca

or

OmniTRAX

Dwight Johnson, 303/393-0033