Earthworks Industries Inc.

Earthworks Industries Inc.

January 05, 2007 12:28 ET

Earthworks Industries Inc.: Letter of Intent Signed re Cortina Landfill Project

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 5, 2007) - Earthworks Industries Inc. ("Earthworks") (TSX VENTURE:EWK) has signed a Letter of Intent (LOI) with the North Bay Corporation (NB), of Santa Rosa, California, to sell a 50% interest in its wholly owned subsidiary, Cortina Integrated Waste Management Inc. (CIWM). The LOI is to be followed by a formal Purchase Agreement between the Parties.

The LOI sets forth the terms and conditions under which the Cortina Landfill Company (CLC), an entity to be formed and wholly owned by NB, will take over, as manager, the planning, financing, construction and operation of CIWM's Cortina landfill project (the "Landfill") on land leased from the Cortina Indian Band ("Band") in Colusa County, California.

CLC will pay $4,000,000 upon the closing of the Purchase Agreement, and will pay a royalty equivalent to $2.00 per ton of waste received by the Landfill, up to the permitted capacity. CLC will also lend to CIWM up to $12,000,000 for the development of the Landfill. The LOI also grants to CLC an option to purchase a further 10% of CIWM shares for $2,000,000, exercisable for one year after the date of the commencement of the operation of the Landfill.

An Advisory Board will be formed with representatives of Earthworks, CLC and the Band to ensure productive and effective communication in all aspects of the Landfill's development. The CIWM Board of Directors will be changed to comprise one nominee of Earthworks and two nominees of CLC.

NB has advanced $350,000 to Earthworks at this time, which will be credited to the purchase price. If a Purchase Agreement is not executed within 120 days, Earthworks will refund the $350,000 to CLC either in cash or shares of Earthworks, at CLC's discretion.

NB is a privately held company providing solid waste collection, transfer and disposal as well as recyclables collection, processing and market services. NB serves the needs of over 100,000 residential and commercial customers throughout the Northern California Counties of Marin, Sonoma, Mendocino, Lake and Mariposa.

All references above to monies are to United States dollars.


David B. Atkinson, President

The TSX Venture Exchange assumes no responsibility for the accuracy of this Release and neither approves nor disapproves of the same.

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