Fairmount Energy Inc.

Fairmount Energy Inc.
Pharaoh Capital Inc.

March 24, 2005 15:56 ET

Fairmount Energy Inc. and Pharaoh Capital Inc. Complete Qualifying Transaction


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: FAIRMOUNT ENERGY INC.

TSX VENTURE SYMBOL: FMT

AND PHARAOH CAPITAL INC.

TSX VENTURE SYMBOL: PHC.P

MARCH 24, 2005 - 15:56 ET

Fairmount Energy Inc. and Pharaoh Capital Inc.
Complete Qualifying Transaction

CALGARY, ALBERTA--(CCNMatthews - March 24, 2005) -

Not for distribution to U.S. newswire services or for dissemination in
the United States of America.

Fairmount Energy Inc. (TSX Venture:FMT) ("Fairmount") and Pharaoh
Capital Inc. ("Pharaoh") (TSX Venture:PHC.P) announced today that
previously announced business combination of Pharaoh and Fairmount by
way of plan of arrangement (the "Arrangement") pursuant to the Business
Corporations Act (Alberta) has been completed. The Arrangement is a
non-arm's length transaction and is subject to final approval of the TSX
Venture Exchange Inc. (the "Exchange").

Under the Arrangement, Pharaoh and a newly formed subsidiary of
Fairmount amalgamated pursuant to a three-cornered amalgamation. The
shareholders of Pharaoh shall exchange seven Pharaoh common shares for
one common share of Fairmount. As the Arrangement has now been completed
Fairmount shall issue approximately 1,074,300 common shares of Fairmount
and shall have an aggregate of approximately 8,748,000 common shares
outstanding. After giving effect to the Arrangement, existing
shareholders of Pharaoh hold approximately 12.3% of the outstanding
common shares of Fairmount. Following the amalgamation and as part of
the Arrangement, the amalgamated corporation has distributed all of its
assets and property to Fairmount and Fairmount has assumed all
liabilities on a winding up of the amalgamated corporation. The
amalgamated corporation has dissolved in accordance with the Business
Corporations Act (Alberta).

The Board of Directors of Fairmount consists of six members, including
Joseph S. Durante, Brian J. Mellum, Abdel F.Z. Badwi, Peter Salamon,
Charles W. Berard and Brad Munro. In addition, the executive officers of
Fairmount consist of Mr. Durante, President and Chief Executive Officer,
Ryan Michaluk, Vice-President, Finance and Chief Financial Officer and
Jennifer Kennedy, Corporate Secretary.

Trading of the common shares of Pharaoh has been halted and the common
shares of Fairmount are expected to commence trading on the Exchange
once the required post-meeting documents have been filed with the
Exchange and the Exchange has provided final acceptance. The common
shares of Fairmount will be listed for trading on the Exchange under the
symbol "FMT".

Information About Fairmount Energy Inc.

Fairmount is a company formed on April 1, 2002 by the amalgamation of
Star Biotech Inc., 169149 Canada Inc. and 4024931 Canada Inc. under the
Canada Business Corporations Act. Fairmount currently has two
wholly-owned subsidiaries, 6263488 Canada Ltd. and Warner Joint Venture
Ltd. Fairmount's assets currently include its joint venture interests in
the Harmattan and Warner areas of Alberta. After completion of the
Arrangement, Fairmount has working capital of approximately $5,600,000.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Fairmount Energy Inc.
    Joseph S. Durante
    President and Chief Executive Officer
    (403) 355 0440
    or
    Fairmount Energy Inc.
    Ryan Michaluk
    Vice-President, Finance and Chief Financial Officer
    (403) 355 0440
    or
    Fairmount Energy Inc.
    2200, 520 - 5th Avenue S.W.
    Calgary, AB T2P 3R7
    (403) 355 0440
    The TSX Venture Exchange Inc. has in no way passed upon the merits of
    the Arrangement and has neither approved nor disapproved the contents of
    this press release.