Gastem Inc.

Gastem Inc.

May 19, 2006 13:41 ET

Gastem Inc.: Closing of Non-Brokered Private Placement

MONTREAL, QUEBEC--(CCNMatthews - May 19, 2006) - Gastem Inc. (TSX VENTURE:GMR) announces the closing of a non-brokered private placement of 4,666,000 Units at a price of $0.15 per Unit, resulting in gross proceeds of CDN$699,900. Each Unit is comprised of one common share of the Company and one full purchase warrant, entitling the holder to acquire one additional common share of the Company at a price of $0.20 for a period of two years.

Of the common shares issued, 657,669 were issued as flow-through common shares, and each common share issuable upon exercise of the Warrants shall be issued as non-flow through shares.

The offering was completed by purchasers residing in the Provinces of British Columbia, Alberta, Ontario, and Quebec, in reliance upon applicable exemptions from registration and prospectus requirements. All securities issued pursuant to the offering are subject to a hold period of four months. A finders fee equal to 6% of the gross proceeds raised was payable to an arms-length finder, which was payable by the issuance of 280,000 Units.

The proceeds from the private placement will be used by Gastem for exploration and working capital purposes.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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