Powertech Industries Inc.
NEX BOARD : PWE.H

May 12, 2006 16:54 ET

Powertech Industries Inc.: Acquisition of Dewey-Burdock Property and Private Placement Close, Change of Business Completes

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 12, 2006) -

NOT FOR DISEMMINATION IN THE UNITED STATES OR FOR RELEASE TO U.S. NEWS WIRE SERVICES

Acquisition of Property Interest

Powertech Industries Inc. (the "Company") (NEX BOARD:PWE.H) is pleased to announce it has closed its acquisition of all of the assets of Denver Uranium Company, LLC ("Denver Uranium") which includes the package of uranium property leases known as the Dewey-Burdock Property comprising approximately 11,000 acres of mineral and surface rights situated in Custer and Fall River Counties, South Dakota. In accordance with the terms of the purchase agreement, the Company has issued 8,000,000 shares in the capital of the Company to the vendors.

In conjunction with the closing of the purchase agreement, the Company also closed the Loan Conversion Agreement entered into to settle an $800,000 loan obligation assumed by the Company from Denver Uranium together with interest and expenses due on the loan. The debt was settled through the issuance of a total of 2,220,000 shares in the capital of the Company to the two lenders.

Both the 8,000,000 shares issued for the purchase and the 2,220,000 shares issued on the loan conversion are subject to the terms of escrow agreements that provide for their periodic release over a three year period in accordance with TSX Venture Exchange Policy 5.4. In addition to the escrow requirements, the shares are subject to a hold period that restricts them from trading until September 12, 2006.

Private Placement

The Company is also pleased to announce that it has closed the brokered private placement, led by Pacific International Securities Inc. (the "Agent") for gross proceeds of $12,000,000. The Company issued 12,000,000 units at $1.00 per unit (a "Unit"). Each Unit consists of one common share in the capital of the Company and one-half of one share purchase warrant, with each whole warrant (a "Warrant") entitling the holder to acquire one additional common share of the Company at a price of $1.30 per share for a period of one year from the date of closing. As consideration for acting as agent, the Company paid the Agent a commission of $190,248 in cash and 649,752 units on the same terms as the Units. In addition, the Company paid the Agent a corporate finance fee of $5,000 and issued 1,080,000 non-transferable compensation options (the "Agent's Options"), each Agent's Option entitles the Agent to acquire one additional common share of the Company at a price of $1.20 for a period of one year from the date of closing.

All securities issued pursuant to the private placement are subject to a hold period expiring September 12, 2006.

Change of Business and Graduation to TSX Venture Exchange.

With the completion of the acquisition of the assets of Denver Uranium and the closing of the private placement to provide funding for the Company's business plan, the TSX Venture Exchange has accepted for filing the Company's change of business application to the exploration and development of uranium resources. In conjunction with the acceptance of the change of business, effective at the opening of trading on Monday May 15, 2006, the Company will graduate from NEX and its shares will recommence trading on the TSX Venture Exchange under the symbol PWE.

POWERTECH INDUSTRIES INC.

Douglas Eacrett, Director

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.


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

Contact Information

  • Powertech Industries Inc.
    Douglas Eacrett
    Director
    (604) 689-5002
    (604) 689-5003 (FAX)