Sparta Capital Ltd.

Sparta Capital Ltd.

May 26, 2006 11:24 ET

Sparta Capital Retains Capstone Investments as Investment Banking Advisor

EDMONTON, ALBERTA--(CCNMatthews - May 26, 2006) - Sparta Capital Ltd. (TSX VENTURE:SAY) today announced that it recently retained Capstone
Investments, an investment banking institution headquartered in San Diego, California, to be its investment banking advisor. Sparta Capital and Hy-Drive Technologies Ltd. of Mississauga, Ontario, have an agreement under which Sparta acts as the Master Sales Agent in the Asia-Pacific region for Hy-Drive's hydrogen generating systems. With Capstone's support, Sparta will work to raise equity financing to fund the development of marketing channels across the Asia-Pacific region.

The Hy-Drive system is a commercial patented technology that reduces harmful exhaust emissions and increases fuel economy of the internal combustion engine. It utilizes a computer-controlled on-vehicle electrolysis process powered by the vehicle's 12 or 24 volt charging system to generate hydrogen and oxygen from distilled water. The gases are injected into the engine's air intake, where the hydrogen supports a faster and more complete fuel burn. This extracts more energy from the fuel and significantly reduces emissions.

"Sparta is building a sales agent network for the Hy-Drive system in each of our
distribution areas. We will use the funds raised to attract and retain high-caliber sales agents and provide necessary training and support to make those agents successful," stated Ray Ludwig, Sparta Vice President of Operations.

"The decision to retain Capstone Investments was the logical culmination of a
relationship Capstone had already forged with Hy-Drive. We anticipate that Capstone Investments will broaden our exposure to institutions and other interested parties and that their advice, with regards to possible future mergers, acquisitions, and capital raising, will bring further growth to our company," said Ted Rousseau, President of Sparta.

"Over the past two years we have worked closely with Sparta. We are delighted they will be raising the capital necessary to expand the distribution and sale of our Hy-Drive system under the terms and conditions and territories defined in our Agent Agreement. Sparta has demonstrated its commitment to invest the time and resources necessary to develop the Asia-Pacific markets. With the recent successful launch of the G2 unit in Australia, we can see the opportunities available in the markets Sparta and their agent network are developing. They understand the product and recognize the potential that exists in the Asia-Pacific region," added Tom Brown, President & CEO of Hy-Drive Technologies Ltd.

Capstone Investments has provided a wide range of institutional services, including investment banking, research, deal origination, and capital introduction services since 1994. Capstone's Investment Banking Group identifies, structures and executes diverse and innovative market transactions for both private and public companies. Capstone places importance on combining sector and product specialization with strong client relationships to ensure that clients receive competitive quality solutions and advice.

Capstone Investments is a member of the National Association of Securities Dealers (NASD), the Securities Investor Protection Corporation (SIPC) and the Municipal Securities Rulemaking Board (MSRB).

Forward-Looking Statements

This press release contains forward-looking statements based on assumptions,
uncertainties and management's best estimates of future events. When used herein, words such as "intend" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on assumptions by and information available to Capstone, Sparta and Hy-Drive ("the companies"). Investors are cautioned that such forward-looking statements involve risks and uncertainties. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include such risks and factors as are detailed from time to time in the periodic reports filed by the companies with regulatory authorities. Actual results may differ materially from those currently anticipated. The companies have no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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

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