Vector Wind Energy Inc.

Vector Wind Energy Inc.

January 07, 2005 16:14 ET

Vector Announces: Nova Scotia Joint Venture Completion of $4.1 million of Project and Corporate Financing


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: VECTOR WIND ENERGY INC.

JANUARY 7, 2005 - 16:14 ET

Vector Announces: Nova Scotia Joint Venture Completion
of $4.1 million of Project and Corporate Financing

OTTAWA, ONTARIO--(CCNMatthews - Jan. 7, 2005) - Vector Wind Energy Inc.
("Vector") today announced an agreement with First Asset Renewable Power
Flow-Through Limited Partnership (First Asset") to develop Vector's wind
development projects in western Nova Scotia. Pursuant to the agreement,
Vector has transferred all its interest in the Nova Scotia projects to a
new operating subsidiary. First Asset has invested $2.8 million in the
subsidiary in return for 2.8 million flow-through shares of the
subsidiary and 280,000 Vector common share purchase warrants exercisable
at $0.50 any time before December 31, 2006. These funds are expected to
be used to finance the pre-development expenses of the Nova Scotia
projects and the acquisition of the first production wind turbine.

Vector has a 10% carried interest in the subsidiary and has the right to
earn an additional 45% interest by matching the First Asset investment.
The carried interest may be reduced in the event that the project is not
completed within the expected budget of $10.7 million. Vector will also
operate the projects on behalf of the subsidiary. When completed in late
2005 these projects are expected to have a total of 6MW of nameplate
capacity and will operate under a 15 year power purchase agreement with
Nova Scotia Power Inc. In addition, Vector has retained Quantum Leap
Company to provide detailed cost analysis and projections for a
potential expansion of the Nova Scotia projects and to assist with
project financing. In consideration for these advisory services, Vector
has agreed to issue 280,000 common share purchase warrants exercisable
at $0.50 any time before December 31, 2006.

Vector also announced today that it has closed a private placement to
raise gross proceeds of $1,332,700 from the sale of 3,246,750 flow
through common shares at $0.40 each and 85,000 common share units at
$0.40 each. (Each unit was comprised of a common share and one-half
common share purchase warrant exercisable at $0.50 at any time within 24
months of closing.) Proceeds of the private placements will be applied
to Vector's exploration and development program and general corporate
purposes. Vector now has 13,488,634 common shares issued and outstanding.

Vector Wind Energy Inc. is a developer of wind energy projects in
Canada. It is currently active in 6 provinces and Nunavut with 10
projects at various stages of exploration and development. These
projects have the potential to support over 250MW of wind energy
capacity.

More information on the Company can be obtained at www.sedar.com.

Shares Outstanding: 13,488,634

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Vector Wind Energy Inc.
    Brian J. Barr
    President
    613-233-9463 x224
    bjbarr@vectorwind.com
    www.vectorwind.com
    The TSX Venture Exchange has in no way passed upon the merits of the
    proposed transaction and has neither approved nor disapproved the
    contents of this press release.