BRITISH COLUMBIA DISCOVERY FUND (VCC) INC.

BRITISH COLUMBIA DISCOVERY FUND (VCC) INC.
Discovery Capital Corporation
TSX VENTURE : DVY.Y

Discovery Capital Corporation

June 20, 2005 15:27 ET

British Columbia Discovery Fund (VCC) Inc. and Discovery Capital Corporation: B.C. Discovery Fund Investment Update

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - June 20, 2005) - British Columbia Discovery Fund (VCC) Inc. -

Makes $1.5 million investment in Paradigm Environmental Technologies Inc., bringing investments made to date in 2005 to $4.4 million; proposes to purchase additional $1.5 million of portfolio assets

Discovery Capital Management Corp. ("Discovery Capital"), manager of British Columbia Discovery Fund (VCC) Inc. (the "Fund" or "BCDF"), is pleased to provide the following update.

Investment in Paradigm Environmental Technologies Inc.

The Fund has invested $1.5 million in Paradigm Environmental Technologies Inc. ("Paradigm"), a private Vancouver, B.C.-based environmental technology company focused on developing and implementing innovative, sustainable and viable solutions to treat wastewater. Paradigm has developed MicroSludge™, a patented sludge disintegration system that vastly improves the performance of anaerobic digesters for secondary wastewater treatment plants of all sizes.

BCDF's investment is part of a $3.95 million financing arrangement recently completed by Paradigm, which also included participation by APV North America, Inc., a subsidiary of UK-based Invensys PLC, which agreed to invest $2.2 million by way of cash and the delivery of certain key components of the MicroSludge system, as well as related parts, to be ordered by Paradigm. An additional $660,000 has been subscribed for by other Paradigm shareholders, bringing Paradigm's total financing to more than $4.5 million. Funds will be used by Paradigm to continue with its pre-commercialization developmental activities, including installation in July 2005 of a MicroSludge unit for evaluation at North America's third largest wastewater treatment plant, the Joint Water Pollution Control Plant in Los Angeles County, California.

Proposed Acquisition of Assets

Paradigm has also entered into an agreement with Exceptional Technologies Fund 5 (VCC) Inc. ("Ex Fund 5") under which Ex Fund 5 has agreed to carry out a restructuring and to acquire all of the issued shares of Paradigm in exchange for shares of Ex Fund 5 in a "reverse takeover" of Ex Fund 5 by Paradigm ("RTO"). Ex Fund 5 is a venture capital corporation launched approximately seven years ago by Discovery Capital Corporation, and managed by its subsidiary, which is also the manager of BCDF.

The restructuring of Ex Fund 5 ("Restructuring") will involve several implementation steps, including the proposed acquisition by BCDF of portfolio positions held by Ex Fund 5 in three investee companies in which BCDF has an existing investment. These positions, which had an estimated fair value of approximately $1.5 million at March 31, 2005, comprise shares of Idelix Software Inc. (private), Tantalus Systems Corp. (private) and Vigil Health Solutions Inc. (public - TSX Venture Exchange) and are still subject to hold periods under the Small Business Venture Capital Act (British Columbia). BCDF proposes to acquire these assets in consideration of the issuance of Class B shares of BCDF, which in turn will be distributed pro-rata to Ex Fund 5 shareholders. The Class B shares of BCDF will have the same rights and restrictions attaching to the common shares (to be designated Class A shares) of BCDF currently being issued for cash, including redemption rights after five years from date of issuance, except that no investment tax credits will be issued in respect of the Class B shares.

Ex Fund 5's Restructuring and the RTO are subject to all necessary shareholder and regulatory approvals and satisfaction of other conditions precedent. The number of Class B shares to be issued and the estimated fair value of the portfolio assets to be acquired are contemplated to be determined by an independent valuator at the time of an Ex Fund 5 shareholder meeting to approve the transactions, anticipated to be held later in 2005, or such later time as the parties to the RTO agreement may agree upon.

Investment Update

BCDF now has investments in ten portfolio companies, spanning a cross section of information technology, life sciences and energy technology businesses at various stages of development. BCDF has invested nearly $9 million to date, of which $4.4 million has been invested since the beginning of 2005, summarized as follows:



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Name of Investment Nature of Operations Investment (at cost)

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Developing and
Paradigm Environmental implementing
Technologies Inc. innovative wastewater
(Private) treatment solutions $1,500,000
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Design and supply of
Day4 Energy Inc. solar power systems and
(Private) components 800,000
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Development of systems
In Motion Technology and software extending
Inc. broadband LAN to mobile
(Private) environments 630,000
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Developing new medicines
Inimex Pharmaceuticals based on selective
Inc. enhancement of innate
(Private) immunity 500,000
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Development of wireless
Mobidia Technology Inc. technology for wireless
(Private) carriers 500,000
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Vigil Health Solutions
Inc.
(Public - TSX Technology platform
VENTURE:VGL) for the aged care market 255,000
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Cryopak Industries Inc. Temperature controlling
(TSX VENTURE:CII) products and solutions 250,000
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Total $4,435,000
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About Paradigm Environmental Technologies Inc.

Paradigm is an environmental technology company based in Vancouver, British Columbia that has developed a patented technology called MicroSludge™ for wastewater treatment plants that significantly enhances the anaerobic digestion process, thereby reducing operating costs and increasing plant capacity. MicroSludge is affordable and modular, and can be easily deployed at existing or new wastewater treatment plant facilities. With the addition of MicroSludge, the volume of residual biosolids that must be disposed of by a wastewater treatment plant can typically be reduced by 60% or more. MicroSludge enables anaerobic digesters to generate substantially increased volumes of methane, which can be readily converted to electricity and heat, giving wastewater treatment plants the ability to be energy self-sufficient. Paradigm is at the pre-commercialization stage, concentrating its efforts on the placement of commercial MicroSludge units with initial reference customers serving large urban areas.


About British Columbia Discovery Fund (VCC) Inc.

British Columbia Discovery Fund (VCC) Inc. invests in small businesses in British Columbia that qualify under the Small Business Venture Capital Act, focusing on all of B.C.'s top internationally recognized technology clusters; information technology, communications, health and life sciences, and energy and environmental technologies. Established in 2002, the Fund is the largest SBVCA registered venture capital corporation making diversified investments in British Columbia with the objectives of achieving long-term capital appreciation for its shareholders and contributing to the growth in value and employment of the technology industry in British Columbia. In addition to offering a means of participating in the potential of British Columbia's newest technology ventures, the Fund offers significant tax savings to eligible British Columbia individual and corporate investors. The Fund offers its shares on a continuous basis and has raised over $27.0 million to date. To obtain further information about the Fund, please contact a registered advisor, or visit www.sedar.com or www.bcdiscoveryfund.com.

About Discovery Capital Management Corp.

With nearly 20 years of venture capital experience in British Columbia, Discovery Capital is a venture fund manager and investor specializing in: information technology, communications, health and life sciences, and other advanced technologies. We have enhanced value for over 250 technology ventures, with our proven expertise in strategic planning, management development, innovative financing strategies, corporate governance and positioning for liquidity.

For more information about Discovery Capital, please visit www.discoverycapital.com.

This press release does not constitute an offering of securities. The prospectus of British Columbia Discovery Fund (VCC) Inc. dated March 8, 2005 contains important information pertaining to an investment in the Fund, including management fees, expenses and commissions associated with the Fund and risk factors. To obtain further information and a copy of the prospectus of the Fund, please contact a registered investment advisor, or visit www.sedar.com or www.bcdiscoveryfund.com.

John McEwen, CEO, B.C. Discovery Fund (VCC) Inc. and Discovery Capital Management Corp.

Harry Jaako, President, B.C. Discovery Fund (VCC) Inc. and Discovery Capital Management Corp.

This news release may include statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. The issuers caution that actual performance will be affected by a number of factors, many of which are beyond their control. Future events and results may vary substantially from what the issuers currently foresee.


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

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