Chemaphor Inc.
TSX VENTURE : CFR

Chemaphor Inc.

March 31, 2006 09:15 ET

Chemaphor Inc. to be Offered $2.1 Million Contribution by Atlantic Canada Opportunities Agency

OTTAWA, CANADA--(CCNMatthews - March 31, 2006) - Chemaphor Inc. (TSX VENTURE:CFR) announced today that it has been informed by the Atlantic Canada Opportunities Agency ("ACOA") that ACOA intends to offer a contribution of up to $2.1 million by way of a loan to fund a research and development project proposal submitted by Chemaphor to ACOA in October, 2005.

Minister of Foreign Affairs and Minister of the Atlantic Canada Opportunities Agency, Peter MacKay, publicly announced ACOA's intention to offer funding to Chemaphor this morning at a press conference held in Charlottetown, Prince Edward Island.

The funding, if received, will be used by Chemaphor to establish a new facility on Prince Edward Island for its research in carotenoid oxidation compounds. Many of these oxidation compounds are believed to occur widely in nature and to have previously unrecognized biological activities, representing an untapped source for nutritional and other, related benefits. Chemaphor believes that this new facility and its proprietary technology could be used to develop a range of products with strong commercial potential possibly including pet products, livestock feed additives, and anti-aging skin creams.

This project will enhance Chemaphor's competitiveness in the biotechnology industry and could have a significant impact in Atlantic Canada. Chemaphor will work closely with the National Research Council's Institute for Nutrisciences and Health in Charlottetown. The project will create employment opportunities for up to five highly qualified personnel, and develop key relationships within the public and private sectors, both locally and nationally. Chemaphor also plans to manufacture any successfully developed products in Atlantic Canada for global export.

"We are pleased that our nutrisciences project proposal has been well received and that ACOA has indicated its intention to offer funding to Chemaphor," said Dr. Graham Burton, President and CEO of Chemaphor. "The research and development described in our proposal will be a key part of our ongoing efforts to expand the potential markets for our products. We believe that significant opportunities exist for Chemaphor in the work we will be able to undertake with these funds."

At this time no definitive agreements are in place and ACOA's stated intention to offer funding is not contractual in nature. Chemaphor and ACOA will now enter into negotiations toward a definitive agreement setting out the detailed terms of the funding. There can be no assurance that any agreement will be ultimately signed. ACOA may terminate negotiations if the terms and conditions of the project specific contribution agreement are not substantially finalized by September 29, 2006. If no definitive agreement is reached with ACOA, Chemaphor will not receive the proposed funding.

About the Company

Chemaphor Inc. (www.chemaphor.com) uses its core expertise in organic chemistry to develop premium products for the animal health, skin care cosmetics, pharmaceutical and specialty chemical markets. The company's goal is to fully exploit its proprietary platform of carotenoid oxidation compounds by finding recognized partners to commercialize its products in multiple, large markets.

The TSX Venture Exchange has neither approved nor disapproved of the information in this press release.

Contact Information

  • Groupe Evolution Inc.
    Sylvain Archambault
    Investor Relations
    (514) 448-4887
    (866) 703-4887 (toll free)
    s.archambault@evolutiongrp.com
    or
    Chemaphor Inc.
    Dr. Graham Burton
    (613) 990-0969