SOURCE: EuroGas, Inc.

October 16, 2009 10:50 ET

EuroGas Obtains Financing From Walter Storm and Forstgarten International

NEW YORK, NY--(Marketwire - October 16, 2009) - EuroGas, Inc. (PINKSHEETS: EUGS) (FRANKFURT: EUG) (XETRA: EUG) (HAMBURG: EUG) (STUTTGART: EUG) today announced that it has entered into a loan and option agreement with Mr. Walter Storm, Chairman of the Supervisory Board, EurAsia Holding AG and Forstgarten International Holding GmbH, an investment company owned by Dr. h.c. Stefan Kaltenbach, Vice Chairman, EurAsia Holding AG (the investors). Mr. Storm and Dr. h.c. Kaltenbach are, through their respective investment companies, the controlling shareholders of EurAsia AG, an international privately held German investment company concentrating on the natural resources sector.

The investors, under the loan agreement, have forwarded EUR 680.000 (corresponding to approximately USD 1,000,000) to EuroGas. The loan is repayable on October 1, 2010, and will carry an interest rate of 8%. These funds will be used for working capital.

The investors have been granted an option and a right of first refusal to earn a 60% interest in all future EuroGas projects. Furthermore, the parties intend to enter into a Master Financing Agreement, under which the investors are to inject further funds into EuroGas or its operations through a USD 7,000,000 convertible debenture. This agreement would enable the investors to convert their debenture into restricted EuroGas common stock at prices ranging from USD 0.25-USD 0.50 per share over the next 3 years (USD 0.25 per share in the first year; USD 0.35 in the second year; and USD 0.50 in the third year). The investors and EuroGas have undertaken to immediately commence the negotiation of the final terms of the agreement, which is expected to be executed within the next few weeks.

"I am delighted to welcome Walter Storm's and Dr. Kaltenbach's involvement in EuroGas," said Wolfgang Rauball, Chairman, President and CEO, EuroGas. "Walter has been a steadfast and loyal EuroGas shareholder for many years, and has, along with Dr. Kaltenbach, the financial and management capabilities to enable EuroGas to wrest the maximum shareholder value from our rich asset portfolio."

Mr. Walter Storm is a highly successful industrialist with international resource and industrial holdings. He is also the founder and a major indirect shareholder of EurAsia, which is the largest shareholder of Osisko Mining Corp., a TSE-listed company with a current market valuation in excess of CAD $2 billion. According to a June 2009 Study by UBS Switzerland EurAsia owns 42 million shares of Osisko's common stock which are currently valued at in excess of USD 330,000,000. Mr. Storm, through EurAsia, was Osisko's major financial backer through its exploration and development stages. The capital provided to Osisko by EurAsia enabled Osisko's management team to build its market capitalization from USD 15 million to its current level of more than USD 2 billion in less than five years. EurAsia's shareholders also own significant producing oil and gas interests in Canada and Kazakhstan, as well as important global resource sector related companies and assets. (http://eurasiaholding.com)

Dr. h.c. Stefan Kaltenbach is the former CEO and shareholder of a leading international manufacturer of medical equipment which has over 3,500 employees. Today, he is a private investor with extensive holdings in international medical and resource industries, mainly through EurAsia. Together with Walter Storm, he spearheaded the financing of Osisko in its exploration and development stages.

About EuroGas, Inc.

EuroGas is a publicly traded oil and gas company with assets in Ukraine and Poland, as well as talc mining interests in the Slovak Republic. The company's common stock trades on the Frankfurt, Hamburg and Stuttgart Stock Exchanges and XETRA in Germany under the symbol EUG and on the Other OTC (Pink Sheets) in the United States under the symbol EUGS. (www.eurogasinc.com)

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

This press release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995.

You can identify forward-looking statements by their use of the forward-looking words "anticipate," "estimate," "project," "likely," "believe," "intend," "expect," or similar words. These statements discuss future expectations, contain projections regarding future developments, operations, or financial conditions, or state other forward-looking information. When considering the forward-looking statements made in this press release, you should keep in mind the risks noted and other cautionary statements throughout this press release. You should also keep in mind that all forward-looking statements are based on management's existing beliefs about present and future events outside of management's control and on assumptions that may prove to be incorrect. If one or more risks identified in this press release or other filing materializes, or any other underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected, or intended.

Contact Information

  • For further information, please contact:
    Wolfgang Rauball
    Chairman & CEO
    EuroGas, Inc.
    Telephone: (212) 618-1274