GTO Resources Inc.

Polaris Geothermal Inc.

Polaris Geothermal Inc.
Western GeoPower Corp.

Western GeoPower Corp.
Ram Power, Inc.

August 06, 2009 10:30 ET

GTO Resources Announces Increase to Proposed Equity Financing to $156 Million

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 6, 2009) -


GTO Resources Inc. ("GTO") (NEX BOARD:GTR.H), Polaris Geothermal Inc. ("Polaris") (TSX:GEO), Western GeoPower Corp. ("Western") (TSX VENTURE:WGP) and Ram Power, Inc., a private Delaware corporation ("Ram"), previously announced on July 15, 2009 that they had entered into a letter of intent ("LOI") with respect to a proposed business combination to create a new, publicly-traded geothermal power company (the "Transaction").

GTO had also announced at that time that it intends to proceed with a private placement offering of subscription receipts, entitling purchasers to receive common shares in the combined entity following the Transaction.

GTO is pleased to announce that it will increase the size of its proposed private placement to $156 million (the "Private Placement") from $100 million. An aggregate of 52 million subscription receipts will be offered at an anticipated price of $3.00 per subscription receipt, each exercisable into one common share of GTO (after giving effect to a 10 for 1 consolidation). In addition, GTO has agreed to grant the agents an over-allotment option (the "Over-Allotment Option"), exercisable in whole or in part prior to the closing of the Private Placement, to offer for sale up to an additional 7.8 million subscription receipts for additional proceeds of $23.4 million. The proceeds of the Private Placement, less the agents' expenses, will be held in escrow pending the completion of the Transaction. The proceeds of the Private Placement will be used to develop key projects of the combined businesses and for working capital and general corporate purposes upon completion of the Transaction. Any additional proceeds from the exercise of the Over-Allotment Option will be used for debt repayment of the combined entity. The Private Placement is subject to applicable regulatory approvals and is anticipated to close on or about August 18, 2009.

Cormark Securities Inc. has been retained as financial advisor to GTO in connection with the Transaction and as lead agent in connection with the Private Placement.

The LOI provides that GTO, Polaris and Western will negotiate and enter into a definitive arrangement agreement and Ram and GTO will enter into a share purchase and sale agreement. Further details regarding the proposed business combination will be detailed in a joint information circular (the "Joint Circular") which will be mailed to securityholders of GTO, Polaris and Western in connection with special shareholders' meetings to approve the Transaction.

Closing of the Transaction contemplated by the LOI is subject to a number of conditions and approvals which include completion of the equity financing on acceptable terms; the satisfactory completion of due diligence investigations; the completion of a definitive agreement setting forth the terms and conditions set out in the LOI; approval of securityholders of GTO, Polaris and Western at a special meeting of such securityholders; approval of shareholders of Ram; approval of holders of debentures of Polaris; approval of certain lenders of Western; court approval; and the approval of all relevant regulatory authorities and third parties. There can be no assurance that the Transaction or the equity financing will be completed as proposed or at all. The LOI provides for termination rights, including in the event the Transaction is not completed by October 30, 2009.

The common shares of GTO are currently halted from trading and will remain halted until further notice.

Investors are cautioned that except as disclosed in the Joint Circular, any information released or received in connection with the Transaction may not be accurate or complete and should not be relied upon.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States or to United States Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.


Ram is a renewable energy development company with several geothermal projects under development in California and Nevada, USA. Ram's management team brings world class expertise and decades of experience in developing and financing geothermal energy projects.


Polaris is a Canadian company (amalgamated under the laws of Yukon), focused on the generation of renewable energy projects in Latin America and other parts of the world. Polaris has a 10 MW geothermal power plant operating at San Jacinto Tizate with further expansion of that project currently under development.


Western is a Canadian renewable energy company (incorporated under the laws of British Columbia) dedicated to the development of geothermal energy projects for the delivery of clean, sustainable, baseload electricity generation. Western is developing the Western GeoPower Unit 1 geothermal power plant at The Geysers Geothermal Field in Sonoma County, California, USA and has geothermal projects under development in California, USA and British Columbia, Canada.

All references to "$" or "dollars" are to Canadian dollars.

Cautionary Statements

This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to the proposal to complete the Transaction and the equity financing, including statements regarding the terms and conditions of the Transaction and the equity financing. Readers are cautioned to not place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Transaction or the equity financing, that the ultimate terms of the Transaction and the equity financing will differ from those that currently are contemplated, and that the Transaction or the equity financing will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this press release are made as of the date of this release. GTO, Ram, Polaris and Western undertake no obligation to update forward looking information, other than as required by law, or comment on analyses, expectations or statements made by third-parties in respect of GTO, Ram, Polaris, Western or their respective financial or operating results or (as applicable), their securities.

Neither the TSX Venture Exchange, Inc., the Toronto Stock Exchange nor the Regulation Services Provider (as that term is defined in the polices of the TSX Venture Exchange) has in any way passed upon the merits of the Transaction or the equity financing and neither of the foregoing entities has in any way approved or disapproved of the contents of this press release.

Contact Information

  • GTO Resources Inc.
    A. Murray Sinclair
    President and Director
    (604) 689-1428
    (604) 681-4692 (FAX)
    Polaris Geothermal Inc.
    Tony Mitchell
    (561) 373-2475
    Western GeoPower Corp.
    Daryl Clark
    (954) 533-2996
    Ram Power, Inc.
    Daniel N. Schochet
    Executive Vice President
    (775) 398-3703