Pan Terra Industries Inc.

Pan Terra Industries Inc.

March 15, 2005 09:43 ET

Pan Terra Industries Inc. Announces Acquisitions and Brokered Equity Private Placement


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: PAN TERRA INDUSTRIES INC.

TSX VENTURE SYMBOL: PNT

MARCH 15, 2005 - 09:43 ET

Pan Terra Industries Inc. Announces Acquisitions and
Brokered Equity Private Placement

CALGARY, ALBERTA--(CCNMatthews - March 15, 2005) - Pan Terra Industries
Inc. (TSX VENTURE:PNT) (the "Company") is pleased to announce that it
has entered into an arm's length Memorandum of Understanding dated March
14, 2005 with Pacific Multilining Inc. ("PMI"), a British Columbia
incorporated company, pursuant to which the Company will acquire all of
PMI's manufacturing assets, inventory, business and customer
information, client contracts, software, and intellectual property
including PMI's Western North American exclusive license for cured-in
placed pipelining rehabilitation technology ("CIPP") (collectively, the
"CIPP Assets") licensed from the Licensor, Multiliner International APS
("Multiliner"), a company headquartered in Denmark, for an aggregate
total deemed consideration of $450,000. The consideration consists of
$50,000 in cash, $250,000 paid through the issuance of 1,000,000 common
shares of the Company at a deemed price of $0.25 per share, and the
assumption of outstanding debt deemed to be not greater than $150,000 on
certain manufacturing equipment to be acquired.

PMI is a privately owned company and has established relationships with
a number of regional contractors in North America to purchase and
install Multiliner products to repair damaged or leaking underground
services.

The acquisition of the CIPP Assets offers a unique opportunity to
acquire the geographic rights to design, manufacture and install
fiberglass CIPP liners as an integrated service offering initially in
Western North America. It also enables the Company through its
wholly-owned operating subsidiary, Bluebird Excavation and Demolition
Ltd. ("Bluebird"), to become an integrated CIPP contractor in Western
Canada allowing it to sub-license and/or sell, design and manufacture
CIPP liners to other contractors to which, ultimately, the Company may
seek to acquire as part of its pipe rehabilitation strategy. It should
also be noted that the total cost comparison of trenchless vs. open cut
enables higher margins and cost savings for integrated contractors.

In addition, the Company has also entered into an arm's length
Memorandum of Understanding dated March 14, 2005 with a hazmat abatement
company (the "Hazmat Abatement Company"), an Alberta incorporated
company, pursuant to which the Company will acquire all of the assets of
the Hazmat Abatement Company ("Hazmat Abatement Assets") for an
aggregate total deemed consideration of $1,850,000. The consideration
consists of $1,200,000 in cash, issuance of a promissory note (bearing
interest at 10%) of $500,000 payable over two years, $150,000
non-interest bearing note payable over 12 months, and 100,000 common
share purchase warrants with an exercise price of $0.23 per share
expiring two years from the date of closing.

The Company anticipates that the acquisition of the Hazmat Abatement
Assets will increase the Company's portfolio of site redevelopment
services, increase project size, business opportunities, and profit
performance through integration of physical facilities, maximization of
equipment and workforce utilization.

Further details regarding the above acquisitions will be announced in
due course.

Each of the above Memorandum of Understanding is subject to conditions
precedent including but not limited to satisfactory due diligence,
obtaining necessary financing, regulatory approval, and entering into
definitive sale and purchase agreements.

The Company also wishes to announce that it has signed a Letter of
Engagement with Dundee Securities Corporation ("Dundee") effective March
14, 2005 to conduct a best efforts brokered private placement offering
for gross proceeds of up to $2,000,000 through the issuance of 8,000,000
units ("Units") of the Company at a purchase price of $0.25 per Unit
(the "Unit Offering"). Each Unit will consist of one common share and
one common share purchase warrant ("Warrant"). Each Warrant will entitle
the holder to acquire one common share of the Company at an exercise
price of $0.30 per share in the first year and $0.50 per share in the
second year. Dundee will be paid a cash fee equal to 10% of the gross
proceeds raised in the Unit Offering and will be granted an Agent's
Option representing 10% of the Units sold. This Agent's Option is
exercisable into Units at a price of $0.25 per Unit for a period of two
years from closing.

Proceeds from the Unit Offering will be used for working capital,
infrastructure to assist in the scaling of the business, and initial
cash outlays in relation to pending and anticipated major projects that
are currently being undertaken by the Company.

As disclosed in Management's Discussion and Analysis for the Third
Quarter ended December 31, 2004, Bluebird's revenue for the three-month
period ended December 31, 2004 has increased 103% to $6.5 million from
$3.2 million during the three months ended December 31, 2003. Revenue
for the nine months ended December 31, 2004 was $20,658,750, an increase
of 64% compared to $12,605,720 for the nine months ended December 31,
2003. The growth in revenue is attributable to an increase in the number
and value of awarded projects, the company's ability to offer a wider
range of packaged site redevelopment services, and strong market demand.

In order to cope with its rapid expansion and current growth rate, which
management believes is not transitory; the Company is implementing a
program (the "Program") to improve operations by instituting a gross
margin improvement initiative designed to optimize: (a) the provision of
services; (b) improve the management of growth; and (C) sharpen the
focus to projects with high gross margin potential. The Program requires
the Company to prune away marginal activities, invest in infrastructure,
raise additional capital to fund future growth and expansion, and
execute acquisitions that are accretive.

The Company's Brokered Unsecured Convertible Debenture ("Convertible
Debenture") Offering as announced on March 1, 2005 is proceeding and is
currently being marketed primarily to institutional investors. Wolverton
Securities Ltd. will be paid a cash marketing commission of up to 4% of
the gross proceeds raised and will be granted an Agent's Option
representing 10% of the Convertible Debentures sold. This Agent's Option
is exercisable into Convertible Debentures of the Company at a price of
$1,000 per Convertible Debenture for a period of two years from closing.
Please refer to the Company's news release dated March 1, 2005 for
further details.

The Convertible Debenture Offering and Unit Offering are subject to
acceptance by the TSX Venture Exchange.

About Pan Terra

Pan Terra is an innovative construction solutions contractor that
develops new sites and redevelops existing sites to the point where an
owner, developer, or general contractor can proceed with building
construction. The focus of the Company is site preparation and
underground utility installations and rehabilitation. The Company offers
packaged services in industrial, commercial, retail and residential
markets. Pan Terra's major clients include leading General Contractors,
Owners and Developers. The Company has extensive relationships with
architects, engineers, and consultants. Pan Terra's growth plan
includes: acquisition of successful companies, leveraging of
environmental and trenchless technology solutions and total dedication
to exceptional operational performance and achievement.

FORWARD LOOKING STATEMENTS: This news release may contain
forward-looking statements. All statements, other than statements of
historical fact, are forward looking statements that involve various
risks and uncertainties. There can be no assurance that such statements
will prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements. Important
factors that could cause results to differ materially from the Company's
expectations are disclosed elsewhere in documents that are available to
the public.

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Pan Terra Industries Inc.
    Don Sandford
    CEO
    (403) 279-9094
    or
    Pan Terra Industries Inc.
    Kaan Camlioglu
    CFO
    (403) 279-9094
    Email: ir@panterraindustries.com
    Website: www.panterraindustries.com
    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.