Peat Resources Limited
TSX VENTURE : PET

Peat Resources Limited

August 24, 2006 12:19 ET

Peat Resources Limited-$3.5 Million Raised for Pilot-Scale Production Facility

TORONTO, ONTARIO--(CCNMatthews - Aug. 24, 2006) -

Further to its news release of August 11, 2006, Peat Resources Limited (TSX VENTURE:PET) announces that, through IBK Capital Corp as agent, it has closed its C$3,500,000 private placement of units and special warrants with RAB Special Situations (Master) Fund Limited ("RAB"). RAB has purchased 9 million units at C$0.20 per unit (C$1,800,000). Each unit comprises one common share and one common share purchase warrant; each common share purchase warrant is exercisable for two years from the closing date at an exercise price of C$0.30 per common share. In addition, RAB has purchased 8,500,000 special warrants at C$0.20 (C$1,700,000); each special warrant permits the holder to convert it to one unit.

The hold period for the above securities expires on December 24, 2006. IBK Capital Corp is being paid a cash fee of 10% of the proceeds raised, and broker warrants equal to 10% of the units and special warrants sold. Each broker warrant entitles the holder to acquire one common share at $0.20 for a two-year period.

The proceeds will be used for the design and operation of a pilot-scale production facility leading to an engineering feasibility report and production of peat fuel for marketing purposes; to complete resource evaluation of additional peat properties in Canada, including northern Ontario and western Newfoundland; and for working capital.

Peat Resources Limited was formed to develop and market peat fuel on a profitable and sustainable basis. The product is intended for customers requiring a consistent long-term supply of economically favourable and environmentally acceptable fuel.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy of this new release.

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