Polaris Geothermal Inc.
TSX : GEO

Polaris Geothermal Inc.

May 04, 2009 17:32 ET

Polaris Geothermal Inc. Successfully Completes US$10,000,000 Private Placement of Units

TORONTO, ONTARIO--(Marketwire - May 4, 2009) -

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

Further to its press release of March 27, 2009, Polaris Geothermal Inc. (TSX:GEO) ("Polaris Geothermal" or the "Company") is pleased to announce that the Company has successfully completed a private placement of 26,533,334 units ("Units") at a price of CDN$0.45 per Unit for aggregate gross proceeds of US$10,000,000 (the "Unit Offering"). Each Unit consists of one voting, convertible, redeemable preferred share (each, a "Preferred Share") and one Class A common share purchase warrant (each, a "Unit Warrant") at a price of CDN$0.45 per Unit. Each Unit Warrant is exercisable into one Class A common share at a price of CDN$0.45 within 24 months of closing of the Unit Offering.

A special meeting of the shareholders of Polaris was held on May 1, 2009, at which time shareholders approved:

(a) the Unit Offering, the payment of corporate finance fees to a limited market dealer in connection therewith, and the acquisition of certain geothermal concession interests in Nicaragua;

(b) the filing of articles of amendment to create the Preferred Share class;

(c) reducing the exercise price and extending the exercise period of the 18,009,000 warrants issued on April 11, 2008 (the "2008 Warrants"), the 26,666,665 warrants issued on July 27, 2007 (the "2007 Warrants"), the 4,500,000 warrants issued on March 10, 2004 (the "2004 Warrants"), and the 3,500,000 warrants issued on March 3, 2006 (the "2006 Warrants" and, together with the 2008 Warrants, the 2007 Warrants and the 2004 Warrants, the "Existing Warrants"), including the approximately 39,408,825 Existing Warrants held by insiders and related parties of the Company.

Approximately US $3,850,000 of the proceeds of the Unit Offering will be used by the Company to expand its portfolio of geothermal properties in Nicaragua and to cover certain acquisition costs. A further CDN$640,000 will be used to satisfy interest payments due and owing on March 31, 2009 to holders of the 9.5% senior secured debentures issued by Polaris on April 11, 2008, which payment such holders had agreed to postpone until closing of the Unit Offering. The Company will spend approximately US$3,300,000 of the remaining proceeds to repay accrued liabilities incurred in connection with drilling programs, critical equipment purchases, civil works, construction, mobilization, planning and related expansion activities at the Company's San Jacinto geothermal project in Nicaragua.

About Polaris Geothermal Inc.

Polaris is a Canadian company, focused on the generation of renewable energy projects in Latin America and other parts of the world. For more information about Polaris visit www.polarisgeothermal.com.

FORWARD LOOKING INFORMATION

This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information in this press release includes, but is not limited to, statements or information concerning the Company's expansion of its portfolio of geothermal properties and planned use of proceeds of financing. The forward-looking information reflects management's current expectations regarding future events and operating performance and is based on certain assumptions. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including those factors disclosed under the heading "Risk Factors" and elsewhere in the Company's documents filed from time to time with the securities regulatory authorities. Readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

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