Polaris Geothermal Inc.
TSX VENTURE : GEO

Polaris Geothermal Inc.

October 12, 2006 10:17 ET

Polaris Geothermal Update

TORONTO, ONTARIO--(CCNMatthews - Oct. 12, 2006) -

Not For Distribution to US Newswire Services or for Dissemination in the United States

Polaris Geothermal Inc. ("Polaris Geothermal" or the "Company") (TSX VENTURE:GEO), a renewable energy geothermal power producer, is pleased to announce that the Toronto Stock Exchange has conditionally approved the listing of the class A common shares of the Company, subject to the Company fulfilling all of the requirements of the Toronto Stock Exchange.

"We are very pleased to have received conditional listing approval and look forward to the next phase in the development of Polaris Geothermal, which is definitely becoming very exciting", stated Tom Ogryzlo, President and Chief Executive Officer of Polaris Geothermal.

In connection with the conditional listing on the Toronto Stock Exchange, Polaris Geothermal will be required to complete the previously announced $12 million private placement offering (the "Offering") (see press release dated August 28, 2006). The Offering will be conducted on a best efforts agency basis of up to 9,600,000 units ("Units") at a price of $1.25 per Unit for gross proceeds of up to Cdn.$12,000,000. Each Unit will consist of one class A common share and one-half of one share purchase warrant. Each whole share purchase warrant will entitle the holder to acquire one class A common share of Polaris Geothermal at an exercise price of $1.65 for a period of 18 months from the date of issuance.

In other news, Polaris Geothermal announces that it has granted an aggregate of 75,000 options to certain directors of a subsidiary corporation of the Company who work in Nicaragua. Each option has an exercise price of $1.35 and is exercisable for a period of two years.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. 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 U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. All dollars in this release are in Canadian funds.

FORWARD-LOOKING STATEMENTS

This press release includes certain "forward-looking statements". All statements regarding the ability of the Company to successfully obtain a listing of its class A common shares on the Toronto Stock Exchange and to successfully arrange for financing 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. All statements that are not historical facts, including without limitation statements regarding future estimates, plans, objectives, assumptions or expectations of future performance, are "forward-looking statements". We caution you that such "forward looking statements" involve known and unknown risks and uncertainties that could cause actual results and future events to differ materially from those anticipated in such statements. Such risks and uncertainties include unpredictable results of exploration activities, uncertainties inherent in the estimation of geothermal resources, fluctuations in the costs of goods and services, problems associated with production operations, changes in legal, social or political conditions in the jurisdictions where the Company operates, lack of appropriate funding and other risk factors, as discussed in the Company's filings with Canadian securities regulatory agencies. The Company expressly disclaims any obligation to update any forward-looking statements.

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