Polaris Geothermal Inc.
TSX VENTURE : GEO

Polaris Geothermal Inc.

June 01, 2005 07:00 ET

Polaris' San Jacinto Resource Increases To 200 MW

TORONTO, ONTARIO--(CCNMatthews - June 1, 2005) -

-Company initiates new bankable feasibility study

Polaris Geothermal Inc. ("Polaris Geothermal"), (TSX VENTURE:GEO) an emerging renewable energy generator, announced today that it has received a final geophysical survey report on the SJT concession in Nicaragua. The report, completed by Sinclair Knight Merz, (SKM), world leading independent geoscientific consultants, indicates that the western and eastern resource sectors of this concession are spatially connected and that the combined resource area is larger than previously estimated. These results, interpreted on the basis of a stored heat assessment using analogies from other developed geothermal systems worldwide, has led SKM to assign a 90 percent probability that the entire resource contains energy sufficient to support production of 200 MW of power over a 20-year period. The final results are a 16 percent increase over their preliminary findings, which were announced on April 20, 2005.

"The San Jacinto-Tizate reservoir has been identified by SKM as a world-class geothermal resource," stated Tom Ogryzlo, President and CEO of Polaris Geothermal. "Combined with our Casita and Larreynaga concessions, we now have over 325 MW of potential generation capacity in Nicaragua, a country that is a net energy importer and in very serious need for lower-cost indigenous power sources."

Based on the data provided by SKM and the increasing demand for energy in Nicaragua, Polaris Geothermal is investigating alternative methods to accelerate development of the San Jacinto-Tizate project and take advantage of the larger resource. This will include drilling to confirm the productivity of the extended resource, particularly the western sector.

As previously announced, Polaris Geothermal has under review, alternative methods to accelerate development of the larger resource beyond the original 66 MW, which is contracted under 20-year power purchase agreement. In support of this action, SKM has been directed to produce a revised bankable feasibility study incorporating the final survey results.

Polaris Geothermal will commission its first 10 MW of power generation from the San Jacinto - Tizate concession in June of 2005.

Polaris Geothermal is a renewable energy resource company focused on the development of geothermal projects. Polaris Geothermal Inc. has 34,365,701 Class A common shares issued and outstanding.

FORWARD-LOOKING STATEMENTS

This press release includes certain forward-looking statements. All statements regarding potential estimated capacity, reserves and future plans and objectives of Polaris, 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 actual results to differ materially from these forward-looking statements include: the ability to extract sufficient geothermal fluid of usable quality from the resource, in a cost-effective manner, and other factors disclosed under the heading "Risk Factors" in Polaris' Management Information Circular revised, for filing purposes July 7, 2004 and elsewhere in Polaris documents filed from time to time with regulatory authorities.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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