Polaris Geothermal Inc.

Polaris Geothermal Inc.

June 10, 2005 09:47 ET

Standard Bank Makes Equity Investment in Polaris Geothermal

TORONTO, ONTARIO--(CCNMatthews - June 10, 2005) -

News release pursuant to National Instrument 62-103 in compliance with applicable securities legislation in Ontario

Polaris Geothermal Inc. ("Polaris Geothermal"), (TSX VENTURE:GEO) an emerging renewable energy generator, is pleased to announce that it has completed a non-brokered Cdn.$2.415 million private placement with Standard Bank Plc ("Standard Bank"). Standard Bank subscribed for 2.1 million Polaris Geothermal units (the "Units") at a price of Cdn.$1.15 per Unit. Each Unit will consist of one class A common share of the Corporation (a "Common Share") and Common Share purchase warrant (a "Warrant"). Each Warrant is exercisable into one additional Common Share at a price of Cdn. $1.50 per share until December 9, 2006.

The securities are subject to a hold period and may not be traded until October 10, 2005, except as permitted by Canadian securities legislation and the TSX Venture Exchange.

As a result of the subscription for the Units, Standard Bank now owns 2,100,000 million Common Shares and 2,100,000 Warrants, which together on a diluted basis represent 11.5% of the issued and outstanding Common Shares.

Standard Bank effected the transaction for investment purposes. Standard Bank may, depending on market and other conditions, increase or decrease its beneficial ownership, control or direction over the Common Shares, through market transactions, private agreements, treasury issuances, exercise of convertible securities or otherwise.

A copy of the report filed pursuant to the above-captioned provisions may be obtained by contacting: Standard Bank, Cannon Bridge House, 25 Dowgate Hill, London EC4R 2SB, United Kingdom, Attention: Allan Walker, Head, Power & Infrastructure Group ((44) 207 815 3022).

Polaris Geothermal is currently developing the San Jacinto resource in Nicaragua and expects to initiate the first 10 MW of production in June of 2005. Sinclair Knight Merz, world leading independent geo-scientific consultants, have assigned a 90 percent probability that the entire resource contains energy sufficient to support production of 200 MW of power over a 20-year period. Polaris Geothermal has in-place a 20-year power purchase agreement for 66 MW, which is expected to generate in excess of $US25 million in annual cash flow once the 66 MW is attained. Beyond the 66 MW, Polaris Geothermal can sell additional power produced in the open market.

"We have been very fortunate to have the support of Standard Bank in the development of this project", stated Tom Ogryzlo, President and CEO of Polaris Geothermal. "Their expertise in both the resource sector and in developing economies, such as Nicaragua, has been invaluable. We greatly appreciate the confidence that this investment demonstrates in the project, our management, and our group of investors."

Polaris Geothermal is a renewable energy resource company focused on the development of geothermal projects. Polaris Geothermal Inc. has 36,475,701 Class A common shares issued and outstanding.


This press release includes certain forward-looking statements. All statements regarding potential estimated capacity, reserves and future plans and objectives of Polaris Geothermal, 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 Geothermal's 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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