HTC PURENERGY SIGNS AGREEMENT TO PURCHASE AN OWNERSHIP POSITION IN ORIGINAL EQUIPMENT MANUFACTURER (OEM) & CONSTRUCTOR AND ANNOUNCES PRIVATE PLACEMENT
Regina, Saskatchewan, September 22, 2008 - HTC Purenergy (the “Corporation” or “HTC”) is pleased to announce it has signed an agreement to purchase a 15% ownership position in Kingsteel Inc. (“Kingsteel”) in exchange for 362,500 common shares of the Corporation at a value of $4.00 per common share and an additional $50,000 cash for a total consideration of $1,500,000 (CDN). The agreement provides HTC with a seat on the Kingsteel board of directors and an option to purchase an additional 30% of the common shares of Kingsteel within a 1-year period.
Kingsteel is a manufacturer and constructor of fabricated products to the energy and fertilizer industries in Western Canada and is the parent company of the Pinnacle Industrial Group including: IMT Integrated Machine Technologies Inc. of Regina, Saskatchewan and NuVision Industries Inc. of Calgary, Alberta.
In December 2007, HTC announced that it had entered into an OEM Design and Construct Agreement with Kingsteel’s subsidiaries who would complete the modular design and pre-engineered construction of HTC’s Purenergy CCS CO 2 capture system. The Intellectual Property that has developed from the Kingsteel design and constructability agreement has led to the advanced design of new CCS componentry and the integration of HTC’s “TKO Technology” which will further enhance the cost effectiveness of HTC’s CO 2 capture system.
The Purenergy CCS CO 2 capture system is the world’s first pre-engineered, modularly constructed CO 2 capture unit that can be retro fitted to existing or new build coal and gas fired power plants. The Purenergy CCS system is capable of capturing up to 3,000 tons per day of CO 2. These 3000 tons of captured CO 2 can then be used in CO 2 enhanced oil recovery (“EOR”) with the ability to produce approximately 15,000 incremental barrels of oil per day in suitable North American oil fields. The United States Department of Energy estimates there are 46 billion barrels of oil in the United States that will require CO 2 EOR production techniques.
Jeffrey Allison, Vice-President and CFO of HTC and new board member of Kingsteel, commented: “The purchase of an ownership position and board seat in Kingsteel provides HTC with the certitude that we will have the deployment capabilities to lead or participate in CO 2/EOR projects in North America and continue to develop and control modular constructability Intellectual Property. Kingsteel provides construction and modular expertise that will be crucial in the timely delivery and deployment of our CO 2 capture systems. We are pleased to be working with Kingsteel whose management team has a proven record of achievement.”
Steve Olasz, Chairman and CEO of Kingsteel, welcomed the announcement:
“HTC and the University of Regina have emerged as global leaders in commercial CO 2 capture and CO 2 EOR/storage systems. Utilizing CO 2 to produce additional oil is an opportunity for Kingsteel to modularly manufacture and construct CO 2 capture systems for the North American EOR market. Our facilities in Regina and Calgary are well positioned to supply this energy infrastructure build out.”
This agreement has been approved by the board of directors of the Corporation and is subject to TSX Venture Exchange Inc. approval.
HTC has completed a private placement and has issued 78,750 common shares (“Common Shares”) at a price of $4.00 per Common Share, for gross proceeds of $315,000.00 (“ Private Placement”). The Common Shares issued are subject to a hold period under applicable securities law until January 23, 2009. The Private Placement has been approved by the board of directors of HTC and the TSX Venture Exchange Inc. Net proceeds of the Private Placement will be used for business development, including commercialization of HTC Purenergy’s CO2 capture management product offer and general corporate purposes.
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