The Board of Directors of Plutonic Capital Inc. (PCC -- TSXV) are pleased to announce that Plutonic has entered into an agreement dated October 27, 2003 and as amended from time to time, for the acquisition of a private British Columbia based independent power company, "Power Co.". Power Co. was founded by the consulting engineering firm Knight Piesold to become a green power producer by generating electricity through run of river hydro electric power generation, and is being acquired from a wholly owned subsidiary of Knight Piesold. The independent power generation industry in British Columbia is in its infancy and recent Provincial government mandates have created an exceptional opportunity in this area.
Power Co. currently has licenses to generate power for three drainages basins near Hope ("Gems Creek Projects") and nine drainage basins in Bute Inlet (the "Bute Inlet Projects"). The projects near Hope collectively will have combined installed capacity of about 50 megawatts ("MW") and the potential to generate approximately 200 gigawatt hours per year ("GWh/year"). The Bute Inlet Projects collectively will have combined installed capacity of about 525 MW and the potential to generate approximately 1840 GWh/year. Preliminary capital cost estimates for the two groups of projects are $75 million and $800 million respectively.
The Gems Creek Projects, which range in size from 11 to 22 MW of installed capacity, have been developed over the last two years by Knight Piesold. Hydrological, environmental and engineering designs studies have been ongoing and no major obstacles appear to be in place that would stop Plutonic from submitting these Projects in the 2004 call for tender process expected from BC Hydro. The Bute Inlet Projects, which range in size from 28 to 102 MW of installed capacity, have recently been identified by Knight Piesold engineers as having very favourable characteristics for run of river installations. However due to their remote locations connection to the transmission grid will be a challenging factor in commercializing these projects.
The purchase price for Power Co. is the issuance to the shareholders of Power Co. of a 20% equity interest in the capital of Plutonic and further share issuances such that the Power Co. shareholders will maintain such 20% interest until Plutonic has raised an aggregate of $1 million, of which $567,500 has been arranged as indicated below. It is anticipated that an initial issuance of 1,532,500 common shares will be made. Jeremy Haile, P. Eng, a principal of Knight Piesold, will be joining the board of Directors of Plutonic upon completion of the acquisition of Power Co. Plutonic has remitted $150,000 to Knight Piesold for work undertaken on the projects since the letter agreement was signed. Plutonic has also arranged for a private placement financing of $567,500 through the sale of 2.27 million units in its capital stock at a price of $0.25 per unit. Each unit shall consist of a common share and a oneyear common share purchase warrant exercisable at $0.30 per common share. Closure of the private placement is subject to regulatory approval.
In order to facilitate this transaction Plutonic has granted an option to Serengeti Resources Corp on its Tide Property. Serengeti shall have an option to earn Plutonic's possible 51% interest in the Tide Property from Rimfire Minerals. In order to do so Serengeti shall issue 100,000 common shares to Plutonic upon receipt of regulatory approval, and 25,000 common shares annually thereafter until vesting. Serengeti will also assume all of Plutonic's rights and responsibilities concerning the Tide Project and pay to Plutonic 1,000,000 common shares its capital stock or $2 million when the property is put into production.
Following completion of the transaction the Board of Directors shall include Donald McInnes, President, R. Stuart Angus, William Lindqvist, Walter Segsworth, Michael Volker and Jeremy Haile. The corporate secretary will continue to be Rupert Legge.
The Company currently has 3,860,000 common shares issued and outstanding. Upon completion of the acquisition of Power Co. and the financing of $567,500, the company will have 7,662,500 common shares issued and outstanding. The Company previously had issued 740,000 common share purchase options to Directors and employees exercisable at $0.20 per share until August 8, 2008. Concurrent with the closure of the acquisition Plutonic shall be grant a further 521,000 common share purchase options to Directors, employees and consultants exercisable at $0.32 per share until five years from the date of grant.
The Company's acquisition of Power Co. will constitute a change of business for the Company and requires the Company to retain a sponsor in accordance with TSX Venture Exchange policies. Leede Financial Markets Inc., subject to due diligence, has agreed to sponsor the Company in connection with this transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.
Completion of the transaction is subject to a number of conditions, including but not limited to Exchange acceptance and disinterested shareholder approval. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the transaction, any information released or received with respect to the change of business may not be accurate or complete and should not be relied upon. Trading in the securities of the company should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
For further information on the transaction contemplated herein call Donald McInnes at Plutonic Capital at 604-669-4999.
On behalf of the Board of Directors
PLUTONIC CAPITAL INC.
Donald McInnes, President
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release