Polaris Geothermal Inc. Successfully Completes US$10,000,000 Private Placement of Units


Polaris Geothermal Inc. announce dthat the Company has successfully completed a private placement of 26,533,334 units (“Units” via private placement memorandum Canada) at a price of CDN$0.45 per Unit for aggregate gross proceeds of US$10,000,000 (the “Unit Offering”). Each Unit consists of one voting, convertible, redeemable preferred share (each, a “Preferred Share”) and one Class A common share purchase warrant (each, a “Unit Warrant”) at a price of CDN$0.45 per Unit. Each Unit Warrant is exercisable into one Class A common share at a price of CDN$0.45 within 24 months of closing of the Unit Private Offering.

A special meeting of the shareholders of Polaris was held on May 1, 2009, at which time shareholders approved:

(a) the Unit Offering, the payment of corporate finance fees to a limited market dealer in connection therewith, and the acquisition of certain geothermal concession interests in Nicaragua;

(b) the filing of articles of amendment to create the Preferred Share class;

(c) reducing the exercise price and extending the exercise period of the 18,009,000 warrants issued on April 11, 2008 (the “2008 Warrants”), the 26,666,665 warrants issued on July 27, 2007 (the “2007 Warrants”), the 4,500,000 warrants issued on March 10, 2004 (the “2004 Warrants”), and the 3,500,000 warrants issued on March 3, 2006 (the “2006 Warrants” and, together with the 2008 Warrants, the 2007 Warrants and the 2004 Warrants, the “Existing Warrants”), including the approximately 39,408,825 Existing Warrants held by insiders and related parties of the Company.

Approximately US $3,850,000 of the proceeds of the Unit Private Offering will be used by the Company to expand its portfolio of geothermal properties in Nicaragua and to cover certain acquisition costs. A further CDN$640,000 will be used to satisfy interest payments due and owing on March 31, 2009 to holders of the 9.5% senior secured debentures issued by Polaris on April 11, 2008, which payment such holders had agreed to postpone until closing of the Unit Offering. The Company will spend approximately US$3,300,000 of the remaining proceeds to repay accrued liabilities incurred in connection with drilling programs, critical equipment purchases, civil works, construction, mobilization, planning and related expansion activities at the Company’s San Jacinto geothermal project in Nicaragua.

Polaris is a Canadian company, focused on the generation of renewable energy projects in Latin America and other parts of the world.


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