NEWS RELEASEFor Immediate Release, November 10, 1998
BPI ACQUIRES COALBED METHANE INTERESTS IN CHINA
BPI INDUSTRIES INC. (the "Company") (BPR - VSE) is pleased to announce that
it has signed a Letter of Intent with International Methane Company, Ltd.
("IMC"), to acquire IMC's coalbed methane royalty assets in China. The
royalties consist of a 20% modified royalty and 15% net profits interest
granted by CDX Joint Venture in its 50% interest in two coalbed methane
projects in China.
The first project, the China I project is located in Shanxi Province, in
the People's Republic of China and is 35,756 acres in size. A seven well
pilot project is currently in the de-watering and flow testing stage. The
second project, the China II project, located in Henan Province, is 26,182
acres in size and will be developed in the future.
The agreement between BPI & IMC calls for BPI to allot, but not issue,
1,950,000 BPI shares in exchange for the coalbed methane royalty assets.
Upon an independent report being issued on the project that is acceptable
to the Vancouver Stock Exchange establishing that the value of the assets
is equal to or greater than the deemed value of the shares, and BPI
receiving royalty payments from the project of CDN$100,000 per month for 3
consecutive months, BPI will issue 50% of the shares allotted. The balance
of the shares will be issued upon BPI receiving further royalty payments
from the project in the amount of CDN$100,000 per month for an additional 3
consecutive months. This transaction is subject to BPI & IMC board
approval as well Regulatory approval.
Efforts are focused on finalizing development of the Shanxi resource to
commercial production. Recent decisions in China's government dictate that
the major cities such as Beijing, having high levels of air born pollution,
will no longer be allowed to utilize coal as the fuel of choice in power
generation and heating. This is anticipated to greatly enhance natural gas
as a fuel which is already in short supply. A pipeline has recently been
completed through the Northern Shanxi Province to Beijing in preparation
for these changes.
The China I project is the first recorded recovery of gas from anthracite
coal. CDX Joint Venture's Chinese partner, the Jin Cheng Coal Company, is
one of the largest coal producer in China and is the owner of the remaining
50% of the China I project. The relationship between parties has been
cultivated over the last six years with all entities being confident of a
continuing stable political and business association.
The U.S. Environmental Protection Agency and Department of Energy are
sponsoring international programs to encourage the capture of coalbed
methane gas to help thwart climate warming. Removing this gas ahead of
mining, qualifies for greenhouse gas credit that are beginning to trade in
international markets and will further enhance the value of this resource.
Final due diligence and formal documentation is in the process of being
completed. The Company believes that these new coalbed methane royalty
assets will greatly enhance the Company's position in the coalbed methane
industry.BPI INDUSTRIES INC."L. Janda"
Lakhwindar Janda,
PresidentFor Further Information Contact
800-803-3204 or 604-685-8688 / info@bpi-industries.com
The Vancouver Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release. |
