Options Proposed

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NEWS RELEASE FOR:
STRATEGEM CAPITAL CORPORATION.

CONTACT:
Ken Morgan
1-604-692-0073
Email: info@strategemcapital.com or visit
www.strategemcapital.com

VANCOUVER, BRITISH COLUMBIA – October 6, 2004 – Strategem Capital Corporation (“Strategem” or the “Company”) (TSX-V: SGE) announced today that, subject to TSX approval, the Company will grant 190,000 employee stock options. The options will have an exercise price of $0.50 per share and will expire in five years.

The Company also announced that, subject to regulatory approval, it will appoint Dennis Nenadic to act as an investor relations representative beginning October 7, 2004. Mr. Nenadic has been employed by the Company since January 2004 in an administrative capacity on a month to month basis. In addition to his administrative duties, Mr. Nenadic will answer investor inquiries and liaise with the investment community. Mr. Nenadic is based in Vancouver and is paid $2,300 per month. Mr. Nenadic currently holds 3,000 shares of the Company.

About Strategem Capital

Strategem Capital Corporation is a publicly-traded merchant bank focused on the development of emerging companies with growth potential. The Company invests in debt and/or equity positions in these companies.

This release and prior releases are available on the Company’s Internet web site located at www.strategemcapital.com.

BY ORDER OF THE BOARD OF DIRECTORS

“Kenneth W. Morgan”
Kenneth W. Morgan, CA, CPA
President, CEO and Director

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

Not for dissemination in the United States