ABCP Update

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Strategem Capital Corporation (“Strategem” or “the Company”) today provided additional information regarding its Canadian Asset Backed Commercial Paper (“ABCP”) holdings.

On December 23, 2007, The Pan-Canadian Investors Committee for Third-Party Structured Asset Backed Commercial Paper (the “Crawford Committee”) approved an agreement in principle to restructure the ABCP issued by 20 trusts (including 43 series) covered by the Montreal Accord, totaling approximately $33 billion. The restructuring will pool each eligible series of ABCP into one of two master asset partnerships which, in turn, will receive either senior notes or subordinated notes depending on the quality of the individual series of ABCP held by each investor.

The Company does not know the proportion of its ABCP holdings that will be exchanged for senior or subordinated notes. The Company believes that the majority of its ABCP holdings will be eligible for
the restructuring but cannot provide any assurance that the restructuring will complete in a timely manner, or at all.

Strategem holds ABCP with a face value of $6.5 million, which it has previously written down to $3.9 million and reclassified as long term. Due to the lack of available information regarding the underlying assets, and the lack of an available market for the ABCP, the Company will take an additional write down to record the ABCP at a value of $3.6 million. The value the Company ultimately receives upon liquidation of its ABCP assets may differ significantly from the Company’s estimates.

The Company has adequate working capital to meet its operational needs in the short term. However, if the restructuring does not complete by the March 2008 target, the lack of available cash will affect the
Company’s ability to make investments or make distributions to its shareholders. The Company does not expect that it will require additional financing.

About Strategem Capital

Strategem Capital Corporation is a publicly-traded merchant bank specializing in the development of emerging companies with above average growth potential. The current focus is on companies that explore and develop precious or base metals.

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


“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.