NEWS RELEASE FOR:
STRATEGEM CAPITAL CORPORATION.
VANCOUVER, BRITISH COLUMBIA – August 29, 2007 – Strategem Capital Corporation (“Strategem” or “the Company”) today disclosed that C$6.5 million of its C$9.0 million of cash on
hand is invested in Canadian Asset-Backed Commercial Paper (“ABCP”).
ABCP totaling C$2.5 million has matured but has not been paid and remains outstanding. The Company has been informed by its financial advisors that this has been caused by a liquidity disruption in the market for Canadian asset-backed commercial paper. The balance of the Company’s ABCP totaling C$4.0 million has varying maturity dates to July 2008. Should the liquidity disruption continue the repayment of these notes may be delayed.
The Canadian ABCP held by the Company is rated R-1 (high) by Dominion Bond Rating Service, the highest possible rating for commercial paper. The Company has been told that the liquidity disruption is due to a lack of liquidity for asset-backed securities rather than the credit worthiness of the underlying assets. The Company expects it will take several months to clarify the situation and to determine the best approach. The Company does not know when or if the ABCP it holds will ultimately become collectible.
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 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.