Strategem Subscribes in Convertible Debenture

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Ken Morgan
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VANCOUVER, BRITISH COLUMBIA – July 14, 2003 – Strategem Capital Corporation (the “Company” or “Strategem”) (TSX-V: SGE) has subscribed for a $150,000 principal amount convertible debenture from Spartacus Capital Inc. (“Spartacus”). The convertible debenture is convertible into 681,818 units of Spartacus and pays interest of 12% per annum. The units of Spartacus consist of a share and a share purchase warrant at $0.22 per unit. The share purchase warrants can be exercised to purchase a share of Spartacus at $0.35 per share for two years. The convertible debenture has a term of one year and can
be extended for a second year with the payment of an extension fee of $15,000. The convertible debenture is secured by common shares of Spartacus owned by some of the principals of the Spartacus.

One of the directors of Strategem is also a director, officer and control person of Spartacus. The Board of Directors of Strategem has approved the subscription for the Spartacus convertible debenture, with the interested director disclosing his interest and abstaining from voting. The purpose of Strategem entering into the convertible debenture arrangement with Spartacus is for investment purposes.

Strategem is waiving the valuation and shareholder approval requirements by relying on OSC Rule 61-501 section 5.6 Exemptions from Formal Valuation Requirement subsection 2 Fair Market Value not more than 25% of Market Capitalization and section 5.8 Exemptions from Minority Approval subsection 2 Fair Market Value not more than 25% of Market Capitalization.

Spartacus, a TSX Venture Exchange Capital Pool Company, is in the process of completing a qualifying transaction to acquire a rare earths mineral property in Wyoming and will be renamed “Rare Element Resources Ltd.” The stock symbol will be RES on completion of the transaction. Spartacus proposes to use the proceeds of the convertible debenture for the phase one recommended exploration program and for general working capital. The rare earths project in Wyoming is called the Bear Lodge project and will be the main asset and focus of the Company with the short term objectives of further delineating and estimating the rare earth metals contained in the property. The use of these metals in specialized applications and more mainstream applications, such as hybrid vehicles, continues to increase at a steady pace and the location of this property make it strategic for buyers of such rare earth metals.

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


“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.