VANCOUVER, BRITISH COLUMBIA, Feb 8, 2011 (Marketwire via COMTEX News Network) --
Galena Capital Corp. (TSX VENTURE:FYI) (the "Company" or "Galena"), a Vancouver based company listed on the TSX Venture Exchange, is pleased to announce it has entered into a non-binding Letter of Intent with Imperial Petroleum, Inc. ("Imperial"), a U.S. based company (www.ImperialPetroleumInc.com).
A wholly owned subsidiary of Imperial holds a process technology license (the "License") respecting a patented and proprietary process that allows for the recovery of bitumen from oil sands (tar sands). The technology utilizes a non-thermal, mechanical and chemical process in a closed-loop system to recover bitumen from oil sands. The closed-loop process results in zero discharge, except for clean sand and the separated bitumen product.
The Letter of Intent contemplates:
-- The formation of a new entity to be named "Arena Energy, LLC" ("Arena"),
which is expected to be a Nevada LLC whose capital stock will be owned,
directly or indirectly, by Galena and Imperial on a 50/50 basis.
-- Arena and Imperial will sign a sub-license agreement under which Arena
will have a non-exclusive sub-license to use the oil sands recovery
technology for development of a specific project in the United States.
-- Galena will invest US$850,000 in Arena which will be used to fund: (i)
the purchase of the sub-license of the oil sands recovery technology;
(ii) acquisition of a production unit capable of processing up to 2,500
tons of oil sands per 24 hour period; (iii) lease and equipment
acquisition and general start up expenses.
-- Galena will be entitled to recover its invested capital out of 80% of
the net cash flow of Arena after which the 50/50 profit sharing will
come into effect.
-- The parties' obligations are subject to completion of due diligence, the
execution of a definitive agreement between Galena and Imperial, and
receipt of all required regulatory approvals.
Galena and Imperial intend that Arena will install its initial operation at one of several potential sites in the U.S. that will provide sufficient minable oil sands capable of sustaining operations for several years. Based on proof of concept production runs by Imperial, the production unit to be acquired by Arena is estimated to commence operations at 300 tons per day with a goal of expanding to 2,400 tons per day based on Imperial's estimate of the production unit's maximum capacity.
"Management of Galena looks forward to the satisfactory completion of the due diligence and finalization of a definitive agreement between Galena and Imperial. This proprietary technology and process could position Galena at the forefront of new oil recovery technologies and will provide a highly scalable business model," states CEO John Seaman.