Mr. Michael O'Reilly reports

COMET INDUSTRIES ANNOUNCES NON-DILUTIVE DEBT FINANCING TO FUND THE ONGOING DEVELOPMENT OF THE IRON MASK PROJECT IN KAMLOOPS BC

Comet Industries Ltd. has entered into a commitment letter for a secured, non-revolving term loan agreement with Harbour Mortgage Corp., pursuant to which the company will borrow up to the aggregate principal amount of $8-million to support construction and development activities related to the company's Iron Mask project in Kamloops, B.C.

The loan has a one-year term and bears interest at the greater of Royal Bank of Canada prime rate plus 4.55 per cent and 9.00 per cent per annum, calculated and payable monthly. A commitment fee of $200,000 is payable to the lender, of which $100,000 was paid upon acceptance of the commitment letter, and the balance will be deducted from the initial advance. The loan will be advanced through multiple draws based on work completed, no more than once per month and in minimum amounts of $500,000, with a $750 administration fee payable on each advance.

The loan cannot be prepaid during its initial six-month term. If the loan is not repaid by the maturity date, an overholding fee equal to 0.25 per cent of the outstanding principal will be payable monthly in advance, in addition to interest and all other amounts owing. Payment of the overholding fee does not extend the loan's term or cure the resulting default.

Including the commitment and administration fees, the effective annual interest rate over the one-year term is estimated at approximately 13.3 per cent, assuming eight monthly draws. Depending on the timing of permitted draws, the effective annual rate is expected to range from approximately 12.3 per cent to 14.5 per cent. If the loan remains outstanding for three months after maturity, the effective annual rate over the extended period would be approximately 12.2 per cent. In no event can the effective annual rate exceed 24 per cent per annum.

The proceeds of the loan are expected to be used to:

1. Repay the company's existing loan from an arm's-length third party in the amount of approximately $1.6-million; and
2. Pay trade creditors, contractors, subcontractors and material suppliers in connection with the servicing and related construction activities at the project.

All lenders are arm's-length parties, and the transaction does not constitute a related-party transaction under applicable securities laws.

The loan will be secured by, among other things, a first-ranking mortgage over the lands comprising the company's Kamloops subdivision project, together with an assignment of rents, an assignment of receivables and a first-ranking general security agreement over all personal property related to the project, with security registered pursuant to the Personal Property Security Act (British Columbia). The company anticipates that it will service the loan by using a portion of the proceeds received from the sale of lots comprising the project.

Completion of the loan is subject to various conditions customary for transactions of this nature, including entering into of a formal loan agreement between the parties and receipt of all requisite approvals, including the approval of the TSX Venture Exchange. The loan will not be convertible into any securities of the company without the prior approval of the exchange. In connection with the loan, the company will pay a cash commission of up to $65,000 to Fit Broker Services Ltd. No bonus securities or other compensation will be provided to the lender in connection with the loan.

About Comet Industries Ltd.

Comet Industries was established in 1972, incorporated in the province of British Columbia, and is listed on the TSX Venture Exchange. The company is in the business of holding and developing real estate properties, all in British Columbia. The company owns unimproved land in Kamloops and Nelson Island on a freehold basis. A major initiative by the company is the Iron Mask industrial park project.

We seek Safe Harbor.