South Crofty Holdings Ltd.: Major Development in Establishing Canada's First Geothermal Energy Company.

Business Editors

VANCOUVER--(BUSINESS WIRE)--Oct. 22, 2001

South Crofty Holdings Inc. (CDNX:SFH.) is pleased to announce a significant advance in establishing Canada's first geothermal energy company for the commercial production of electricity.

This publicly listed renewable energy company will be created by way of a reverse take-over of SFH and a vend-in of 100% of the significant Meager Creek geothermal project from Crew Development Corp. (CRU) to SFH.

The Canadian Venture Exchange (CDNX) has announced its conditional acceptance of the series of transactions, which will result in the formation of the NPGP, subject to ratification by South Crofty shareholders. A meeting of SFH shareholders is scheduled November 22, 2001 to consider and vote on the proposal.

Crew proposes a five percent stock dividend to its shareholders and will announce the record date in due course. On completion of the transactions, CRU will own approximately 87% of SFH, which will be re-named North Pacific GeoPower (NPGP) and dedicated solely to the development of the Meager Creek geothermal energy project located north of Vancouver, BC, Canada.

Of the 135.8 million shares that will be outstanding in NPGP, CRU will own 117.9 million shares (post dividend), shareholders of CRU (numbering about 8,000) will receive 6.2 million shares (via the stock dividend) and 11.7 million shares will be held by existing South Crofty shareholders (numbering about 1,200). Therefore, it is anticipated that there will be approximately 9,200 shareholders in NPGP. When all these transactions have been finalized, because of the large Norwegian shareholder base, it is proposed to seek a listing on NPGP on the Oslo stock exchange.

It is anticipated that trading of South Crofty, which has been halted since the announcement of the proposed transaction, will be reinstated on October 23, 2001 with the current trading symbol of SFH on the CDNX.

CRU is a mid-tier diversified international mining company, based in Vancouver, Canada and well positioned for further growth. The company controls five quality development projects and owns, through Metorex, seven producing mines. Crew is active in Africa, Canada, Greenland, Norway and the Philippines and has a demonstrated ability to discover new grassroots projects, advance projects to the development stage, and operate mines efficiently. The primary listing for Crew shares is the Toronto Stock Exchange (TSE) and since January 2000 it has been listed on the Oslo Stock Exchange (OSE). The company is also listed in Germany and in the US.

As extensively disclosed in the Company's news release 3 May 2001, GeothermEx, world experts in geothermal energy projects, have determined that the project has a potential to deliver at least 100 MW of clean, reliable electric power making a substantial contribution to the sustainable energy requirements of the economy. For each 100 MWhr of clean, electric power produced, 263,000 pounds of greenhouse gases (carbon dioxide) can be saved.

As GeothermEx had indicated in its report that the most likely electrical power capacity is at least 192 MW, a revised model of 150 MW was completed and announced on May 16, 2001. This model is based on the same debt to equity ratio and pricing structure as the 100 MW proposal, with the third 50 MW plant coming on line in 2008. A further reassessment of the economies of a 200 MW facility may be undertaken on completion of the proposed confirmation well program.

On the basis of a total cost of US$538.3 million (capital, operating, and interest during construction) for a 150 MW plant, the Net present value (NPV) of the projected after tax cash flows were estimated at approximately $US 212 million.

This NPV is the sum of discounted projected cash flows and is subject to proving commercial viability of the project. Additionally, NPV estimates are subject to a number of conditions and assumptions (e.g. net price received on long term electrical contracts) which are subject to change. Some of the conditions and assumptions are: commercial well productivity can be demonstrated by drilling and testing one or more confirmation wells, an adequate number of drilling sites can be identified in the rugged terrain of this field, a discount rate of 8% per annum, debt to equity ratio of 80/20, power price contract US$69 per megawatt hour.

There is a strong interest in investing in clean, environmentally positive energy companies by institutional investors such as ethical funds, energy funds and natural resource funds. As a result, SFH anticipates a strong investment interest by these funds to invest in NPGP.

Following completion and testing of the geophysical ground survey, upon receipt of the permits, anticipated soon, a three slim-hole testing program would commence. This program is funded and is designed to provide important information about the flow of the super-heated water from the inside of the mountain to the surface, the source of which will be the target deep production size wells to be drilled next year. Expressions of interest have been received to provide funding for this next stage of project development.

This program is designed to provide important information about the flow of the super-heated water from the inside of the mountain to the surface. In geothermal electric projects, super heated water is drawn from a series of wells to the surface, where it drives steam turbines and generates electrical power. This process has been successfully used in the United States and other countries on the Pacific Rim of fire and around the world, where it is an important addition to grid-connected renewable energy. Geothermal electric power is the second-largest source of grid-connected renewable energy in United States and saves 22 million tons of carbon dioxide (CO2) emissions per year.

SOUTH CROFTY HOLDINGS LTD. Lawrence Campbell, Director

This News Release was prepared by the Board of Directors on behalf of South Crofty Holdings Ltd. which is solely responsible for its contents.