Palcan Announces Closure of $780,000.00 Private Placement

VANCOUVER, British Columbia--Feb. 1, 20042, 2004--Palcan Fuel Cells Ltd. (TSX VENTURE:PC) is pleased to announce the successful closing of its previously announced Private Placement, dated January 26, 2004, consisting originally of 2,220,000 units at a price of $.30 per share, is now amended to 2,600,000 units for a total proceeds of $780,000.00.

Palcan's unit offering will consist of a total of 2,600,000 common shares being issued at a price of $.30 per share. The investors will also be granted non-transferable warrants (at the rate of one half warrant per share purchased in the Private Placement) to purchase up to an additional 1,300,000 common shares for a period of one year at a price of $.385 per share, and at $.77 in the second year.

The aforementioned shares purchased are subject to a four month hold period, net proceed of this private placement will be used for general working capital.

The Company will pay a Finder's Fee of 10% of the gross proceeds to the finder upon closing of the private placement.

The following transaction is subject to the approval of the TSX Venture Exchange.

About Palcan

The Company is a leading developer and manufacturer of 100 watt to 5-kilowatt proton exchange membrane (PEM) fuel cells and metal hydride hydrogen storage products. The Company's proprietary and patent pending technologies form the core of the PalPac(TM) Power Products. A unique and integrated fuel cell power system aimed directly at low output applications where smaller internal combustion engines (ICE) and batteries are the power source. These include personal transport NEV and fleet type vehicles used in closed range environments (airports, amusement parks, golf courses, malls, delivery circuits), two and three wheeled scooters, in addition to including stationary, marine and portable power applications. The Company's manufacturing, research and development facilities are located in Burnaby, British Columbia and the Company trades on the TSX Venture Exchange under the symbol "PC".

John Shen, Ph.D. President & CEO

Certain matters discussed in this press release may contain forward-looking statements that may involve risk and uncertainties. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including but not limited to; product development delays, the ability to attract and retain business partners, competition from other fuel cell manufacturers, competition from existing power technologies, and the ability to provide the capital required for product development, operations and marketing. Investors are encouraged to review the Company's filings on SEDAR at www.sedar.com.

The TSX Venture Exchange has neither reviewed nor approved of the contents of this news release.