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TORONTO, ONTARIO--(Marketwire - May 31, 2010) - Semcan Inc (TSX VENTURE:STT) ("Semcan" or the "Company") today reported that it has signed a definitive agreement to merge with Group DKG Corp. ("DKG") of Toronto. DKG, a private Ontario corporation with operations in Scarborough, Ontario and Buffalo, New York, was founded to consolidate the corrosion-resistant fiberglass reinforced plastic ("FRP") industry. Examples of corrosion-resistant FRP products include: scrubber systems, ducting and chimney liners used in coal-fired power plants; tanks, vessels and piping systems used in water and sewage treatment facilities; and pipes, ducting and ventilation systems. The two companies share customer bases in mining, power generation and water treatment.

Following the proposed merger, Semcan's engineering, project management and system integration capabilities will be augmented by DKG's manufactured products, which are used in applications requiring chemical and corrosion-resistant containment and transport of liquids, gases and chemicals.

The Combined Business

The merged business and the markets served by the respective verticals are set out below:

To view the SemcanDKG (verticals) figure, please visit the following link: [ http://media3.marketwire.com/docs/semcanDKG.pdf ]

The combined business will realize immediate rent and general and administrative cost savings through centralized head office functions. But management expects the real long term benefit of the merger to be revenue growth from the integration of the verticals' sales teams and expanded product and solutions offerings. The Company intends to grow organically by maximising sales of its combined product range through its enhanced sales channels. The Company will also grow by acquiring companies with the main qualifying criteria being Common Customers and Engineered Solutions.

Both companies have experienced declining backlog over the past eighteen months due to reduced demand from the coal-fired power market, depressed commodity prices, and little activity in the oil and gas industry. However, since early 2010, inquiries from customers have increased significantly, with both companies responding to high levels of requests for quotations in all markets served, aside from the power industry. If as is expected U.S. federal regulations for environmental controls are updated, significant capital expenditures are expected to reemerge in the power market as well, as power plant owners update pollution control equipment to meet new regulations.

After almost 18 months of downtrend, the backlog chart below shows the uptick in orders in the merged entity's backlog:

To view the Semcan DKG graph, please visit the following link: [ http://media3.marketwire.com/docs/semcanDKGgraph.pdf ]

"Backlog" is the actual value of revenue remaining to be earned from purchase orders received from customers. The projects represented in backlog are executed according to a schedule agreed with each customer which could range in duration from one month to eighteen months. Revenues are earned on a percentage of completion basis. Semcan and DKG use the same methods of calculating backlog and recognizing revenue.

The benefit of the two companies joining forces now is to position the merged company to increase its products and services offering to common customers in common markets ahead of the increased demand from the markets we serve. The indications are that the industry is coming out of the recession and that we have turned the corner upwards of a U-shaped recovery.

The Transaction

Semcan currently has 31,097,867 issued and outstanding common shares. The proposed merger will be accomplished by having DKG amalgamate with a new wholly-owned subsidiary of Semcan. Prior to the merger, some of Semcan's secured lenders will convert approximately $3,116,283 million of outstanding indebtedness into approximately 15,581,413 common shares at a price of $0.20 per share prior to the close of the transaction. Following the debt conversion, Semcan will have 46,679,280 common shares issued and outstanding.

DKG's shareholders will receive approximately 21,705,955 common shares in Semcan based on a deemed issue price of $0.17 per Semcan share, representing approximately 32% of the merged company after the debt to equity conversion and prior to the closing of the proposed new financing described below. In addition, current holders of warrants in DKG will receive 5,903,712 common share purchase warrants of Semcan. After the conversion of debt and consummation of the merger, Semcan's shareholders will hold approximately 68% of the merged company.

Contemporaneous with the closing of the merger, Semcan intends to close a financing under which a minimum of $2.0 million of new equity at a price of $0.15 per common share will be raised by way of a short form prospectus resulting in the issuance of at least 13,333,333 shares of Semcan. The proceeds of the financing will be used for working capital purposes.

Following the merger and $2.0 million financing, Semcan will have approximately 81,718,568 issued and outstanding common shares.

DKG currently has 47 shareholders, the majority of whom are residents of Ontario, holding approximately 6,767,901 common shares of DKG. The senior management of DKG and its subsidiaries, who are David Deacon (DKG CEO), Jonathan Aune (DKG VP Corporate Affairs), David Richardson (President, Precisioneering Limited), all residents of Ontario, and Merrill Arthur (President, An-Cor Industrial Plastics, Inc.), a resident of New York ("DKG Senior Management"), will collectively hold approximately 19% of the shares of Semcan after closing . After the close of the proposed financing described below, DKG Senior Management will then collectively hold approximately 16% of the shares of Semcan.

The transaction is expected to close on 30^th June 2010 and is conditional on obtaining TSXV approval and any necessary regulatory and shareholder approval, the $3,116,283 debt to equity conversion, completion of due diligence and closing of the $2.0 million financing.

About DKG

DKG was founded to consolidate the corrosion-resistant fiberglass reinforced plastic ("FRP") industry. DKG has two manufacturing subsidiaries which were acquired in 2008: Precisioneering Limited of Scarborough, ON ("Precisioneering") and An-Cor Industrial Plastics, Inc. of North Tonawanda (Buffalo), NY ("An-Cor"). The manufacturing operations will be maintained after closing, and DKG's senior management will work from Semcan's Milton office.

Precisioneering

Established in 1964, Precisioneering designs and manufactures corrosion resistant engineered proprietary fiberglass equipment. Its standard products include fiberglass tanks, brine makers, pollution control scrubber systems, fans, ducting, stacks, grating, platforms, walkways and ladders. The main fabrication processes utilized by Precisioneering include filament winding, hand lay-up, Reverse Transfer Molding (RTM) and a variety of specialized fabrication processes to meet the ever-changing demands of the industry. Finished products are used in Canada and the USA in addition to many other global applications. Precisioneering has a diverse customer base including GE, DuPont, Dow Chemical, Southern Power, Vale Inco, and Sherritt. It is highly regarded for its engineering, quality and customer service. Further information about Precisioneering is available at [ www.precisioneering.com ].

An-Cor

Established in 1960, An-Cor specializes in the design, engineering, manufacturing, installation and maintenance of custom FRP industrial equipment. Some of An-Cor's custom products include tanks, scrubbers, piping, stacks and chimney liners. An-Cor is highly regarded in the FRP industry for quality, expertise and manufacturing certifications. In 2006, An-Cor expanded its manufacturing capabilities to include field-winding, which is a portable factory used for the manufacture of ultra large-sized components at the installation site. Field winding is often essential for participation in large retrofit projects in the coal-fired power plant sector. Further information about An-Cor please is available at [ www.an-cor.com ].

Financial Information for DKG's Operating Subsidiaries

	Precisioneering Six Months ended March 31/10 (Unaudited, C$)		An-Cor Six Months ended March 31/10 (Unaudited, USD)
Assets		$4,218,303		$4,117,892
Liabilities		$2,901,448		$4,308,850
Equity		$1,316,855		($190,958	)
Revenue		$3,334,297		$2,251,512
EBITDA		$130,788		($138,179	)

Directors and Officers

Semcan currently has seven directors, of which four are independent. On closing of the proposed merger, it is anticipated that one independent director and one of the management directors will be replaced by nominees of DKG. Mr. David Deacon, C.E.O. of DKG, will assume the C.E.O. role of Semcan.

Mr. Phil Jamieson, current Chairman and C.E.O. of Semcan, will stay with the Company as Chairman.

Mr. Jonathan Aune of DKG will join the Semcan senior management team as VP Corporate Affairs.

Mr. John Wilby, the current CFO of Semcan, will remain in that position.

Commenting on the merger, Phil Jamieson said, "I am pleased to be able to recommend this transaction to our shareholders, as it provides much needed working capital, expands our product range, strengthens our sales channels and brings us a dynamic new leader in David Deacon to take the company to its next stage of development."

Caution Regarding Forward-Looking Information and Non-GAAP Measures

Forward-Looking Information

This news release may contain certain forward-looking statements including statements under the heading "The Combined Business" dealing with managements' views on future business trends. These statements relate to future events or future performance and reflect management's current expectations and assumptions regarding the growth, results of operations, performance, and business prospects and opportunities and prospective customer orders based, in part, on customer requests for quotes. Such forward-looking statements reflect management's current beliefs and expectations and are based on information currently available to management of Semcan. In particular, statements regarding the future operating results and economic performance are forward-looking statements, including those statements under the heating "The Combined Business" which refer to the "backlog" of projects and revenue anticipated to be earned from such projects. Forward-looking statements involve significant risks and uncertainties, and in particular, there can be no assurance that customer requests for quotes or that the "backlog" of projects will result in increased revenue to Semcan. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements, including risks outlined under "Risk Factors" in our Annual Information Form, which is posted at [ www.sedar.com ]. In evaluating these statements, investors should specifically consider various factors, including such risks as Investment Risk; Business Valuations; Condition of Capital Markets; Dependence on Key Personnel; General Economic Factors; Interest Rate Risk; Competition; and Reliance on Key Suppliers. One or more of these "Risk Factors" could cause actual events or results to differ materially from any forward-looking statement. These factors should not be considered exhaustive. Although the forward-looking statements contained in this press release are based on what management of Semcan considers to be reasonable assumptions based on information currently available to them, there can be no assurance that actual events or results will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. These forward-looking statements are made as of the date of this press release, and none of Semcan nor its directors assumes any obligation to update or revise them to reflect new events or circumstances. Undue reliance should not be placed on forward-looking statements.

Non-GAAP Measures

The term "EBITDA" is a financial measure used in this document which is not a standard measure under Canadian generally accepted accounting principles. Semcan's method of calculating EBITDA may differ from the methods used by other issuers. Therefore, Semcan's measure of EBITDA, as presented in this press release, may not be comparable to similar measures presented by other issuers. EBITDA refers to net earnings determined in accordance with generally accepted accounting principles, before depreciation and amortization, interest expense, and income tax expense. Management believes that EBITDA is a useful supplemental measure of cash available for debt service, working capital, capital expenditures, income taxes, and distribution. Investors are cautioned that EBITDA, as a non-GAAP measure, is not an alternative to measures under GAAP and should not, on its own, be construed as an indicator of performance or cash flows, a measure of liquidity or as a measure of actual return.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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