SOURCE: Pan African Mining Corp.

May 12, 2008 03:01 ET

Formal Documentation Executed in the Pan African Mining Corp. Acquisition; Transaction Proceeding to Date as Agreed

VANCOUVER, BC--(Marketwire - May 12, 2008) - PAN AFRICAN MINING CORP. (TSX-V: PAF) (FRANKFURT: P2A) (the "Company") is pleased to announce that formal documentation has now been executed by the parties in connection with its proposed acquisition by Asia Thai Mining Co., Ltd. ("ATM") through 0819615 B.C. Ltd. (the "Purchaser"), a wholly-owned subsidiary of ATM. An Arrangement Agreement dated May 9, 2008 was executed among ATM, the Purchaser, the Company and African Queen Mines Ltd., a newly-formed subsidiary of the Company ("African Queen"), in order to effectuate the acquisition by means of a plan of arrangement (the "Plan of Arrangement"). Other documents executed by the parties concurrently include a Disclosure Letter furnished by the Company, a Stock Transfer Agreement entered into between the Purchaser and Mr. Irwin Olian, CEO and Chairman of the Company, and Support Agreements executed by the executive officers and directors of the Company.

Under the Plan of Arrangement and related documents, the Purchaser will offer to purchase on the effective date all of the outstanding common shares of the Company at the price of $4.00 cash per share and also offer to purchase for cash all outstanding warrants and all outstanding options (vested and not yet vested) of the Company for a price equal to the difference between $4.00 and the exercise price per share of the respective warrant or option (the "Transaction"). Prior to the completion of the Transaction, the Company will transfer to African Queen the following: (i) $2,500,000 cash, (ii) all of the shares of the Company's non-Madagascar subsidiaries, namely, PAM Botswana (Pty) Ltd., PAM Minerals Namibia (Pty) Ltd. and PAM Mocambique Limitada, and (iii) all other assets and liabilities of the Company related to the Company's non-Madagascar subsidiaries and non-Madagascar properties. Subject to any required approvals, the Company plans to distribute the shares of African Queen in a spin-off transaction to shareholders (but not warrantholders or optionholders) of the Company of record on a date which is three business days prior to the date of the special meeting of shareholders of the Company described below.

The Plan of Arrangement will be subject to the approval of the shareholders, warrantholders and optionholders of the Company at a special meeting to be held for that purpose. In that regard, the Company has set the proposed securityholder meeting date as June 20, 2008, and a record date of May 19, 2008, for shareholders, warrantholders and optionholders entitled to notice of and to vote at that meeting. Full documentation relating to the meeting will be mailed to the Company's shareholders, warrantholders and optionholders shortly after the record date.

The Transaction remains subject to various standard and customary conditions, including receipt of an independent fairness opinion and all necessary regulatory approvals and approval of the shareholders, warrantholders and optionholders. The Purchaser has represented that the cash consideration payable to shareholders, warrantholders and optionholders of the Company is in place and accordingly there is no financing condition to closing of the Transaction.

About Pan African

The Company is an exploratory resource company with approximately 7,500 sq. km. of diversified mineral properties and 5,000 sq. km. of uranium properties in Madagascar. The Company is exploring these properties for uranium, gold, coal, precious stones, base metals and industrial commodities. In addition, the Company is exploring two large regions for gold and metals in Mozambique under agreements with other companies. It also has approximately 5500 sq. km. of diamond licenses in Botswana which it is presently exploring. Its operations in Madagascar are carried out through its operating subsidiary, PAM Madagascar Sarl, and its uranium activities are carried out through its 80% owned subsidiary PAM Atomique Sarl. The Company has offices in Vancouver, Canada and Antananarivo, Madagascar. More information about the Company is available at www.panafrican.com.

About Asia Thai Mining Co., Ltd.

Asia Thai Mining Co., Ltd. ("ATM") is a holding company incorporated in Thailand. ATM, either directly or through affiliated companies has extensive experience in the development and operation of mining interests, in particular in respect of coal mining interests. Through its subsidiaries, it is involved in the exploration and development of several coal mines in Indonesia. The company projects its coal production capacity will reach approximately 4 million tons by 2009. ATM forms part of a group of affiliated mining companies, including Saraburi Coal Co., Ltd. ("SBCC"). SBCC has been mining coal and tin in Thailand and other Southeast Asian countries since 1998. In addition, SBCC has recently been awarded a 9-year, US$500 million coal mining contract in Thailand from Electricity Generating Authority of Thailand and SBCC will start work in 2008. ATM is a private company with its registered address and principal place of business at 2034/132-161 New Petchburi Road, Bangkapi, Huaykwang, Bangkok, Thailand.

ON BEHALF OF PAN AFRICAN MINING CORP.

"Irwin A. Olian"
Irwin A. Olian
CEO & Director

Forward-Looking Statements

Certain statements herein constitute forward-looking statements or forward-looking information within the meaning of applicable securities legislation, including the statements or information about the Transaction and proposed spin-off of African Queen. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information.

With respect to forward-looking statements and information contained herein, we have made numerous assumptions including among other things, assumptions of our ability to close the Transaction and spin-off African Queen. Although our management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that a forward-looking statement or information herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. Such risks and uncertainties include risks and uncertainties involved in satisfying the conditions to close the Transaction and spin-off African Queen.

There can be no assurance that forward-looking statements or information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

Accordingly, readers should not place undue reliance on forward-looking statements or information. All forward-looking statements and information made herein, are qualified by this cautionary statement.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of the information contained herein.

Contact Information

  • For more information, contact:

    Irwin Olian
    President and CEO
    E-mail: Email Contact
    Phone: (604) 899-0100
    Fax: (604) 899-0200

    Tom Kinakin
    Corporate Communications - Vancouver
    Email: Email Contact
    Phone: (604) 899-0100
    Fax: (604) 899-0200

    Carrie Howes
    Corporate Communications - London
    Email: Email Contact
    Phone: +44-7780-602-788

    Pan African Mining Corp.
    Suite 1925, Box 11553
    650 West Georgia Street
    Vancouver, BC
    V6B 4N8