Pan Terra Industries Inc.

Pan Terra Industries Inc.

May 19, 2011 15:50 ET

Pan Terra Industries to Acquire African Gold and Copper Assets and Secures Experienced African Resource Management Team

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 19, 2011) - Mitchell Adam, President and CEO of Pan Terra Industries Inc. (TSX VENTURE:PNT) ("Pan Terra" or the "Company") is pleased to announce it has entered into a Letter of Intent (the "LOI") dated May 18, 2011 to acquire 80% of the issued and outstanding common shares of Congo Namibia Trading (PTY) Limited ("Congo Namibia"), a private company incorporated under the laws of Namibia, Africa. Pan Terra has also secured the management and consulting services of African mining, exploration and financing executives; Mr. Duane Parnham, former Chairman of UNX Energy Corp., Mr. Andre Neethling, Former Managing Director of Ongopolo Mining and Processing, and Mr. Arno Gunzel, former Exploration Manager of Ongopolo Mining and Processing.

Congo Namibia

Congo Namibia is a well established Namibian gold and copper exploration and development company complete with proven management, compliant black empowerment participation and operations based in Tsumeb, Namibia.

Congo Namibia holds 100% interest in five (5) significant Exclusive Prospecting Licences in the Tsumeb Copper Belt (the "Tsumeb Copper EPL's"), a right to acquire a 51% interest in the Congo Namibia – Angola Nam Russia Limitada Joint Venture on Mining in Angola (the "Angola Gold JV"), and a right to acquire 50% interest in the Congo Namibia – Antrim Mines Zimbabwe (Pty) Limited Joint Venture on the Antrim Gold Prospect (the "Zimbabwe Gold JV").

Mitchell Adam, President of Pan Terra stated "the ability of Pan Terra to attract successful professional mining executives of this quality has given the company the foundation to aggressively grow through project acquisition and development".

Congo Namibia LOI

Pursuant to the terms and conditions of the LOI, dated May 18, 20011, Pan Terra will acquire 80% of the issued and outstanding shares of Congo Namibia for total consideration of $300,000 CDN, issuance of 3 million common shares in the capital of the Company and the issuance of 3 million share purchase warrants priced at $0.73 CDN and exercisable for a period of 24 months from closing of the proposed Transaction (the "Transaction").

As to the Tsumeb Copper EPL's the company has granted the vendors an overriding 2% royalty on copper production. With respect to the projects subject to the Angola Gold JV and the Zimbabwe Gold JV the Company has granted the following gold ounce bonus. Future bonus payments of US$3.00 per ounce gold to a maximum of US$30 million (10 million ounces of gold equivalent) based on any potential indicated and inferred resource estimate if such estimate is in fact contained in future National Instrument 43-101 compliant reports prepared on behalf of the Angola Gold JV and the Zimbabwe Gold JV. To date there is no inferred resource estimate and a National Instrument 43-101 report has not been prepared.

The Company will also be granted a right of first refusal to acquire up to 10% of Congo Namibia shares not acquired by Pan Terra in the Transaction. The remaining shares in Congo Namibia are controlled by local Namibian partners. The Transaction is subject to a finder's fee.

Options Granted

The company also wishes to announce the granting of 500,000 incentive stock options to consultants exercisable at $0.73 for a period of five years. In addition, Pan Terra announces it has agreed to settle $143,000 of trade payables owed to various creditors, one of whom is a related party to Pan Terra. The Corporation will issue 246,552 common shares of the Corporation (based on applicable TSXV pricing policies) and 195,890 share purchase warrants exercisable at $0.73 and expiring 24 months from the date of issue. The shares for debt transaction is subject to TSXV approval and the common shares and warrants will be subject to a four month hold period from the closing date.

Completion of the Transaction is subject to a number of conditions, including but not limited to TSXV acceptance, director approvals, the completion of satisfactory due diligence by Pan Terra, the negotiation and execution of definitive documentation, and other conditions contained in the LOI. It is expected that a definitive agreement will be executed on or before July 15, 2011.

The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

This news release contains forward-looking statements regarding the future success of the business of the Company that is subject to risk and uncertainties. Examples of such forward- looking statements including, but are not limited to, statements concerning the Company's acquisition of the interest in the Congo Namibia, expectations concerning the timing and success of exploration activities generally, government regulation of exploration and mining operations, indications and benefits of exploration, drilling test work and engineering assessments, environmental risks, tile disputes or claims, and the Company's intention to raise additional capital and financing. These forward-looking statements involve known and unknown risk and uncertainties that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied in these forward-looking statements. These risks include risks related to dependence on key personnel, competition, risks related to newly acquired businesses, uncertainty and dilution of additional financing and ability to service debt, as well as the risk factors described in the Company's Management Discussion and Analysis filed on SEDAR at, and the risks to be described in any Management Information Circular. The forward-looking statements contained herein are made as of the date of this news release and are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any such forward- looking statements to reflect any change in its expectations or in events, conditions or circumstances on which any such forward-looking statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

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.

Contact Information

  • Pan Terra Industries Inc.
    Mr. Mitchell Adam
    (604) 678-5308

    Pan Terra Industries Inc.
    1011 West Cordova Street Suite 4006
    Vancouver, British Columbia V6C 0B2