Pan Terra Industries Inc.
TSX VENTURE : PNT

Pan Terra Industries Inc.

October 07, 2011 16:01 ET

Pan Terra Industries Executes Definitive Agreement to Acquire African Gold and Copper Exploration and Development Company

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 7, 2011) - Mitchell Adam, President and CEO of Pan Terra Industries Inc. (TSX VENTURE:PNT) ("Pan Terra" or the "Company") is pleased to provide the following update on the company's previously announced acquisition (Stockwatch May 19, 2011) in Namibia, Africa. Pan Terra has entered into a definitive agreement (the "Agreement") effective October 6, 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.

Congo Namibia

Congo Namibia is a gold and copper exploration and development company with operations based in Tsumeb, Namibia.

Congo Namibia holds 100% interest in five (5) significant Exclusive Prospecting Licenses 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").

Congo Namibia Agreement

Pursuant to the terms and conditions of the Agreement, Pan Terra will acquire 80% of the issued and outstanding shares of Congo Namibia for total consideration of $1,650,000 CDN. The purchase price will be satisfied as follows: (i) payment of $300,000 CDN; (ii) issuance of 3 million common shares in the capital of Pan Terra at a deemed issue price of $0.45 per common share; and (iii) the issuance of 3 million share purchase warrants exercisable at $0.75 CDN for a period of 24 months from closing of the proposed Transaction (the "Transaction").

With respect to the Tsumeb Copper EPL's, Pan Terra has granted the vendors an overriding 2% royalty on any future copper production. With respect to the projects subject to the Angola Gold JV and the Zimbabwe Gold JV, Pan Terra has agreed to future bonus payments to the vendors 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 on any of the Congo Namibia properties and a National Instrument 43-101 report has not been prepared.

Pursuant to the Agreement, Pan Terra has a right of first refusal to acquire up to 10% of Congo Namibia common 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 payable in accordance with TSXV policies. The Transaction is arm's length. 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, and other conditions contained in the Agreement. It is expected that the transaction will close on or before October 31, 2011.

Concurrently with closing the Transaction it is anticipated that Pan Terra will enter into consulting agreements in connection with consulting services to be provided to the company from African mining, exploration and financing executives Mr. Duane Parnham, former chairman of UNX Energy Corp., Mr. Andre Neethling, former managing director of Namibian based Ongopolo Mining and Processing, and Mr. Arno Gunzel, former exploration manager of Ongopolo Mining and Processing.

Mertens Update

Pan Terra's due-diligence work is progressing well for its previously announced acquisitions of Mertens Mining and Trading Ltd. (Stockwatch May 30, 2011). Pan Terra has received and is responding to due diligence reports on Merten's prepared by Pan Terra's legal advisors in Africa. The acquisition process is behind schedule but the relevant regulatory-document-filing process will begin within the next few weeks. As a result, the deadline for the closing of the acquisition is expected to be extended until November 30, 2011. It is anticipated that a definitive agreement for the Merten's transaction will be executed shortly.

Shares for Debt

Pan Terra also announces it is not proceeding with its previously disclosed shares for debt transaction involving $143,000 of trade payables, as indicated in its May 19, 2011 press release. Instead, Pan Terra has agreed to settle $15,000 of debt owed to the estate of the company's former CEO, the late Murray Tildesly. Pan Terra will issue 33,333 common shares at an issue price of $0.45 per share and 33,333 share purchase warrants exercisable at $0.75 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.

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 www.sedar.com, 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
    President
    (604) 678-5308
    mitch@mgacapital.net

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