PNG Gold Corporation Announces Results From Initial Metallurgical Test Work; 95% Gold and 86% Silver Recoveries Indicated With Low Reagent Consumption

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 22, 2012) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWSWIRE SERVICES

PNG Gold Corporation (TSX VENTURE:PGK) ("PNG Gold" or the "Company") has received results of preliminary metallurgical test work on its Imwauna gold project on Normanby Island, Milne Bay Province, eastern Papua New Guinea. The test work was commissioned on PNG Gold's behalf by Lycopodium Minerals, Brisbane, QLD at Metcon Laboratories of Sydney, NSW, a division of the global ALS Group of testing laboratories.

Highlights of the test work are:

• High 95% gold and 86% silver extraction with indications of improved results with longer leach times and perhaps more controlled grinding.
• Low reagent consumptions.
• Very good correlation between head assay and leach test calculated heads which is unusually good for gold (emphasis added) which tends to be particulate and difficult to sample.
• The results suggest fine rather than flake gold mineralization.
• Higher than usual silver extraction levels with the rate of silver dissolution also being faster than typically observed.

Metcon Laboratories ("Metcon") received thirty-two (32) mineralized drill core samples from 16 holes completed in PNG Gold's 2011 diamond drilling program. The core had previously been crushed for assay procedures at ALS in Townsville, QLD. Samples contained between 3 and 15 g/t Au and 1 to 45 g/t Ag. All samples were subjected to metallurgical LeachWell tests and assayed for total and sulphide sulphur. Eleven (11) of the largest samples were also subjected to cyanide leaching in bottle roll tests.

The sampled drill holes are located in the northern and central sections of the Imwauna deposit extending along a vein strike length of 425 m. Samples are from individual quartz veins ranging in thickness from 0.4 m to 2.9 m (core length) and from near surface depths (e.g. IMH 187) to depths of approximately 160 m vertically from surface in IMH 196. The sampled drill holes are shown on the drill hole location map http://www.pnggold.com/i/pdf/Imwauna-Exploration-Locations_metallurgical-testing.pdf and summarized in Table 2 at the end of this release.

Metcon also noted that samples contain 0 to 1.3% S, indicating sulphide contents from 0% up to 3%. There was no discernible correlation between the sulphide content and gold extraction, suggesting the gold is free and not locked in sulphides. Further tests on other drill holes are planned to confirm these initial results.

Dick Whittington, President and CEO, stated, "These results highlight the potential for excellent metallurgical recoveries from the Imwauna vein system. The possibility of lower than normal reagent consumption is also very gratifying. Additional work still has to be done but this is a promising start to our ongoing metallurgical test work programme."

Methodology

Metcon Labs pulverized the samples to -300 microns and conducted bottle roll and LeachWell tests on 11 samples and LeachWell tests only on the other 21 samples. Following the leach tests, head assays were also done in order to give a metallurgical balance and measure of the percentage of cyanide soluble gold. Assays for total sulphur and sulphide sulphur were also carried out using the Leco furnace technique. All of the sulphur appears to occur as sulphide sulphur.

LeachWell is an aggressive test which involves reacting a small sample (e.g. 100 g) with water and a LeachWell tablet (a proprietary reagent) followed by tumbling for 1 to 2 hours. It is expected to overestimate potential recoveries. Nevertheless, the more conservative bottle roll tests produced similar high extraction rates for both gold and silver, with average recoveries just 4.1% and 6.9% lower, respectively. Comparative extraction rates are summarized in Table 1.

Table 1: Comparison of Leach Results

Sample	% Au leached bottle roll	% Au leached LeachWell	% Ag leached bottle roll	% Ag leached LeachWell
94560	98.2	99.4	86.7	96.8
94570	96.6	98.4	92.1	85.2
94730	96.9	98.2	87.1	88.5
94733	94.5	98.9	82.7	93.4
94734	96.7	98.1	90.1	91.8
94973	83.4	99.3	90.5	93.7
94976	88.3	99.5	60.9	98.5
94982	94.3	99.3	83.3	94.8
95041	97.4	99.7	96.1	96.2
95061	98.0	99.5	90.8	94.0
95368	96.8	95.2	86.1	89.4

The bottle roll tests were conducted according to Metcon's standard format. The sample was slurried at 40% solids and leaching carried out under pH 10.5 at a solution-strength of 0.1% NaCn for a 24 hr period. Leach conditions were monitored and controlled with the addition of more reagents if required to maintain leaching conditions. Periodic liquor samples were also taken to determine the rate of gold and silver dissolution and ultimately the total extraction. Average reagent consumptions in the bottle roll tests were approximately 1 kg/t for both lime and cyanide, relatively low by industry standards. Metcon also commented that cyanide consumption could likely be reduced with further optimization.

Core logging, sampling and assaying procedures

All holes drilled by PNG Gold are collared using HQ triple tube drill tools. A few holes have been reduced to NQ size at depth in the hole in order to continue the hole. Geotechnical measurements such as core recovery, fracturing and veining, rock quality designations (RQD's), hardness and photographic logging are performed systematically prior to sampling and assaying. The core is logged, samples selected by PNG Gold geologists then systematically sawn in half at the site. The one half core sample is numbered, sealed in a bag and delivered by PNG Gold to its base in Alotau where the samples are palletized and placed in secure storage prior shipment to ALS in Townsville, QLD. The other core half is retained on the site.

Core samples are dried, crushed and pulverized to 85% passing through a 75 micron mesh. The pulps are assayed for gold and silver using a 50 g split, Fire Assay (FA) and AA finish. Analyses were also carried out for the trace elements As and Pb. Results are available on the company's website. Rejects and pulps are stored at the lab for future reference.

Qualified Person

Mr. Colin McKenzie, P.Geo., and COO of PNG Gold Corporation, is a qualified person in accordance with National Instrument 43-101 and has reviewed and approved the technical information contained in this news release.

About the Imwauna Gold Deposit

The Imwauna exploration license - EL 1091 - is located on the north side of Normanby Island approximately 80 km northeast of Alotau, the provincial capital of Milne Bay Province, Papua New Guinea. Alotau is serviced by daily flights from Port Moresby the national capital and scheduled coastal freighters. PNG Gold maintains a logistics base in Alotau to supply the Normanby Island site.

The Imwauna prospect is an epithermal, low sulphidation quartz vein system comprising two principal veins, the thicker, more continuous Main vein and the East vein. The mineralized veins consist of finely crystalline quartz, white to grey in colour and display typical epithermal textures such as vugs, dog tooth crystals and fine, chalcedonic layering. Sulphides are rare to absent although some deeper intersections contain a few per cent of fine pyrite. Vein margins are often brecciated and re-sealed with silica.

Historic exploration drilling in 178 drill holes (see PNG Gold Corporation Technical Report, November 30, 2010 on Sedar) has outlined a narrow zone of gold mineralization over a strike length of at least 900 m to an average vertical depth of about 100 m. Widths are usually 1 to 3 m in the Main vein but less in the East vein. Recent drilling has confirmed the extension of the Imwauna vein system to depths of 150 metres with high grade intercepts now evident at this depth - see News Release dated February 9^th, 2012 reporting 32 g/t over 1.4 m at a depth of 150 metres. Drilling is ongoing and is designed to extend the deposit to depth and obtain sufficient information to support a 43-101 resource estimate, now scheduled for the second quarter 2012.

About PNG Gold Corporation

PNG Gold Corporation is an exploration company with an advanced stage drilling program in Papua New Guinea. PNG Gold holds a 100% interest in the Imwauna and Sehulea properties on Normanby Island, Milne Bay Province, Papua New Guinea, and trades on the TSX Venture Exchange under the symbol PGK. PNG Gold's mission is to become the premier exploration and development company in Papua New Guinea.

For further details, please visit the Company's website at www.pnggold.com.

ON BEHALF OF THE BOARD OF DIRECTORS

J.R.H. (Dick) Whittington, President & CEO

No regulatory authority has approved or disapproved the information contained in this news release.

Forward-Looking Statements

Certain information set forth in this news release contains forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements relate to matters such as results of exploration and development of the Normanby Property and completion of financing and are subject to numerous risks and uncertainties, certain of which are beyond the control of PNG Gold, including, but not limited to, the impact of general economic conditions, industry conditions, financial market conditions, dependence upon regulatory and shareholder approvals, and the uncertainty of completing intended financing and obtaining additional financing. Exploration of mineral properties is subject to the inherent risk that it may not result in commercial discovery. Readers are cautioned that the assumptions used in the preparation of forward-looking statements, although considered reasonable at the time of preparation, may prove to be incorrect and, as such, undue reliance should not be placed on forward-looking statements. PNG Gold expressly disclaims any obligation to update forward-looking statements contained herein except as required by applicable law.

Table 2: Samples used in Metallurgical Tests

Hole ID	Easting	Northing	Elev (m)	Sample	From (m)	To (m)	Vein Length (m)*	Au (g/t)	Ag (g/t)
IMH187	289075.0	8886926.5	485.6	94230	31.2	33.0	1.8	4.88	22.8
IMH188	289075.4	8887018.1	484.9	94266	112.9	113.3	0.4	4.37	9.1
IMH190	289044.4	8886953.6	495.4	94297	101.4	102.9	1.5	4.50	8.0
and				94306	120.7	121.4	0.7	10.50	14.4
IMH193	289047.9	8886996.8	492.1	94560	89.4	90.8	1.4	15.60	10.6
and				94570	103.1	104.7	1.6	3.14	2.2
IMH194	289054.3	8886992.6	491.8	94730	133.6	134.8	1.2	3.89	7.9
and				94733	136.3	137.2	0.9	5.67	14.2
and				94734	137.2	138.0	0.8	6.04	10.1
IMH196	288989.4	8886899.1	494.1	94934	126.4	127.4	1.0	5.24	9.2
and				94973	179.2	180.2	1.0	8.50	12.5
and				94976	181.2	182.0	0.8	4.02	45.3
and				94982	187.0	188.0	1.0	3.15	1.5
IMH197	289000.6	8886926.9	509.1	95041	94.8	95.8	1.0	6.91	12.2
and				95061	120.8	121.8	1.0	6.45	6.5
IMH199	289021.1	8886866.3	493.3	95222	84.5	85.1	0.6	4.15	6.0
IMH200	289073.3	8887156.0	493.3	95368	139.0	140.0	1.0	3.50	2.0
IMH202	289008.5	8886817.7	514.2	95489	77.0	78.0	1.0	5.02	9.3
IMH203	289008.5	8886817.7	514.2	95572	81.3	82.3	1.0	4.09	10.7
and				95574	82.9	83.5	0.6	6.57	19.9
IMH204	288963.1	8886812.9	511.2	95629	138.0	138.9	0.9	11.9	10.8
and				95632	142.5	145.4	2.9	3.46	6.8
and				95634	147.0	148.3	1.3	4.16	4.1
IMH209	288966.2	8886833.1	540.3	95918	141.0	142.0	1.0	12.10	13.0
and				95922	150.0	151.5	1.5	15.25	14.0
IMH211	289087.3	8887028.5	476.5	95976	63.4	64.3	0.9	3.64	9.70
IMH213	288981.0	8886747.9	537.1	96062	65.7	66.1	0.4	4.15	3.2
IMH215	288981.9	8886747.6	537.0	96101	73.5	74.3	0.8	12.7	17.1
and				96102	74.3	75.1	0.8	8.75	12.5
and				96106	79.4	80.4	1.0	5.02	14.3
and				96110	83.5	84.0	0.5	13.45	36.0
and				96111	84.0	84.8	0.8	7.75	25.5

* vein lengths are core lengths and are not true thicknesses