GON Gondwana Gold

TORONTO, Nov. 19, 2012 /CNW Telbec/ - Gondwana Gold Inc. (TSXV: GON) ("Gondwana" or the "Corporation") is pleased to announce that it has executed a definitive agreement dated November 19, 2012 with Pan African Oil Ltd. ("PAO") which contemplates a three-cornered amalgamation whereby securityholders of PAO will receive securities of Gondwana and PAO will become a wholly-owned subsidiary of Gondwana (the "Transaction").  Pursuant to the Transaction: (i) each common share of PAO will be exchanged for 0.8 (the "Exchange Ratio") of a common share of the Corporation; and (ii) each convertible security of PAO will be exchanged for similar convertible securities of the Corporation at the Exchange Ratio.

PAO is a private company existing under the laws of the province of British Columbia incorporated on November 30, 2011. PAO is engaged in oil and gas exploration onshore and offshore Africa. PAO's principal asset is its 81% interest in two petroleum exploration licences for blocks 2211 B, 2311 A and 2612 A in the Walvis & Lüderitz Basins, Offshore Namibia. PAO has retained Petrotech Engineering Ltd. to prepare a National Instrument 51-101 report on PAO's Offshore Namibia properties.

The completion of the Transaction will be a change of business for the Corporation pursuant to Policy 5.2 of the TSX Venture Exchange, with the resulting focus of the Corporation on the oil and gas industry.

Gondwana is currently a mining exploration company with exploration properties located in Africa. Gondwana was incorporated on July 24, 2007 and was listed as a capital pool company on the TSX Venture Exchange on May 22, 2008.  Gondwana completed its qualifying transaction and was listed as a mining company on September 3, 2010.  Since completing its qualifying transaction, the Corporation has been focused on pursuing exploration and development opportunities within the mining sector.  For further information about the Corporation and its activities, please refer to the Corporation's website at www.gondwanagold.com as well as filings at www.sedar.com.

Gondwana and PAO are arm's length parties, and there are no non-arm's length parties of Gondwana who are insiders of PAO or who presently hold any direct or indirect beneficial interest in either PAO or any of its assets.

Gondwana currently has issued and outstanding: i) 30,487,500 common shares; ii) stock options to acquire 225,000 common shares of Gondwana at $0.70 per share exercisable until August 19, 2016; and iii) stock options to acquire 150,000 common shares of Gondwana at $0.70 per share exercisable until February 24, 2017.

PAO currently has issued and outstanding: i) 34,140,000 common shares; ii) stock options to acquire 1,200,000 common shares of PAO at $0.25 per share exercisable for ten years from the date of grant, being March 22, 2012; iii) stock options to acquire 450,000 common shares of PAO at $0.25 per share exercisable for ten years from the date of grant, being May 14, 2012; iv) stock options to acquire 450,000 common shares of PAO at the price of the next equity financing exercisable for ten years from the date of grant, being May 14, 2012; v) warrants to acquire 10,640,000 common shares of PAO at $0.40 per share exercisable for 24 months after closing of the Transaction; and vi) warrants to acquire 851,200 units of PAO at $0.25 per unit exercisable for 24 months after closing of the Transaction, with each unit exercisable into one common share of PAO and one warrant to acquire one common share of PAO at $0.40 per share exercisable for 24 months after closing of the Transaction.

Pursuant to the Transaction, Gondwana will issue approximately 27,312,000 common shares and 10,872,960 securities convertible, exchangeable or exercisable into common shares of Gondwana to holders of PAO common shares and PAO convertible securities, respectively.  It is anticipated that immediately following the closing of the Transaction, the Corporation will have approximately 57,799,500 common shares issued and outstanding (69,728,420 on a fully diluted basis, assuming exercise of all then outstanding options and warrants, including the warrants underlying the units issuable upon exercise of certain warrants).

Completion of the Transaction is subject to a number of conditions, including the approval of the TSX Venture Exchange, the requisite approval of shareholders of each of Gondwana and PAO, the approval of the board of directors of Gondwana, the completion of satisfactory due diligence by Gondwana and PAO, and other customary closing conditions.

PowerOne Capital Markets Limited acted as PAO's financial advisor in connection with the Transaction. Clarus Securities Inc. acted as the Corporation's financial advisor in connection with the Transaction.

Following the closing of the Transaction, it is proposed that the board of directors of the Corporation shall be reconstituted to consist of five members who are reasonably acceptable to the TSX Venture Exchange, which will include (a) three nominees of PAO, namely Bongani Mtshisi, Gary Wine and one additional nominee of PAO to be mutually agreed upon by the parties; (b) one nominee of the Corporation, namely the Corporation's current Chairman, J.D. Miller; and (c) one mutually agreed upon independent director. The biographies of the anticipated directors and members of senior management of Gondwana following closing of the Transaction are as follows:

J.D. Miller - Director (Montreal, Quebec, Canada)

Mr. Miller's professional expertise spans 30 years of experience in the areas of strategic planning, financial architecture and management including over ten years experience in African based matters.  His mandates have centered around complex commercial situations in the steel, healthcare, and natural resource sectors.  During the period from 1987 until its time of acquisition in 1990 by Ingram & Bell, a wholly-owned subsidiary of MDS (TSE), he served as the President and Chief Executive Officer of Mavtech Holdings Inc. (TSE & ME).  Mr. Miller is known for his work in community affairs as well as for his support of amateur sport across Canada with B2ten.  He was educated at the Choate School in Wallingford, Connecticut and the University of Pennsylvania in Philadelphia.

Bongani Mtshisi - Director (Johannesburg, Gauteng, South Africa)

Mr. Mtshisi is a Mining Engineer by training and has worked in key commodities such as Platinum, Gold, Diamond, Nickel and Copper with such companies as Anglo Platinum, Debeers/HUF and Sub Nigel Gold.  Mr. Mtshisi is CEO of BSC Resources LTD, a company which is responsible of exploration and development of copper and nickel commodities in South Africa. Mr. Mtshisi was also a founding member of Auryx Gold Corp (TSX. AYX) a leader in Namibian gold exploration.  Mr. Mtshisi has demonstrated his ability to identify sound exploration projects and structure teams to drive projects up the value curve in the projects that he has spearheaded, creating value for shareholders.

Gary Wine - Director and Chief Executive Officer (Calgary, Alberta, Canada)

Mr. Wine is a geologist by training with over 35 years in the oil exploration business and has been directly responsible for numerous oil and gas discoveries throughout his career.  Previously, Mr. Wine was President and Chief Operating Officer of Petrolifera Petroleum Limited whom he helped to found, and grow the company at one point to a market capitalization of approximately $1 billion.  Mr. Wine presided in his position of President until the company was sold in March 2011.  Mr. Wine has extensive exploration experience worldwide which has included various countries in South America, Asia and Europe.

Willie Viviers - Chief Financial Officer (Cape Town, Western Cape, South Africa)

Mr. Viviers is a chartered accountant and served for 13 years as a partner with PricewaterhouseCoopers in South Africa specializing in corporate governance and risk management services. Mr. Viviers then joined the Strategy Partners Group where he assisted various businesses with optimization strategies while fulfilling interim Chief Financial Officer and Financial Director positions in organizations experiencing growth or structural problems. In 2009, he joined the Bright Equity Group, a founding shareholder of Auryx Gold Corp. He consulted to the Auryx Gold group and was the Interim CFO of Auryx Gold Corp. until it was taken over by B2Gold Corp. He still consults to the Auryx Gold group and is the Financial Director of the operating subsidiaries.

Phil Miller - Vice-President, Exploration (Calgary, Alberta, Canada)

Mr. Miller brings 30 years of world-wide experience to advance and guide the company's exploration plans. He has extensive African experience and has been involved in a number of significant discoveries in Nigeria. In addition he has evaluated opportunities and managed exploration campaigns in many other areas of the world, including the Middle East, the deep water Gulf of Mexico, North Sea, offshore South America, Argentina, Southeast Asia, and Australia. A geophysicist by training, Mr. Miller joined PAO from Nexen where he directed the evaluation of new business opportunities as Exploration Manager for Global New Ventures.

The Corporation intends to apply for an exemption from the sponsorship requirements of the TSX Venture Exchange in connection with the Transaction.  There is no assurance that such exemption will be granted.

Completion of the Transaction is subject to a number of conditions, including TSX Venture Exchange acceptance and disinterested Shareholder approval.  The Transaction cannot close until the required Shareholder approval is obtained.  There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Filing Statement to be prepared in connection with the transaction, any information released or received with respect to the Change of Business may not be accurate or complete and should not be relied upon.  Trading in the securities of Gondwana Gold Inc. should be considered highly speculative.

Certain statements contained in this release constitute forward-looking information. These statements relate to future events or the Corporation's future performance.  The use of any of the words "could", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Corporation's current belief or assumptions as to the outcome and timing of such future events.  Actual future results may differ materially.  In particular, the Corporation's stated expectation as to the completion of the Transaction is a statement containing forward-looking information.  Actual results and developments may differ materially from those contemplated by this forward-looking information depending on, among other things, the risks that the parties will not proceed with the Transaction, that the ultimate terms of the Transaction will differ from those that are currently contemplated and that the Transaction will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities).  The Corporation disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

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

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

SOURCE Gondwana Gold Inc.