VANCOUVER, BRITISH COLUMBIA--(Marketwire -05/07/12)- New Guinea Gold Corporation ("NGG" or the "Company") (NGG.V - News)(NG8.F - News) has adjourned generally its application for Final Order approving the Plan of Arrangement with PNG Gold Corporation ("PNG Gold"). Despite numerous requests to both PNG Gold and its counsel for clarification of PNG Gold's intention in respect of the consummation of the Plan of Arrangement, no response has been provided. In light of such uncertainty, our counsel cannot represent to the court that PNG Gold is supportive of our application for Final Order.
NGG remains committed to consummating the Plan of Arrangement with PNG Gold and by adjourning generally, we have preserved our ability to proceed with the application in the future when and if PNG Gold advises us of their intentions in respect of the Plan of Arrangement.
In addition, PNG Gold has refused or ignored our requests for (i) funding under the Credit Agreement which was entered into with PNG Gold in conjunction with the Arrangement Agreement and (ii) the release from the security arrangements supporting the Credit Agreement of free trading PNG Gold Shares for sale to fund certain of NGG's obligations.
As a result of PNG's refusal to fund under the Credit Agreement and failure to meet its obligations under the Provision for Services Agreement, NGG faces severe short term cash flow constraints which compromise our ability to carry on our business in Papua New Guinea.
If PNG Gold is not prepared to advance funds to NGG in the very near term, it should be willing to allow NGG to seek alternative sources of funding to support its operations. By continuing to refuse or ignore NGG's request for funding under the Credit Agreement, or by alternate means, PNG Gold is damaging the interests of NGG and its shareholders. Management of NGG cannot speculate on the possible reasons or motivation for PNG Gold's inaction to date and will continue to press for the immediate resolution of this impasse.
ON BEHALF OF THE BOARD
Greg Heaney, CEO and Director
Forward Looking Statements - Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of NGG, including, but not limited to the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with the uncertainty of resource and reserve estimates, currency fluctuations, dependence upon regulatory approvals, the availability of future financing and exploration risk. Readers are cautioned that the assumptions used in the preparation, may prove to be imprecise and, as such, undue reliance should not be placed on the forward-looking statements.
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