Thistle concludes Consent Agreement and Receipts and Acknowledgement Deed pursuant to a debt restructuring plan



    TORONTO, Oct. 24 /CNW/ - Thistle Mining Inc. ("Thistle" or the "Company")
(AIM: TMG)

    Background

    Pursuant to a sale and purchase agreement entered into between Thistle,
CGA Mining Limited ("CGA") and Central Asia Gold Limited ("Central Asia")
dated 31 January 2007 (as amended, the "SPA"), Thistle (through its wholly
owned Dutch subsidiary, Toowong Mining B.V. ("Toowong")), acquired
approximately 25.4% of the shares in the capital of CGA (the "Toowong
Shares"). Under the terms of the SPA, Thistle was entitled to payment by
Central Asia of deferred consideration equal to U.S.$1.0 million and
U.S.$4.0 million payable on 20 August 2007 and 20 March 2008, respectively
(less any amount(s) required to meet any substantiated warranty and indemnity
claims that may be made by Central Asia or CGA).
    The aggregate amount of Thistle's outstanding indebtedness (the "Casten
Indebtedness") to Casten Holdings Limited ("Casten") is CDN$15,594,190 and
U.S.$14,243,050 as of 1 October 2007, which is comprised of CDN$11,287,164 and
U.S.$10,306,000 of principal and CDN$4,307,026 and U.S.$3,937,050 of accrued
but unpaid interest and fees thereon.
    The aggregate amount of Thistle's outstanding indebtedness (the "MC
Resources Indebtedness") to MC Resources Limited ("MC Resources") is
CDN$15,594,190 and U.S.$14,245,371 as of 1 October 2007, which is comprised of
CDN$11,287,164 and U.S.$10,306,000 of principal and CDN$4,307,026 and
U.S.$3,939,371 of accrued but unpaid interest and fees thereon.
    On 11 April 2007, Thistle entered into a non-binding memorandum of
agreement in respect of the restructuring of indebtedness owing by Thistle to
MC Resources and Casten (the "Memorandum of Agreement"). The Memorandum of
Agreement contemplated (amongst other matters) the transfer of Thistle's
(direct or indirect) ownership interest in the Toowong Shares to MC Resources
and Casten, based on a price per CGA share of AUS$0.65 being the price per
share provided for in the SPA, which would result in the reduction of
Thistle's indebtedness to MC Resources and Casten in an aggregate amount of
U.S.$25.5 million.
    On 11 May 2007, Thistle entered into a debt standstill agreement with MC
Resources and Casten (the "Standstill Agreement") pursuant to which MC
Resources and Casten agreed (amongst other matters) that should CGA's consent
to the transfer of the Toowong Shares to MC Resources and Casten not be
obtained by 11 August 2007, the arrangements provided for in the Memorandum of
Agreement would lapse. In addition, upon the occurrence of certain
circumstances, the Standstill Agreement would be terminated.
    On 27 June 2007, Thistle announced (amongst other matters) that:

    
    (a)  a framework had been laid down in April and May 2007 for the
         restructuring of the remaining indebtedness owed by Thistle to its
         major creditors, MC Resources and Casten, in accordance with the
         terms of the Memorandum of Agreement and the Standstill Agreement;
         and

    (b)  Thistle had provided a number of warranties to CGA and Central Asia
         and would remain subject to possible claims under the terms of the
         SPA related to the disposal of Thistle's interest in the Masbate
         gold project located in the Philippines. Although no formal claims
         or actions related to the SPA and the sale of Thistle's interest in
         the Masbate gold project have been received, CGA and Central Asia
         had reserved their rights in connection with the SPA and the events
         leading up to completion of the sale.
    

    CGA's consent was not obtained by 11 August 2007 and, accordingly, the
arrangements provided for in the Memorandum of Agreement lapsed. In addition,
upon the occurrence of certain circumstances referred to in the Standstill
Agreement, the Standstill Agreement became of no force or effect. Accordingly,
upon demand by MC Resources and Casten, all of the MC Resources Indebtedness
and the Casten Indebtedness would become immediately due and payable.

    Consent Agreement

    Thistle, MC Resources, Casten, CGA, Central Asia and Toowong have entered
into a consent agreement dated 16 October 2007 (the "Consent Agreement").
    Pursuant to the Consent Agreement, CGA and Central Asia have consented to
the transfer by Thistle to MC Resources and Casten of the Toowong Shares
(directly or indirectly).
    In addition, CGA has agreed that Toowong will subscribe for its pro rata
share of a planned equity issue by CGA (excluding a CDN$5m over-allotment
option) which is scheduled to take place in mid-November 2007 (and in any
event prior to 30 November 2007) ("Equity") at a price not exceeding CDN$0.83
per share (but not exceeding an aggregate subscription payment of
CDN$8,882,000). MC Resources and Casten have agreed to provide loans or other
financing (directly or indirectly) to Toowong to enable it to subscribe for
the Equity.
    Under the Consent Agreement, the obligations to pay the deferred
consideration to Thistle have been terminated and Central Asia has agreed to
pay a reduced amount of U.S.$4.5 million to MC Resources and Casten.
    Under the Consent Agreement, Central Asia and CGA have provided a full
release to Thistle, its directors and officers and all other parties involved
in the sale of the Masbate Project from and in respect of all existing or
future claims in connection with the SPA and the acquisition by Central Asia
of the interests of Thistle in the Masbate gold mine pursuant thereto.

    Outstanding Indebtedness and Receipts and Acknowledgement Deed

    Subsequent to the Consent Agreement, MC Resources, Casten, Thistle and
President Steyn Gold Mines (Free State) (Proprietary) Limited have entered
into a receipts and acknowledgement deed dated 22 October 2007 (the "Deed").
    Under the Deed in return for the agreement by Thistle to transfer its
(direct or indirect) interest in the Toowong Shares to MC Resources and Casten
and to terminate all of its interest in, and not to claim payment of, the
deferred consideration, MC Resources and Casten have acknowledged payment by
Thistle, and the reduction and set-off against the Casten Indebtedness and the
MC Resources Indebtedness, of:

    
    (a)  an amount equal to U.S.$37,801,781 based on a price per CGA share
         held by Toowong of CDN$0.90 per share, at an exchange rate of U.S.
         $1.0248/CDN$; and

    (b)  an amount equal to U.S.$4.5 million.
    

    Accordingly, MC Resources and Casten have acknowledged payment, reduction
of and set-off against the MC Resources and Casten Indebtedness of an
aggregate amount equal to U.S.$42,301,781. The remaining outstanding
indebtedness is estimated at approximately U.S.$20.8 million of which
U.S.$1.4 million is principal debt outstanding and U.S.$19.4 million relates
to outstanding interest as at 1 October 2007, taxes and fees. The transfer is
expected to be completed by October 30, 2007 in accordance with the
obligations set forth in the Consent Agreement.

    Related Party Matters

    In addition to being major creditors of Thistle, MC Resources and Casten
each own 35% of the outstanding shares of Thistle and as a result are each a
"related party" of Thistle for the purposes of Ontario Securities Commission
Rule 61-501 - Insider Bids, Issuer Bids, Business Combination and Related
Party Transactions ("Rule 61-501").
    Accordingly, the completion of certain of the transactions contemplated
by the Consent Agreement including the transfer of the Toowong Shares to MC
Resources and Casten and the reduction of, and set-off against, the Casten
Indebtedness and the MC Resources Indebtedness under the terms of the Deed
(the "Related Party Transactions"), will constitute a "related party
transaction" for the purposes of Rule 61-501.
    Thistle is relying on the "financial hardship" exemption described in
Rule 61-501 from the formal valuation and minority shareholder approval
requirements of Rule 61-501. Thistle's directors and at least two thirds of
its independent directors (the "Directors") have determined that:

    
    (a)  Thistle is in serious financial difficulty;

    (b)  Thistle has exhausted all alternative methods of financing and the
         only option remaining is to dispose of a substantial part of its
         business in order to reduce Thistle's debt burden;

    (c)  the Related Party Transactions are designed to improve Thistle's
         financial position; and

    (d)  the Related Party Transactions are reasonable in the circumstances
         of Thistle.
    

    The Directors have consulted with the Company's nominated adviser, Grant
Thornton, and believe that the Related Party Transactions are in the best
interests of Thistle and its shareholders as a whole.
    If Related Party Transactions are not completed, the Directors believe
that Thistle will be unable to meet its financial commitments as they fall due
and consequently will be unable to continue to operate. In this event, MC
Resources and Casten will utilise any legal means necessary, including
appointment of a receiver, liquidator or administrator, to realise upon their
security interests in respect of the Casten Indebtedness and the MC Resources
Indebtedness.
    The Related Party Transactions also constitute related party transactions
for the purposes of the AIM Rules. As such, the Directors have concluded that,
following consultation with Thistle's nominated adviser, Grant Thornton, the
terms thereof are fair and reasonable insofar as Thistle's shareholders are
concerned. In giving its advice, Grant Thornton has taken into account the
directors' commercial assessment.
    Thistle believes that after the Related Party Transactions are
undertaken, Thistle will continue to operate its core asset, the President
Steyn Gold Mine, which Thistle is currently in non-binding negotiations to
dispose of, in an orderly fashion, to a third party, Pamodzi Gold Limited
(JSE: PZG). Reference is made to the Company's press announcement dated 5
October 2007 (Thistle announces acceptance of a revised offer for its
interests in the President Steyn Gold Mine). This belief is dependent (amongst
other matters) on production improvements in line with management's
expectations, gold production not falling below 340 kilograms for the month of
November 2007 and no other material deterioration in the economic
circumstances applicable to Thistle and its subsidiaries or any other material
adverse effect on its or its subsidiaries' business, assets, liabilities or
condition (financial or otherwise) occurring after the date hereof.

    Forward Looking Information: This press release may contain or refer to
forward-looking information based on current expectations. Forward-looking
statements are subject to significant risks and uncertainties, and other
factors that could cause actual results to differ materially from expected
results. These forward-looking statements are made as of the date hereof and
the Company assumes no responsibility to update or revise them to reflect new
events or circumstances.





For further information:

For further information: Anton Kakavelakis, Chief Financial Officer + 27
57 391 9026 or email to info@disselgroup.com; Gerry Beaney, Maureen Tai or
Troy MacDonald, Grant Thornton Corporate Finance at +44 (0) 207 383 5100

Organization Profile

THISTLE MINING INC.

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