Thistle announces signing of binding agreements with Pamodzi Gold Limited for its interests in the President Steyn Gold Mine

    TORONTO, Nov. 1 /CNW/ - Thistle Mining Inc. ("Thistle") or the "Company")
(AIM: TMG) and Pamodzi Gold Limited ("Pamodzi") (JSE: PZG) announced today
that they entered into a Sale of Shares and Claims Agreement ("SSCA") for the
sale to Pamodzi of Thistle's direct and indirect interests in President Steyn
Gold Mines (Free State) (Pty) Ltd ("PSGM") on October 29, 2007 (the "Sale
    Pamodzi is a South African gold mining company that is controlled by
Pamodzi Resources (Pty) Limited, a South African black owned resources company
("Pamodzi Resources"). Pamodzi owns established mining operations in both the
western and eastern parts of the Witwatersrand. In the west, Pamodzi owns the
Middelvlei mine, an open cast operation currently in ramp-up stage. In the
east, the interest consists of a group of operating mines namely Grootvlei,
Cons Modder and Nigel. Pamodzi has also signed agreements with Harmony Gold
Limited to acquire their Orkney mines. The stated objective of Pamodzi is to
be a 1,000,000 oz per annum producer in the short to medium term. The
acquisition of PSGM will secure for Pamodzi a foothold in the Free State
goldfields of South Africa and contribute towards the realization of its
stated objective. Pamodzi is in a good position to secure the capital needed
to develop PSGM's Golden Triangle project and explore its Eldorado reefs thus
securing a sound future for the employees of PSGM.
    Under the terms of the SSCA, the consideration payable by Pamodzi to
Thistle for all of its direct and indirect interests in PSGM (on its behalf
and on behalf of all other holders of such interests) will be ZAR240 million
(Two Hundred and Forty Million South African Rands) (approximately US$
36.9 million (Thirty Six Million Nine Hundred Thousand United States Dollars))
at an exchange rate of ZAR 6.50 to the US$ (the "Purchase Consideration"). The
Purchase Consideration which will be allocated as to ZAR10 million (Ten
Million South African Rands) in respect of the entire issued share capital of
PSGM and the remainder to all claims on loan account held against PSGM and all
of its subsidiaries by Thistle and all of its other subsidiaries.
    The Purchase Consideration has been reduced by ZAR 10 million from the
figure announced in the press release dated October 5, 2007 to fund the
payment of certain claims identified after that date.
    The Purchase Consideration is to be satisfied through the payment of (i)
ZAR 100 million (One Hundred Million South African Rands) in cash (conditional
on a placement of shares of Pamodzi failing which Pamodzi will allot and issue
Pamodzi shares to Thistle at a 10% discount to the volume weighted average
traded price over the 30 trading days prior to December 1, 2007); and (ii) a
participating loan of ZAR 140 million (One Hundred and Forty Million South
African Rands) (the "Participating Loan") in respect of a Participating Loan
Agreement entered into between Thistle, Clidet No 776 (Pty) Ltd ("Clidet"), a
wholly owned subsidiary of Pamodzi Resources, and Pamodzi Resources. Should
the cash portion of the Purchase Consideration be settled by the allotment and
issue of Pamodzi shares it is the Company's current intention to retain these
shares subject to the financial circumstances of the Company.
    In terms of the Subscription Agreement, Clidet will acquire a specified
number of ordinary shares in Pamodzi (the "Pamodzi Gold Shares") for an
aggregate amount of ZAR 140 million (One Hundred and Forty Million South
African Rands) at subscription price of ZAR14.73 per share.
    In terms of the Participating Loan Agreement, on or after May 31, 2009
(or in limited circumstances, prior thereto), Thistle will be entitled to
repayment of the Participating Loan including interest calculated at 12% per
annum together with 80% of any increase in the value of the Pamodzi Gold
Shares (in total referred to as the "Settlement Amount") which will be settled
by way of a transfer of Pamodzi Gold Shares to Thistle or out of the proceeds
of sale of the Pamodzi Gold Shares. However, in circumstances where the
Settlement Amount is greater than the Pamodzi Gold Shares, the payment is
limited to the value of the Pamodzi Gold Shares.
    As security for the performance by Thistle of its, and certain of its
subsidiaries', obligations under the SSCA, including in respect of the
warranties provided by it, Thistle has entered into a cession agreement under
which it has ceded and assigned to Pamodzi, by way of a security cession, all
of Thistle's rights and interests under the Participating Loan Agreement.
Similarly, as security for the performance by Clidet of its obligations under
the Participating Loan Agreement and the other transaction agreements (as
applicable), Clidet has entered into a pledge agreement under which it has
ceded and pledged to Thistle, by way of a security pledge, all of its rights,
title and interest in and to the Pamodzi Gold Shares.
    The Purchase Consideration will be adjusted upwards or downwards (as the
case may be) by the difference between the net working capital of PSGM as at
June 30, 2007 and as at December 1, 2007 (the "Effective Date"). In addition,
the Purchase Consideration will be adjusted downwards by one half of the
aggregate loans advanced to PSGM by Casten Holdings Limited and/or MC
Resources Limited (who are major creditors and shareholders of Thistle each
owning 35% of the outstanding shares of Thistle) and all the interest and fees
related thereto from September 26, 2007 to the Effective Date. An adjustment
downwards will reduce the cash and Participating Loan portion of the Purchase
Consideration equally. Should there be an increase in the Purchase
Consideration, then only the cash consideration will be increased. At this
stage an adjustment downwards of between ZAR 40 million and ZAR 50 million is
    Completion of the Sale Transaction is conditional on various matters,
including competition and any applicable regulatory and South African exchange
control approvals and receipt of shareholder approval by the shareholders of
each of Thistle and Pamodzi. In addition for the Sale Transaction to be
completed, production at PSGM must exceed 340 kg of gold in November 2007.
Notwithstanding the closing date of the Sale Transaction, the sale will be
deemed to have taken place on the Effective Date and ownership of and risk in,
and benefit attaching to, the entire issued share capital of PSGM will,
against payment of the full Purchase Consideration (together with any accrued
interest thereon, if any), be deemed to have passed to Pamodzi on the
Effective Date.
    In the event that Pamodzi withdraws from the Sale Transaction, it has
agreed to pay a break fee of ZAR5 million (Five Million South African Rands)
to Thistle, subject to certain limited conditions.
    On October 30, 2007 Mindserv (Pty) Ltd ("Mindserv"), a wholly owned
subsidiary of Thistle owning 85% of the issued share capital of PSGM, Iningi
Investments 167 (Pty) Ltd ("Iningi"), owning the remaining 15% of PSGM and
PSGM agreed to the sale of Iningi's interest in PSGM to Mindserv for ZAR 2
million (Two Million South African Rands). The purchase consideration is
payable by Mindserv to Iningi in full by no later than the fifth business day
after receipt of the cash portion of the Purchase Consideration under the
SSCA. This agreement is conditional on closing of the Sale Transaction under
the SSCA.
    A meeting of the Company's shareholders to consider the proposed sale is
expected to be held in Toronto in early December 2007. In connection with the
meeting, the Company will be preparing and sending to its shareholders a
notice of meeting and circular containing additional details concerning the
Sale Transaction in mid November 2007. A further announcement in respect of
the circular will be made by the Company in due course. The Sale Transaction
will require approval by a two thirds majority of the votes cast by Thistle
shareholders at the meeting. Pamodzi has received assurances from MC Resources
Limited and Casten Holdings Limited, each owning 35% of the outstanding shares
of Thistle, of their intention to vote for the Sale Transaction.
    Pamodzi's shareholder meeting to approve the Sale Transaction is expected
to be held early in December 2007 in Johannesburg, South Africa. The Sale
Transaction will require approval by a simple majority of the votes cast by
Pamodzi shareholders at the meeting. Thistle has received assurances from
Pamodzi Resources and Middelvlei Gold Investments (Pty) Ltd, together owning
50.1% of the outstanding shares of Pamodzi, of its intention to vote for the
Sale Transaction.
    Assuming the shareholders of Pamodzi and Thistle approve the Sale
Transaction and all other conditions to the completion are satisfied or
waived, Thistle expects that the Sale Transaction will be completed by
December 14, 2007 ("Completion Date"). Under the terms of the SSCA, the
conditions precedent must be completed by February 1, 2008 ("Long Stop Date"),
or else the agreement will never become of any force or effect and the status
quo ante will be restored as near as may be possible unless the Long Stop Date
is extended by mutual agreement.
    The Company's Board of Directors is considering using the proceeds of the
Sale Transaction primarily to meet the Company's outstanding debt obligations
and will be considering the future direction of the Company and discussing
this with the Company's creditors.
    PSGM owns and operates the President Steyn Gold Mine which includes five
shafts and a processing facility in the Free State province of South Africa.
Total ounces sold by PSGM in the first six months of 2007 amounted to
59,999 oz compared to 71,389 oz sold in the corresponding period in 2006.

    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, Group Financial Controller,
+ 27 57 391 9026 or email to; Gerry Beaney, Maureen Tai
or Troy MacDonald, Grant Thornton Corporate Finance at +44 (0) 207 383 5100

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