Thistle Announces Transaction with CGA Mining Limited Regarding Thistle's Masbate Gold Project

    TORONTO, Jan. 31 /CNW/ - Thistle Mining Inc ("Thistle" or the "Company")
(AIM:TMG) and CGA Mining Limited (previously named Central Asia Gold Limited)
("CGA") (ASX and TSX:CGX) announced today that they have entered into a Sale
and Purchase Agreement ("SPA") for the sale to a wholly-owned subsidiary of
CGA (the "Purchaser") of 100% of Thistle's shareholding in Philippine Gold Ltd
("PGO"), a wholly-owned subsidiary of the Company, and its other interests in
the Masbate gold project located on the island of Masbate in the Philippines
(the "Masbate Project") including PGO's effective 19.2 % interest in the
Runruno Gold Project located in the Philippines which is controlled by Metals
Exploration PLC (AIM:MTL) (collectively, the "Shares and Assets". The Shares
and Assets are currently held principally through PGO. The completion of the
transaction ("Completion") is subject to various conditions referred to below.
    The Masbate Project is an epithermal gold system located within the
municipality of Aroroy, Masbate province, approximately 360 kilometres south
east of Manila, which has been extensively studied and is considered to be at
an advanced development stage. The project is supported by a large gold
resource and reserve estimate and extensive exploration work. For additional
information relating to the mineral and resource estimates in respect of the
Masbate Project, reference is made to: (a) the technical report titled
"Masbate Gold Project, Masbate Island, Philippines Form NI-43 101F1 Technical
Report" dated April 30, 2006, which was prepared by Mr. Andrew James Vigar of
Mining Associates and Mr. Stewart Charles Lewis of IMC Consultants Pty. Ltd.,
who are independent qualified persons for the purposes of NI 43-101; (b)
Thistle's 2005 Annual Information Form; and (c) the Company's press release
dated May 15, 2006 ("Results for the first quarter ended March 31, 2006"), all
of which are available to the public at
    Under the terms of the transaction, the consideration payable for the
sale and purchase of the Shares and Assets is, in aggregate, US$51 million
(the "Purchase Consideration"). As the book value of Thistle's investment in
PGO and loans advanced by Thistle to PGO as at December 31, 2006 amounted to
US$9.9 million and US$25.1 million respectively, the transaction will be
immediately accretive to Thistle shareholders. More details of the financial
impact of the transaction will be disclosed in a circular to be sent to
Thistle shareholders in mid-February 2007.
    The Purchase Consideration shall be satisfied by:

    (a) the issue by CGA to a new wholly-owned subsidiary of Thistle
        ("Thistle Sub") at Completion of such number of fully paid ordinary
        shares of CGA as shall have a value nearest to (but not less than)
        US$21 million (the "CGA Shares");

    (b) the payment by the Purchaser to Thistle at Completion of
        US$25 million in cash, less the deposit of US$500,000 that has
        already been paid by the Purchaser to Thistle. The deposit is
        repayable in limited circumstances including if Thistle shareholders
        do not vote in favour of the transaction;

    (c) the payment by the Purchaser into escrow (the "Escrow") of
        US$4 million and US$1 million to Thistle, less any amount(s) which
        are required to meet any substantiated warranty and indemnity claims
        that may have been made by the Purchaser, on a date not later than
        six months from the the date of Completion (the "Completion Date");

    (d) the payment to Thistle twelve months after Completion of the amount
        of US$4 million paid into Escrow as referred to in sub-paragraph (c)
        above, less any amount(s) required to meet any substantiated warranty
        and indemnity claims that may have been made by the Purchaser within
        twelve months of the Completion Date.

    In addition to the above, Thistle will be reimbursed for approximately
US$4.4 million in working capital and capital expenditures in respect of the
Masbate Project.
    The issue price of the CGA Shares forming part of the Purchase
Consideration will be based on the lesser of A$0.65 per share and the volume
weighted average price at which ordinary shares in the share capital of CGA
are traded on the Australian Stock Exchange (the "ASX") in the 10 consecutive
trading days immediately prior to the Completion Date. A share price of A$0.65
represents a premium of 14 % to the closing price of CGA's ordinary shares on
the ASX on January 31, 2007 and an 18% premium to the 5 day volume weighted
average trading price of CGA's ordinary shares on the ASX immediately
preceding January 31, 2007. This compares with cash on hand in CGA's balance
sheet as at December 31, 2006 in an amount of A$78 million or A$0.65 per
    It is expected that, immediately following Completion, the Company,
through Thistle Sub, will own approximately 25% of the issued shares of CGA.
Thistle currently intends to maintain its position in the CGA Shares and will
be subject to a lock-up preventing it from disposing of those shares for a
period of 12 months from the Completion Date. Further details on the lock-up
are set out below.
    In compliance with: (a) a general Security Agreement made by the Company
in favour of Casten Holdings Limited ("Casten") dated June 30, 2005, (b) a
general Security Agreement made by Thistle in favour of MC Resources Limited
("MC") dated June 30, 2005, (c) a Pledge of Securities made by Thistle in
favour of Casten dated June 30, 2006, (d) a Pledge of Securities made by
Thistle in favour of MC dated June 30, 2005; and (e) an Equitable Charge Over
Shares between Thistle, MC, Casten and Thistle Holdings, as security agent for
MC and Casten, dated March 28, 2006 (together, the "Existing Security
Documents"), Thistle will provide a first priority security to Thistle
Holdings (the "First Ranking Pledge") over all the issued and outstanding
shares in Thistle Sub (the "Thistle Sub Shares") as security for the
performance by Thistle of all its obligations under the Existing Security
Documents. The First Ranking Pledge will terminate upon repayment of all
amounts owing to MC and Casten under the Existing Security Documents and
related credit agreements and loan notes (the "Existing Loan Documents").
    Under the terms of the SPA, Thistle will provide a second priority
security to the Purchaser (the "Second Ranking Pledge") over the Thistle Sub
Shares (ranking in priority after the First Ranking Pledge) as security for
the amount of any substantiated warranty or indemnity claims made by the
Purchaser under the SPA and certain related agreements. If the amount of any
such claim is in excess of the amounts then held in Escrow, the Purchaser may
instruct Thistle to:

    (a) either (at Thistle's sole discretion) cause Thistle Sub to sell such
        number of CGA Shares on market or provide loans to Thistle Sub as are
        required to raise a sum (net of any permitted expenses) equal to the
        remaining amount due under all such claims; and

    (b) where CGA Shares are sold, cause the sale proceeds (net of any
        permitted expenses) to be paid to the Purchaser in or towards
        satisfaction of such claims or, where a loan is provided, cause that
        the loan to be paid to the Purchaser in or towards satisfaction of
        such claims.

    The Second Ranking Pledge will terminate 12 months after the Completion
Date, unless a valid claim under the SPA or related agreements has been
instituted prior to the end of that period in which event that pledge will
remain in effect until the claim has been substantiated. The Second Ranking
Pledge will also terminate on the date all amounts due under the Existing Loan
Documents have been repaid in full (other than by means of a financing
facility) or fully converted into equity.
    At all times during the term of the aforementioned pledge agreements, and
subject to no event of default having occurred thereunder, Thistle Sub will be
entitled to exercise all rights attaching to the CGA Shares including, among
other things, the right to vote and the right to receive dividends.
    Thistle and Thistle Sub will be subject to a 12 month "lock-up" from
Completion under which they will agree not to dispose of the CGA Shares during
that period, subject to certain limited exceptions set out in an investor
agreement to be entered into between Thistle, Thistle Sub and CGA (the "CGA
Investor Agreement") including upon a takeover, insolvency event, court order,
and transfers to Thistle or any of its affiliates, being any wholly-owned
subsidiary of Thistle, MC and Casten each of which owns 35% of the outstanding
share capital of Thistle, subject to any additional requirements of the ASX
Listing Rules, as applicable
    Completion of the sale of the Shares and Assets by the Purchaser is
subject to certain conditions, including the following:

    -  approval of the shareholders of both CGA and Thistle;
    -  the written approval of the TSX to the listing of the CGA Shares on
       the TSX (in addition to the obligation of CGA to apply to the ASX
       immediately following Completion for the quotation of the CGA Shares
       on the ASX within five business days following Completion); and
    -  the release of all existing security over the Shares and Assets.

    A meeting of the Company's shareholders to consider the proposed sale is
expected to be held in Toronto on or about March 16, 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
transaction in mid-February. The transaction will require approval by a simple
majority of the votes cast by Thistle shareholders at the meeting. The Company
has received no assurances from any of its shareholders as to any such
shareholder's intention to vote for the approval of the transaction.
    CGA's shareholder meeting to approve the transaction is expected to be
held on or about March 17, 2007 in Australia. The transaction will require
approval by a simple majority of the votes cast by CGA shareholders at the
meeting. CGA has not received any assurances from any of its shareholders as
to any such shareholder's intention to vote for the approval of the
    Assuming the shareholders of CGA and Thistle approve the transaction and
all other conditions to the Completion are satisfied or waived, Thistle
expects that the proposed transaction will be completed by March 30, 2007.
Under the terms of the SPA, if the transaction is not completed on or before
March 30, 2007, either Thistle or CGA may terminate the SPA and the
transactions contemplated by the SPA unless the Completion Date is extended by
mutual agreement.
    The projected debt due and payable by the Company on April 1, 2007 is
expected to be $39.5 million (Assuming a US dollar/Canadian dollar exchange
rate of 1.1764 ). The total debt of the Company as at January 31, 2007
(including debt not immediately due and payable on April 1, 2007) is
$ 36.74 million and CAD $ 30.93 million. The transaction is expected to
strengthen the Company's balance sheet by enabling it to apply approximately
$27.0 million of the Purchase Consideration to the repayment of the Company's
short term debt on or after the Completion Date.
    As noted above, at Completion the Company, through Thistle Sub, will
receive an interest of approximately 25% in CGA and accordingly will retain
significant exposure to the Masbate Project through that interest as well as
exposure to other resource projects in which CGA is involved.
    Under the terms of the CGA Investor Agreement, for so long as Thistle Sub
and its affiliates own more than 10% of the voting shares of CGA, Thistle Sub
will be entitled to nominate one person to be appointed as a director to the
board of directors of CGA. It is anticipated that the first director nominated
by Thistle Sub at the Completion Date with be Andreas J. Graetz, the Company's
Chief Financial Officer.
    CGA is in a strong position to assume the development of the Masbate
Project. In particular:

    -  CGA has a strong balance sheet. At December 31, 2006, cash on hand
       amounted to A$78.0 million or A$0.65 per share; and

    -  CGA management has been responsible for the successful development of
       a number of significant gold mines, including the Boroo gold project
       in Mongolia, Golden Pride in Tanzania, the Obotan mine in Ghana and
       the Chalice Gold Project in Western Australia.

    In addition, preliminary agreements to acquire interests in three new
resource projects have been entered into by CGA. Those projects are: two
copper projects in Zambia, the Mkushi and Mokambo Copper Projects, and the
Segilola Gold Project in Nigeria.
    With regard to this announcement and for further information on CGA and
its projects reference is made to the announcement ("Proposed Acquisition of
the Masbate Gold Project in the Philippines") made by CGA in Canada and
Australia on the date hereof and to CGA's website:
    The transaction is also expected to allow the Company to focus on the
continued rejuvenation and development of its South African mining operations
including underground mine development, the exploration programme over the
unmined Eldorado reefs and the development of the Golden Triangle at President
Steyn Gold Mine ("PSGM"). For additional information relating to the Golden
Triangle project and mineral reserve and mineral resource estimates on PSGM,
please refer to the technical report titled "43-101 Document for President
Steyn Gold Mines Situated in the Witwatersrand Basin, Free State Goldfield,
South Africa" dated March 16, 2006, which was prepared by Peter Camden-Smith,
an independent qualified person for the purpose of National Instrument 43-101,
and is available to the public on
    Lord Lang, the Chairman of Thistle states that:

    "We could not have wished for a better partner to develop the Masbate
    project. The strong balance sheet and talented and experienced management
    team of CGA will allow the Company to benefit from the development of the
    Masbate project through its holding of approximately 25% in CGA on
    completion of the transaction in a rapid and effective manner. In
    addition, the cash proceeds of the sale will be mainly applied by Thistle
    to the reduction of debt and the strengthening of the Company's balance
    sheet which will help position Thistle for the development of its South
    African operations and other opportunities."

    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: Andy Graetz, Chief Financial Officer at + 27 82
929 5562 or email to; Gerry Beaney, Grant Thornton
Corporate Finance at +44 (0) 207 383 5100

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