NGG

NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWSWIRE SERVICES

New Guinea Gold Corporation ("New Guinea Gold" or the "Company") (TSX
VENTURE:NGG)(FRANKFURT:NG8) and PNG Gold Corporation ("PNG Gold") (TSX
VENTURE:PGK) jointly announce that they have entered into a letter of intent
with respect to a potential acquisition of New Guinea Gold by PNG Gold. This
announcement is being made in response to recent unusual trading volume in New
Guinea Gold's common shares in the absence of any material news from New Guinea
Gold. 


This letter of intent is effective as of October 29, 2011 and non-binding,
except for an exclusivity period and certain other non-material matters. 


The terms presently under discussion would involve an arrangement under which
New Guinea Gold shareholders would be issued one common share of PNG Gold for
each 5.714 common shares of New Guinea Gold held (or an inverse exchange ratio
of 0.175 PNG Gold shares for each one New Guinea Gold share).


Management believes the transaction, if consummated, will provide a platform for
growth for shareholders of each company in the following manner. It will provide
New Guinea Gold shareholders an immediate premium to New Guinea Gold's recent
stock price, and afford a secure and expedient development path for New Guinea
Gold's production and exploration licences on New Britain Island in Papua New
Guinea. PNG Gold's shareholders will benefit from the transaction by the
acquisition and recapitalization of the Sinivit Mine. Recapitalization will
enable the mine to significantly improve operational performance. PNG Gold's
management also intends to implement an expanded exploration programme. The
addition of Sinivit will also enhance PNG Gold's ability to advance its 100%
earned interest in the Imwauna Property on Normanby Island in Papua New Guinea.


PNG Gold and New Guinea Gold caution that no binding agreement has been reached.
The execution of any such agreement would be conditional upon, among other
things, completion of satisfactory due diligence by PNG Gold and approval of the
directors of PNG Gold and New Guinea Gold. There is no assurance any agreement
will be concluded with respect to the transaction described above or any other
transaction, or that any transaction if agreed will be completed.


The parties do not intend to make further announcements or communications
regarding this potential transaction until a definitive agreement is reached, or
discussions are terminated without such an agreement being reached. 


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 New
Guinea Gold and PNG Gold, including, but not limited to the expected benefits
from the potential transaction, 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 of such
information, although considered reasonable at the time of preparation, may
prove to be imprecise and, as such, undue reliance should not be placed on
forward-looking statements.

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