NGG

New Guinea Gold Corporation ("New Guinea Gold" or the "Company") (TSX
VENTURE:NGG) provides the following update on the Company's operations and
strategies.


Mining Leases and Exploration License Renewed

Pursuant to the recommendation of the Mining Advisory Council; the Minister for
Mining, the Honorable Mr. Byron Chan has now executed the formal instruments
renewing the Company's expiring Mining Leases and Mining Easement (ML 122 and ME
70) and its exploration license (EL 1140).


The Mining Lease 122 has been renewed and extended for a further ten years with
a new expiry date of 15 February 2022. Mining Easement 70 has been renewed for a
period of 8 years and now expires on 15 February 2020. The Exploration License
(EL) has been granted for a further two years as is standard in Papua New Guinea
and now expires on 10 May 2013. 


The renewal of the MLs contained several ministerial conditions, which reinforce
the States and Company's obligations under the applicable legislation. Two of
those conditions are material in nature: -




1)    The Company is required to change its processing method within twenty-
      four months from the date of approval to a "new and more efficient ore
      processing system". This is consistent with the Company's current     
      strategy and plans are underway to accommodate such a change should   
      the Definitive Feasibility Study produce a positive economic outcome; 
      and                                                                   
2)    That the Company enter into discussions with the State's              
      representatives to assess the State's participation in the Mining     
      Lease.                                                                



Company Chairman Mr. Ces Iewago commented "This is a great outcome for New
Guinea Gold and reflects well on the relationship that has been fostered with
the PNG Authorities. The Company now has certainty of tenure and a great basis
for moving ahead. We look forwards to working closely with all of our
stakeholders to maximize the value and benefits deliverable from the Sinivit
Mine and the surrounding high-potential exploration acreage. The possible
addition of the State as a stakeholder in the project would be welcomed and the
expression of interest confirms the belief the PNG Government has in the
potential of the project." 


Cash Situation

As per previous Press Releases the Company is currently experiencing a cash
shortfall. The Board in good faith believed that PNG Gold Corporation (PGK)
would honor its commitments to support the Company under the various agreements
executed between the parties. To date this support has failed to materialize.
Despite numerous formal and informal communiques PGK has failed to respond to
NGG's requests regarding their intentions with regards to the proposed Plan of
Arrangement. 


The Company has an immediate need of funds and is unable to deal with its
various investments or indeed raise further capital until the expiration of the
Arrangement Agreement on May 31st, which now seems inevitable. 


In anticipation of the termination of the Arrangement Agreement, our counsel
made a written request on May 16, 2012 to PGK's counsel for written notification
of PGK's intentions in respect of its right of election under subsection 4(b) of
the Credit Agreement to have some or all of the $1,000,000 advanced by PGK set
off against the cancellation of PGK shares owned by the Company and pledged to
PGK as security for its loan. Under the Credit Agreement cancelled PGK shares
are valued at market price and credited against the outstanding loan amount.


Requests have also been made for (i) written authorization allowing NGG to
contact third parties in respect of the sale of public company shares owned by
NGG, including the PGK shares, (ii) written confirmation that PGK will support
an application to the TSX-V for the transfer within escrow of the PGK shares to
an acceptable third party and (iii) confirmation whether PGK wishes the Company
to proceed with its court application for the Final Order in connection with the
Plan of Arrangement. To date, we have had no response from PGK.


The Board is currently considering the options available to raise the necessary
short-term working capital requirements and address the longer term objectives
of the Company. In formulating and implementing these plans the Company expects
the support and cooperation of PGK, a reasonable expectation in the
circumstances.


Definitive Feasibility Study (DFS)

Whilst the DFS is not yet complete current indications are that it will result
in a marginal economic benefit at best. The draft capital expenditure estimate
is slightly above $20M compared to the $12M to $15M initial estimate.
Furthermore the assay results from the previously gathered samples have resulted
in a +/-15% reduction in the contained ore estimate. Management believes this is
related to how the remaining reconciled gold in situ is contained within the
material in the Heaps and Vats. Whilst management remains confident of its
previous estimate a conservative view must prudently be adopted. The test work
has proved that approximately 90% of the remaining gold can be liberated via a
CIL/CIP plant. 


No firm decision has been taken as yet however the most likely way forwards now
will be that the materials would be processed if and when either the Kavursuki
or Mengmut prospect are proven to be economic resources. This material will
enhance the economic viability of either of those potential projects.


Management Cease Trade Order (MCTO)

After discussion with the Company's Auditors BDO on their progress in completing
the audit of the December 2011 Financial Statements the Company advises as
follows: - 


Due to the occupation of the Mine by the landowners over the Financial Year End
neither the Auditors nor the Company were able to conduct a physical stock-take
of inventories on site. Because of the material value of the inventory
additional audit procedures are being conducted to validate the inventory
balances. As a consequence the Company now believes that the MCTO will remain in
place for a further two weeks. 


ON BEHALF OF THE BOARD

Ces Iewago, Chairman

For further information, please contact info@newguineagold.ca, or access our
website - www.newguineagold.ca.


Forward Looking Statements - Certain information set forth in this news release
contains forward-looking statements, including the timing of filing of NGG's
Annual Financial Filings. These forward looking statements involve substantial
known and unknown 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 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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