EDITOR: | May 23rd, 2013

SG Spirit Gold: Terms for Pangea Energy Corp. Private Placement Announced

| May 23, 2013 | No Comments


SG Spirit Gold Inc. (TSX VENTURE:SG) (“SG Spirit” or the “Company”) is pleased to announce that, further to its news release of April 8, 2013 announcing that it had entered into a Letter of Intent dated April 5, 2013 (the “LOI“) with Pangea Energy Corp. (“Pangea“) to combine their businesses (the “Transaction“), Pangea has engaged a syndicate of agents (the “Agents”), led by Salman Partners Inc. (the “Lead Agent”) to place on a “best efforts” basis by way of private placement, subscription receipts of Pangea (the “Subscription Receipts“) at a price of US$0.35 per Subscription Receipt. Aggregate gross proceeds from the sale of the Subscription Receipts will be a minimum of US$5,000,000, up to a maximum of US$15,000,000 (the “Offering“). The Offering may, at the election of the Lead Agent, be increased up to US$20,000,000, in the event that subscriptions for Subscription Receipts received are greater than US$15,000,000 in aggregate. Successful completion of the minimum US$5,000,000 financing is a condition of the Transaction.

Offering Details

Upon satisfaction of certain conditions (the “Release Conditions“), each Subscription Receipt will convert, without the payment of any additional consideration and subject to adjustment, into a Pangea common share immediately prior to closing of the Transaction. The common shares of SG Spirit will ultimately be the securities received by the holders of the Subscription Receipts upon completion of the Transaction. The Offering is scheduled to close on or about June 15, 2013 or such other date as Pangea and the Agents may agree (the “Closing Date“).

The gross proceeds of the Offering (the “Escrowed Funds“) will be held in escrow on behalf of the subscribers with a trustee (the “Escrow Agent“) acceptable to the Lead Agent. The Escrowed Funds, less any commission payable to the Agents, will be released from escrow to Pangea contemporaneously with the closing of the Transaction (the “Escrow Release Time“), provided that the following conditions (the “Escrow Release Conditions“) have been satisfied before the Escrow Release Time:

  1. All conditions precedent to the closing of the Transaction shall have been satisfied or waived to the satisfaction of the Lead Agent, acting reasonably;
  2. To the extent required in accordance with the rules of the TSX Venture Exchange (the “Exchange“), the Transaction and the issuance of the public company shares and Broker Warrant Shares pursuant to the Offering shall have been approved by the shareholders of SG Spirit and Pangea, if required; and
  3. The Exchange having granted conditional approval allowing SG Spirit to become at least a Tier 2 Oil and Gas Issuer.

In the event the Escrow Release Time does not occur within 90 days after the Closing Date of the Offering, the Escrowed Funds, plus any accrued interest earned thereon, shall be returned pro rata to each holder of the Subscription Receipts in exchange for that number of Subscription Receipts held by such holder.

Pangea will pay the Agents an aggregate fee of 8.0% of the gross proceeds from the Offering payable in cash. In addition, at the time Escrow Release Conditions are satisfied, the Agents will receive non- transferable broker warrants (the “Broker Warrants“) equal in number to 8.0% of the aggregate number of Subscription Receipts sold pursuant to the Offering. Each Broker Warrant shall entitle the holder to acquire one Pangea common share at an exercise price of $0.45 for a period of 24 months from the satisfaction of the Escrow Release Conditions.

The gross proceeds of the Offering less the expenses of the Agents and the commission payable to the Agents, will be used to effect the Transaction and to fund continuing exploration and developmental activities on Pangea’s oil and gas properties.

The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“), or any state securities laws, and accordingly, may not be offered or sold within the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of Pangea’s securities or the Company’s securities in the United States.

Completion of the Transaction is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of SG Spirit should be considered highly speculative.

The Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

About Pangea

Pangea Energy is a private Canadian-based oil and gas exploration and production company with interests in assets in Romania and is in negotiation to acquire producing and non-producing properties in the United States. Pangea is focused on increasing and optimizing production from oil producing assets, while also undertaking exploration programs on the core oil properties in its portfolio to identify targets and increase reserves.


Adrian Bray, President & CEO

Cautionary Note Regarding Forward-Looking Statements

Information set forth in this news release may involve forward-looking statements under applicable securities laws. Forward- looking statements are statements that relate to future, not past, events. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as “anticipate”, “believe”, “plan”, “estimate”, “expect”, and “intend”, statements that an action or event “may”, “might”, “could”, “should”, or “will” be taken or occur, or other similar expressions. All statements, other than statements of historical fact, included herein including, without limitation; statements about the terms of the Offering, the use of proceeds from the Offering and the terms and completion of the Transaction are forward-looking statements. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward- looking statements. Such factors include, among others, the following risks: the need for additional financing; operational risks associated with oil & gas exploration; requirement to obtain shareholder approval; failure to execute the definitive agreement for the Transaction, fluctuations in commodity prices; title matters; environmental liability claims and insurance; reliance on key personnel; the potential for conflicts of interest among certain officers, directors or promoters with certain other projects; competition; dilution; the volatility of our common share price and volume and the additional risks identified in the management discussion and analysis section of our interim and most recent annual financial statement or other reports and filings with the Exchange and applicable Canadian securities regulators. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date that statements are made and SG Spirit undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable securities laws. Investors are cautioned against attributing undue certainty to forward-looking statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release, and no securities regulatory authority has either approved or disapproved of the contents of this release.

Raj Shah


Raj Shah has professional experience working for over a half a dozen years at financial firms such as Merrill Lynch and First Allied Securities Inc., ... <Read more about Raj Shah>

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