Mr. Greg Clarkes reports

PNG GOLD CORPORATION ANNOUNCES DIAMOND DRILL HOLE RESULTS: 10.72 G/TONNE GOLD OVER 3.0 METRES

PNG Gold Corp. has released drill core assay results and recent geological modelling from its 2012 exploration program at the Imwauna structure, located on Normanby Island, Milne Bay province, in eastern Papua New Guinea.

Three diamond drills are currently on site with a fourth arriving next month. The company has planned to complete 21 additional holes totalling 4,665 metres on the Imwauna structure by Dec. 15, 2012, with plans to continue drilling over the holiday season.

                                HIGHLIGHTS
                                                Core              
Hole No.            From            To        length          Gold
                     (m)           (m)           (m)       g/tonne
                                                                  
IMH259             151.6         154.6           3.0         10.72

Details of assay results of diamond drill holes IMH-259 to 262 are located in an attached table.

Imwauna structure -- points of interest

The assay results from these four drill holes disclosed in this press release show encouraging results as they begin to support the geological model. Geological modelling has identified moderate south-plunging, high-grade gold zones along the Imwauna structure. Attached to this news release is a diagram showing a grade-times-thickness longitudinal section along the Imwauna structure, with the Henry and Klink zones identified. Drilling is now under way in these zones to trace the mineralization to depth.

The Henry and Klink zones have previously reported drilling intercepts, as shown in an attached table.

               Henry zone                              Klink zone           
                                                                            
Hole IMH No.   g/tonne Au     Metres    Hole IMH No.   g/tonne Au     Metres

050                 16.66        1.7    094                  9.50        4.6
051                 22.46        2.1    101                  5.90        4.9
082                 36.16        5.6    163                108.00        0.4
084                 10.64        2.3    174                 13.98        3.0
091                 21.10        3.8    204                 13.11        7.4
172                 34.26        2.6    215                  8.16        6.3
217                 32.10        1.4                                        
218                 49.86        4.0    Composite intervals are core lengths
253                111.97        6.0                                        

About the Imwauna structure

• South-southwest-trending Imwauna structure is over 2.0 kilometres long, dipping steeply 80 to 90 degrees west and remains open along strike.
• Previous drilling has located six zones of moderate, south-plunging high-grade gold mineralization.
• All six zones remain open to depth.
• Geological setting is a bonanza gold, epithermal, low-sulphidation system.
• PIMA studies of drill core indicate an illite group alteration assemblage of illite, smectite and quartz with a moderate pH level silver greater than gold system.
• Zones are typically one to four metres wide, hydrothermal and hydraulic brecciated, with vuggy quartz veining present.
• Pyrite content 1 per cent, minor arsenopyrite, traces of chalcopyrite and visible gold do occur.
• Previous work using fluid inclusions suggest source of fluids from south and at depth.
• Recent drilling is providing indications of zone width and thickness increasing with depth.

Kela's prospect

In addition to the drill program under way at the Imwauna structure, a seven-hole program totalling 1,852 metres has been completed on the Kela's prospect area. The purpose of the program is to locate the previously untested structure and defining its orientation as it appears to be dipping moderately to the east, toward the Imwauna structure. Low-sulphidation epithermal veining was encountered in most holes. Further drilling may be undertaken once assay results are received and the data compiled.

      IMWAUNA ASSAY RESULTS -- IMH 259-261

                                   Core
Hole     Elev.    From      To   Length     Au    Ag
ID         (m)      (m)     (m)  (m)(i)  (g/t) (g/t)

IMH259     540   151.60  154.60     3.0  10.72  25.4
(ii)IMH
260        570   244.95  246.45     1.5   0.23   6.6
IMH261     505    147.3   148.4     1.1  10.35  56.5
(ii)IMH
262        518    173.4   174.4     1.0   1.14   2.6

(i) Core lengths are not true thicknesses.
(ii) Did not reach Imwauna structure.

Core logging, sampling and assaying procedures

All holes drilled by PNG Gold are collared using HQ triple-tube drill tools. A few holes have been reduced to NQ size at depth in the hole in order to continue the hole. Geotechnical measurements such as core recovery, fracturing and veining, rock quality designations (RQD), hardness and photographic logging are performed systematically prior to sampling and assaying. The core is logged, samples selected by PNG Gold geologists then systematically sawn in half at the site. The one-half core sample is numbered, sealed in a bag and delivered by PNG Gold to its base in Alotau where the samples are palletized and placed in secure storage prior to shipment to ALS Minerals in Townsville, QLD. The other half of the core is retained at the site.

Core samples are dried, crushed and pulverized to 85 per cent passing through a 75-micron mesh. The pulps are assayed for gold and silver using a 50-gram split, fire assay (FA) and atomic absorption (AA) finish. Samples grading over 100 parts per million Au are subjected to a fire assay with gravimetric finish. Analyses were also carried out for the trace elements arsenic and lead. Rejects and pulps are stored at the lab for future reference.

Quality assurance/quality control (QA/QC)

The ALS Minerals lab is an International Organization for Standardization (ISO) 9001:2008-qualified assayer that performs and makes available internal assaying controls. Duplicates, certified standards and blanks are systematically used as part of PNG Gold's QA/QC program. The company also inserts blind standards with each sample batch at the rate of about 1 for 10. Periodically duplicate pulps are assayed at a second independent certified assay lab. The duplicate assays are compared with original assays for reproducibility and lab bias.

Qualified person

Lorne Warner, PGeo, chief operating officer of PNG Gold, is a qualified person in accordance with National Instrument 43-101, and has reviewed and approved the technical information contained in this news release.

Credit agreement with New Guinea Gold Corporation

Pursuant to the previously announced credit agreement dated March 7, 2012, between the company and New Guinea Gold (NGG), the company granted NGG a credit facility in the original principal amount of $1-million bearing interest of 8 per cent per annum compounded monthly. The company and NGG have now concluded settlement of the indebtedness with the cancellation of 2,880,953 of the company's common shares owned by NGG and pledged as security for the indebtedness at a deemed price of 20 cents per share, and the payment of $481,069.37 in cash. The indebtedness having been fully repaid, the company has released or will release all security interests granted by NGG in respect of the indebtedness.

About the Imwauna gold deposit

The Imwauna exploration licence -- EL 1091 -- is located on the north side of Normanby Island, approximately 80 kilometres northeast of Alotau, the provincial capital of Milne Bay province, eastern Papua New Guinea. Alotau is serviced by daily flights from Port Moresby, the national capital, and scheduled coastal freighters. PNG Gold maintains a logistics base in Alotau to supply the Normanby Island site.