Mr. Greg Clarkes reports

PNG ANNOUNCES CONCLUSIONS REACHED IN THE ENGINEERING REPORTS AND CORPORATE DIRECTION

PNG Gold Corp. previously announced that it had received pre-FEED (front-end engineering design) engineering reports from Stantec Consulting Ltd. and WSP Canada. Those reports concluded that PNG's ReGen rerefining technology process is technologically sound and that the quantity and quality of the rerefined products produced will be equivalent to, or greater than, results obtained in previous engineering studies.

The following conclusions, subject to the assumptions and parameters set out therein, were reached in the engineering reports:

1. The ReGen used motor oil (UMO) rerefining process is technically sound. Stantec's report concluded: "Having completed the pre-FEED study and based upon the samples provided, it is Stantec's opinion that PNG's ReGen technology is technically viable and capable of producing high-quality base oils meeting requirements of API 1509 groups II and III. Furthermore, Stantec has concluded, after having conferred with the major manufacturers of the process equipment required to construct and operate the proposed 2,800-barrel-per-day rerefinery, that the project is feasible as proposed." Similarly, WSP concluded, "Having completed the pre-FEED study, it is WSP's opinion that PNG's ReGen refining technology process is technically sound, and construction and operation of the proposed rerefinery should provide finished products equivalent or greater than those contained in previous engineering studies."
2. The finished product stream generated from a ReGen rerefining process is of high quality and high quantity. Stantec reported 75-per-cent recovery of Group II and Group III base lubricating oils, of which 55 per cent of the plant output was estimated to be Group III base oil. WSP's preliminary computer modelling showed 78-per-cent recovery of Group II and Group III base lubricating oil.
3. The preliminary operating costs using current market prices were projected by WSP to be 7 per cent of the company's projected revenue.
4. The capital cost of constructing a ReGen rerefinery in Bowden, Alta., was projected by Stantec to be approximately $90-million. The numerous cost advantages associated with existing infrastructure in addition to the large storage tank farm located at the Bowden site were highlighted in the WSP report,namely: rail and truck loading and unloading; existing concrete foundations; existing pipe rack; existing water supply; existing gas and electricity utilities; and the space to facilitate a modular construction strategy.

From additional research conducted by the company, it was further determined:

1. Only 50 per cent of the used motor oil collected in North America is estimated to be actually rerefined into Group I and Group II base lubricating oils, with the balance primarily being sold as low-grade burner fuel.
2. Based on today's prices, the cost of feedstock supply to the Bowden plant would represent 28 per cent of the projected revenue when operating at steady-state production.
3. Market research shows a significant demand for Group III oil in Canada and the United States.
4. The current economic conditions in Alberta provide an excellent opportunity to attract quality fabrication contractors, with short production lead times, to manufacture the plant equipment modules at very attractive pricing.
5. The current exchange rate between the Canadian dollar and U.S. dollar provides a significant lift to the profitability of a Canadian-built refinery.
6. Carbon credits available in Alberta should provide substantial additional revenue for PNG.
7. The patents that are granted or are pending by, or for, PNG are considered to be current and valid.
8. Based on the project product output contained in the engineering reports and today's commodity pricing, in the first full year of steady-state production following commissioning of the first ReGen rerefinery, PNG projects recurring annual revenue of approximately $159-million. This revenue is projected to produce recurring annual EBITDA (earnings before interest, taxes, depreciation and amortization) of approximately $100-million. EBITDA is a non-generally accepted accounting principles measure.

As a result of these reports and research, PNG's management made the following recommendation to the company's board of directors: PNG submit a change of business application to the TSX Venture Exchange to become an industrial oil listed company, along with filing for a change of name to Gen III Oil Corp.

Subject to approval of the change of business by the TSX-V, PNG's management recommends that:

1. The company accepts the bid for FEED and detailed engineering as submitted by Stantec Consulting and immediately proceed with the next phase of development; this includes completion of detailed engineering design, obtaining of all necessary refining permits and ordering of long-lead-order equipment targeting a fall 2017 start of construction in Bowden;
2. PNG immediately pursue the next stage of development of this rerefinery to avail itself of market conditions for Group II and Group III base oil to leverage the advantages currently available to PNG in terms of availability of construction labour and inexpensive equipment manufacture and fabrication;
3. Immediately following commencement of construction of Bowden, PNG secures additional rerefining sites to export the technology elsewhere around the world.

The board of directors of PNG accepted all of management's recommendations, and the company is proceeding accordingly.

On behalf of Stantec Engineering, Santino Pasutto, Stantec's manager, business development, oil and gas, said: "It is with excitement and enthusiasm that Stantec embarks on this project's newest chapter, further strengthening our important relationship with PNG. Beyond the technically compelling aspects of this work, this large-scale project stands to deliver tremendous benefit to a range of stakeholders by creating local job opportunities by finding new uses for a non-renewable resource through reprocessing and by repurposing a facility that has long been closed. We're proud to be able to contribute to such a significant initiative in Alberta."

We seek Safe Harbor.