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Pan Global Signs Deal To Purchase 100% Of Licences Held By Its Exploration Partner In Serbia And Bosnia

VANCOUVER, BRITISH COLUMBIA – (January 15th, 2013) – Pan Global Resources Inc. (“Pan Global” or the "Company") (TSX Venture Exchange: PGZ) is pleased to announce that it has entered into a Letter of Intent (LOI) with 298221 B.C. Ltd. (the “Vendor”) and its sole shareholder Mr. Petr Palkovsky to purchase 100% of the Vendor’s wholly-owned subsidiary Lithium Li Holdings Inc. (‘Lithium Li’). Lithium Li holds 15 exploration licenses in Serbia and Bosnia that have been subject to an Option Agreement with the Company (Figure 1). The proposed transaction is subject to a number of conditions, including TSXV approval.

Under the terms of the current Option Agreement, the Company can earn up to 80% in any three licences held by Lithium Li by funding the completion of a feasibility study (or spending a total of $20,000,000), and issuing a total of 1,125,000 shares and paying $500,000 cash. The other 12 licences remain with the Vendor.

Under the terms of the new LOI, PGZ will purchase Lithium Li and all its current 15 and any future licences for consideration of cash payments totalling CAD$5.8Million, and the issuance of a total of seven million shares to the Vendor over a period of four years (see below for details). Critical payments and share issuances are linked to performance milestones directly related to exploration results and the consequent ability to raise financing to fund continued exploration. No further payments relating to the Option Agreement will be made.

Julian Bavin, President and CEO of Pan Global stated: “We are extremely pleased to have signed this LOI which will provide the Company with 100% ownership of the 15 Lithium Li exploration licences where exploration results to date have already defined five very high priority licences, including the Valjevo licence in which drilling results to date have indicated an unusually extensive resource of borate mineralisation of significant grade and width. We are also very pleased to be welcoming Petr Palkovsky and his team from Lithium Li as part of Pan Global which will help focus our exploration efforts on prioritisation of the portfolio and increasing the value to our shareholders.” Petr Palkovsky, owner of Lithium Li stated: “It gives me great pleasure to be merging Lithium Li into Pan Global Resources. This will enable sufficient exploration to be undertaken on the portfolio of 15 licences to ensure that the most highly prospective licences and mineral resources are advanced, while being firmly focused on shareholder returns.”

The terms of the LOI provide for the issuance of seven million Company shares, and the payment of CAD$ 5.8 million to the Vendor under the following conditions:

Issuance of Company shares to the Vendor

Date Number of Shares Cumulative
Upon signing the
Definitive Agreement (1)
250,000 250,000
Upon completion of
Financing of C$4 Million (2)
500,000 750,000
Upon completion of C$9 of
Cumulative Financing (2)
1,000,000 1,750,000

Upon completion of C$15M of
Cumulative Financing (2)

1,250,000 3,000,000
Third Anniversary 2,000,000 5,000,000
Fourth Anniversary 2,000,000 7,000,000

(1) Subject to receipt of TSXV approval
(2) All financing figure relate to cumulative amounts, post signing of the Definitive Agreement

Cash Payments to Vendor (3) :

Date Amount ($CDN) Cumulative
Upon signing the
Definitive Agreement (1)
300,000 300,000
Upon completion of
Financing of C$4 Million (2)
400,000 700,000
Upon completion of C$9 of
Cumulative Financing (2)
650,000 1,350,000

Upon completion of C$15M of
Cumulative Financing (2)

1,250,000 2,600,000
Third Anniversary 1,600,000 4,200,000
Fourth Anniversary 1,600,000 5,800,000

(3) The Company has the option to pay up to 50% of any cash payment in the equivalent value of Company Shares, issued at a discount of 20%.

In addition to the cash and share payments detailed above, Mr. Petr Palkovsky shall be entitled to have one nominee appointed to the board of directors of the Company, and shall be retained to serve as Operations Director of the Company. The LOI will be replaced by a Definitive Agreement by March 15th.

nr 2013 01 15

Figure 1: Issued licenses in Balkans Option

www.panglobalresources.com.
FOR FURTHER INFORMATION PLEASE CONTACT:
Mr. Julian Bavin, President and CEO
E-mail: jbavin@panglobalresources.com

Dan McIntyre, Investor Relations
E-mail: dmcintyre@panglobalresources.com

NEITHER 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.

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