Axactor SE — M&A Activity 2010

Feb 22, 2010

IGE and Pangea DiamondFields create strong African diamonds exploration and production company - detailed version

IGE and Pangea DiamondFields create strong African diamonds exploration

and production company - detailed version

International Gold Exploration IGE AB (OSLO: IGE) today announced that

the Company has entered into a sales and purchase agreement whereby IGE

acquires all activities of Pangea DiamondFields plc through its

subsidiary Efidium Ltd. Merging the two companies' activities creates a

significant diamond exploration and production company with resources

spread across three Southern African countries.

The consideration will be paid in approximately 495 million new IGE

shares, which at closing Thursday represented a value of NOK 282 million

(USD 48 million).

The combined company will be a significant diamond exploration and

mining company in Africa with nine diamond projects in Angola, South

Africa and the Democratic Republic of Congo. IGE's new diamond portfolio

will combine one project in commercial operation (Angola), a second

project ready for commercialization (Angola) and a third project

expected to reach commercial stage later this year (South Africa).

IGE has defined diamond exploration and production as its core business

area and the Company currently operates four projects in Angola.

Authorization for the sale of diamonds from IGE's lead project Luxinge

is expected from the Angolan authorities in the near future.

Pangea is through Efidium currently engaged in five diamond projects, of

which one project is in commercial operation in Angola, only 50

kilometers from IGE's Luxinge project and with a monthly output of 2,000

carats and poised to grow rapidly. The company has a verified resource

base of 8.4 million carats. Pangea is listed on the AIM market of the

London Stock Exchange.

"Pangea represents extensive diamond exploration and mining experience

and a well established presence in Africa. The merger of the two

companies creates a considerable resource base and a growing cash flow

from diamond mining. Within the next 12 months we expect three diamond

projects to generate revenue" said IGE's CEO Tomas Fellbom.

"IGE and Pangea are an excellent fit. The combined company will have a

well balanced project portfolio, highly experienced exploration and

operational staff and sufficient critical mass to be an important player

in African diamond mining going forward. In particular, combining our

respective operations in Southern Africa creates opportunities to

maximize the efficiency and reach of the merged organisation" said

Pangea's CEO Boris Kamstra.

Pangea's senior management has agreed to remain with the Company and

will head the combined subsidiary IGE Diamonds.

The combined company will have a broad shareholder base including

international institutional investors, Pangea management and a great

number of retail investors. Upon completion of the transaction, Pangea's

current shareholders will hold approximately 38.4% of IGE which will

remain listed on the Oslo Stock Exchange.

Valuation of the two companies is based on a combination of market value

and their respective verified resources, including IGE's resources in

the Rönnbäcken nickel deposit in Sweden. The combined company's broad

project portfolio and enhanced resource base will enable IGE to further

accelerate the development of its activities. In order to increase its

development pace, IGE is contemplating an equity offering in the form of

a rights issue.

IGE will present details of the acquisition and Pangea DiamondFields plc

immediately after the previously scheduled presentation of the fourth

quarter 2009 results at:

Monday 22 February at 09:30, Hotel Continental, Oslo.

Pangea's CEO Boris Kamstra will participate together with IGE's CEO

Tomas Fellbom. The event will be video webcasted live at www.ige.se.

For further information please contact:

Tomas Fellbom

CEO, IGE

Telephone +46 733 225 786

E-mail tomas.fellbom@ige.se

Boris Kamstra

CEO, Pangea DiamondFields

Telephone +27 836 806 809

E-mail bkamstra@pangeagroup.co.za

Please also refer to www.ige.se and www.pangeadiamondfields.com

International Gold Exploration IGE AB (publ), is a Swedish exploration

and mining group focused on diamonds, nickel and gold. The Company

started production of alluvial diamonds in Angola and gold in Kenya in

the beginning of 2009. IGE has a portfolio of projects in Angola,

Sweden, Kenya and Norway.

The IGE shares are listed on the Oslo Stock Exchange (ticker: IGE) and

the company

is headquartered in Stockholm,

Sweden

Additional information - IGE's acquisition of Pangea DiamondFields

Disclosed in accordance with Oslo Børs' "Ongoing obligations of stock

exchange listed companies" section 3.4.2 - detailed stock exchange

announcement.

Agreement and Parties

According to the agreement, International Gold Exploration AB (IGE) is

acquiring Pangea DiamondFields plc's (Pangea) 100 per cent owned holding

company Efidium Ltd. All assets and property covered by the agreement

are held by Efidium and its subsidiaries.

Transaction

Through the Transaction IGE is acquiring all exploration and mining

interests owned directly and indirectly by Pangea, with a maximum net

debt of USD 3.5 million to be assumed by IGE

IGE will upon closing of the Transaction issue 495,399,057 new shares to

Pangea, subject to EGM approval of the additional shares and other

relevant approvals. Total number of shares outstanding after completion

of the transaction is expected to be 1,291,109,010.

The issue of the consideration shares by IGE requires the approval of

IGE shareholders in general meeting by passing of a resolution requiring

2/3 of votes cast. The Board of Directors of IGE intends to call an

Extraordinary General Meeting for this purpose on or about 26 March,

The Transaction including share issue is expected to be completed in

April 2010. The Transaction is classified as a disposal by Pangea

resulting in a fundamental change of business pursuant to Rule 15 of the

AIM Rules for Companies. Accordingly, completion of the Transaction is

conditional upon the consent of Pangea's shareholders being given in

General Meeting by approval of an ordinary resolution (50 per cent of

votes cast in General Meeting).

Pangea intends to convene a General Meeting of shareholders to approve

the transaction to be held on or about 24 March . A notice formally

convening the General Meeting, including a shareholder circular will be

dispatched to shareholders and a further announcement confirming that it

has been sent will be made in due course.

Pangea will distribute IGE shares to its shareholders as soon as

practically possible once the IGE shares are received. Once IGE shares

are distributed to them, the current shareholders of Pangea will

subsequently hold approximately 38.37 per cent the enlarged issued share

capital of IGE.

The Acquired Activities

Pangea DiamondFields is, through its 100 per cent owned subsidiary

Efidium Ltd., a diamond mining and exploration company with operations

in South Africa, Angola and the Democratic Republic of Congo. The

company has five active projects, of which one is in commercial

operation with a monthly output of 2,000 carats and increasing. A second

project is expected to enter commercial phase in South Africa within the

next 12 months.

Pangea has an attractive and independently verified resource base of 8.4

million carats with significant blue sky potential.

Pangea is listed on the London Stock Exchange AIM market, where

management and related parties represent a majority among the company's

shareholders.

Pangea's projects are all focused on the discovery and recovery of

alluvial diamonds. Geographically, these projects are found in two

clusters on the Angola/Congo border and in South Africa. The

Angola/Congo cluster is adjacent to IGE's projects in Angola.

Key projects are:

Country Project Interest Resources *) Status

Angola Cassanguidi 59% 902 000 carats

Current output of 2,000 carats - to be ramped up

DR of Congo Longatshimo River 100% 3,567 000 carats

Bulk sampling completed, ready for pilot mining

Tshikapa River 100% 3,353 000 carats

Advanced evaluation completed

South Africa Bakerville 74% 455 000 carats

Pilot mining completed, preparations for commercial mining

Harts River 74% 78 000 carats

Bulk sampling completed

*Resources are independently verified according to SAMREC standards

Pangea's management has a unique combined track record from the African

diamond mining industry, with more than 120 years of collective industry

experience between them. Senior management has agreed to remain with the

company. Pangea has a total of 221 employees.

Pangea Executive Management:

. Boris Kamstra Pr Eng; MBA

Chief Executive Officer

20 + years project experience

. Anton Esterhuizen MSc Mineral Exploration

Chief Exploration Officer

30 + years mineral exploration, International recognition in economic

geology

. Jurgen Schwarz BCompt(SA)

Chief Financial Officer

20 years relevant financial experience

. Helen Pein BSc (Hons) Geology

Exploration Manager

25 years experience in exploration

. Michael Hunt MSc (Chemical Engineering)

Operations Manager -CAR/Angola

30 + years mineral processing experience, predominantly in diamonds with

De Beers

Non Executive Directors:

. Bill Nairn BSc (Mining) Engineering

Chairman of the Board

Mining Engineer

Retired technical director Anglo PLC (2001 -2004)

And Director: AngloPlatunum

Director Anglo Gold Ashinti

43 years mining and mine management

. Rob Still BCom (Hons), CA (SA), IMM

Vice Chairman of the Board

22 years in mining and mining finance

. Miles Kennedy

Lawyer

Former executive chairman Kimberley Diamond Company (ASX)

30 years in mining and mining finance

. Ashley Dunster

Engineer

Managing Partner -Global Private Equity Capital International Group

Financial Information

Efidium is the holding company for all of Pangea's operating activities

excluding the administrative and corporate activities of Pangea

DiamondFields plc, its AIM listed parent company.

In its interim results for the six months ended 30 June 2009 and the

annual reports for the three previous years, Pangea has disclosed the

following financial information:

USD 1,000 1H 2009 2008 2007 2006

Diamond revenue 896 2,803 4,817 3,092

Other income 894 4,534

Operating result* -8,972 -17,312 -19,814 -15,250

Net result -8,971 -17,198 -19,019 -14,855

Non-current assets 8,774 13,304 15,723 10,711

Current assets 4,496 8,111 4,673 26,641

Equity 12,285 20,930 16,115 32,083

Non-current liabilities 0 0 3,787 4,009

Current liabilities 985 486 495 931

Total balance sheet 13,270 21,416 20,396 37,352

*Note: All exploration costs have been expensed and not capitalised.

These expense constitutes the majority of the operating costs.

Strategic Importance to IGE

The acquisition of Pangea's activities represents a milestone in IGE's

development towards becoming a significant diamond exploration and

production mining company. Diamonds represent a core business area for

IGE. The transaction provides IGE with:

. Significantly increased diamond reserve base

. Cash flow from ongoing operations and diamond sales

. Stronger diamond exploration and production mining expertise

. Broader and more diversified African presence (diversification into

three key diamond countries)

. Strengthened management

. Operational synergies in Africa (project management, operations,

equipment, logistics)

. Broader shareholder base

The current IGE operations in Angola will be merged with Pangea's

operations into the subsidiary IGE Diamonds. This business unit will be

headed by Pangea's existing management.

The combined company will remain headquartered in Stockholm and listed

on the Oslo Stock Exchange.

Other Information

A 90 day Lock Up clause has been agreed with Pangea's largest

shareholders, representing not less than 60 per cent of Pangea's

shareholder base.

In order to incentivise the key senior management and employees of

Pangea in creating value for IGE Diamonds, Pangea, in consultation with

IGE has decided to allot 5 per cent of the consideration shares paid to

Pangea to an employee benefit trust ("EBT"). Beneficiaries of the EBT

include Boris Kamstra, Brett Thompson, Rob Still, Bill Nairn, and Miles

Kennedy, current directors of Pangea in part compensation for their

services as directors since mid 2008 for which no compensation has been

sought or paid. IGE shares awarded through the EBT will vest to

beneficiaries over a 20 month period from the completion of the

transaction.

AM Capital of Paris, France, has served as corporate finance adviser for

IGE in this transaction. DLA Nordic (Sweden) and DLA Piper (Norway) have

served as legal advisers to IGE. Ambrian Partners Limited has served as

corporate finance advisers and Maitland Advisory LLP as legal advisers

to Pangea.