Colombia Goldfields Ltd Announces Increase in the Medoro Consideration and the Execution of Additional Lock-Up Agreement in Respect of the Plan of Arrangement



    TORONTO, Aug. 10 /CNW/ - Colombia Goldfields Ltd. (TSX: GOL) announced
today an increase to the consideration (the "Medoro Consideration") to be
issued to the stockholders of Colombia Goldfields Ltd. in connection with the
previously announced proposed acquisition of the outstanding common shares of
Colombia Goldfields. Under the previous terms of the proposed arrangement,
Medoro was to issue 29,266,856 shares and 940,720 warrants to the stockholders
of Colombia Goldfields in exchange for the 104,524,486 outstanding shares of
Colombia Goldfields (a share exchange ratio of 0.28 of a share plus 0.009 of a
consideration warrant of Medoro for each share of Colombia Goldfields). Under
the revised terms, the exchange ratio under the Medoro Consideration has been
increased by 20% so that Medoro will now issue 35,120,227 common shares and
1,128,864 warrants to the stockholders of Colombia Goldfields in exchange for
the 104,524,486 outstanding shares of Colombia Goldfields. The exchange ratio
is 0.336 of a common share plus 0.0108 of a consideration warrant of Medoro
for each common share of Colombia Goldfields. Each full warrant is exercisable
into one Medoro common share at a subscription price of Cdn$0.50 per Medoro
common share for a term of two years. On completion of the proposed
arrangement, Colombia Goldfields' stockholders will own approximately 18% of
Medoro based upon the number of issued and outstanding shares of Medoro as of
today.
    Medoro also announced today that it has entered into a voting and lock-up
agreement with Baker Steel Capital Managers LLP, a key shareholder of Colombia
Goldfields, in connection with the proposed acquisition. Pursuant to the
lock-up agreement, Baker Steel has agreed, among other things, to vote all of
its Colombia common shares in favour of the proposed acquisition. Including
securities of Colombia Goldfields held by Baker Steel Capital Managers LLP,
approximately 19% of the outstanding Colombia Goldfields shares (on a
fully-diluted basis) are now subject to lock-up agreements.
    A copy of the arrangement agreement in connection with the proposed
acquisition has been filed under Colombia Goldfields profile on EDGAR and is
available at www.sec.gov.

    About Colombia Goldfields

    Colombia Goldfields Ltd., through its subsidiaries Compania Minera de
Caldas S.A. and Gavilan Minerals S.A., is developing what we believe is a
multi-million ounce gold resource in Colombia's historic Marmato Mountain gold
district.
    Colombia Goldfields is traded in the US under the symbol CGDF, on the
Toronto Stock Exchange under the symbol GOL, and in Germany under the symbol
C2B.

    Disclaimer

    This release contains forward-looking statements that are based on the
beliefs of Colombia Goldfield's management and reflect Colombia Goldfield's
current expectations as contemplated under section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities and Exchange Act of
1934, as amended. When used in this release, the words "estimate, "project,"
"believe," "anticipate," "intend," "expect," "plan," "predict," "may,"
"should," "will," "can," the negative of these words, or such other variations
thereon, or comparable terminology, are all intended to identify
forward-looking statements. Such statements reflect the current views of
Colombia Goldfields with respect to future events based on currently available
information and are subject to numerous assumptions, risks and uncertainties,
including, but not limited to, risks and uncertainties pertaining to
development of mining properties, changes in economic conditions and other
risks, uncertainties and factors, which may cause the actual results,
performance, or achievement expressed or implied by such forward-looking
statements to differ materially from the forward looking statements. In
particular, there is no assurance that a definitive agreement will be executed
or that the proposed transaction will be completed.




For further information:

For further information: J. Randall Martin, Vice Chairman and CEO,
Colombia Goldfields Ltd. (TSX: GOL/OTC BB: CGDF), 8 King Street East, Suite
208, Toronto, Ontario, M5C 1B5, T: (416) 361-9640, F: (416) 361-0883,
info@colombiagoldfields.com, www.colombiagoldfields.com

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COLOMBIA GOLDFIELDS

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