Gran Colombia Gold Completes $275,000,0000 Private Placement, Frontino
Acquisition and Reverse Takeover of Tapestry Resource Corp.

TORONTO, Aug. 23 /CNW/ - Gran Colombia Gold Corp. (TSXV: GCM, formerly TPR) (the "Company") is pleased to announce the completion of the reverse takeover transaction (the "Transaction") previously announced in the press release of Tapestry Resource Corp. ("Tapestry") dated June 30, 2010.

Pursuant to the Transaction, Tapestry acquired all of the issued and outstanding securities of Gran Colombia Gold, S.A. ("Gran Colombia") in exchange for the issuance of securities of Tapestry, by way of a three-cornered amalgamation and changed its name to Gran Colombia Gold Corp.

The TSX Venture Exchange (the "Exchange") has granted final approval of the Transaction. Trading in the common shares (the "Common Shares") and warrants (the "Warrants") of the Company on the Exchange is anticipated to commence under its new name at market open on August 24, 2010. The Common Shares will trade under the symbol "GCM" and the Warrants will trade under the symbol "GCM.WT".

Private Placement

Prior to the completion of the Transaction, Gran Colombia completed a private placement of subscription receipts (the "Subscription Receipts") of Gran Colombia (the "Private Placement"). Pursuant to the Private Placement, Gran Colombia issued 687,500,000 Subscription Receipts for gross proceeds to Gran Colombia of $275,000,000. Each Subscription Receipt was automatically exchanged, without payment of any additional consideration and with no further action on the part of the holder thereof, for one unit of Gran Colombia (each a "Unit"). Each Unit consisted of one common share of Gran Colombia and one half of one common share purchase warrant of Gran Colombia. GMP Securities L.P. (the "Agent") acted as agent in respect of the Private Placement on a "best efforts" basis. For the Agent's services in connection with the Private Placement, Gran Colombia paid the Agent a cash commission equal to 6.0% of the gross proceeds of the Private Placement and granted to the Agent compensation options entitling the Agent to subscribe for 41,250,000 Units at $0.40 per Unit for a period for two years.

Frontino Acquisition

On August 17, 2010, Gran Colombia loaned COP372,500,000,000 (comprising COP365,000,000,000 advanced on August 17, 2010 and COP7,500,000,000 relating to half of the COP15,000,000,000 deposit already paid, together the "Principal Amount", such amount being approximately US$200 million) from the proceeds of the Private Placement to Zandor Capital, S.A. ("JVCo"), a wholly-owned Panamanian subsidiary of Medoro Resources Ltd. ("Medoro") under a convertible promissory note (the "Convertible Note"). JVCo used these funds to complete, on August 18, 2010, the acquisition of all of the assets (the "Frontino Acquisition") of Frontino Gold Mines Ltd. ("Frontino"). On August 19, 2010, the Principal Amount was converted into such number of shares of JVCo that resulted in Gran Colombia holding a 95% interest in JVCo with Medoro retaining a 5% interest in JVCo. Concurrent with the conversion of the Convertible Note, Gran Colombia, Medoro and JVCo entered into an Exploration, Development and Mine Operating Agreement and Shareholders' Venture Agreement (the "Joint Venture Agreement") setting out the parties' rights and obligations with respect to their ownership in the shares in the capital of JVCo. The Joint Venture Agreement includes, among other provisions, the back-in right pursuant to which Medoro has the right to increase to a 50% interest in JVCo within one year.

Pursuant to the terms of the Frontino Acquisition agreement, the liquidator responsible for the sale of the Frontino assets is required to use the proceeds from the disposition of the Frontino assets to fund unpaid and accrued pension liabilities estimated to amount to approximately US$200 million. This is expected to be accomplished through the assignment of these pension obligations to the Colombian Social Security Institute (the "ISS"), a governmental entity responsible for the administration and payment of the pension obligations. As of the date of the closing of the Frontino Acquisition, the ISS had not completed the necessary calculations required in order to formally accept the assignment of the pension obligations. Consequently, JVCo has agreed with the Frontino liquidation advisory board that if, within twelve months from closing the Frontino Acquisition, the ISS does not accept the assignment of the pension obligations, JVCo will arrange for a private firm to accept these obligations. If required to do so, assigning the pension obligations could result in the payment of additional fees to the private provider, which fees have not yet been calculated but which have been estimated to cost up to US$35 million. While the amount required to fund the pension obligations (being approximately US$200 million) will be held in escrow until the obligations are assigned to the ISS or a private provider, if a private provider is required JVCo would have the obligation to pay the additional fees of up to US$35 million. As of the date hereof, Gran Colombia has no reason to believe that the ISS will not assume the pension obligations and therefore anticipates that a private provider will not be engaged, thereby eliminating the need to pay any additional fees. Accordingly, the Company believes the risk that additional fees will have to be paid is remote.

The Frontino assets are located approximately 220 kilometres northeast of Medellin. For additional information see the filing statement of Tapestry dated August 12, 2010 in respect of the Transaction (the "Filing Statement") and the technical report in respect of the Frontino Project authored by Scott E. Wilson and Stewart D. Redwood dated June 9, 2010.

Other Acquisitions

The Company has also entered into agreements to acquire interests in the following other mining projects: (1) the El Zancudo Project, located in the Titiribi mining district in Antioquia, Colombia; (2) the Concepción Project, located in the municipalities of Concepción, San Vicente, El Penol and Barbosa in the Antioquia Department of Colombia; (3) the Mazamorras Project, which is located in the department of Narino; and (4) the Carla Gran Colombia Project, located in Segovia and Remedios municipalities of Antioquia. For additional information see the Filing Statement, the technical report on the El Zancudo Project prepared by Stewart D. Redwood dated April 6, 2010, the technical report on the Concepción Project prepared by Stewart D. Redwood dated May 31, 2010, the technical report on the Mazamorras Project prepared by SRK Exploration Services Limited dated May 2010 and the technical report on the Carla Gran Colombia Project dated prepared by SRK Exploration Services Limited dated June 18, 2010.

Reverse Takeover

Upon the closing of the Transaction, the securities issued pursuant to the Private Placement were exchanged for Common Shares and Warrants on a one-for-one basis. Each such whole Warrant entitles the holder to purchase one additional Common Share at an exercise price of $0.65 per share for a period of five years.

Pursuant to the terms of the amalgamation agreement governing the amalgamation and the terms of the agency agreement dated July 27, 2010 entered into among the Agent, Tapestry and Gran Colombia in connection with the Private Placement, each holder of Common Shares following the completion of the Transaction who was a Gran Colombia shareholder prior to the completion of the Private Placement is restricted from selling, transferring or otherwise disposing of a 25% tranche of such Common Shares until each of the dates that is 30, 60, 90 and 120 days from the date the Common Shares are listed and posted for trading on the Exchange.

Pursuant to the requirements of the Exchange, 25,876,660 Common Shares will be subject to a value security escrow agreement, with 25% of such Common Shares being released from escrow every six months following receipt of final Exchange approval of the Transaction. An additional 1,737,500 Common Shares will be subject to a four month Exchange hold period commencing on the date of the Transaction. Another 11,083,340 Common Shares will be subject to an Exchange hold period of one year, with 20% of such Common Shares to be released immediately and an additional 20% every three months thereafter.

Gran Colombia's Directors and Senior Management

Following the closing of the Transaction, the following individuals will serve as directors of the Company: Serafino Iacono, Miguel de la Campa, Maria Consuelo Araujo, José Francisco Arata, Jorge Neher, Ronald Pantin, Robert Hines, Stephen Wilkinson and Ricardo Lozano. The Company's senior management will be comprised of Serafino Iacono (Executive Co-Chairman), Miguel de la Campa (Executive Co-Chairman), Mario Consuelo Araujo (Chief Executive Officer), Michael Davies (Chief Financial Officer), José Oro (Chief Operating Officer) and Peter Volk (General Counsel and Secretary).

Directors, officers and consultants of the Company as well as certain charities have been granted options to acquire 40,500,000 Common Shares at an exercise price of $0.40.

Additional Information

In connection with the Transaction, the board of directors of the Company approved the termination of the Company's engagement with Watson Dauphinee & Masuch and approved the appointment of KPMG LLP as its auditor. The board of directors also approved the financial year end as December 31.

Additional details regarding the Transaction, including with respect to the business and properties of the Company, are contained in the Filing Statement, copies of which are available under the Company's profile on SEDAR at www.sedar.com.

About Gran Colombia Gold Corp.

Gran Colombia Gold Corp. is a Canadian-based exploration, development and mining company focused on acquiring gold properties of merit to bring to production, with primary emphasis on Colombia. The Company owns interests in five exploration and mining projects, including a 95% interest in the Frontino gold mine, currently producing approximately 55,000 ounces of gold annually. These properties, located in the Antioquia and Narino departments of Colombia, are mostly contiguous and are all part of the same geological system.

Forward Looking Information

This news release contains forward-looking information with respect to: (i) the commencement of trading of the Company's common shares and warrants on the Exchange; (ii) the payment of additional fees by the Company in connection with the administration of the pension liabilities; and (iii) changes to the Company's auditor and financial year end. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such forward-looking information. No assurance can be given that such results or events will occur in the disclosed time frames or at all.

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 news release

%SEDAR: 00003116E

SOURCE Gran Colombia Gold Corp.

For further information: For further information: Peter Volk, General Counsel & Secretary, (416) 360-4653 x223

Organization Profile

Gran Colombia Gold Corp.

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