TORONTO, July 25, 2012 /CNW/ - Gran Colombia Gold Corp. (TSX: GCM)
announced today that Gran Colombia Gold SA, a subsidiary of Gran
Colombia, has entered into a share purchase agreement with Andean
Minerals and Metals Corp., a privately held Panamanian company, in
connection with the proposed disposition of its Mazamorras Project to
Andean for consideration of US$5,500,000, as described below.
The Mazamorras Project is an early stage gold-copper exploration project
located in the Department of Nariño, Colombia. The Project includes
four concessions covering approximately 5,976 hectares and was
purchased by Gran Colombia in 2010. The Company ceased exploration
activities at the Mazamorras Project in October 2011 and has not
allocated any exploration resources to the Project in 2012.
Pursuant to the Share Purchase Agreement, Andean will purchase 100% of
the issued and outstanding share capital of "Mazamorras Gold SA", a
subsidiary of Gran Colombia which holds the Mazamorras Project. As
consideration, Gran Colombia will receive an aggregate cash payment of
US$3,500,000 (US$1,000,000 to be paid on closing, and five installments
of US$500,000 each to be paid on the dates that are three months, six
months, twelve months, eighteen months and twenty four months from the
date of closing); and common shares and warrants of Andean equal to 5%
of the current issued and outstanding share capital of Andean. Andean
will also pay the remaining US$2,000,000 of the purchase price to the
original vendor of the Project and will assume all remaining
obligations under the original purchase agreement of the Mazamorras
Project. Such obligations include a remaining exploration commitment
of US$2,000,000 and a 2.5% net smelter return royalty on any production
from the Project payable to the original vendor of the Project. The
transaction is expected to close on September 15, 2012.
José R. Oro, the former Vice President, Exploration and Corporate
Development of Gran Colombia, who resigned from the Company effective
June 30 2012, is the President of Andean Minerals and Metals Corp.
Maria Consuelo Araujo, Chief Executive Officer of Gran Colombia,
commented: "This transaction is in line with Gran Colombia's strategy
of focusing on our Segovia and Marmato projects and will strengthen our
balance sheet. We are pleased that José Oro and Andean will be taking
over this project. We thank José Oro for his invaluable contribution to
Gran Colombia and wish him the best in his new project. We are
confident that Andean has the exploration and development expertise and
financial resources required to advance the Mazamorras Project and
through our stake in Andean, we will be able to participate in any
potential upside of the Mazamorras Project."
About Gran Colombia Gold Corp.
Gran Colombia is a Canadian-based gold and silver exploration,
development and production company with its primary focus in Colombia.
Gran Colombia is currently the largest underground gold and silver
producer in Colombia with several underground mines in operation at its
Segovia and Marmato operations. In addition, Gran Colombia is advancing
a project to develop a large-scale, gold and silver mine at its Marmato
Additional information on Gran Colombia can be found on its website at
www.grancolombiagold.com and by reviewing its profile on SEDAR at www.sedar.com.
Cautionary Statement on Forward-Looking Information:
This news release contains "forward-looking information", which may
include, but is not limited to, statements with respect to the future
financial or operating performance of the Company and its projects.
Often, but not always, forward-looking statements can be identified by
the use of words such as "plans", "expects", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates", or
"believes" or variations (including negative variations) of such words
and phrases, or state that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be achieved.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Gran Colombia to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements. Forward-looking statements
contained herein are made as of the date of this press release and Gran
Colombia disclaim, other than as required by law, any obligation to
update any forward-looking statements whether as a result of new
information, results, future events, circumstances, or if management's
estimates or opinions should change, or otherwise. There can be no
assurance that forward-looking statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, the reader is cautioned
not to place undue reliance on forward-looking statements.
SOURCE: Gran Colombia Gold Corp.
For further information:
VP, Investor Relations