SOURCE: Colombia Goldfields Ltd.

August 25, 2006 16:25 ET

Colombia Goldfields Increases Interest in the Marmato Mountain Development Project to 75%

TORONTO -- (MARKET WIRE) -- August 25, 2006 -- Colombia Goldfields Ltd. (OTCBB: CGDF) is pleased to announce that the company has both amended its agreement to purchase RNC (Colombia) Limited ("RNC") and has exercised its option to increase its interest in RNC from 50% to 75% ownership.

RNC is currently developing the Marmato Mountain Development Project in the Republic of Colombia, S.A. and owns Compania Minera deCaldas, S.A. ("Caldas"), a Colombian corporation that (i) owns certain mining rights, and (ii) has options to acquire mining rights, all located in the Zona Alta portion of the Marmato Mountain Development Project.

Under the new terms of the amended purchase agreement, Colombia Goldfields has increased its interest in RNC to 75% by issuing an additional 4.2 million shares of Colombia Goldfields restricted common stock and paying $200,000 to the seller, Investcol Limited. The company has also agreed to lend an additional US$5.0 million to the project in tranches by December 31, 2006 and provide sufficient funds to RNC, upon terms satisfactory to Colombia Goldfields, to complete a full bankable feasibility study.

As well, Colombia Goldfields now has the option to acquire the remaining 25% interest in RNC on or before May 1, 2009 for a purchase price equal to 25% of the value of Caldas determined by a bankable feasibility study. However, now the maximum purchase price to be paid is capped and shall not exceed $15,000,000 plus 4,000,000 shares of Colombia Goldfields common stock. Payment of the $15,000,000 portion of the purchase price can now be made by Colombia Goldfields in either cash or common stock, or any combination thereof.

Colombia Goldfields CEO J. Randy Martin stated, "The Marmato Mountain project has continued to exceed our expectations. As well, we are extremely pleased to have minimized our short term cash outlay to purchase an additional 25% of this project and to establish a maximum purchase price on the remaining 25% portion."

For the full terms, interested investors are encouraged to review the company's recent 8-K filing at www.sec.gov and visit our website at: www.colombiagoldfields.com.

On behalf of the board

Harry Hopmeyer - Chairman
Colombia Goldfields Ltd. (OTCBB: CGDF)
8 King Street East, Suite 208
Toronto, Ontario, M5C 1B5

B: 416-203-3856
F: 416-365-1828
info@colombiagoldfields.com
www.colombiagoldfields.com
About Colombia Goldfields:

Colombia Goldfields' experienced management team seeks to develop gold and silver deposits by applying modern technology to an expanding portfolio of mining properties in the heart of Colombia's historic Marmato Mountain gold district. The company has acquired an option to earn a 100% interest in eight gold exploration projects located in an area stretching from 3 to 7 km from the base of Marmato Mountain. Collectively known as the Caramanta Exploration Projects, the company can earn its 100% interest by spending US$3 million on exploration over a three-year period (see 8K dated September 28, 2005). Colombia Goldfields has also acquired a 75% interest in the Marmato Mountain Development Project and has the option to acquire the remaining 25% interest.

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.

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