C2C Gold Corporation Inc.
TSX VENTURE : CCN

C2C Gold Corporation Inc.

October 09, 2009 14:33 ET

Resignation of Jhinson Machuca from Board of Directors, Legal Proceedings Involving Ecuadorean Partner

QUEBEC CITY, CANADA--(Marketwire - Oct. 9, 2009) - Further to our last Press Release of September 8th, 2009, when C2C Gold Corporation Inc. (TSX VENTURE:CCN) announced arbitration proceedings in Ecuador with Andres David Machuca Granda, representing our Ecuadorean JV Partner, Minera Beloro, in order to resolve our differences, we have to unfortunately report that we have been unable to reach a positive settlement of our differences. Payment of $1,200,000 US dollars as of July 31st, representing production net profit share due to C2C Ecuador by virtue of our JV Agreement, still unpaid and outstanding since February, is now unlikely to be voluntarily paid by our JV Partner. Furthermore, our JV Partner has put C2C Ecuador into default when we refused to pay $200,000 US dollars due to Mr. Andres David Machuca Granda under the terms of the JV Agreement. Instead of going into arbitration to resolve our differences, as per terms and conditions of our Agreement, our local partner decided unilaterally to terminate the JV as of September 6th. During the past months, we have been attempting to reconcile our differences, but to no avail from our partner.

Given the lack of collaboration on the part of Andres David Machuca Granda, de facto owner of the mine, his nephew Jhinson Machuca Loaiza, has decided to resign from the Board of Directors of C2C Gold, as of September 30th, 2009. His resignation was accepted, and we informed him that we understood his motivations, namely fear of legal action against him personally, he would nevertheless be liable as a Board Member, should there be any action taken against him, being a related party to our JV Partner.

On Monday October 5th, we have sent a team of representatives of our strategic investors to Ecuador as our "ambassadors" who could potentially resolve the impasse, but again this effort has been fruitless. After two days of negotiations in Ecuador, Andres David Machuca Granda was not receptive to consider any settlement or new Agreement.

Because of the lack of collaboration and actions on the part of Andres David Machuca Granda, our negotiations with European investors to subscribe to the Gold Loan previously announced, are terminated. We are now constrained to initiate legal proceedings against Minera Beloro and against Andres David Machuca Granda.

We will seek the full powers of the legal system, in both Ecuador and Canada, to recuperate our investment and will obtain compensation for damages inflicted, the whole in order to fairly represent the interests of our shareholders.

Separately, we are conducting an internal inquiry into the role and responsibility, if any, of the previous President and CEO as well as Machuca's advisors, to determine if their actions may have been irremediably detrimental to the rapid deterioration of the situation.

In light of the foregoing, this will inevitably seriously impact the cash flow of C2C in the short term, but current management has already identified other high valued properties which could be acquired in a near future. C2C will soon announce a hard cash financing in order to stabilize its financial position and move forward with other projects.

About C2C

C2C is an active gold producer working in southwestern Ecuador through a Joint Venture exploiting the Paraiso-Pambil gold mine-mill complex.

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 release.

For further information, please join us on a Conference Call initiated by our Chairman Louis Lessard scheduled on Tuesday, October 13th at 9:00 EST.

Dial-In number: (514) 392-3301 or +1 (866) 392-3211 conference: 9654556#

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