Columbus Gold Corporation
TSX VENTURE : CGT

Columbus Gold Corporation

December 06, 2011 09:00 ET

Columbus Gold to Purchase Outright 100% Interest in 1.9 Million oz. Paul Isnard Gold Project; Terminates Earn-in Requirement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 6, 2011) - Columbus Gold Corp. (TSX VENTURE:CGT) ("Columbus Gold") is pleased to announce that it has executed an amending agreement (the "Amendment") that provides for Columbus Gold to accelerate its ability to earn-in to the Paul Isnard gold project in French Guiana. With the Amendment, Columbus Gold is now able to acquire an immediate 100% interest to the project by paying US$1.5 million to Auplata SA ("Auplata"). For clarity, Columbus Gold will no longer be required to complete minimum exploration expenditures nor complete a bankable feasibility study. The Paul Isnard Project includes the 43-101 compliant 1.9 million ounce Montagne d'Or inferred gold deposit.

Robert Giustra, Chairman & CEO of Columbus Gold, stated: "This latest amendment results in an acquisition cost of about US$5.30 per ounce for 1,890,000 inferred ounces, which is a very impressive achievement in an environment of historically high gold prices. In addition, the deal removes any doubt respecting our ability to achieve a 100% interest in the project. Combined with the recent news concerning the reduction of the underlying royalty, it is not unreasonable to point-out that this project has been materially de-risked. We are now prepared to proceed with an aggressive drilling campaign."

Columbus Gold originally had the right to earn an initial 51% interest in the Paul Isnard project over a two year period, by issuing shares and by incurring minimum exploration expenditures of US$7 million and could earn-up to 100% by completing a bankable feasibility study. The share issuances have been satisfied, however, pursuant to the Amendment the remaining requirements have been cancelled. In connection with the Amendment, the two-year escrow imposed on 67% of Auplata's shares in Columbus Gold remains intact, however Auplata now has the ability to engage Columbus Gold to locate a purchaser for a requested number of shares, and if a purchaser is so located within a 30-day period Auplata will be forced to sell such shares pursuant to the terms of its request. If Columbus Gold is unable to locate a purchaser for some of the requested shares within the 30-day period, such shares will be released from escrow to Auplata. The Amendment is subject to TSX Venture Exchange approval and non-objection by relevant French authorities.

Drilling at Paul Isnard will focus on the Montagne d'Or gold deposit where holes will be drilled up to 200 metres depth with the goal of increasing the mineral resources, and where infill drilling is expected to convert Inferred resources to Measured and Indicated categories. Future drill programs will target the eastern and western extensions of the Montagne d'Or deposit where more than 2.5 km of strike provides expansion potential, and will test numerous underdeveloped gold prospects and undrilled geochemical anomalies which occur throughout the project area.

The Paul Isnard gold project includes the 43-101 compliant 1.9 million ounce Inferred gold resource in the Montagne d'Or gold deposit which consists of 36.7 million tonnes grading 1.6 gpt. The Montagne d'Or gold deposit is open along strike and at depth. The project is located approximately 180 km west of the capital city of Cayenne, French Guiana and has been an important centre of alluvial and colluvial gold mining operations since the late 19th century with reported estimated production of about two million ounces.

The project occurs within the northernmost of two east-west trending Proterozoic greenstone belts making up the French Guiana sector of the Guiana Shield. Modern exploration at Paul Isnard includes geological, geochemical and geophysical surveys, and diamond core drilling carried out primarily from 1996 to 1999. Most of this work included 54 holes for 10,600 metres directed at the Montagne d'Or gold deposit which consists of a linear mineralized body within laminated felsic volcanic rocks outlined and partially delineated for a strike length of 2,000 metres and an average depth of 100-150 metres. The deposit consists of two closely spaced, mineralized layers, respectively averaging about 50 and 17.5 metres in thickness, and multiple smaller, sub parallel gold-bearing bands and stringer zones.

Columbus Gold's independent consultant and Qualified Person, John Prochnau (P. Geo), B.Sc. (Mining Engineering), M.Sc. (Geology), has reviewed and approved the technical content of this news release.

About Columbus Gold

Columbus Gold is a gold exploration and development company operating in French Guiana and Nevada. In French Guiana, Columbus Gold recently acquired an option to earn a 100% interest in the Paul Isnard gold project, which has a 43-101 compliant 1.9 million ounce inferred gold resource and substantial expansion potential. In Nevada, Columbus is a prolific project generator focused on advancing projects either through joint-venture with industry partners or on its own where exploration risk is minimized and potential is particularly promising. Columbus Gold's president, Andy Wallace has a long and successful history of gold discovery and mine development. The company currently has 12 of its 25 strategically located gold projects in Nevada joint-ventured to major and junior mining companies.

ON BEHALF OF THE BOARD,

Robert F. Giustra, Chairman & CEO

This release contains forward-looking information and statements, as defined by law including without limitation Canadian securities laws and the "safe harbor" provisions of the US Private Securities Litigation Reform Act of 1995 ("forward-looking statements"), respecting the Amendment, the underlying agreement (with the Amendment, the "Agreement"), the closing share issuances, the timing of closing, and the conditions precedent in connection therewith. Forward-looking statements involve risks, uncertainties and other factors that may cause actual results to be materially different from those expressed or implied by the forward-looking statements, including without limitation the ability to obtain regulatory and TSX Venture Exchange approval of the transactions contemplated under the Agreement, in particular obtaining those in time for a June 2011 closing; Columbus Gold's willingness to complete the transactions on the above terms; the ability to obtain applicable exemptions from prospectus and registration requirements in connection with the issuance of securities of Columbus Gold; the ability to satisfy the conditions precedent contained in the Agreement, including without limitation the ability to obtain a positive title opinion, TSX Venture Exchange approval, and the Pelican private placement in particular in time for a June 2011 closing; the ability to obtain alternate financing; changes in the market; decisions respecting whether or not to pursue the transactions contemplated under the Agreement; non-performance by contractual counterparties; and general business and economic conditions. Forward-looking statements are based on a number of assumptions that may prove to be incorrect, including without limitation assumptions about: general business and economic conditions; that Columbus Gold and Auplata will be able to successfully complete the conditions precedent to the Agreement; that Columbus Gold will desire to continue earning into the Property over time; the ability to locate sufficient financing for ongoing operations; and general market conditions. The foregoing list is not exhaustive and we undertake no obligation to update any of the foregoing except as required by law.

Neither the 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.

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