Vancouver, British Columbia, Canada, February 14th, 2011. Columbus Gold Corporation (CGT: TSX-V) (the “Company” or “Columbus Gold”) is pleased to announce that it has satisfied another condition precedent in its proposed acquisition of the Paul Isnard gold project in French Guiana, first announced on December 3rd, 2010, through completion of its due-diligence on the proposed acquisition.
The Paul Isnard gold project includes the Montagne d’Or gold deposit which consists of 1.9 million ounces gold from 36.7 million tonnes grading 1.6 gpt. The Montagne d’Or gold deposit is open along strike and at depth.
The agreement governing the terms of the proposed acquisition (the “Agreement”) contains additional conditions precedent including, among other things: obtaining a positive title opinion in connection with the Paul Isnard property; the completion of a US$2 million fundraising by Columbus Gold; non-objection by the French Government; and stock exchange, shareholder, and regulatory approvals.
In connection with its due-diligence, Columbus Gold has met with key government officials in both France and French Guiana (a Department of France) and reviewed the French Mining Code and proposed new mining legislation which is in the final stages of consultation, and is expected to be submitted for vote by the Supreme Court of France in 2011 or 2012, known as the Scheme of Mining Orientation and Management of French Guiana, or SDOM.
The dual objectives of the SDOM are to encourage economic development in French Guiana while protecting its environment. In part to accomplish these goals, the SDOM provides increased security of land tenure and clarifies mineral development guidelines, and assigns lands in French Guiana to 1 of 5 classification requiring varying levels of environmental and other obligations for mining companies. Pursuant to the SDOM, the Montagne d’Or gold deposit lies within an area classification proposed to allow open-pit mining under certain conditions that include: the requirement to demonstrate the identification of a viable mineral deposit; the completion of an Environmental Impact Study and Reclamation Plan; and possible additional reclamation, or environmental investigations as may be required for the public interest, on or off site. A map depicting the SDOM classifications in the Paul Isnard Project area can be viewed at the following link:
The Paul Isnard project is located approximately 180 km west of the capital city of Cayenne, French Guiana and consists of eight mining permits totaling 135 km2 and a pending application for two additional mining permits totaling a further 14.4 km2. The Paul Isnard project area 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. The greenstone terrain hosts important gold deposits in French Guiana and neighboring countries, including Rosebel in Suriname, and is generally considered to represent an extension of the productive and much more extensively explored and developed Birimian System greenstone belts of West Africa.
Modern exploration focused on primary gold mineralization at Paul Isnard has been limited but includes geological, geochemical and geophysical surveys, and 75 diamond core holes totaling 12,983 metres, carried out by Golden Star Resources largely from 1995 to 2007. Most of this work, including 60 holes for 11,454 metres, has been 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 3,000 metres and dip length up to 200 metres. The deposit consists of two closely spaced, mineralized layers, respectively averaging about 65 and 35 metres in thickness, and multiple smaller, sub parallel gold-bearing bands and stringer zones.
The Columbus program will be focused on the Montagne d’Or deposit where infill drilling is planned to convert Inferred resources to Measured and Indicated categories, and holes drilled at greater depths and along strike are planned in order to increase the mineral resources. Numerous less developed gold prospects and untested geochemical anomalies which occur throughout the project area will also be evaluated.
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.
ON BEHALF OF THE BOARD,
Robert F. Giustra
Chairman & CEO
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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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 Agreement, the conditions precedent in connection therewith, and the SDOM, including when and whether it will be approved and the content thereof. 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, shareholder, and TSX Venture Exchange approval of the transactions contemplated under the Agreement; the ability to pass the transactions contemplated under the Agreement through applicable French law; the ability to obtain a positive title opinion on the property; the ability to satisfy the other conditions precedent in the Agreement; the ability to obtain applicable exemptions from prospectus and registration requirements in connection with the issuance of securities of the Company in connection with the Agreement and the fundraising required thereunder; the ability to complete milestones under the Agreement (if ultimately approved) in order to earn into the property, including without limitation the ability to obtain qualified workers, financing, permits, approvals, equipment, and ultimately a Bankable Feasibility Study in connection therewith; ability to obtain alternate financing; general political risk in France and French Guiana; changes that may be made to the SDOM in connection with its review process in France and French Guiana; that the SDOM may not be put forward for a vote in its current form or otherwise; that the SDOM may be put forward to a vote and not approved, or approved with changes that may or may not be beneficial to the Company; changes in the market; decisions respecting whether or not to pursue the transactions contemplated under the Agreement (either at the pre-approval stage, or post-approval stage, if ultimately approved); 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 the Company and Auplata will be able to successfully complete the conditions precedent to the Agreement, including without limitation the ability to obtain a positive title opinion, complete required fundraisings, and the ability to obtain regulatory, TSX Venture Exchange, and shareholder approval of the transactions contemplated under the Agreement; that the SDOM will be put forward for approval in its current form or in a form that is substantially similar thereto; that the SDOM will be approved through the required voting mechanism; that France and French Guiana will remain stable political environments; that the Company will be able to complete necessary milestones under the Agreement in a timely and successful fashion; that French law will allow the transactions contemplated under the Agreement to succeed; that the Company 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.