News Releases

Columbus Restructures Royalty on 1.9 M oz. Paul Isnard Gold Project, French Guiana

December 5, 2011

Vancouver, British Columbia, Canada, December 5th, 2011. Columbus Gold Corporation (CGT: TSX-V) (“Columbus Gold”) is pleased to announce that it has entered into an agreement (the “Agreement”) with Euro Ressources S.A. (“EURO”) pursuant to which Columbus Gold has purchased an option (the “Option”) to acquire the existing outstanding royalty (the “Existing Royalty”) on the Paul Isnard Gold Project (“Paul Isnard Project”) currently held by EURO. EURO is a majority-owned subsidiary of IAMGOLD with a direct ownership of approximately 86%.

Robert Giustra, CEO of Columbus Gold, commented: “This transaction is a significant step forward for Columbus Gold in the advancement of the Paul Isnard Project. By restructuring the royalty to industry standard terms, we have significantly improved the economic potential of the asset. In addition, we welcome EURO as a stakeholder and a future significant shareholder and look forward to maintaining a strong relationship to advance the project.”

Under the terms of the Agreement, the Option is exercisable by Columbus or EURO prior to July 30, 2015 after Columbus meets certain conditions, including having earned a 100% interest in the Paul Isnard Project, for consideration to EURO consisting of $4.2 million cash, issuance of 12,865,600 Columbus Gold common shares (subject to adjustment in certain circumstances) (the “Share Consideration”), and delivery of an agreement in respect of a revised net smelter returns royalty on the Paul Isnard Project of (i) 1.8% net smelter returns (“NSR”) on the first 2 million ounces of gold produced, and; (ii) 0.9% NSR on the next 3 million ounces produced (the “Revised Royalty”). No ongoing royalty will be payable once gold production reaches 5 million ounces. This is a material improvement from the terms of the Existing Royalty which are significantly more onerous, and would require Columbus to pay 10% of the gold price, in excess of US$400 per ounce, on the first 2 million ounces of production and 5% of the gold price, in excess of US$400 per ounce, on the next 3 million ounces produced. For example, using a gold price of $1,500 per ounce, the royalty payable under the Existing Royalty would be US$110 per ounce (calculated on the initial 2 million ounces). By comparison, assuming a NSR of US$1,500 per ounce, the royalty payable under the Revised Royalty would be only US$27.00 per ounce (calculated on the initial 2 million ounces).

As consideration for entering into the Agreement, Columbus has agreed to make a $250,000 payment to EURO consisting of $83,333 cash and $166,667 worth of Columbus common shares to be issued at the 20-day volume weighted average price, to be paid upon receipt of approval by the TSX Venture Exchange.

The Share Consideration is subject to adjustment in the event that the Company issues equity at a price lower than a deemed issue price of $0.653 per share (prior to exercise of the Option), or if the 20-day volume weighted price at the time the option is exercised is less than the deemed issue price. In any event, the Share Consideration will not exceed 19.9% of the issued and outstanding shares of Columbus at the time of exercise. In the event the Share Consideration is subject to such cap, the difference in value calculated using the prevailing 20-day volume weighted average price will be paid to EURO in cash.

Cormark Securities Inc. acted as financial advisor to Columbus on this transaction. The Agreement is subject to approval by the TSX Venture Exchange. 


Robert 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.

For more information contact:

Investor Relations
604-634-0970 or

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 Option and the consideration due thereunder and regarding production at the Paul Isnard Project. 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 that the TSX Venture Exchange will not approve the transactions surrounding the Option; that Columbus Gold will not exercise the Option; the ability to acquire necessary permits and other authorizations; the ability to locate sufficient prospectus and registration exemptions to allow Columbus Gold to issue shares in connection with the Option exercise; that production may never occur at the Paul Isnard Project; environmental compliance; cost increases; availability of qualified workers and drill equipment; competition for mining properties; risks associated with exploration projects, mineral reserve and resource estimates (including the risk of assumption and methodology errors); dependence on third parties for services; non-performance by contractual counterparties; title risks; 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: that the TSX Venture Exchange will approve the Option; that Columbus Gold will ultimately exercise the Option; that the consideration underlying the Option will be roughly consistent to that expressed in this news release and will not be materially different due to adjustments that may be required as disclosed herein; that Columbus Gold will identify and employ prospectus and registration exemptions required in connection with share issuances due under the Option; that Columbus Gold will hold necessary capital to make the cash payment due under the Option when and if due; that production may occur at the Paul Isnard Project; general business and economic conditions; the timing and receipt of required approvals; availability of financing; power prices; ability to procure equipment and supplies including without limitation drill rigs; and ongoing relations with employees, partners and joint venturers. The foregoing list is not exhaustive and Columbus Gold undertakes no obligation to update any of the foregoing except as required by law.

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