VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug 1, 2013) - Colombia Crest Gold Corp. ("Colombia Crest"; the "Company") (TSX VENTURE:CLB)(ECRTF)(FRANKFURT:EAT) is pleased to announce that it has reached a second Amended Fredonia Agreement with Grupo de Bullet to earn a 75% interest in its Colombian mineral exploration concessions. The original Fredonia Agreement with Grupo de Bullet ("Bullet") is described in the news release of August 18, 2010. Colombia Crest will also open up funding to raise $300,000 at a purchase price of $0.015 per Unit to fund continued operations and property payments, as further detailed below.
To date, Colombia Crest has earned a 50% interest in the Fredonia group of concessions. The next milestone is to reach 75% interest ownership. The original Agreement required a bankable feasibility study by March 28, 2019 to reach the 75% ownership. Under the newly Amended Agreement, Bullet has agreed to allow Colombia Crest to earn 75% by spending a minimum of US$5 million and by reaching a minimum of one million ounces of gold in the measured and indicated status, or complete the feasibility study before 2019. This Amended Agreement gives Colombia Crest a much clearer milestone to deliver.
"The flexibility and rapid response time of Grupo de Bullet in working to amend this agreement has been a true testament to their understanding of these difficult markets and their commitment to helping their partners in Colombia," commented Hans Rasmussen, President and CEO. "This amended agreement gives us the flexibility to add ounces over time and achieve a realistic milestone by 2019."
As part of the Fredonia land package, the Company wishes to also announce that it has returned concession 7340 to Grupo de Bullet - it consists of about 1,999.6 hectares. Therefore, under the Fredonia Agreement with Grupo de Bullet SA, Colombia Crest now retains the rights to explore 9 concessions, which includes six Technical Studies and three Contracts, covering approximately 13,123 hectares.
Venecia Project, Colombia
On April 2, 2013, Colombia Crest announced that it had reached an Amended Agreement for the 1,985 hectare Venecia Project with Colombian Mines Corporation (TSX VENTURE:CMJ) whereby cash payments could be spread out over the remainder of 2013. However, as a result of a US$25,000 cash payment not met in July, Colombia Crest was given a notice of default of the Venecia Agreement and was provided 30 days from July 29, 2013, to rectify the default or the Venecia Agreement will be terminated.
"We will do everything in our power to raise funds in the next 30 days to meet this cash payment obligation and others that are coming in Colombia," commented Hans Rasmussen, President and CEO. "Our intention is to meet our contractual obligations with Colombian Mines Corporation and Grupo de Bullet, despite the headwinds created by an oversold junior exploration equity market. Our assets in Colombia have the same intrinsic value now has they had two years ago when we began exploring, but the market sentiment has changed considerably in that time. Thus, we feel that persistence is the only solution and that soon the markets will recover."
Private Placement Financing
In order to meet certain expenditure requirements in Colombia, including the Venecia Concession payment described above, the Company reports that it will pursue a non-brokered private placement of units (each a "Unit") at the price of $0.015 per Unit to raise gross proceeds of $300,000. Each Unit will be comprised of one common share and one transferable share purchase warrant. Each warrant will entitle the holder to purchase one additional common share at the price of $0.05 for one year after Closing, $0.10 during the second year after Closing and $0.15 during the third year after Closing.
Proceeds from the financing will be used mainly for maintaining the Company's Colombian concessions. The Company will pay finders' fees in respect of a portion of the financing in accordance with the policies of the TSX Venture Exchange. The proposed private placement and finder's fees are subject to TSX Venture Exchange acceptance. All shares issued pursuant to the offering, and any shares issued pursuant to the exercise of warrants will be subject to a four-month hold period from the Closing date.
About Colombia Crest Gold Corp.
Colombia Crest Gold Corp. is focused on systematically exploring, developing and monetizing promising new gold projects in Colombia. The Company is currently carrying on exploration programs at the Fredonia and Venecia projects where it has optioned over 15,000 hectares located approximately 40 km south of the city of Medellín, in Antioquia Province. The properties are positioned within the Middle Cauca Belt, the most prolific gold belt in Colombia with more than 500 years of gold mining history and several new gold discoveries.
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Please visit the Company's website at www.ColombiaCrestGold.com.