January 13, 2011

TORONTO, Jan. 13 /PRNewswire/ – Gran Colombia Gold Corp. (TSX: GCM) is pleased
to provide an operational and exploration update and announce drill
success at two new veins. The Company owns five production and
exploration gold projects located in the central and southern parts of
Colombia – Gran Colombia (formerly known as the Frontino Gold Mines),
Segovia, Zancudo, Providencia and Mazamorras. 

Maria Consuelo Araujo, Chief Executive Officer of the Company,
commented:  “Gran Colombia Gold is focused on ramping up production at
the Gran Colombia mine and growing the Company’s ore resources and
reserves.  We have made significant progress at all the properties we
own and we are on target to reach our production goals while confirming
further exploration targets across the portfolio. We are also extremely
pleased to have made two new discoveries at veins never before
explored, with the Marmajito vein grading 43.7g/t gold in a 0.4 m
intercept and a second vein grading 34.4 g/t in a 0.6 metre intercept
at the Providencia Mine.”

With the objective of identifying new ore blocks that may have the
potential to be exploited in the short to medium term, the Company has
initiated surface exploration work and diamond drilling at each
property with the objective of working toward a NI 43-101 compliant
technical report.  Currently, three drill rigs are operating at the
Gran Colombia properties and two at the adjacent Segovia. During
January, four more drill rigs will be added at these properties.
Additionally, two rigs have commenced drilling at the Mazamorras
property and two rigs will commence drilling next week at the
Providencia property.  In total, the Company expects to have at least
15 drill rigs operating within the next four months. Management
believes the current drilling program may identify other attractive
targets, including potential open pit production to further increase
near-term production. 

Gran Colombia Operations and Exploration

Operations – The Company achieved its near-term production goal since taking over
operations in August, 2010, producing over 4,100 ounces of gold in
November and 4,900 ounces in December. The average grade of gold
produced at the mine since inception is 9.26 grams per tonne.  The
Company is currently on target for its annualized level of 100,000
ounces of gold by the end of the third quarter, 2011. The Company has
achieved an 88.96% recovery rate as this has been the rate used since
the inception of the Gran Colombia mine and has been the average since
September 2010.  The Company has also assumed a gold price of
USD$1,385.20, a silver price of USD$29.52 and a gold/silver ratio of
46.92. The Company is unhedged to the rising gold and silver price

A number of capital investments aimed at increasing capacity are
currently underway and include development in infrastructure and the
tailings pond. Construction of the tunnel commenced December 13, 2010
with all licences and permits in place.  The construction of a
6-kilometer tunnel to intercept the 23 known veins at the Gran Colombia
mines is a key project for the Company – and numerous alteration areas
are not yet studied in the same location of this tunnel. The tailings
pond is being improved to ensure increased capacity, and at the
hydroelectrical plant Proelectrica, refurbishment is being completed at
no additional cost to the Company.

To improve mining operations, the Company has acquired critical new
equipment and implemented improvements at the Maria Dama processing
plant to increase throughput to 1,000 tonnes per day (“tpd”), which was
achieved within nine months.  The current mill capacity has already
increased from an initial 450 tpd when the Company restarted operations
in September, 2010 to 600 tpd in December, 2010. 

Exploration – A drilling program commenced in October 2010 with 30,000 meters of
diamond drilling planned to confirm the continuity at depth of
previously known and currently exploited high grade veins being mined
at the Providencia, Sandra K, and El Silencio mines and to potentially
discover new veins and mineralised areas in these significantly
under-explored mining areas. 

Over 2,400 metres have already been completed in 10 holes varying in
depth from 153 metres to 540 metres.  The first hole, DD01, intercepted
two highly mineralized veins (see figure 1 here: http://files.newswire.ca/920/GranColombiaFig1.pdf).

One of the intersections, located 115 meters from surface confirms the
extension of the Marmajito Vein at depth with an intercept of 0.4
metres grading 43.7 grams per tonne gold (“g/t”) in an area where the
mineralized structure had not been previously identified. The second
intersection, at a depth of 343 meters from surface, 50 metres below
the current production level at the Providencia Mine, encountered 0.6
metres with a gold grade of 38.4 g/t. Intercepting these two very
important veins below current production levels will allow mining
development through planning and design of new working faces in short
and medium terms.

Drilling at all of the projects was completed by Perforaciones Tecnicas
S.A.S with the exception of the Mazamorras Project, where the work was
completed by Kluane Drilling Ltd.

Segovia Project

At the Segovia project, over 1,370 meters of a planned 7,500 metres have
been drilled in eight holes designed to test at depth a rich
outcropping vein to the west. Intersected values vary from 2 g/t to
71.6g/t Au. The best intercept to date is 0.3 metres at a grade of 71.6
g/t gold at a depth of 121 metres.

El Zancudo Project

Initial trial mining has commenced at La Independencia mine with two
mining fronts and two development fronts. The El Zancudo mill was
tested with ore at the end of December, 2010, and will now start to
process the ore mined from La Independencia, going from 25 tpd in
January to a planned 120 tpd in the second quarter. Intensive
exploration is planned for El Castano mine area with the intention of
increasing gold production from this area. Exploration is also focusing
on alteration zones south of the mine.

Underground drilling continues, with 200 metres already completed and
surface drilling scheduled to commence later this month. Underground
drilling is taking place initially below La Independencia mine in order
to confirm reserves and zones of mineralization.

Highlights of initial underground grade control sampling results at El
Zancudo are summarized below.

Sample ID Thickness (m) Au (g/t) Ag (g/t) Au Equiv*
ZGI-CH-043 0.18 55.5 425.0 64.5
ZGI-CH-046 0.25 54.4 4826.0 157.1
ZGI-CH-049 0.25 84.4 1194.0 109.8
ZGI-CH-030 0.12 21.8 115.0 24.2
ZGI-CH-039 0.23 67.1 563.0 79.0
ZGI-CH-060 0.18 33.5 55.8 34.6
ZGI-CH-078 0.19 50.7 234.0 55.7
ZGI-CH-081 0.20 106.1 776.0 122.7
ZGI-CH-084 0.24 42.0 278.0 47.9
ZGI-CH-087 0.22 23.9 1369.0 53.0
ZGI-CH-090 0.26 119.9 154.0 123.2
ZGI-CH-093 0.20 15.3 183.0 19.1
ZGI-CH-096 0.18 51.2 684.0 65.8
ZGI-CH-099 0.15 33.0 58.4 34.2
ZGI-CH-108 0.22 55.2 398.0 63.7
ZGI-CH-115 0.25 109.5 1209.0 135.2
ZGI-CH-118 0.24 164.2 1725.0 200.9

Table 2. Gran Colombia vein samples results at El Zancudo Project.

Providencia Project

Geological studies have been very efficient, identifying a group of 12
mineralized veins with gold values varying from 1 g/t to 37 g/t Au,
with the best result to date of 37 g/t in a punctual sampling. Drill
site preparation has been completed and drilling with two rigs is
expected to start next week, as part of the 6,000 metre program.
Geophysical work will also commence next week.

Mazamorras Project

This project is located in Narino Department, in southern Colombia.
Drilling of this copper-gold porphyry target has commenced, with three
drilling rigs should commence by April, 2011. The three areas where
drilling will start are San Felipe, Zona Norte and El Pedregal.

San Felipe is a zone located to the South of the “A” porphyry copper
anomaly (with individual rock samples grading above the 1,000 parts per
million (“ppm”) of copper).  At the “A” porphyry copper, gold in rock
samples ranks within the 100-200 parts per billion (“ppb”) range; at
the San Felipe zone, the gold values in rock samples ranks within the
100 ppb to 7,500 ppb range with individual values as high as 76,300
ppb.  Silver values in the same zone reach values up to 140 ppm.  We
are currently exploring the oxidation part of the San Felipe deposit.
Lowell Mineral Exploration (“LME”) undertook the first systematic rock
sampling in this area; collecting 21 samples, with a simple average of
58.3 metres at a gold grade of 2.35 g/t and 16.7 g/t silver. The
highest gold value was 76.3 g/t (which was excluded from the above
average). Re-sampling of this area, based on 38 samples, produced an
average of 58.3 metres at a gold grade of 2.3 g/t and 16.3 g/t silver,
almost identical to the LME values excluding the one anomalous
intercept. The Company believes that San Felipe represents one of the
most interesting gold-silver anomalies surrounding the porphyry copper
systems of the Mazamorras project.  Sampling highlights follow.

  ppb ppm ppm ppm
1ES0013 266 3.2 168 376
1ES0019 545 3 25 635
1ES0020 348 2.6 11 76
1ES0022 352 0.4 109 41
1ES0023 1210 11.3 166 283
1ES0025 654 0.9 344 153
1ES0026 868 11 136 60
1ES0028 117 1.1 164 248

Qualified Person

The technical information contained in this press release has been
reviewed and approved by Ricardo A. Valls, M.Sc., P.Geo (registered
geoscientist in Ontario and Quebec), a qualified person under National
Instrument 43-101 – Standards of Disclosure for Mineral Projects.

About Gran Colombia Gold Corp.:

Gran Colombia Gold is a Canadian-based gold and silver exploration and
development company focused on acquiring, developing and operating
properties of merit in Colombia. The Company holds 95% of the former
Frontino gold and silver assets, including the largest underground gold
and silver mining operation in Colombia. It also owns four more
exploration projects in Colombia for total exploration acreage of
approximately 21,400 hectares. The Company is committed to implementing
its exploration and development strategy with a comprehensive
environment, safety and community program, meeting international
standards of best practice.

Additional information on the Gran Colombia Gold can be found on the
Company’s website at
www.grancolombiagold.com and by reviewing the Company’s profile on SEDAR at www.sedar.com.

Forward Looking Information:

This news release contains “forward-looking information”, which may
include, but is not limited to, statements with respect to the future
financial or operating performance of the Company and its projects.
Often, but not always, forward-looking statements can be identified by
the use of words such as “plans”, “expects”, “is expected”, “budget”,
“scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or
believes” or variations (including negative variations) of such words
and phrases, or state that certain actions, events or results “may”,
“could”, “would”, “might” or “will” be taken, occur or be achieved.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Gran Colombia to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements. Forward-looking statements
contained herein are made as of the date of this press release and Gran
Colombia disclaim, other than as required by law, any obligation to
update any forward-looking statements whether as a result of new
information, results, future events, circumstances, or if management’s
estimates or opinions should change, or otherwise. There can be no
assurance that forward-looking statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, the reader is cautioned
not to place undue reliance on forward-looking statements.

SOURCE Gran Colombia Gold Corp.

Source: newswire

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