Gran Colombia Announces Proposed Sale of its Mazamorras Project in Colombia

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[{"type":"text","content":"\n\n\n\n\n\nTORONTO, July 25, 2012 /CNW/ - Gran Colombia Gold Corp. (TSX: GCM)\n announced today that Gran Colombia Gold SA, a subsidiary of Gran\n Colombia, has entered into a share purchase agreement with Andean\n Minerals and Metals Corp., a privately held Panamanian company, in\n connection with the proposed disposition of its Mazamorras Project to\n Andean for consideration of US$5,500,000, as described below.\n\n\nThe Mazamorras Project is an early stage gold-copper exploration project\n located in the Department of Nariño, Colombia.  The Project includes\n four concessions covering approximately 5,976 hectares and was\n purchased by Gran Colombia in 2010.  The Company ceased exploration\n activities at the Mazamorras Project in October 2011 and has not\n allocated any exploration resources to the Project in 2012.\n\n\nPursuant to the Share Purchase Agreement, Andean will purchase 100% of\n the issued and outstanding share capital of \"Mazamorras Gold SA\", a\n subsidiary of Gran Colombia which holds the Mazamorras Project.  As\n consideration, Gran Colombia will receive an aggregate cash payment of\n US$3,500,000 (US$1,000,000 to be paid on closing, and five installments\n of US$500,000 each to be paid on the dates that are three months, six\n months, twelve months, eighteen months and twenty four months from the\n date of closing); and common shares and warrants of Andean equal to 5%\n of the current issued and outstanding share capital of Andean.  Andean\n will also pay the remaining US$2,000,000 of the purchase price to the\n original vendor of the Project and will assume all remaining\n obligations under the original purchase agreement of the Mazamorras\n Project.  Such obligations include a remaining exploration commitment\n of US$2,000,000 and a 2.5% net smelter return royalty on any production\n from the Project payable to the original vendor of the Project.  The\n transaction is expected to close on September 15, 2012.\n\n\nJosé R. Oro, the former Vice President, Exploration and Corporate\n Development of Gran Colombia, who resigned from the Company effective\n June 30 2012, is the President of Andean Minerals and Metals Corp.\n\n\nMaria Consuelo Araujo, Chief Executive Officer of Gran Colombia,\n commented: \"This transaction is in line with Gran Colombia's strategy\n of fo...

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