Prima Colombia Hardwood Inc. announces delay in start up of operations

Jul. 14, 2011 (Canada NewsWire Group) --

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TSX-V: PCT

VANCOUVER, July 14, 2011 /CNW/ - Prima Colombia Hardwood Inc. (TSX-V:PCT) ("Prima" or the "Company") announces a delay in the start up of its operations, which was previously scheduled for the third quarter, as a result of delays in obtaining cutting permits from the Ministry of Environment in Colombia.

Until May 18, 2011 the Company had been working with the regional government of Choco in the ordinary course of business to obtain cutting permits, including successfully obtaining its first cutting permit for Mecana 1. On May 18, 2011, the Ministry of Environment took over jurisdiction from the regional government of Choco. Subsequently, Prima and the Ministry of Environment have had several meetings and established a working team to process the Company's permit applications. Prima was recently informed that the Ministry of Environment had revoked the Mecana 1 permit. The revocation is under appeal. While Prima and the Ministry of Environment continue to work constructively together, Prima is unable to determine with any certainty the expected issuance date of the cutting permits required for the start up of its operations.

The Company in conjunction with its Colombian advisors fully expects that the permits will be issued but are uncertain as to the exact timing. Cutting permits of this nature are routinely issued in Colombia. However, until such time as the permits are issued, the Company has decided to scale back the start up of its operations. The Company will provide temporary layoffs to some staff and is delaying delivery of some equipment and supplies.

"The change in jurisdiction from Choco to the Ministry of Environment has occurred at an inopportune time, just as we are in the final stages of start up. Had the change occurred 6 months ago, it would not likely have delayed our start up", says Donald P. Hayes, CEO.  "While the Timber Agreement with the Community of Los Delfines remains in full force and effect, we cannot harvest without cutting permits issued for exact locations within the License area."

Given the uncertainty of timing in respect of the issuance of the permits and start up of operations, the Company has also delayed the completion of the financing announced on May 27, 2011. The Company plans to reduce its monthly cash requirements in an orderly fashion to approximately $600,000 per month in order to preserve the timber opportunity until the permits are obtained. The Company has received indications from key shareholders to bridge its cash requirements during this time period and will continue to discuss financing options with third parties.

About Prima Colombia

Prima Colombia Hardwood Inc. is a TSX Venture Exchange-listed Canadian based forest products company focused on international tropical hardwood timber development, production and marketing. Prima Colombia's initial operations are located near Bahia Solano, Department of Choco on the west coast of the Republic of Colombia. All Prima forestry concessions are intended to be operated following the highest standards of sustainable forestry and environmental management. Prima brings over 30 years of forestry experience and dedication to best environmental operating practices and working with local communities and governmental agencies.

Forward-Looking Information
This news release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Examples of such statements include statements pertaining to permitting and timing of and revenue from current and proposed timber development, operations, production and marketing.

There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements and information are based will occur. Forward-looking statements and forward-looking information are subject to a variety of known and unknown risks, uncertainties and assumptions, including those discussed in Prima Colombia's quarterly and annual management's discussion and analysis and under "Risk Factors" in Prima Colombia's Annual Information Form dated May 11, 2011, which are available at www.sedar.com under Prima Colombia's profile, and any of which may cause the actual results, performance or achievements of Prima Colombia to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained in this news release. Some of the factors which could affect future results and could cause actual results to differ materially from those expressed in the forward-looking statements and information contained herein include: general economic, market, business and governmental conditions; lack of operating history; results of operations and development activities; continued availability of capital and financing; reduced demand for timber (cyclical nature of industry); availability of necessary equipment or the failure of equipment or processes to operate as anticipated; transportation, development, construction and production delays; anticipated and unanticipated costs; accidents; the regulatory and foreign environment and the timing and possible outcome of regulatory matters, including governmental approvals; political instability in Colombia; property title disputes or claims; environmental risks, including natural disasters; reclamation expenses; labour disputes and other risks of the timber industry; and any of the assumptions below not being correct.

Such forward-looking information is based on a number of assumptions which may prove to be incorrect, including, but not limited to: cutting permits are issued on a timely basis; tree cutting commences in May; heavy lift helicopter arrives and harvesting commences in July; other equipment is delivered on a timely basis; and customer trial orders are fulfilled.

The factors identified above are not intended to represent a complete list of the factors that could affect Prima Colombia. Additional factors are noted under the heading "Risk Factors" in the Annual Information Form dated May 11, 2011 available at www.sedar.com under Prima Colombia's profile. Further, should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievement may vary materially from those expressed or implied by the forward-looking information contained in this news release. Forward-looking statements and information are based on the beliefs, estimates and opinions of management at the date the statements are made and are subject to change without notice. These factors should be carefully considered and viewers are cautioned not to place undue reliance on forward-looking information, which speaks only as of the date of this news release.  Other than as required by law, Prima Colombia does not undertake to update forward-looking statements or information if management beliefs, estimates or opinions or other circumstances should change, or to reflect events or circumstances that occur after the date of this news release or to reflect the occurrence of unanticipated events. All forward-looking information attributable to Prima Colombia herein is expressly qualified in its entirety by the cautionary statements contained in or referred to herein.

Neither 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 news release.