Prima colombia hardwood inc. announces $10,000,000 financing and receives bridge loan

May 27, 2011 (Canada NewsWire Group) --

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

TSX-V: PCT

VANCOUVER, May 27, 2011 /CNW/ - Prima Colombia Hardwood Inc. (TSX-V:PCT) ("Prima" or the "Company") announces that it has entered into an agreement with a syndicate of agents co-led by Cormark Securities Inc. and Canaccord Genuity Corp., and including EAS Advisors LLC (through the Riverbank Partners division of Merriman Capital, Inc.) (the "Agents") to offer for sale on a "best efforts" agency basis, up to $10,000,000 in units ("Units") at a price of $0.20 per Unit (the "Offering").  Each Unit will consist of one common share ("Common Share") and one-half of one common share purchase warrant (the "Warrant").  Each whole Warrant will entitle the holder to acquire one additional common share of the Company at an exercise price of $0.35 per share until September 21, 2015.  The Warrants associated with this Offering will have the same terms as the existing Prima Warrants that are listed for trading on the TSX Venture Exchange under the symbol PCT.WT.  The Agents shall have an over-allotment option to offer up to an additional $1,500,000 in Units at the same price and terms as the Offering, prior to the closing of the Offering.

The Company intends to use the net proceeds of the Offering to fund its capital expenditures for 2011 and for general working capital purposes.

The Offering is expected to close on or about June 21, 2011 (or any such other date as agreed to by the Company and the Agents) and is subject to certain customary conditions and regulatory approvals, including the approval of the TSXV, and the entering into by the Company and the Agents of an agency agreement.  The Units will be offered and sold on a private placement basis.  Accordingly, all securities issued in connection with the Offering will be subject to a hold period of four months from the date of closing of the Offering.

Prima has also entered into a bridge loan facility with Endeavour Capital Corporation ("Endeavour") providing for borrowings of up to CDN$4,000,000 available to be drawn in two equal tranches of CDN$2,000,000, of which the first tranche has been drawn down.  In consideration for the loan, the Company agreed to issue to Endeavour per each $2,000,000 draw-down, 2,700,000 share purchase warrants of the Company (the "Endeavour Warrants") where each Endeavour Warrant will give Endeavour the right to acquire one common share at an exercise price of CDN$0.22 per warrant share for a period of one year expiring on May 20, 2012 subject to regulatory approval.  The cash will be used by the Company for planned capital expenditures during 2011 and other working capital requirements.  Prima expects to fully repay this bridge loan from current and future financings of the Company.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state of the United States in which such offer, solicitation or sale would be unlawful.  The securities have not been registered under the 1933 Act, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as such terms are defined in Regulation S under the 1933 Act) absent registration or an applicable exemption from the registration requirements.

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.

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.