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(All amounts are reported in U.S. dollars unless otherwise indicated)
TORONTO, March 24 /CNW/ - Colombia Goldfields Ltd. (the "Company") (TSX: GOL/OTCBB: CGDF | news | PowerRating | PR Charts ) today announced its fourth quarter 2007 update on the mineral rights acquisition and drilling programs, as well as a status report on the progress of the social programs in the Marmato district. The Company also announced audited financial results for the quarter and year ending December 31, 2007.
During the quarter and throughout 2007 the Company progressed towards its objectives of consolidating ownership in the Zona Alta (Upper Zone) and defining a bulk-mineable ore body at Marmato Mountain in Colombia. The Company has increased its mineral ownership rights total to 111 of 117 legally registered mines in Zona Alta.
"In addition to significant activity on Zona Alta, the Company was aggressive in laying the groundwork to increase our growing Marmato portfolio," said J. Randy Martin, Vice Chairman and CEO, Colombia Goldfields, Ltd. "This program resulted in an agreement to acquire the Zona Baja (Lower Zone) as well as the adjacent Echandia property. When these transactions are completed, we will have essentially consolidated the new gold district."
By the end of 2007 the Company had 5 drills operating at Marmato Mountain with 13 rigs soon to be operating in the district. During the year, a total of 11,500 meters were drilled. Subsequent to the close of the fourth quarter, an additional 6,000 meters were drilled. This drilling program is part of the 60,000-meter drill program planned for Zona Alta and is to be completed by the end of 2008. The objective of the initial 11,500 meter program is to begin converting the Company's 5.3 million ounce historical geologic resource to a NI 43.101-compliant resource.
Colombia Gold Acquisition
On November 20, 2007, the Company entered into a Memorandum of Understanding with Colombia Gold PLC, a privately held U.K. company, to acquire Colombia Gold's issued and outstanding shares. Colombia Gold's principal asset is the mining concessions on the Echandia property located immediately adjacent to Marmato Mountain. Colombia Goldfields believes that Echandia contains similar geologic structures as Marmato Mountain. Completion of the transaction is subject to negotiation and execution of a definitive agreement, the completion of due diligence and customary conditions and approvals.
Social and Environmental Programs
Colombia Goldfields has hired a sociologist and a communications specialist to liaise with local residents with respect to the relocation of the town. Rockslides have made much of the old town on Marmato uninhabitable. In addition to working with the residents, the Company is working with regional and national government bodies to facilitate the move.
To December 31, 2007, Colombia Goldfields had completed the first year of data collection for the Environmental Base Line Study. Additionally, 17 of the 26 artisanal mills located on Zona Alta have been purchased with 11 subsequently permanently closed. The Company has also contracted with a non-governmental organization to implement a reforestation program in the Marmato district.
Audited results for the quarter and year ended December 31, 2007
The Company incurred a loss for the quarter ending December 31, 2007 of $4.9 million or $(0.06) per share, compared to a loss of $1.4 million or $(0.03) per share for the same period in 2006. For the year ending December 31, 2007 the Company incurred a loss of $14.6 million or $(0.21) per share, compared to a loss of $6.3 million or $(0.15) per share for 2006. The loss was driven by mineral property exploration costs of $8.1 million and general and administrative expenses of $6.1 million (including stock based compensation of $3.1 million) along with a foreign exchange loss of $2.1 million.
Total assets at December 31, 2007 totaled $74.5 million, including mineral and exploration properties and rights of $65.4 million and cash and cash equivalents of $6.9 million, compared with total assets of $45.0 million at December 31, 2006. As of December 31, 2007, stockholders equity was $51.1 million, compared to $29.2 million at December 31, 2006.
Private Placement Completed
On December 28, 2007 the Company completed a private equity offering of 9,165,226 units, consisting of one share of common stock and one-half warrant, for gross proceeds of $10.3 million. Each unit was priced at CDN $1.10 and each warrant is exercisable for one common share at a price of CDN $1.20. The proceeds are to be used in the Company's drilling programs and for general corporate purposes.
Events Subsequent to the Close of the Quarter
On January 29, 2008 Colombia Goldfields entered into a Share Purchase and Sale Agreement with the shareholders of Mineros Nacionales S.A., a Colombian company that owns Zona Baja (Lower Zone) on Marmato Mountain. Under the terms of the Agreement, Colombia Goldfields intends to purchase all the issued and outstanding shares of Mineros for cash consideration of $35 million. The Agreement calls for the transaction to be completed by April 29, 2008. However, the closing can be extended to no later than July 29, 2008. Colombia Goldfields has provided a deposit guarantee of $2.5 million, payable to the vendors if the transaction is not completed for any reason.
Mineros Nacionales is currently operating an 800 tonne per day underground mine that produces approximately 25,000 ounces of gold per year from a conventional mill that is achieving gold recoveries of 88%. The November 14, 2007 Micon International 43.101 report indicates historical geologic resources of 7.3 million ounces of gold in the Zona Baja.
In March 2008, the Company expanded its management team by naming Martti Kangas as Vice President, Corporate Development. Mr. Kangas joins Colombia Goldfields following his most recent assignment as Senior Vice President at a major investor relations company.
About Colombia Goldfields
Colombia Goldfields Ltd., through its subsidiaries Compania Minera de Caldas S.A. and Gavilan Minerals S.A., is developing what we believe is a multi-million ounce gold resource in Colombia's historic Marmato Mountain gold district.
Colombia Goldfields is traded in the US under the symbol CGDF, on the Toronto Stock Exchange under the symbol GOL, and in Germany under the symbol C2B. The Company's full September 30, 2007, unaudited consolidated financial statements and management's discussion and analysis are available at www.colombiagoldfields.com, EDGAR at www.sec.gov and SEDAR at www.sedar.com under the Company's profile.
Disclaimer
This release contains forward-looking statements that are based on the beliefs of Colombia Goldfield's management and reflect Colombia Goldfield's current expectations as contemplated under section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. When used in this release, the words "estimate, "project," "believe," "anticipate," "intend," "expect," "plan," "predict," "may," "should," "will," "can," the negative of these words, or such other variations thereon, or comparable terminology, are all intended to identify forward-looking statements. Such statements reflect the current views of Colombia Goldfields with respect to future events based on currently available information and are subject to numerous assumptions, risks and uncertainties, including, but not limited to, risks and uncertainties pertaining to development of mining properties, changes in economic conditions and other risks, uncertainties and factors, which may cause the actual results, performance, or achievement expressed or implied by such forward-looking statements to differ materially from the forward looking statements. In particular, there is no assurance that a definitive agreement will be executed or that the proposed transaction will be completed.
SOURCE: Colombia Goldfields Ltd.
Company Contact: J. Randall Martin, Vice Chairman and CEO, Colombia Goldfields Ltd. (TSX: GOL, OTCBB: CGDF), 8 King Street East, Suite 208, Toronto, Ontario, M5C 1B5, T: (416) 361-9640, F: (416) 361-0883, info@colombiagoldfields.com, www.colombiagoldfields.com; U.S. Investor Relations: John Menditto, Roth Investor Relations, Inc., Tel. (732) 792-2200, Email: johnmenditto@rothir.com; Canadian Investor Relations: Martti Kangas, V.P. Corporate Development, Colombia Goldfields, Ltd., Tel: (416) 361-9640, martti@colombiagoldfields.com
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