Vancouver, British Columbia, Canada, August 20, 2012 - Columbus Gold Corporation (CGT: TSX-V - "Columbus Gold") has tentatively waived its right of first refusal to acquire an option on the Karapinar copper porphyry project located in Western Turkey. Karapinar is adjacent to the Demirtepe high-grade copper-gold-silver-molybdenum skarn project, on which Columbus Gold holds a conditional option via an agreement (the "Empire Agreement") with Empire Mining Corporation ("Empire") dated March 28, 2012. The Empire Agreement further provides Columbus Gold with the aforementioned right of first refusal respecting transactions involving Karapinar. For additional details on the Empire Agreement, please see Columbus Gold's announcement of March 29, 2012.
Columbus Gold understands that Empire has entered into a conditional option agreement with First Quantum Minerals Ltd. ("FQML") over both Karapinar and Demirtepe. Although Columbus Gold has provided a tentative waiver of its right of first refusal respecting Karapinar, due to the inclusion of Demirtepe in the FQML deal, Empire is unable to complete this transaction without first terminating the Empire Agreement with Columbus Gold. This termination is contemplated by the Empire Agreement, and would require Empire to return a $2,000,000 (plus interest) deposit to Columbus Gold, and to pay a break fee.
On April 2nd, 2012 Columbus Gold announced that it had initiated the process of evaluating a number of different options respecting the possible spin-out of its non-core assets, including the option over Demirtepe; on the basis that the non-core assets were not being valued by the market and to allow management of Columbus Gold to focus its attention on French Guiana and the 1.9 million oz. Paul Isnard gold project. Reaching an agreement with Empire on Demirtepe would further those objectives and be a step forward in unlocking value for shareholders.
Empire and Columbus Gold each have a committee of independent directors formed to discuss the aforementioned transactions, and the two companies are presently in talks respecting such termination.
ON BEHALF OF THE BOARD,
Chairman & CEO
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