GRAN COLOMBIA ANNOUNCES PROPOSED ISSUANCE OF US$120 MILLION OF GOLD-LINKED NOTES TO FINANCE EXPANSION OF GOLD PRODUCTION AT ITS SEGOVIA OPERATIONS

Gran Colombia Gold Corp. has entered into an agreement with GMP Securities LP as sole lead agent and sole bookrunner to issue, on a best efforts private placement basis, 120,000 units of the company at a price of $1,000 (U.S.) per unit, for aggregate gross proceeds of $120-million (U.S.). Each unit will consist of one $1,000 (U.S.) principal amount secured gold-linked note of the company and common share purchase warrants of the company.

The net proceeds of the offering will be used as project financing for the development and construction of a 2,500-tonne-per-day mill, related infrastructure, additional capital expenditures relating to the corporation's Segovia operations, and interest payments on the notes. For this purpose, the corporation shall establish a segregated bank account to hold the net proceeds of the offering for use only as contemplated herein.

The final terms of the offering are subject to negotiation among the agent and the company. The offering is expected to close in mid-October, 2012.

We seek Safe Harbor.