Vancouver, British Columbia, Canada. June 8th, 2011, Columbus Gold Corp. (CGT: TSX-V) (“Columbus Gold”) is pleased to announce that it has amended its option to acquire a 100% interest in the Paul Isnard gold project in French Guiana (the “Amendment”), which includes the 43-101 compliant 1.9 million ounce Montagne d’Or gold deposit, thereby accelerating Columbus Gold’s ability to earn an initial 51% interest in the project.

Robert Giustra, Chairman & CEO of Columbus Gold, stated: “The amendment to the acquisition terms for Paul Isnard removes a significant share overhang from the market and provides complete clarity and a higher level of confidence respecting the projected share structure of Columbus Gold as we aim to earn an initial 51% interest in the project, and ultimately a 100% interest. Maintaining a reasonable capital structure from the onset will ensure the potential for higher share levels and as a consequence will result in greater returns for our shareholders”.

Columbus Gold originally had the right to earn an initial 51% interest in the Paul Isnard project over a two year period, by incurring minimum exploration expenditures of US$7 million, and by issuing common shares equal to 49% of its post-issuance outstanding share capital, in a combination of a part and parcel private placement to Pelican Venture SAS (“Pelican”) for up to 15%, and annual share option payments to the vendor, Auplata S.A. (“Auplata”) for the balance to 49% in aggregate. The first two share issuances to Auplata were subject to a two-year escrow. Pursuant to the original terms, Columbus Gold could not accelerate share payments prior to the completion of $7 million in exploration expenditures. (See press release dated December 3, 2010 for details on the original terms.)

With the Amendment, Columbus Gold is now able to issue all of the shares to Auplata at closing, which is expected this month, whereby Pelican will acquire up to 15% in a part and parcel private placement and the balance to 49% in aggregate will be issued to Auplata. In consideration for the Amendment, Columbus Gold has agreed to only escrow 67% of those shares that were subject to escrow prior to the Amendment.

The Paul Isnard gold project includes the 43-101 compliant 1.9 million ounce Inferred gold resource in the Montagne d’Or gold deposit which consists of 36.7 million tonnes grading 1.6 gpt. The Montagne d’Or gold deposit is open along strike and at depth. Columbus Gold has an option to earn a 100% interest in Paul Isnard, subject to an underlying royalty.

The Amendment, the underlying agreement, and the transactions contemplated thereby are subject to TSX Venture Exchange approval and to the completion of the remaining conditions precedent, being a positive title opinion and the completion of the Pelican private placement.

The Paul Isnard gold project is located approximately 180 km west of the capital city of Cayenne, French Guiana and has been an important centre of alluvial and colluvial gold mining operations since the late 19th century with reported estimated production of about two million ounces.

The project occurs within the northernmost of two east-west trending Proterozoic greenstone belts making up the French Guiana sector of the Guiana Shield. Modern exploration at Paul Isnard includes geological, geochemical and geophysical surveys, and diamond core drilling carried out primarily from 1996 to 1999. Most of this work included 54 holes for 10,600 metres directed at the Montagne d’Or gold deposit which consists of a linear mineralized body within laminated felsic volcanic rocks outlined and partially delineated for a strike length of 2,000 metres and an average depth of 100-150 metres. The deposit consists of two closely spaced, mineralized layers, respectively averaging about 50 and 17.5 metres in thickness, and multiple smaller, sub parallel gold-bearing bands and stringer zones. 

The initial Columbus Gold drilling program planned to commence in August will be focused on the Montagne d’Or deposit where holes drilled to 200 metres depth are planned in order to increase the mineral resources and infill drilling is planned to convert Inferred resources to Measured and Indicated categories. Future drill programs will also target the eastern and western extensions of the Montagne d’Or deposit where more than 2.5 km of strike provides excellent expansion potential and will also test numerous less developed gold prospects and undrilled geochemical anomalies which occur throughout the project area.

Columbus Gold’s independent consultant and Qualified Person, John Prochnau (P. Geo), B.Sc. (Mining Engineering), M.Sc. (Geology), has reviewed and approved the technical content of this news release.

ON BEHALF OF THE BOARD,

Robert Giustra
Chairman & CEO

Neither the 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 release.

For more information contact:

Peter Kendrick
Senior Vice-President
604-638-3474 or
1-888-818-1364
info@columbusgoldcorp.com

This release contains forward-looking information and statements, as defined by law including without limitation Canadian securities laws and the “safe harbor” provisions of the US Private Securities Litigation Reform Act of 1995 (“forward-looking statements”), respecting the Amendment, the underlying agreement (with the Amendment, the “Agreement”), the closing share issuances, the timing of closing, and the conditions precedent in connection therewith. Forward-looking statements involve risks, uncertainties and other factors that may cause actual results to be materially different from those expressed or implied by the forward-looking statements, including without limitation the ability to obtain regulatory and TSX Venture Exchange approval of the transactions contemplated under the Agreement, in particular obtaining those in time for a June 2011 closing; Columbus Gold’s willingness to complete the transactions on the above terms; the ability to obtain applicable exemptions from prospectus and registration requirements in connection with the issuance of securities of Columbus Gold; the ability to satisfy the conditions precedent contained in the Agreement, including without limitation the ability to obtain a positive title opinion, TSX Venture Exchange approval, and the Pelican private placement in particular in time for a June 2011 closing; the ability to obtain alternate financing; changes in the market; decisions respecting whether or not to pursue the transactions contemplated under the Agreement; non-performance by contractual counterparties; and general business and economic conditions. Forward-looking statements are based on a number of assumptions that may prove to be incorrect, including without limitation assumptions about: general business and economic conditions; that Columbus Gold and Auplata will be able to successfully complete the conditions precedent to the Agreement; that Columbus Gold will desire to continue earning into the Property over time; the ability to locate sufficient financing for ongoing operations; and general market conditions. The foregoing list is not exhaustive and we undertake no obligation to update any of the foregoing except as required by law.