Columbus Gold Corp. (TSX VENTURE:CGT) is pleased to announce that it has entered into a binding letter option agreement with major gold producer Nord Gold N.V. (LSE:NORD) under which Nordgold has been granted the right to a 50.01% interest in certain licences at Columbus Gold’s 100% owned Paul Isnard Gold Project in French Guiana. The Project hosts an inferred gold resource of 5.37 million ounce (117.1 Mt @ 1.43 g/t Au) in the Montagne d’Or gold deposit.

Nordgold may earn a 50.01% interest in the Project by completing a bankable feasibility study and by expending not less than US$30 million in 3 years in staged work expenditures, which includes a requirement for Nordgold to pay Columbus Gold $4.2 million in cash no later than May 21, 2014. The $4.2 million payment is due in consideration of Columbus Gold purchasing an underlying royalty on the Project. During the earn-in period, Columbus Gold will act as operator on the Project and charge a 10% management fee on certain expenditures.

Robert Giustra, CEO of Columbus Gold, commented: “This agreement is exceptional not only by its requirement for an experienced and world class mine developer to fund a considerable amount of spending but also for the fact that Columbus Gold shareholders retain half the project at feasibility. In addition, the deal provides Columbus Gold with the option to participate in mine construction or to delegate it to Nordgold for a resulting significant and valuable equity interest for Columbus Gold shareholders in a large producing mine.” Mr. Giustra further added: “This agreement clearly demonstrates our continued dedication to protecting our shareholders by transacting at the project level and not diluting the company, which also holds our large and prospective Nevada gold portfolio.”

The Agreement provides for a 50.01% / 49.99% joint venture to be formed between the parties upon Nordgold earning its interest in the Project. In the event that the JV decides to advance the Project to mine construction and commercial production, Columbus Gold may elect to fund the JV pro-rated to its 49.99% interest or allow Nordgold to sole fund, whereby Columbus Gold’s interest would be diluted pursuant to a straight-line formula. The initial deemed value of each party’s interest in the JV, which affects the rate of dilution, will vary based on the ounces of proven & probable reserves indicated in the BFS. For example, pursuant to the formula, 2 million Ounces would require Nordgold to spend approximately $160 million to dilute Columbus Gold to a 25% interest; 3 million Ounces would require Nordgold to spend approximately $210 million to dilute Columbus Gold to a 25% interest; and 4.5 million Ounces would require Nordgold to spend approximately $270 million to dilute Columbus Gold to a 25% interest. In the event that the JV decides not to move forward to mine construction and commercial production within 4.5 months after BFS completion, Nordgold must offer 0.01% of the overall JV to Columbus Gold for a determinable price and each party will hold 50% in the JV.

During the option period, Nordgold has agreed to a standstill under which it will not obtain 20% or greater of the outstanding voting securities of Columbus Gold, will not solicit proxies from Columbus Gold’s shareholders, will not attempt to engage in discussions respecting fundamental transactions involving Columbus Gold, and will vote any securities it holds in favour of management proposals put forward by Columbus Gold. Columbus Gold understands that Nordgold currently holds no common shares in its capital.

The Agreement is subject to several conditions that must be satisfied on or before January 31, 2014, including obtaining the consent of underlying royalty holders and the approval of the TSX Venture Exchange. The Agreement contains other provisions standard for a binding letter option agreement, including an area of interest, force majeure extensions, termination provisions, and a requirement that it be replaced by a definitive agreement in due course. A copy of the Agreement will be available in due course on Columbus Gold’s SEDAR profile at www.sedar.com.

ABOUT NORDGOLD

Nordgold is publicly traded on the London Stock Exchange and is an international pure-play emerging-markets gold producer established in 2007. Nordgold has expanded rapidly through acquisitions and organic investment, achieving a rate of growth unmatched in the industry during that period. In 2012, Nordgold’s gold production was 717 Koz. The company operates nine mines in Russia, Kazakhstan, Burkina Faso and Guinea. Nordgold has one development project, four advanced exploration projects and a diverse portfolio of early exploration projects and licenses in CIS and West Africa. Nordgold employs over 10,000 workers on two continents