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TORONTO, Dec. 12, 2011 /CNW/ - Gran Colombia Gold Corp. (TSX: GCM) announced today that it has retained GMP Securities L.P. to assist the Corporation in the evaluation of several debt financing alternatives for the Corporation.  The Corporation is considering various forms of project financing to fund mine and mill expansion plans at its Segovia Operations in the municipalities of Segovia and Remedios, Department of Antioquia, Colombia, where the Corporation has identified opportunities to expand production in accordance with its stated goals of achieving more than 150,000 ounces of gold production annually commencing in 2013. The Corporation is currently exploring all avenues and is in discussions with (i) investment banks with regard to brokered project debt structures, (ii) strategic lender groups, and (iii) international banks with regard to gold loan structures.

The project financing is intended to fund the Corporation's plan to increase production at its Segovia Operations through the development of a new mechanized mining operation and the acquisition of a new 2,500 tonnes per day (tpd) mill in addition to the expansion of the Maria Dama mill. The new mechanized underground mine will exploit recently explored near-vertical veins at Las Aves and Poma Rosa, close to the westward continuation of the Providencia and El Silencio veins. Development of the new mining area is planned for completion by the end of 2012 and the new 2,500 tpd mill is expected to be commissioned by the third quarter of 2013.

Gran Colombia remains on track to achieve its previously provided production guidance of a total of 90,000 gold ounces in 2011 from the Segovia Operations and Marmato Underground.

At the Segovia Operations, cost reductions implemented in September 2011 have brought the cash cost per gold ounce for October and November down under $1,100 per ounce and the operations are now cash flow positive. The management team continues to focus on increasing productivity and reducing operational inefficiencies to further reduce cash costs. Expansion of the existing Maria Dama mill at the Segovia Operations to 1,000 tpd is now well underway. The new ball mill required to achieve the increase in capacity from the current 700 tpd capacity is in country and en route to Maria Dama, where site preparation activities are nearing completion. Installation of the new ball mill will commence at the end of the month and the expansion at Maria Dama will be completed during the first quarter of 2012. The Corporation has also planned a $20 million 80,000 meter drilling program at its Segovia Operations in 2012 to expand and upgrade its resource, expected to be funded out of operating cash flow.

About Gran Colombia Gold Corp.:

Gran Colombia is a Canadian-based gold and silver exploration, development and production company with its primary focus in Colombia.  Gran Colombia is currently the largest underground gold and silver producer in Colombia with six underground mines in operation.  In addition, Gran Colombia is also developing a large-scale, open-pit gold and silver mine at Marmato.  The Company also has a highly-prospective land position in Colombia as well as an advanced stage property in Venezuela and earlier stage properties in Mali.

Additional information on Gran Colombia can be found on the Company's website at www.grancolombiagold.com and by reviewing the Company's profile on SEDAR at www.sedar.com.

Cautionary Statement on Forward-looking Information

This news release contains "forward-looking information", which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its projects. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Gran Colombia to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and Gran Colombia disclaim, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.