Mr. Mike Davies reports

GRAN COLOMBIA GOLD ANNOUNCES CHANGES TO RESTRUCTURING PROPOSAL FOR THE GOLD-LINKED AND SILVER-LINKED NOTES AND NEW DATE FOR MEETINGS

After further consultation with Gran Colombia Gold Corp.'s holders of gold and silver notes, Gran Colombia has revised the terms for the comprehensive debt restructuring proposal that is to be implemented pursuant to a plan of arrangement under the Business Corporations Act (British Columbia).

The revised arrangement will include:

• All accrued and unpaid interest on the 10-per-cent secured gold-linked notes due 2017 and 5.0-per-cent senior unsecured silver-linked notes due 2018 will be added to the principal amount of each gold note and silver note.
• The exchange of the principal amount of gold notes will be for the same amount of senior secured convertible PIK-toggle debentures due 2020.
• The exchange of the principal amount of the silver notes will be for the same amount in senior unsecured convertible PIK-toggle debentures due 2022.
• The option to holders of each of the gold and silver notes to convert up to 100 per cent of their respective notes on the effective date into freely tradable common shares of the company at a conversion price of 13 U.S. cents per common share, approximately equal to 17 Canadian cents, the volume-weighted average price of the company's common shares for the most recent 20 consecutive trading days, based on today's closing Bank of Canada exchange rate.

If the revised arrangement becomes impractical under the BCA, the company may instead complete a plan of arrangement or compromise under the Canadian Companies' Creditors Arrangement Act.

To allow for the time required for dissemination of supplemental information to holders of the gold notes, silver notes and common shares, the special meetings have been rescheduled to Dec. 22, 2015. The record date of Oct. 26, 2015, for the meetings of the holders of the gold notes, silver notes and common shares will remain unchanged.

The company also reiterated that it will be adding three new independent members to its board of directors following implementation of the revised arrangement. The company's compensation, corporate governance and nominating committee is continuing to review candidates.

Key terms of the gold note exchange and 2020 debentures under the revised arrangement have been revised to include the following:

The aggregate principal amount will be the sum of $100-million (U.S.) and the accrued and unpaid interest on the gold notes that will be added to the principal amount of the gold notes under the revised arrangement, rounded down to the nearest whole $1 (U.S.). Holders will have the option to convert some or all of their gold notes on the effective date by the issuance of freely tradable common shares of the company at a conversion price of 13 U.S. cents per common share, representing approximately 7,692 common shares for each $1,000 (U.S.) gold note.

The 2020 debentures will be issuable only in denominations of $1 (U.S.) and integral multiples thereof.

The 2020 debentures, at the option of the company, will bear either: (a) cash interest at a rate of 6.00 per cent per annum or (b) pay-in-kind interest (or PIK) at a rate of 7.00 per cent per annum, in either case payable monthly in arrears on the last business day of each month, commencing in the first full calendar month following the effective date. For further certainty, the company will be able to elect between either a cash interest payment or a PIK interest payment on a monthly basis. PIK interest will be added to the principal amount of the 2020 debentures outstanding.

The maturity date will be Oct. 30, 2020.

The 2020 debentures will be convertible, at the option of the holder, at any time prior to the close of business on the earlier of the maturity date and the last business day immediately preceding the date fixed for redemption, at a conversion price of 20 U.S. cents per common share (before giving effect to any PIK interest or payment of interest in shares; this represents a conversion rate of 5,000 common shares per $1,000 (U.S.) principal amount of 2020 debentures). The 2020 conversion price shall be subject to standard provisions providing for adjustments upon the occurrence of certain corporate events.

The 2020 debentures may be redeemed for cash in whole or in part from time to time at the option of the company on not more than 60 days and not fewer than 30 days prior notice, at a price equal to their principal amount (including any PIK 2020 debentures issued) plus accrued and unpaid interest.

On maturity, provided that: (a) no event of default shall have occurred and be continuing and (b) the value of the company's common shares traded during the 20 consecutive trading days ending 25 trading days prior to Oct. 30, 2020, is equal to or greater than three times the principal amount of the 2020 debentures outstanding at the beginning of such 20-day period, calculated using the Bank of Canada noon exchange rate on such date, the company may, at its option, on not fewer than 30 days prior notice and subject to regulatory approval, elect to satisfy its obligation to repay principal (including any PIK 2020 debentures issued) plus accrued and unpaid interest amounts of the 2020 debentures by issuing and delivering that number of freely tradable common shares obtained by dividing the principal plus accrued and unpaid interest amounts of the outstanding 2020 debentures by 95 per cent of the volume-weighted average trading price of the common shares on the Toronto Stock Exchange for the 20 consecutive trading days ending five trading days preceding the maturity date.

The 2020 debentures will be senior secured indebtedness of the company.

The ranking of, and security for, the 2020 debentures is as set out in the gold note indenture. The covenants and events of default are also as set out in the gold note indenture.

In addition to the right of the company to redeem the 2020 debentures, as set out above, the company will also have the right at any time to purchase the 2020 debentures in the market, by tender or by private contract, at any price, which, for greater certainty, may be below par.

In addition to the above, the company covenants that a minimum of 75 per cent of its excess cash flow, as defined below, will be paid into a sinking fund, which will be applied toward repayment, repurchase (in the market, by tender or by private contract, at any price, which, for greater certainty, may be below par) or other redemption, as the company elects, of the 2020 debentures. Excess cash flow means with respect to any fiscal quarter of the company, consolidated earnings before interest, taxes, depreciation and amortization for such fiscal quarter less capital, development and exploration expenditures, cash payments of principal and interest on debt, changes in non-cash working capital items, and payment of taxes and certain other existing financial obligations of the company.

Key terms of the silver note exchange and 2022 debentures under the revised arrangement have been revised to include:

The aggregate principal amount will be the sum of $78.6-million (U.S.) and the accrued and unpaid interest on the silver notes that will be added to the principal amount of the silver notes under the revised arrangement, rounded down to the nearest whole $1 (U.S.).

Holders will have the option to convert some or all of their silver notes on the effective date by the issuance of freely tradable common shares of the company at a conversion price of 13 U.S. cents per common share, representing approximately 7,692 common shares for each $1,000 (U.S.) silver note.

The 2022 debentures will be issuable only in denominations of $1 (U.S.) and integral multiples thereof.

The 2022 debentures, at the option of the company, will bear either: (a) cash interest at a rate of 1.0 per cent per annum or (b) PIK interest at a rate of 2.0 per cent per annum, in either case payable monthly in arrears on the last business day of each month, commencing in the first full calendar month following the effective date. For further certainty, the company will be able to elect between either a cash interest payment or a PIK interest payment on a monthly basis. PIK interest will be added to the principal amount of the 2022 debentures outstanding.

The maturity date will be Aug. 31, 2022.

The 2022 debentures will be convertible, at the option of the holder at any time prior to the close of business on the earlier of the maturity date and the conversion date, at a conversion price of 25 U.S.cents per common share (before giving effect to any PIK interest or payment of interest in shares; this represents a conversion rate of 4,000 common shares per $1,000 (U.S.) principal amount of 2022 debentures). The 2022 conversion price shall be subject to standard provisions providing for adjustments upon the occurrence of certain corporate events.

The 2022 debentures may be redeemed for cash in whole or in part from time to time at the option of the company on not more than 60 days and not fewer than 30 days prior notice, at a price equal to their principal amount (including any PIK 2022 debentures issued) plus accrued and unpaid interest.

On maturity, provided that: (a) no event of default shall have occurred and be continuing and (b) the value of the company's common shares traded during the 20 consecutive trading days ending 25 trading days prior to Aug. 31, 2022, is equal to or greater than three times the principal amount of the 2022 debentures outstanding at the beginning of such 20-day period, calculated using the Bank of Canada noon exchange rate on such date, the company may, at its option, on not fewer than 30 days prior notice and subject to regulatory approval, elect to satisfy its obligation to repay principal (including any PIK 2022 debentures issued) plus accrued and unpaid interest amounts of the 2022 debentures by issuing and delivering that number of freely tradable common shares obtained by dividing the principal plus accrued and unpaid interest amounts of the outstanding 2022 debentures by 95 per cent of the volume-weighted average trading price of the common shares on the TSX for the 20 consecutive trading days ending five trading days preceding the maturity date.

The 2022 debentures will be unsecured indebtedness of the company. The covenants and events of default are also as set out in the silver note indenture.

In addition to the right of the company to redeem the 2022 debentures, as set out above, the company will also have the right at any time to purchase the 2022 debentures in the market, by tender or by private contract, at any price, which, for greater certainty, may be below par.

In addition to the foregoing, the company covenants that once the 2020 debentures have been fully retired, a minimum of 75 per cent of its excess cash flow, as defined above, will be paid into a sinking fund, which will be applied toward repayment, repurchase (in the market, by tender or by private contract, at any price, which, for greater certainty, may be below par) or other redemption, as the company elects, of the 2022 debentures.

Voting information for securityholders

The company will be providing supplemental information and materials regarding the postponed meetings to holders of the gold notes, silver notes and common shares in due course. Holders of the gold notes, silver notes or common shares who have voted for the company's original debt restructuring proposal will not need to take any further action to have their votes counted in favour of the revised arrangement. Holders of the gold notes, silver notes or common shares who have not yet voted or who voted against the company's original debt restructuring proposal should refer to the supplemental materials that will be sent by the company in due course, and are encouraged to vote as soon as practicable, and in any event, no later than the proxy cut-off on Dec. 18, 2015. Holders of the gold notes, silver notes or common shares who have voted and would like to change their vote as it applies to the revised arrangement can do so by voting their revised form of proxy in accordance with the instructions provided therein once received.

For further information on this, please contact the company's proxy advisory and solicitation agent, Kingsdale Shareholder Services, at 1-866-581-0508 or by e-mail at contactus@kingsdaleshareholder.com.

The revised arrangement is subject to certain conditions, including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals, including the receipt of approval by the Toronto Stock Exchange. Terms outlined herein may be amended as required to receive such approvals.

We seek Safe Harbor.