Columbus Gold to Buy Paul Isnard Gold Project in French Guiana

Columbus Gold Corporation (TSX VENTURE:CGT) has announced that it has entered into a definitive option agreement to acquire the Paul Isnard gold project in French Guiana which includes the 2 million ounce Montagne D'Or gold deposit.

French Guiana is a department of France bordering Brazil and Suriname in South America.

In 2008, SRK completed a Preliminary Assessment at Montagne D'Or and estimated a 43-101 compliant inferred resource of 2 million ounces gold from 33.2 mt grading 1.69 gpt. The Montagne D'Or gold deposit is open in every direction laterally and at depth.

Robert Giustra, Chairman & CEO of Columbus Gold, stated: "The acquisition of the Paul Isnard gold project, anchored by the 2 million ounce Montagne d'Or orebody is a company transforming event that overnight has transformed Columbus Gold from an early stage gold explorer to potentially a developer. The deposits at Paul Isnard have considerable scope for expansion, they are amenable to open pit mining and initial metallurgical tests performed at the Montagne d'Or deposit indicate recoveries of approximately 90% from conventional leaching. In addition, infrastructure is good and the port of St. Laurent is located only 85 km away by road. The project also has the distinction of being located in a politically stable country."

Pursuant to the agreement (the "Agreement") with Auplata S.A. ("Auplata"), the 100% owned subsidiary of Auplata, SOTRAPMAG SAS ("SOTRAPMAG") and Auplata's largest shareholder Pelican Venture SAS ("Pelican"), all French companies, Columbus Gold can earn a 100% interest in Paul Isnard by making minimum exploration expenditures of US$7 million and completing a Bankable Feasibility Study over a four year period. Columbus Gold must also issue shares to Auplata over the four year period totaling 49% of Columbus Gold's issued and outstanding share capital when including any shares issued under a private placement to Pelican in the total. Pelican will complete a part and parcel private placement in Columbus Gold at a price of $0.215 per share for a total of up to 15% of Columbus Gold's issued and outstanding share capital after giving effect to the private placement. The private placement is intended to provide Pelican with an incentive to assist with government and community relations, a role Columbus Gold deems important to the successful development of Paul Isnard.

The Paul Isnard project is located approximately 180 km west of the capital city of Cayenne, French Guiana and consists of eight mining permits totaling 135 km² and a pending application for two additional mining permits totaling a further 14.4 km². The Paul Isnard project area has been an important centre of alluvial and colluvial gold mining operations since the late 19^th 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. The greenstone terrain hosts important gold deposits in French Guiana and neighboring countries, including Rosebel in Suriname, and is generally considered to represent an extension of the productive and much more extensively explored and developed Birimian System greenstone belts of West Africa.

Modern exploration focused on primary gold mineralization at Paul Isnard has been limited but includes geological, geochemical and geophysical surveys, and 75 diamond core holes totaling 12,983 metres, carried out by Golden Star Resources largely from 1995 to 2007. Most of this work, including 60 holes for 11,454 metres, has been 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 3,000 metres and dip length up to 200 metres. The deposit consists of two closely spaced, mineralized layers, respectively averaging about 65 and 35 metres in thickness, and multiple smaller, sub parallel gold-bearing bands and stringer zones. It is open internally, between widely spaced drill holes at 50 to 200 metre centres, along strike and at depth.

A mineral resource estimate, categorized as Inferred per NI 43-101 reporting standards, was completed by SRK Consulting as at February 29, 2008, for Golden Star Resources Ltd. Applying a cutoff grade of 0.5 grams per tonne gold, SRK estimated a resource of 33,200,000 tonnes grading 1.69 gpt gold for 2,000,000 contained ounces gold. Columbus Gold is commissioning an updated 43-101 report which will be filed on SEDAR within 45 days.

The Columbus program will be focused on the Montagne d'Or deposit where infill drilling is planned to convert Inferred resources to Measured and Indicated categories, and holes drilled at greater depths and along strike are planned in order to increase the mineral resources. Numerous less developed gold prospects and untested geochemical anomalies which occur throughout the project area will also be evaluated.

Columbus Gold has the option of earning directly into the Paul Isnard gold project or indirectly by earning into SOTRAPMAG which controls 100% of Paul Isnard subject to underlying royalties. Columbus Gold can earn an initial 51% interest in Paul Isnard by:

• issuing shares to Auplata on the Effective Date (as defined below) totaling, after issue, 30% of Columbus Gold's issued and outstanding share capital, which total includes any shares to be issued to Pelican pursuant to the private placement;
• making minimum exploration expenditures of US$2 million by the first anniversary of the Effective Date;
• issuing additional shares to Auplata by the first anniversary of the Effective Date such that, after issue, Auplata will own 40% of Columbus Gold's issued and outstanding share capital, which total includes the 30% of Columbus Gold's share capital previously issued to Auplata and Pelican;
• making additional minimum exploration expenditures of US$5 million by the second anniversary of the Effective Date; and
• issuing additional shares to Auplata by the second anniversary of the Effective Date such that, after issue, Auplata will own 49% of Columbus Gold's issued and outstanding share capital, which total includes the 40% of Columbus Gold's share capital previously issued to Auplata and Pelican. The Agreement stipulates that under no circumstances may Auplata (together with the shares issued to Pelican) own 50% or more of the Company.

Upon earning an initial 51% interest, Columbus Gold can elect to earn an additional 49% interest in Paul Isnard for a total interest of 100% (subject to underlying royalties) by completing a Bankable Feasibility Study by the fourth anniversary of the Effective Date. Auplata will retain the right to extract certain surface ores until the fourth anniversary of the Effective Date.

All share issuances to Auplata pursuant to the Agreement will be subject to escrow until the second anniversary of the Effective Date. In addition, Auplata will be subject to a standstill provision restricting it from acquiring additional shares of Columbus Gold.

The transactions contemplated in the Agreement are subject to a number of conditions precedent which must be satisfied by May 31^st, 2011 and once satisfied will define the effective date of the Agreement (the "Effective Date"). Among other things, the conditions precedent include stock exchange and regulatory approvals of the Agreement and related transactions, and the Company obtaining a positive title opinion in connection with the property. In addition, Columbus Gold will be required to raise a minimum of US$2 million (net of the proceeds of the Pelican private placement).

The Agreement is also subject to a 60 day due-diligence period by Columbus Gold and a 15 day due-diligence period by Auplata. Completion of the transaction is also subject to shareholder approval of the shareholders of Columbus Gold, and the transaction cannot close until the required shareholder approval is obtained.