Gran Colombia Gold announces improvement in Segovia's cash cost to $1,164 per ounce in March 2013 and production of 24,350 ounces of gold in first quarter of 2013

Gran Colombia Gold Corp. (TSX: GCM) announced today that the cost reduction program initiated in January at its Segovia Operations is already having a positive impact on its all-in sustaining cost per ounce. Cash cost, the primary component of the company's all-in sustaining cost, at the Segovia Operations decreased to an average of $1,337 per ounce for the first quarter of 2013, down from $1,604 per ounce in the fourth quarter of 2012. The company's cost reduction program resulted in $850,000 per month of savings starting in February, with approximately $700,000 directly related to operating costs and the balance to general and administrative expenses. As a result of the realized cost reductions and the improvement in gold production, Segovia's cash cost decreased to $1,164 per ounce in the month of March.

"We are pleased to report a significant improvement in our first quarter cash cost results at Segovia," said Serafino Iacono, Executive Co-Chairman of Gran Colombia.  "The actions that we have taken to reduce our cash costs are an important first step in improving our cash margins and we are continuing to identify opportunities for further cost reductions while the Pampa Verde project, that is now underway, will be the foundation of our low cost, modern mining operations in Segovia."

The company also announced today that first quarter 2013 gold production totaled 24,350 ounces, a 10 percent increase compared to the fourth quarter of 2012, as set out below:.

Gold production at the Segovia Operations was up 13 percent from the fourth quarter of 2012. With the resolution of the power disruptions that had adversely impacted the fourth quarter, the company successfully increased tonnes processed by approximately 8 percent from the previous quarter to an average of 918 tonnes per day ("tpd") for the first quarter of 2013. In the month of March, the daily rate averaged 1,033 tpd. Although head grades at the Segovia Operations were similar in the first quarter of 2013 to the previous quarter, gold production at the Segovia Operations also benefitted from an improvement in mill recovery to 83 percent, up from 76 percent in the previous quarter. Mine development work is continuing at the Segovia Operations and the company expects that head grades will begin to show improvement by the end of the second quarter of 2013.

The company expects to report its full financial and operating results for the first quarter of 2013 on or about May 14, 2013.

About Gran Colombia Gold

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 several underground mines in operation at its Segovia and Marmato Operations. In addition, Gran Colombia is advancing a project to develop a large-scale, gold and silver mine at its Marmato operations.

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

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 and, specifically, statements concerning anticipated growth in annual gold production and reduction of cash costs. 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. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements are described under the caption "Risk Factors" in the Company's Annual Information Form dated as of March 28, 2012 which is available for view on SEDAR at www.sedar.com. Forward-looking statements contained herein are made as of the date of this press release and Gran Colombia disclaims, 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.

SOURCE: Gran Colombia Gold Corp.