Colombia Crest Gold letter to shareholders

Welcome to Colombia Crest Gold Corp!

We are excited to commence 2013 with a recently completed drill program, and newly discovered exploration targets within the Middle Cauca Belt, Colombia.  The first drilling ever done on the property showed us typical porphyry style grade in various areas, guiding our team to follow-up areas to further explore. The telling surface results we have received on the Garrucha target area will add to our drill program this year. The team is working steadily to fully explore the potential of our large land package.

Having reached a major milestone with the sale of the San Simon Bolivian asset to a Bolovian mining company for $5 million, we continue along our business model of finding and monetizing promising gold projects. 

We have built our team around finding porphyry gold deposits, as well as with strong knowledge of gold projects in South America in order to effectively explore the land and seek out new projects at the same time.

Plans for Phase 2 Drill Program in 2013

The upcoming year will build on the foundation that was set during 2011-12. Specific items include:

• Analyze current drill results alongside new ZTEM Survey results to attain better understanding of the location of structures in the property.
• Further surface sampling at the new Garrucha target where strong surface sampling results from stream sediment sampling have already been identified.
• Further surface sampling at the El Retiro target - this is the eastern-most concession of the Fredonia land package where up to 8.25 g/t gold has been discovered in vein-type mineralization in channel chip samples taken from outcrop.
• Drilling at Arabia, Garrucha and possibly El Retiro to follow up on significant gold grades from drilling, outcrop, and stream sediment sampling.
• Secure additional highly prospective, undervalued property in Colombia to increase Company value.

Exploration Work to Date

In 2012, the 18 hole, 6,547 metre drill program on the Arabia target returned results of varying degrees, our team feels we are just hitting the top of a larger porphyry gold system. In reviewing the neighboring projects and projects to the south of the Middle Cauca Belt, we are seeing similar drill results, though many of the other projects show the system reaching higher towards the surface.

By late 2011, Colombia Crest field crews detected, mapped and sampled two large porphyry gold anomalies in the Venecia and Fredonia projects; the area was named Arabia. Rock chip results returned up to 3.8 grams per tonne gold, coincident with potassic-altered porphyry outcrops. One month later, assay results were received from 1,132 soil samples and showed two distinctly anomalous gold zones (defined as areas greater than 40 parts per billion "ppb"). The first anomalous area, named Arabia 1, covers almost 400 by 800 metres, while the second area, named Arabia 2 and located about one kilometre to the southwest, covers about 300 by 400 metres. As is typical of porphyry gold-copper systems of the region, the gold anomalies have coincident copper and molybdenum anomalies.

IAMGOLD

IAMGOLD is a significant shareholder in the Company, having participated in a private placement for 14.5% ownership of the company – with warrants outstanding, priced at CAD$0.35/share, when exercised will achieve 19.9% ownership. Soil results from Arabia followed the placement; therefore, IAMGOLD geologists made their recommendations for this placement based on the technical merits of the project without a single drill hole completed at the time. This placement gave the project immediate credibility in the market place and strong financial support for the 2012 drill program. As part of the agreement, Colombia Crest has formed a technical advisory team that includes representatives from both IAMGOLD and Colombia Crest. Building on Colombia Crest's community relations and social responsibility programs, IAMGOLD has added support to this important program.

Bolivia

In early January 2013, we were pleased to announce our agreement for the sale of the Bolivian subsidiary and the San Simon project to STEINMAR Ltda., a Bolivian company.  Steinmar agreed to purchase the outstanding shares of Eaglecrest Exploration Bolivia S.A. for payments that total US$5 million.  This aligns with our business model for monetizing gold projects, and we will continue along this path to maximize shareholder value.

Up Next

With the Colombian projects moving forward with drilling, the Company continues to explore the targets. The equity and capital markets are rewarding positive exploration results from Colombia as evidenced by the market valuations of our neighboring competitors who have announced drill results.  As gold remains the investment of choice above all other asset classes, it looks as though 2013 will be another great year of progress.

Keep in Touch

Whether you’re a current shareholder or new to the Company, we hope to provide you with up-to-date and relevant information on what’s happening at Colombia Crest and the countries we work in. I encourage you to visit our website often and sign up for email updates on our homepage, which will offer you news as it’s released as well as inform you about upcoming investor shows we’ll be attending.

All the very best,

Hans Rasmussen

President, CEO and Director