GRAN COLOMBIA GOLD ACQUIRES AN OPTION TO PURCHASE ADDITIONAL PROPERTIES AND
PROCESSING FACILITIES WITHIN THE SEGOVIA/REMEDIOS AREA

TORONTO, Dec. 21 /CNW/ - Gran Colombia Gold Corp. (TSX-V:GCM) is pleased to announce that it has signed an option agreement with Minatura International LLC and various affiliated companies (collectively, "Minatura") providing for an option to purchase 65% of Minatura's mining properties and processing assets in the Segovia/Remedios area of Antioquia, Colombia, which are within the same geological structure of the Gran Colombia Mines (formerly known as the Frontino Mines).

Maria Consuelo Araujo, Chief Executive Officer stated: "We are pleased with this opportunistic acquisition which allows Gran Colombia Gold to further amalgamate properties in this area.  The option agreement provides us with exploration rights to the areas north of our Remedios properties and south of our Gran Colombia properties (the area formerly known as the Frontino property), where we plan to prove continuity of the high-grade gold mineralized systems. The investment provides us with ready and permitted processing capacity for the ore from our Remedios properties, our Gran Colombia Mines and small miners in the area. While our main priority in 2011 remains to increase production at our Gran Colombia Mines and continue exploration at our other properties, this acquisition is a perfect fit for our development strategy within the Remedios/Segovia mining district."

The option includes:  (i) six existing mining concessions for a total acreage in excess of 662 hectares, including the existing San Pablo Mine and the La Bartola Mine; (ii) 24,300 hectares of applications for concessions in the same area; and (iii) existing permitted processing facilities of approximately 50 tonnes per day ("tpd") capacity (collectively, the "Assets").

Under the terms of the option agreement, Remedios Gold, S.A. ("Remedios"), a wholly owned subsidiary of the Company, paid US$300,000 for a 90 day due diligence term, which was paid with cash on hand.  If the option is exercised, Remedios will pay Minatura an additional US$7,700,000 for a 65% interest in the Assets and will commit to:  (i) a US$7,000,000 investment plan over two years, which is designed to explore and evaluate geological resources with the objective of developing an initial National Instrument 43-101 compliant technical report, and to upgrade and develop the San Pablo Mine to bring it into production; and (ii) upgrade the existing processing plant at the San Pablo Mine to at least 250 tpd capacity, for an estimated investment of US$3,500,000.

The option agreement also includes a put/call option between the parties for Minatura's remaining 35% of the Assets for a period of three years from the closing date, for a price equivalent the greater of:  (i) US$10 million; and (ii) such percentage of the measured and indicated resources at a value of US$60/oz Au and of inferred resources at a value of US$20/oz Au, as per the initial National Instrument 43-101 compliant report.

To view Map 1 please visit: http://files.newswire.ca/920/grancolombiamap1.pdf

About Gran Colombia Gold Corp.:

Gran Colombia Gold is a Canadian-based gold and silver exploration and development company focused on acquiring, developing and operating properties of merit in Colombia. The Company holds 95% of the former Frontino gold and silver assets, including the largest underground gold and silver mining operation in Colombia. It also owns four more exploration projects in Colombia for total exploration acreage of approximately 21,400 hectares. The Company is committed to implementing its exploration and development strategy with a comprehensive environment, safety and community program, meeting international standards of best practice.

Additional information on the Gran Colombia Gold 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.

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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

For further information:

Belinda Labatte
Investor Relations
[phone]