TORONTO, March 13 /PRNewswire/ - Gran Colombia Gold Corp. (TSX: GCM) announced today the successful assignment by Frontino Gold Mines Ltd. ("FGM"), the previous operator of the Gran Colombia mines, of its pension liability for its former employees to the Colombian Social Security Institute (the "ISS"), a governmental entity responsible for the administration and payment of pension obligations.
Maria Consuelo Araujo, Chief Executive Officer of the Company, commented: "With the conclusion of the transfer of the pension obligations to the ISS, the Company has demonstrated not only its full compliance with its contractual obligations, but a commitment to the community by improving their quality of life, but also its stakeholders by continuing to be a socially responsible mining company."
The assignment of the FGM pension obligations to the ISS had been a material term of the acquisition of the mining assets of FGM by the Company. However, at the time of the closing of the acquisition, the ISS had not completed the necessary calculations it required in order to formally accept the assignment of the pension obligations. Accordingly, the Company had placed 380 billion Colombian pesos ("COP") or approximately US$203 million, in a trust account pending completion of the assignment of the pension obligations. On March 11, 2011, the Company transferred COP 365 billion or approximately US$195 million, to the ISS and the balance of the funds in the trust account will be used to fund costs and expenses related to the liquidation of the pension plan.
The ISS will now assume responsibility for the administration and payment of all remaining pension obligations to the former employees of FGM and the Company will have no further obligations in respect of these pensions.
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.
SOURCE Gran Colombia Gold Corp.