Gran Colombia Gold Completes $275M Private Placement, Frontino Acquisition and Reverse Takeover of Tapestry Resource

On August 20, 2010, Gran Colombia Gold Corp. (“Gran Colombia”) (TSXV: GCM), which was formerly Tapestry Resource Corp. (“Tapestry”), completed a reverse takeover transaction pursuant to which Gran Colombia acquired all of the issued and outstanding securities of Gran Colombia Gold, S.A. (“GCG”), a Panamanian company holding interests in five gold mine properties in Colombia, by way of a three-cornered amalgamation.

In connection with the reverse takeover transaction, GCG completed a brokered private placement of subscription receipts. GMP Securities L.P. was engaged by GCG to act as agent in respect of the private placement. Pursuant to the private placement, GCG issued 687,500,000 subscription receipts at a price of $0.40 each, for gross proceeds to GCG of $275,000,000. Approximately US$200,000,000 of the proceeds from the private placement were used by GCG to indirectly acquire the assets of Frontino Gold Mines Ltd. (“Frontino”), one of Colombia's largest gold mining operations, in a transaction completed prior to the reverse takeover.

Pursuant to the acquisition of Frontino's assets, GCG entered into a joint venture agreement with Medoro Resources Ltd. (“Medoro”) under which GCG holds a 95 per cent interest in the joint venture entity that purchased the Frontino assets and Medoro holds the remaining 5 per cent, with a back-in right pursuant to which Medoro has the right to increase to a 50 per cent interest in the joint venture entity.

GCG was represented in-house under the direction of Peter Volk, General Counsel and Secretary and Michael Galego, Associate General Counsel and Assistant Secretary and by a team from Macleod Dixon LLP led by Jorge Neher in Bogotá and Richard Lachcik in Toronto. The Toronto team included Robert Eberschlag, John Carron, Avril Cole, Morris Popowich and Janet Wong (securities), Janne Duncan (corporate) and Edward Heakes (tax). The Bogotá team included Mauricio Zagarra, Rubén Eduardo Luján and Daniela Jaimes. GCG was also represented concerning Panamanian corporate law matters by Maricarmen Plata of Anzola Robles & Asociados, and concerning US securities law matters by Willkie Farr & Gallagher LLP with a team that included Steven Seidman, Laura Delanoy, Howard Block and Martin Miller.

Tapestry was represented by Anfield Sujir Kennedy & Durno LLP with a team that included Jay Sujir and Verlee Web.

GMP Securities L.P. was represented by Wildeboer Dellelce LLP with a team that was led by Perry Dellelce and included Derek Sigel, Peter Simeon, Alexandra Vazquez (securities and corporate) and Kevin Fritz (tax).

Medoro was represented in-house under the direction of Joanne Sanci, Legal Counsel and Secretary, and by a team from Stikeman Elliott LLP led by Raymond McDougall and Lisa McDowell.