Colossus Provides Financing Update

TORONTO, ONTARIO--(Marketwired - Jan. 2, 2014) - Colossus Minerals Inc. (TSX:CSI)(OTCQX:COLUF) ("Colossus" or the "Company") After announcing the termination of a financing previously announced on December 18, 2013 the Company has held discussions with a group of holders of Convertible Gold Linked Notes ("Notes") in relation to the anticipated failure of the Company to pay interest on the Notes on December 31, 2013 and the consequential default under the Notes that would result from the Company's inability to rectify such failure before January 10, 2014.

On December 31, 2013 the Company received a proposal from these noteholders and Sandstorm Gold Limited ("Sandstorm") which, if implemented would offer the Company the ability to carry on business activities past December 31, 2013 with a view to its potential sale or future recapitalization. However, existing holders of common shares would experience massive dilution to the point where they would, in aggregate, hold approximately 1.7% of the outstanding common shares after giving effect to the terms of the proposal.

The proposal is being considered by the Company's directors and discussions are continuing. Holders of Notes and the common shares are cautioned that the transactions herein are currently at the discussion stage and completion is subject to many factors such as the execution of board approval, the negotiation and execution of definitive documentation, court approval and regulatory approval. There can be no assurance that any transaction will be completed on the terms described herein, or that existing shareholders will ultimately receive or retain any value.

In order to conserve its cash resources the Company is in the process of laying off approximately 400 workers at the Serra Pelada Project and has placed the project on a care and maintenance status. It is also significantly reducing the number of employees at the Toronto office.

Cautionary Statement Regarding Forward-Looking Information

Forward-looking statements in this press release include statements regarding the ability of the Company to obtain financing or if obtained to obtain on commercially reasonable terms, the timing and nature of future exploration and development programs that are dependent on projections that may change as drilling continues, or if unexpected ground conditions are encountered. The Company does not currently have any mineral properties that are in production or that contain a reserve as defined by National Instrument 43-101. In addition, areas of exploration potential are identified which will require additional drilling to determine whether or not they contain similar mineralization to areas that have been explored in more detail. Significant additional drilling is required at Serra Pelada to fully understand system size.