Colossus Files Notice of Intention Under Bankruptcy and Insolvency Act

TORONTO, ONTARIO--(Marketwired - Jan. 14, 2014) - Colossus Minerals Inc. (TSX:CSI)(OTCQX:COLUF) ("Colossus" or the "Company") As indicated previously, the Company was unable to rectify its inability to make the December 31, 2013 interest payment on the Convertible Gold Linked Notes ("Notes") prior to the close of business on January 10, 2013.

Colossus announced today that the Board of Directors has approved a proposal (the "Term Sheet") received from certain holders of Notes and Sandstorm Gold Ltd. ("Sandstorm") outlining the terms of a restructuring of Colossus that provides for interim debtor-in-possession financing (the "DIP Financing") to fund the Company as it pursues, in tandem, a six week sale and investment solicitation process (the "Sale Process") and a restructuring of Colossus' capital structure through the conversion of Colossus' debt into equity (the "Restructuring").

The Board of Directors has also approved today the filing by the Company of a notice of intention (the "NOI") to make a proposal under the Bankruptcy and Insolvency Act (Canada) (the "BIA"), which is intended to enable Colossus to pursue the Sale Process and Restructuring with the benefit of creditor protection and under Court-supervision. Duff & Phelps Canada Restructuring Inc. ("Duff & Phelps") was named as the proposal trustee in the NOI.

In the coming days the Company intends to seek an order from the Court (i) approving the terms of a DIP Financing credit facility (the "DIP Credit Facility") and (ii) approving the terms of the Sale Process, which is to be administered by the Company and its financial advisor and overseen by Duff & Phelps.

The DIP Credit Facility will be a senior secured, term credit facility with an initial maximum credit amount of up to US$4,000,000, subject to increase by up to an additional US$6,000,000 with the consent of the lenders under the DIP Credit Facility. Interest under the DIP Credit Facility will accrue at the rate of 20.0% per annum and be payable monthly in arrears. The DIP Credit Facility will be used to: (i) provide working capital, maintenance capital expenditures, other capital expenditures, financing charges and other ordinary course expenditures, (ii) pay fees, costs and expenses associated with the DIP Credit Facility; (iii) pay fees, costs and expenses in connection with the proceedings necessary to implement the BIA Proposal; and (iv) pay fees, costs and expenses in connection with the Sale Process. The maturity date of the DIP Credit Facility will be the earliest of: (i) the date that is 12 weeks after the commencement of the proceedings under the BIA unless extended on terms satisfactory to the lenders, (ii) the effective date of the BIA Proposal and (iii) the date upon which the proceedings under the BIA are terminated.