Colossus extends mineralization at Serra Pelada (October 21, 2010)

Vancouver – The first step-out results on Colossus Minerals’ (CSI-T, OC1-F) recently expanded Serra Pelada land package show continued high-grade gold-platinum-palladium mineralization.

The results come from a 774-ha land package Colossus acquired from Vale (VALE-N) in March that significantly increased its overall holdings in Brazil’s Para State from only 100 hectares. The expanded property is adjacent to and largely surrounds the initial property.

Colossus is exploring the Brazilian property in a joint venture with Coomigasp, a 45,000-member cooperative of local miners, with Colossus holding 75% ownership of the total land package.

The drilling was designed to extend the Central Mineralized Zone southwest into the new land package, with results indicating a steeply dipping mineralized subzone.

Hole 72 hit 8.35 metres carrying 53.13 grams gold per tonne, 0.06 gram Pt per tonne and 0.12 gram Pd per tonne, then 25 metres averaging 30.19 grams gold, 3.53 grams Pt and 4.25 grams Pd. Hole 65 returned 5.2 metres carrying 12.89 grams gold, 0.49 gram Pt and 0.7 gram Pd, and then 3 metres grading 28.45 grams gold, 0.12 gram Pt and 0.36 gram Pd. All results were between 215 and 270 metres depth.

Drilling is ongoing to further extend the Central Mineralized Zone southwest, as well as to the northeast.

The Serra Pelada project saw a huge gold rush in the 1980s, when up to 80,000 artisanal miners produced an estimated 2 million oz. gold from a hand-dug open pit. The 400 metre by 300 metre by 100 metre pit eventually succumbed to collapsed walls and flooding, causing production to trail off. Colossus is looking to extract what is left in the pit and the surrounding area.

Earlier in October the company released more results from several zones on the original Serra Pelada property.

From the central mineralized zone, hole 55 hit 52.4 metres grading 18.57 grams gold, 8.34 grams Pt and 11.33 grams Pd from 209 metres, while roughly 700 metres northwest, hole 66 intersected 1.8 metres grading 32.07 grams gold fom 139 metres in the Portal zone.

In the GT zone, hole 56B cut 8.25 metres carrying 12.27 grams gold, 0.58 gram platinum and 0.92 gram palladium and hole 57 hit 21.37 metres averaging 6.51 grams gold, 0.6 gram platinum and 0.96 gram palladium, with both estimated to be approximate true widths and extended the zone by more than 50 metres along strike.

Mineralization is hosted mainly by fine-grained carbonaceous rocks but also occurs in iron oxide-rich breccias and silicified zones. The oxidized zone is more than 300 metres deep.

The results are part of a 5,000-metre drill program designed to target the downplunge projection of the Central Mineralized Zone and also extensions of the newly discovered gold-PGE mineralized zones.

For more effective exploration, the company is driving a 3,500-metre, $15-million decline. The company will be able to start underground drilling in early 2011, while the decline is expected to be complete in roughly a year.

As part of an amended deal with Coomigasp, Colossus must make monthly payments of roughly $200,000 to the cooperative as well as finance all development costs. Once production begins Colossus must make premium payments ranging from roughly US$16 per oz. to US$26 per oz. to Coomigasp, depending on the amount of metal produced.

Colossus Minerals share price rose 7¢ or 0.8% to close at $8.38 on the news. The company has a 52-week share price range between $4.00 and $9.14 and 86 million shares outstanding.