Colossus Minerals Inc. (COLUF)

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Colossus Minerals Updates Development Progress at Serra Pelada
TORONTO, ONTARIO--(Marketwire - Dec. 5, 2011) - Colossus Minerals Inc. (the "Company" or "Colossus") (TSX:CSI) (CUSIP:91681L109) is pleased to provide an update on the development activities at its 75% owned Serra Pelada Gold-Platinum-Palladium Project. The Serra Pelada Project is a Colossus-COOMIGASP Joint Venture located in Para, Brazil.

HIGHLIGHTS

Approximately 675 metres of decline development completed; total advance, including secondary development, of approximately 775 metres
First underground drill bay has been commissioned and underground drilling is underway
Surface infrastructure construction continues, ahead of schedule, with a number of auxiliary buildings now complete
Agreement to build a dedicated electrical transmission line has been reached
Approximately ninety percent of all underground mining equipment is on site; ordering of process plant equipment has commenced
Metallurgical test-work confirms Gravity Recoverable Gold (GRG) values of between 76% and 88%
PGM flotation program ongoing to optimize the efficiency of the flow-sheet to extract platinum and palladium
Claudio Mancuso, President & Chief Executive Officer of Colossus commented, "We are very pleased with the progress of development at Serra Pelada. We continue to strengthen our on-site management team with the addition of a number of experienced mining professionals. The pace of decline development has progressively and methodically increased over the past six months and we are now approaching our target of five metres of development per day. The next twelve months will be very exciting as we continue de-risking the project and work towards our goal of producing gold in 2013."

DETAILS

November was Colossus' best month for underground development with the pace of development at approximately four metres per day. The Company has now completed approximately 675 metres of decline development to a vertical depth of approximately 100 metres. The pace of both decline and total development continues to improve with the achievement of six metres per day on certain days throughout November. Secondary development items completed in November included a muck bay and the first underground drill bay. The underground drill bay has been commissioned and underground drilling has begun. The first of a series of underground holes will be a geotechnical hole drilled parallel to the decline. This geotechnical hole will serve as an additional tool to predict ground conditions in the decline and will help to further improve the pace of development. Close-spaced underground definition drilling of the Central Mineralized Zone (CMZ) will commence in mid-December. The Company currently estimates that the top of the CMZ will be reached with approximately 600 metres of further decline development and an additional 100 metres to open two working faces into the CMZ from the decline. Once development reaches the top of the CMZ, the first 2,500 tonne bulk sample will be extracted.

In addition to the pace of underground development continuing to improve, surface infrastructure remains ahead of schedule with a number of auxiliary support buildings now complete. An industrial warehouse and mine-dry area are approximately ninety percent complete, which have allowed the Company to order additional supplies to support underground development and construction efforts. Approximately ninety percent of equipment required for underground development is now on site and includes three drill jumbo's (two for exploration and one for development), and various other underground equipment such as shotcrete jumbos, rock-bolters and loaders. In November 2011, the company concluded an agreement with Centrais Eléctricas do Parà, the state's electrical transmission provider, to build a dedicated 32 kilometre, 34.5 kV power line to site. Construction of the power line will commence immediately and is anticipated to be completed by December 2012 at a net cost of approximately R$1.4 million (USD $0.8 million). Power for site construction and underground development is currently provided by four diesel generators which will be used for auxiliary and standby power supply once the dedicated transmission line is in place.

The current metallurgical development program is aimed at confirming Serra Pelada's amenability to gravity gold separation processes and to continue with optimization of a flow-sheet for extraction of platinum and palladium and other platinum group metals using flotation. The latest multi-stage gravity separation tests conducted at Met-Solve Laboratories (Langley, BC) on samples from the CMZ have confirmed previous test results, with GRG values continuing in the 76% to 88% range (see Table 1, below). Recent gravity tests, using Falcon and Knelson concentrators, have purposely targeted lower-grade composites and have averaged 82.1% gravity gold recovery. Gravity recoveries are expected to increase with increased grades. These results, along with tests to verify the physical properties of Serra Pelada mineralization, are being used to support the ongoing design and engineering of the first phase, gravity processing plant.
Table 1: Gravity Test Results

Date		        Sample Origin		Head Grade, Gold (g/t)		   GoldRecovery (%) 
 Nov-2010		CMZ Composite		15.9		                              88.0 
 Nov-2010		CMZ Composite		15.8		                              84.2 
 Nov-2011		CMZ (SPD-113)		15.8		                              79.4 
 Nov-2011		CMZ (SPD-113)		12.7		                              76.6 
 Average						                                      82.1 
 

Both platinum and palladium continue to report to the gravity concentrate at lower levels (typically less than 10% recovery); therefore, a parallel program of flotation testing and mineralogy is being conducted at Blue Coast Research (Nanaimo, BC) to improve recovery. Results from the initial programs completed to date show the importance of controlling gangue flotation; therefore, the current program is focusing on graphite pre-flotation circuits in addition to the use of dispersants and depressants. Results of the PGM flotation program are expected to be released in early 2012.

The basic engineering for the first phase, gravity processing plant is presently well underway, with detailed engineering anticipated to commence early in the new-year. Construction of the process plant is expected to commence in the first quarter of 2012. Procurement of certain long-lead equipment items has commenced, with the ball mill refurbishment substantially complete. The gravity process flow sheet includes crushing, scrubbing, ball milling, centrifugal gravity concentration prior to intensive cyanidation, electro-winning and smelting of gravity concentrates to make a gold doré. A simplified flowsheet is given in Figure 1 below.

To view the flowsheet, "Figure 1," please visit the following link: http://media3.marketwire.com/docs/CSI-Simplified-Flowsheet-with-Frame.pdf.

Andy Holloway, P.Eng, Principal Process Engineer at AGP Mining Consultants, is a qualified person under National Instrument 43-101 and is responsible for the Company's metallurgical program and results and has verified the contents disclosed.

About Colossus:

Colossus is a development-stage mining company focused on bringing into production the high-grade gold-platinum-palladium Serra Pelada project, located in the mineral prolific Carajas region in the state of Para, Brazil. Between 1980 and 1986 Serra Pelada was host to the largest precious metals rush in Latin American history. Coverage by 60 Minutes of this famous mining rush can be viewed at the following link: http://sixtyminutes.ninemsn.com.au/article.aspx?id=299887.