Tolima Gold Inc. Starts Operations at Its "San Pablo" Processing Plant

TORONTO, ONTARIO--(Marketwire - Jan. 11, 2012) -

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Tolima Gold Inc. (TSX VENTURE:TOM) (the "Company" or "Tolima") is pleased to announce the commencement of operations at the San Pablo gold processing plant located within the historical gold district of Remedios and Segovia, in Antioquia, Department of Colombia. The San Pablo processing plant is part of an industrial complex comprising a gold mine, general infrastructure, laboratories and now a fully refurbished processing plant with an initial capacity of 100 tons per day. Tolima Gold has also announced that it will continue with the upgrading program in order to take the San Pablo plant to a capacity of 300 tons per day without affecting its current plant and mine operation.

Furthermore, the Company has entered into a strategic partnership with Gran Colombia Gold Corp. (TSX:GCM) ("Gran Colombia") whereby Gran Colombia will provide ore to be processed in the San Pablo plant while the Company's mines are brought to commercial production. The strategic partnership has an initial term of 6 months and under it Gran Colombia will deliver ore at its own cost and the Company will process the ore at its own cost, with sales proceeds being split 70/30, respectively. This strategic partnership will allow the Company to operate the San Pablo plant to capacity from the start and to generate continuous cash flow to support its capital and exploration investment programs. The Company intends to simultaneously increase the processing capacity of the San Pablo plant to 300 tons per day while developing its current San Pablo and La Bartola mines to be able to feed the upgraded processing plant.

The San Pablo and La Bartola mines are two well-known underground mines with their main shafts distant 400 meters from each other. The San Pablo mine is in the development stage with new galleries being added to access the mineralized structures, which will include a new shaft and four additional levels. La Bartola mine has been abandoned for some time and the Company intends to sample and rehabilitate the mine, as well as initiate development of a tunnel between the San Pablo and Bartola veins. All these developments will add up to more than 3 km of new tunnels in 2012.

In addition, the Company will continue exploring its seven properties in the Remedios project in order to find further mine prospects within this strategic location.

About the processing plant: The San Pablo processing plant was acquired with the Remedios properties in the last half of 2011. All of the stages of the plant were modified to improve its efficiency. The plant is practically new. It had had been run intermittently and required improvement in some areas in order to reach design capacity. Since its acquisition, crushing and milling stages were improved. The rock size entering the crushing stage was left at 10in and the out coming size was reduced to a maximum of 5in. This change in size improves the milling stage drastically. The primary and secondary mills were relocated, improving the overall flow of the material along the plant. New and more modern equipment was added to the floatation process adding efficiency to this crucial step. The capacity of this stage was doubled with the addition of two new floating cells. The Cyanide process had a complete maintenance completed. Furthermore, a new set of filters were added to the Merryl Crow. The Foundry was also modernized by adding a new, more efficient furnace. With these improvements, the plant will run at design capacity and will be ready for an increase in capacity.

Information Concerning Tolima

Tolima is a gold exploration and development company with contractual interests in gold properties in Colombia. Tolima's mineral properties are the Remedios Project, located in the Remedios/Segovia mining district, including the San Pablo and Bartola mines, located in the Antioquia Department of Colombia; the Ancal/Marmato Project, located in the Marmato/Caramanta district in the Caldas and Antioquia Departments of Colombia; and the Nortol project, including the newly acquired Papayo property, located in the Northern part of the Tolima Department of Colombia. Tolima continues to explore opportunities for the acquisition of additional mining interests in prospective mining districts in Colombia.

Cautionary Statements

Some of the interests in mining properties in Colombia held by Tolima are held beneficially and are subject to formal assignment to Tolima subsidiaries. Formal assignment is subject to review by the relevant mining authority and to registration before the National Mining Registry of Colombia, and is also subject to current compliance with the terms of each mining property and to meeting certain legal, financial and technical criteria. There is no certainty as to when such formal registration will be achieved.

Many of the interests are also held pursuant to preliminary or conditional documentation with the legal holders or beneficial holders of the respective mining titles or applications and are subject to further definitive agreements and conditions, and there is no certainty as to when such definitive documents will be completed or if the conditions will be satisfied.

Forward-looking statements

This news release contains certain "forward looking statements" including, for example, completion of the proposed acquisition, the acquisition of additional mining interests by Tolima, the ability of Tolima to complete definitive documentation in respect of certain acquisitions and assets and the ability of Tolima to achieve formal assignment and registration of its mining properties. Such forward-looking statements involve risks and uncertainties, both known and unknown. The results or events depicted in these forward-looking statements may differ materially from actual results or events. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding and are implicit in, among other things: receipt of government and third party approvals in respect of transferring assets, the state of the capital markets; tax issues associated with doing business internationally, the ability of Tolima to successfully manage the political and economic risks inherent in pursuing mineral exploration opportunities in Colombia; and the ability of Tolima to obtain qualified staff, equipment and services in a timely and cost efficient manner to develop its business. Any forward-looking statement speaks only as of the date of this news release and, except as may be required by applicable securities laws, Tolima does not intent and disclaims any duty or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or results or otherwise.