Colossus Minerals' First Underground Drill Holes Return Better Than Expected Widths and Grades While Surface Drilling Encounters More High Grade in Lower Limb

TORONTO, ONTARIO--(Marketwire - Oct. 16, 2012) - Colossus Minerals Inc. (the "Company" or "Colossus") (TSX:CSI)(OTCQX:COLUF) announces assay results from ongoing surface and underground drilling programs on its 75% owned Serra Pelada Gold-Platinum-Palladium Project. The Serra Pelada Project is a Colossus-COOMIGASP joint venture and is located in the State of Pará, Brazil.

HIGHLIGHTS

• SPUD-011 intersected 33.90 metres grading 3.67 g/t gold, 1.13 g/t platinum and 2.93 g/tpalladium including a higher grade zone of 5.95 metres grading 9.62 g/t gold, 3.41 g/t platinum and 8.46 g/tpalladium in the upper portion of the Central Mineralized Zone ("CMZ"). The hole exhibited better grades and a wider zone than what was interpreted from surface drilling. 
   
• SPUD-012 intersected 3.25 metres grading 4.29 g/t gold, 3.17 g/t platinum and 3.45 g/t palladium at the beginning of the CMZ before the hole was stopped due to technical problems. This hole was also successful in exhibiting higher grades and a wider zone than what was interpreted from surface drilling. 
   
• SPD-175 intersected 1.20 metres grading 273.47 g/t gold, 18.82 g/t platinum and 62.67 g/tpalladium in the lower limb zone ("Lower Limb") indicating that the high grade mineralization mined out of the historic pit, less than 150 metres to the southeast, continues along the lower limb of the folded structure. 
   
• SPD-181 intersected 3.55 metres grading 18.81 g/t gold, 24.46 g/t platinum and 31.38 g/tpalladium in the upper portion of the CMZ in between holes that returned lower grade mineralization at this elevation. This result suggests that high grade mineralization can occur at Serra Pelada that can go undetected between widely spaced drill holes and therefore demonstrates the need to drill the deposit on tight spacing. 
   

Claudio Mancuso , President & CEO of Colossus commented, "While still early in the underground drilling campaign, we are encouraged that the first few holes indicate that the CMZ is wider and contains better grades than what we were able to interpret from surface drilling in this area. The Lower Limb continues to demonstrate its potential with another high grade intercept and other intercepts that continue to expand the zone."

DETAILS

September saw the return of three diamond drill rigs infill drilling on the CMZ after a slowdown in exploration drilling in July and August when the surface drill rigs were deployed to the process plant construction area to conduct geotechnical drilling ahead of the commencement of earthworks and civil construction.

A second underground drill bay, which is approximately 200 metres closer to the CMZ, was commissioned in September. Delineation drilling of the CMZ on 10 metre centers has commenced from this location. The closer drill bay is expected to result in more efficient delineation drilling from underground.

In this release, and for all future public disclosure, Colossus will use "SPUD" to identify underground delineation drill holes while "SPD" will continue to identify surface drill holes.

Results from the current surface and underground drilling programs at Serra Pelada can be found in Table 1 below and the drill hole collar locations as well as drill hole traces can be seen in Figure 1 below.

TABLE 1: SIGNIFICANT DRILLING RESULTS

CMZ

SPD-181 was drilled along section 115NE and is the first in a series of holes to conduct infill drilling of the CMZ between the current 25 metre grid line spacing. The hole was successful in demonstrating that the upper portion of the CMZ (where it begins to bend into the upper limb zone) contains high grade mineralization with the intersection of 3.55 metres grading 18.81 g/t gold, 24.46 g/t platinum and 31.38 g/tpalladium. This higher grade intercept was not expected based on the drill holes on either side of this infill hole. This intercept indicates that there may be structures that contain high grade mineralization that can only be identified through an increased number of drill holes. The second interval of interest in this hole intersected 1.70 metres grading 14.74 g/t gold, 5.62 g/t platinum and 9.64 g/t palladium and is located almost 40 metres further down the hole than the first intercept. This intercept represents the inner most edge of the CMZ and is estimated to be 30 metres from the interpreted nose of the fold that typically contains the majority of the high grade CMZ mineralization.

Further infill drill holes will be conducted from surface along selected lines in order to provide increased drill hole density for the area of the CMZ that will be mined in the initial start-up and first few years of production at Serra Pelada. As underground development progresses towards the bulk sample location, additional underground drill bays will be established to conduct tightly spaced delineation drilling of the CMZ. In anticipation of these new drill bays, the surface infill drilling will aid to increase the drill hole density required to prepare an accurate resource estimate.

Underground Delineation Drilling

SPUD-011 was drilled from the underground drill bay located approximately on section 50NE and approximately 125 metres below surface (see Figure 2). The first hole along this section tested the uppermost portion of the CMZ and is part of a series of holes that will test the zone horizontally and sub-horizontally, on 10 metre centers, in order to increase the drill hole density in this area. The hole intersected a wider zone of mineralization than was anticipated. The zone was expected to be approximately 23 metres wide at this point based on the interpretation from the surface drill holes. SPUD-011 intersected 33.9 metres (an almost true width) grading 3.67 g/t gold, 1.13 g/t platinum and 2.93 g/t palladium including a higher grade interval at the end of the hole of 5.95 metres grading 9.62 g/t gold, 3.41 g/t platinum and 8.46 g/t palladium. The higher grade mineralization at the end of the drill hole was not anticipated based on the surface drill holes on this section. This underground drill hole shows the potential to uncover additional precious metal mineralization at Serra Pelada. Underground drilling continues along this section. It is interesting to note that there were two intervals in the overall mineralized zone that had a combined length of 2.26 metres that had no core recovery and were therefore assigned zero grade values for the overall average.

SPUD-012 was designed to intercept the CMZ at a depth 10 metres below the center point of the CMZ encountered in SPUD-011. At 181.9 metres, while in the start of the CMZ, a drill rod broke down the hole and attempts to retrieve it were not successful, forcing the Company to abandon the hole. A new hole to replace this one will be drilled at the end of the planned sequence of holes for this section. The portion of the mineralized deposit that was encountered intersected 3.25 metres grading 4.29 g/t gold, 3.17 g/t platinum and 3.45 g/t palladium. These results indicate that the mineralized zone started five metres sooner than what was interpreted from the surface drill holes and therefore increases its presumed thickness and suggests that internal interpretations of the results of surface drilling has underestimated the true thickness of the CMZ.

SPUD-013 is underway and is designed to test the mineralized area 10 metres below the trace of hole SPUD-012.

Lower Limb Zone

SPD-168 was drilled on section 350NE and designed to test for Lower Limb mineralization approximately 80 metres northwest of the current edge of the historic Serra Pelada open pit. The hole returned 1.7 metres grading 4.61 g/t gold, 0.16 g/t platinum and 0.39 g/t palladium demonstrating the continuity of the mineralization away from the mined out pit. Future development from the underground mine at Serra Pelada will allow access to this potential mineralization.

SPD-172 was drilled on section 350NE and designed to test the Lower Limb 50 metres NW of SPD-168. SPD-172 intersected 1.1 metres grading 15.56 g/t gold, 0.53 g/t platinum and 1.85 g/t palladium in an iron oxide breccia demonstrating the high grade potential of the Lower Limb in this area. SPD-172 is approximately 170 metres northwest of the portion of the high grade CMZ that was mined out of the historic open pit. The Lower Limb is open to the northwest which is in the up-dip direction on the lower limb of the Serra Pelada fold structure and demonstrates that there is still potential ore grade mineralization in the bedrock close to the historic Serra Pelada open pit that was mined out by garimpeiros.

SPD-175 was drilled on section 400NE and designed to test the Lower Limb 25 metres southeast of SPC-011 (3.0 metres grading 2.89 g/t gold, 0.15 g/t platinum and 0.51 g/t palladium released on September 3, 2009). SPD-175 intersected 1.20 metres grading 273.47 g/t gold, 18.82 g/t platinum and 62.67 g/t palladium and indicates that the high grade mineralization that was mined out of the historic pit, less than 150 metres to the southeast, continues along the Lower Limb. It also demonstrates the grade variability when comparing this multi-ounce intercept with the lower grade reported from SPC-011 proving that the Lower Limb will also have to be tightly drilled in order to realize its full potential in the overall mine plan at Serra Pelada. This intersection indicates that high grade Lower Limb mineralization was inaccessible to the garimpeiros due to the hard red siltstone country rock but can be mined by mechanical means from the underground operation at Serra Pelada.

SPD-178 was drilled on section 325NE and designed as a 25 metre step-out, up-dip of SPD-149 (3.8 grading 11.54 g/t gold, 2.04 g/t platinum and 2.61 g/t palladium released onApril 25, 2012). The hole intersected 1.50 metres grading 16.60 g/t gold, 9.91g/t platinum and 33.27 g/t palladium of Lower Limb mineralization and extends the zone towards the northwest in the up-dip direction.

Serra Pelada Geology

Gold-platinum-palladium mineralization at Serra Pelada overprints metasediments occupying the hinge of a large fold. The CMZ comprises mainly a steep dipping carbonaceous alteration zone in the fold hinge that also extends onto the upper and lower limbs of the fold for a limited distance. The Lower Limb represents shallow-dipping, gold-platinum-palladium mineralization predominantly associated with an iron oxide rich breccia as well as iron oxide rich argillic alteration and locally carbonaceous alteration on the lower limb of the main fold. The upper limb mineralization is characterized by an iron oxide rich breccia similar to that found in the Lower Limb.

Technical Information

Diamond drilling was HQ cored. Sampling of core by Colossus personnel and sample preparation by Intertek Limited, Parauapebas and SGS Geosol, Parauapebas, Brazil were carried out under strict protocols recommended in the National Instrument 43-101 Technical Report dated January 31, 2010 on the Serra Pelada Project. After photographing and logging, core sample intervals were cut and/or split in half, yielding samples of various weights depending on the sample length. Where core recoveries were low, intervals were composited to yield approximately one kilogram minimum sample mass. Intertek and SGS Geosol pulverize one or two kilogram splits (>95% passing 106 microns) from the crushed (>95% passing 1.7 mm), dried samples. Duplicates, blanks and certified gold-PGE reference materials were inserted in the sample train by Colossus personnel prior to Intertek preparation work.

The labs insert additional blanks, duplicates and high grade gold/PGE reference materials in the assay stream and replicate or duplicate assays were performed routinely and on most medium- to high-grade materials. Fire assays for gold, platinum and palladium were on 25 gram subsamples utilizing a lead-rich collector material and AA finish.

The Intertek and SGS Geosol assay results for blanks, duplicates, replicates and also all reference materials were well within generally accepted QA/QC measures. A 200 gram aliquot of medium and high grade pulps were rotary split from each pulp by Intertek and SGS Geosol and one of these samples was securely shipped directly by Intertek toGenalysis Limited, Perth Laboratory for check assaying. A similar procedure is used for samples assayed at the SGS Geosol lab with the samples being securely transported to the Intertek lab in Parauapebas, Brazil for check assaying.

Graham Long , Vice President, Exploration of Colossus, is a qualified person under National Instrument 43-101 and is responsible for this release and has verified the contents disclosed.

About Colossus:

Colossus is a development-stage mining company focused on bringing its Serra Pelada project into production. Serra Pelada, located in the mineral prolific Carajas region in the State of Pará, Brazil, is host to one of the highest grade gold and platinum group metals deposits in the world. Between 1980 and 1986 Serra Pelada was host to the largest precious metals rush in Latin American history. Coverage of this famous mining rush by 60 Minutes can be viewed by following the link below. Colossus Minerals shares, warrants and notes trade on the Toronto Stock Exchange (TSX) under the symbols CSI, CSI.WT.A and CSI.NT respectively and in the United States its Common Shares trade on the OTCQX under the symbol COLUF. The Company is headquartered in Toronto, Canada.

http://sixtyminutes.ninemsn.com.au/article.aspx?id=299887

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Forward-looking statements in this press release include statements regarding 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.

Except for statements of historical fact relating to Colossus, certain statements in this press release relating but not limited to the Company's exploration and development plans, activities and intentions, constitute "forward-looking information" within the meaning of the Securities Act (Ontario) or "forward-looking statements" within the meaning of the United States Private Litigation Reform Act of 1995. These forward-looking statements represent management's best judgment based on current facts and assumptions that management considers reasonable. Forward-looking statements are frequently characterized by words such as "target", "plan", "expect", "project", "intend", believe", "anticipate" and other similar words, or statements that certain events or conditions "appear to", "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The factors include but are not limited to risks related to the joint venture operation, actual results of exploration activities, the inherent risks involved in the exploration and development of mineral properties, changes in project parameters as plans continue to be refined, delays in obtaining government approvals, the uncertainties of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future, the uncertainties inherent to conducting business in Brazil and the rest of Latin America, the availability of equipment and supplies, unexpected adverse climate conditions, the reliance on only a few key members of management, as well as those factors discussed in the section entitled "Risk Factors" in the Company's most recent Annual Information Form filed with Canadian provincial securities regulatory authorities and other regulatory filings which are posted on SEDAR at www.sedar.com. Unless required by law, Colossus undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

To view Figure 1, please visit the following link:http://media3.marketwire.com/docs/CSI1610_Figure_1.pdf.

To view Figure 2, please visit the following link:http://media3.marketwire.com/docs/CSI1610_Figure_2.pdf.

Contact: Ann Wilkinson
Company Name: Colossus Minerals Inc.
Contact Title: VP, Investor Relations
Phone: (416) 643-7655
Other1: awilkinson@colossusminerals.com
Other2: www.colossusminerals.com