core sector communique

Colossus and Sandstorm Agree to a US$75 Million Long-Term Precious Metal Sale Transaction

TORONTO, ONTARIO--(Marketwire - Sept. 19, 2012) - Colossus Minerals Inc. (the "Company" or "Colossus") (TSX:CSI)(OTCQX:COLUF) is pleased to announce that it has entered into an agreement with Sandstorm Gold Ltd. ("Sandstorm") (NYSE MKT:SAND)(TSX VENTURE:SSL) to sell refined precious metals in an amount equivalent to a portion of the life-of-mine payable platinum, palladium and gold produced from Colossus' 75% owned Serra Pelada Project. Colossus will receive an upfront deposit of US$75 million, as well as ongoing payments for each ounce of metal delivered under the agreement.

Transaction Highlights

• Attractive source of capital: The transaction provides a non-dilutive source of capital by selling 35% of payable platinum and palladium production and a small portion (1.5%) of payable gold production. Colossus will deliver all metals due under this agreement from its 75% of the Serra Pelada project.

• Fully funded for construction and beyond: The US$75 million is in excess of the remaining funding required for the construction and ramp up of production at Serra Pelada. The excess funds provide a construction contingency and may also be used to advance the Company's regional exploration program or other value-enhancing activities.

• Third party validation: Partnering with Colossus demonstrates Sandstorm's confidence in Serra Pelada and its potential to deliver low cost production. Sandstorm completed significant due diligence on the property including a review of the geological and metallurgical work being used as the basis for construction of the mine and the substantial exploration potential that remains at Serra Pelada.

• Maintain significant commodity exposure: Under the terms of the Transaction Colossus and its shareholders maintain significant exposure to all precious metals produced from Serra Pelada, particularly gold.

Claudio Mancuso, President & CEO of Colossus commented, "This transaction is an endorsement of the quality and potential of Serra Pelada and the emergence of Colossus as a high-grade near-term gold producer. The transaction provides a favourable, non-dilutive source of funding and the necessary capital to ensure the successful completion of construction. Development of Serra Pelada remains on schedule and we look forward to having Sandstorm as a partner as we advance the Serra Pelada project towards initial production in mid-2013."

Nolan Watson, President & CEO of Sandstorm commented, "This transaction represents Sandstorm's largest investment to date. Sandstorm is proud to become a partner with Colossus, a quality high-grade near-term producer, in completing the construction of Serra Pelada. Colossus has assembled an excellent operations team and has placed itself in a strong position to produce in 2013."

Details of the Agreement

Sandstorm will provide a US$75 million deposit to Colossus. In return, Colossus will deliver to Sandstorm life-of-mine payable metal equal to 35% of the platinum, 35% of the palladium and 1.5% of the gold from Serra Pelada. The percentages of payable metals to be sold by Colossus to Sandstorm are calculated based on 100% of payable metals derived from production at Serra Pelada; however, Colossus will deliver all metals due under this agreement from its 75% of the Serra Pelada project.

Ongoing payment terms: In addition to the upfront deposit, Sandstorm will also pay to Colossus a purchase price equal to the lesser of US$200 per ounce of platinum, US$100 per ounce of palladium and US$400 per ounce of gold (subject to inflation adjustments of 1% per year) and the prevailing market price. The balance of production from Colossus' 75% of the Serra Pelada project, as well as COOMIGASP's 25% portion of production, will be sold at prevailing market prices.

Buy-back option: Colossus has the right to purchase up to 50% of Sandstorm's obligation to purchase metals for US$48.75 million. Colossus may exercise this option either as a single purchase or in 10% increments until April 1, 2015.

Other terms and conditions: Colossus has guaranteed certain minimum annual deliveries for the initial 10 year period, commencing in 2013. In addition, Colossus has agreed to refund a pro-rata portion of the upfront deposit in the event that Serra Pelada does not achieve a completion test within 48 months of funding. Colossus' obligations under the agreement will be secured by Colossus' interest in its principal subsidiaries as well as by certain assets of Colossus Mineração Ltda. ("Colossus Brazil"). The amount so secured will be limited to $10 million until Colossus' outstanding senior unsecured gold linked notes have been repaid. In addition, Colossus has guaranteed the performance by Colossus Brazil of its obligations under the agreement with Sandstorm. Future royalty arrangements or similar metal sales agreements by Colossus or its subsidiaries involving Serra Pelada are subject to rights of first refusal or consent rights in favour of Sandstorm. The agreement also contains other terms and conditions, including customary representations, warranties, covenants and events of default. The initial term of the contract is 40 years, subject to successive 10-year renewals at the discretion of Sandstorm. Funding of the deposit by Sandstorm is expected to occur today.

Colossus' financial advisor for this transaction was GMP Securities L.P. and its legal advisor was Davies Ward Phillips & Vineberg LLP.

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.