UPDATE 1-Greystar says Colombia accepts its gold mine appeal

* Greystar says mine feasibility study due in October

* Environmental ministry warned against leaching zones

* Stock gains 45 percent
(Adds share price reaction)

By Diana Delgado

BOGOTA, May 31 (BestGrowthStock) – Shares of Greystar Resources
(GSL.TO: ) jumped 45 percent on Monday after the company said it
won’t have to redesign its Angostura gold project in Colombia
to conform to new mining regulations in the country.

In a statement, Greystar said Colombia had accepted its
appeal against a demand to resubmit an environmental study on
the project.

The Andean nation ordered the miner in April to resubmit
the study following the approval of a new law forbidding mining
in a certain ecosystem — a decision Greystar said was
retroactive implementation.

Frederick Felder, executive vice president of the company,
told Reuters by telephone that Bogota had agreed to review its
original study submitted in December. The modification of the
mining code became effective on Feb. 9, 2010.

Felder said that work on the Angostura gold and silver
project — with construction of a mine expected to begin early
next year — was not affected by the appeal process.

“During these days, we continued our feasibility studies
… we were confident the government was going to accept the
study,” he said. Colombian officials were not immediately
available for comment.

Mining companies have returned to Colombia after shunning
the country for years due to rebel violence. Security has
improved under President Alvaro Uribe, who sent troops out to
drive back armed groups.

The environment ministry said earlier it had warned
Greystar that part of Angostura’s leaching zones were located
on so-called paramo ecosystems even before the new mining code
was approved. [ID:nN18158721]

Paramo occurs in the Andes between upper forest limits and
the lower edges of snow line, but in Colombia, paramo systems
vary depending on the mountain range.

Felder said that the environment ministry had not evaluated
whether Angostura’s leaching zones were on paramo systems.

Angostura has 10.2 million troy ounces of measured and
indicated gold reserves and 3.4 million of inferred resources
with 74 million ounces of silver reserves and resources,
according to preliminary feasibility studies.

The company plans to complete a definitive feasibility
study in October.

Shares of Greystar, which lost nearly half of their value
following the April decision, clawed back much of their lost
value on Monday.

Just after midday, the stock was up C$1.68 at C$5.44 on the
Toronto Stock Exchange.

Investing Analysis

(Writing by Jack Kimball; Additional reporting by Cameron
French in Toronto; editing by Peter Galloway)

UPDATE 1-Greystar says Colombia accepts its gold mine appeal