Gran Colombia shares soar as pension liabilities lifted

Mon Mar 14, 2011 11:34am EDT

* Says pension obligations shifted to Colombian authorities

* Shares rise 18 pct; 2nd highest percentage gain on TSX

March 14 (Reuters) - Shares of Gran Colombia Gold Corp rose as much as 18 percent on Monday, a day after pension obligations for former employees at a Colombian mine it bought last year were transferred to the social security authorities in that country.

Gran Colombia bought Frontino Gold Mines Ltd in August last year and the transfer of the pension obligations to the country's authorities was one of the terms of the deal.

Shares of the Canadian gold miner were trading up 17 percent at C$1.92 in heavy trade, making them the second highest percentage gainer on the Toronto Stock Exchange.

On Friday, the company transferred about $195 million to the Colombian Social Security Institute (ISS). It said the balance of the funds in a trust account -- set up last year to deal with the pension obligations -- will be used for costs related to liquidating the pension plan.

Gran Colombia's shares which have gained nearly 41 percent since the deal in August. (Reporting by Amruta Sabnis in Bangalore; Editing by Jarshad Kakkrakandy) ((amruta.sabnis@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 4135 5800; Reuters Messaging: amruta.sabnis.thomsonreuters.com@reuters.net)