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Press release from Marketwire

Continental Gold Drills 14.3 Metres at 446g/t Gold and 166g/t Silver in the Veta Sur System, Buritica Gold Project, Colombia

Tuesday, August 31, 2010

Continental Gold Drills 14.3 Metres at 446g/t Gold and 166g/t Silver in the Veta Sur System, Buritica Gold Project, Colombia09:01 EDT Tuesday, August 31, 2010TORONTO, ONTARIO--(Marketwire - Aug. 31, 2010) - Continental Gold Ltd. ("Continental" or the "Company") (TSX:CNL) is pleased to announce the first results of the 2010 drilling campaign in the Veta Sur and Yaragua vein systems plus a new discovery on the Company's 100%-owned Buritica Gold Project, Antioquia Province, Colombia. Highlights -- Drill-hole BUSY-79, in the Veta Sur system, intersected 14.3 metres at 446g/t gold and 166g/t silver including 3.0 metres at 2106.1g/t gold and 738.7g/t silver; And separately, 5.5 metres at 100.2g/t gold and 88.3g/t silver -- These bonanza grade intercepts represent a newly recognized style of mineralization which overprints the base metal carbonate gold may be more widespread in the broader (2.5x0.7kms) Buritica mineralized system. -- Drilling in Veta Sur has now outlined gold mineralization over 400 metre horizontal and 350 metre vertical extents and which is open laterally and at depth. Other significant new Veta Sur intercepts include BUSY-66: 8.50 metres at 23.67g/t gold and 149g/t silver and BUSY-68: 4.70 metres at 85.44g/t gold and 71g/t silver -- Further drilling in the Yaragua system has demonstrated: -- continuity of the San Antonio high grade vein set over horizontal and vertical extents of more than 400 metres. Significant new intercepts include BUSY-73: 5.9 metres at 21.34g/t gold and 49g/t silver plus 3.90 metres at 31.98g/t gold and 40g/t silver (Footwall Vein) -- potentially economic thickness and grades of Vein B over 350 metres horizontal and 300m vertical extents including BUUY-35: 8.85 metres at 10.28g/t gold and BUUY- 38: 9.30 metres at 6.37g/t gold and 44g/t silver -- numerous other intersections of additional veins in the vicinity of Vein B -- Busy-63 intersected 1.5 metres at 64.82g/t and 2.7 metres at 5.87g/t gold, representing a newly discovered vein system under a soil geochemical anomaly to the north of the Yaragua vein system. DetailsContinental's soil geochemistry (Press Release, August 09, 2010), surface and underground mapping and drilling at Buritica have outlined base metal-carbonate type auriferous systems with gold mineralization in sets of high grade veins and also in breccias bodies. Gold mineralization in Continental's 18000-hectare Buritica property is hosted mainly by the Tertiary-age Buritica intrusive complex and also by Cretaceous metasediments around its margins. Continental's work (2007-2009) focused on the Yaragua Mine area where diamond drilling plus underground sampling has partially delineated the high grade auriferous vein sets through horizontal and vertical extents respectively of around 500m and 350m. The Veta Sur system, contiguous with and to the southwest of Yaragua, was discovered in 2008. This release announces the first results from the Company's 2010 drill program on the Veta Sur and Yaragua areas.Veta SurAll six new surface drill-holes (BUSY-63, -68,-72, -75, -77 and -79) into the Veta Sur system intersected substantial gold mineralization in the form of veins and disseminations over a total width of more than 50 metres. The main intercepts from these holes together with those from the four earlier drill holes are tabulated below. ---------------------------------------------------------------------------- Drillhole I.D. From To Interval (i) Gold Silver Zinc (m) (m) (m) (g/t) (g/t) (ppm) ---------------------------------------------------------------------------- BUSY-79 186.3 191.8 5.5 100.20 88 410 incl. 188.7 190.8 2.1 258.11 196 435 193.3 207.6 14.3 445.99 166 590 incl. 198.6 201.6 3.0 2106.10 739 481 ---------------------------------------------------------------------------- BUSY-77 273.8 274.1 0.3 28.35 16 4167 327.3 330.9 3.6 8.07 152 50108 ---------------------------------------------------------------------------- BUSY-75 188.1 189.7 1.6 15.72 35 306 218.1 218.7 0.6 6.19 13 6555 241.4 242.0 0.6 11.57 48 922 ---------------------------------------------------------------------------- BUSY-72 252.6 253.4 0.8 4.74 24 301 263.4 267.7 4.3 6.73 20 244 273.9 274.6 0.7 12.36 283 1900 315.9 320.2 4.3 3.29 16 2309 397.5 399.1 1.6 18.55 41 10831 ---------------------------------------------------------------------------- BUSY-68 221.2 225.9 4.7 85.44 71 1304 incl. 225.0 225.9 0.9 428.73 326 246 258.0 261.1 3.1 11.05 97 340 ---------------------------------------------------------------------------- BUSY-66 137.9 146.4 8.5 23.67 149 6431 227.75 208.05 0.3 18.89 38 799 ---------------------------------------------------------------------------- BUSY-64 139.1 140.0 0.9 40.39 5 865 ---------------------------------------------------------------------------- 184.0 185.5 1.5 9.72 14 1085 208.45 210.0 1.55 5.19 36 758 211.8 212.4 0.6 24.76 134 1031 302.7 305.4 2.7 5.47 13 391 323.6 327.5 3.9 13.70 64 418 358.0 361.5 3.5 9.49 8 1117 ---------------------------------------------------------------------------- BUSY-46(ii) 83.3 85.5 2.2 5.86 48 7140 214.4 214.9 0.5 13.46 29 4183 228.95 229.9 0.95 32.71 43 2399 288.55 290.7 2.15 5.50 10 170 332.0 343.4 11.4 3.64 27 2808 ---------------------------------------------------------------------------- BUSY-44(ii) 271.3 273.4 2.1 4.26 68 6901 ---------------------------------------------------------------------------- BUSY-33(ii) 61.0 71.6 10.6 12.59 44 4327 88.7 99.1 10.4 29.37 212 5308 140.05 140.8 0.75 22.53 446 4295 148.4 149.9 1.5 18.75 70 828 199.0 200.5 1.5 15.14 75 361 ---------------------------------------------------------------------------- BUSY-23(ii) 235.4 241.3 5.9 52.43 20 331 247.2 248.8 1.6 9.28 53 259 269.1 270.3 1.2 61.43 62 267 ---------------------------------------------------------------------------- - True widths not known. Intercepts at 1g/t gold cut-off grade - Holes drilled in 2008-2009 and previously reported on website/technical report This drilling confirms that the Veta Sur system extends over 400 metres horizontally and 350 metres vertically and is open laterally and at depth. See a plan view of drilling and also a longitudinal section of Veta Sur. (Figures 1 and 2, http://media3.marketwire.com/docs/Figure1and2BuriticaPlanMap.pdf). Further drilling is expected to clarify the internal structure of the Veta Sur system and the high grade subzones within it.The ultra high grade intersections in BUSY-79 (14.3 metres at 446g/t gold and 166g/t silver including 3.0 metres at 2106.1g/t gold and 738.7g/t silver and separately, 5.5 metres at 100.2g/t gold and 88.3g/t silver) exhibit abundant visible gold associated with siliceous and calcareous veins and breccias which cross-cut and overprint the auriferous base-metal carbonate veins and disseminations. Highly anomalous in tellurium, antimony and arsenic and less so in lead and zinc this bonanza grade style of gold mineralization may be analogous to the bountiful Stage II style mineralization (eg Ronacher and others, 2004) in the 25 Moz. gold Porgera deposit. Stage II mineralization may prove to be more widely distributed in the Buritica system and will be targeted in ongoing drilling.YaraguaDrilling in the Yaragua area focused on the extensions of Vein B to the east and further delineation of the San Antonio vein set. The main intercepts from these holes and tabulated below and may be examined in plan view (Figures 1 and 2, http://media3.marketwire.com/docs/Figure1and2BuriticaPlanMap.pdf) ---------------------------------------------------------------------------- Drillhole I.D. From To Interval Gold Silver Zinc Subzone (m) (m) (m) (g/t) (g/t) (ppm) ---------------------------------------------------------------------------- BUSY-78 109.2 110.0 0.8 22.72 111 20200 San Antonio ---------------------------------------------------------------------------- BUSY-73 118.1 121.6 3.5 7.53 15 2370 San Antonio 122.05 122.7 0.65 14.77 7 7579 San Antonio 125.7 131.6 5.9 21.34 49 3181 San Antonio 138.9 142.8 3.9 31.98 40 8731 Footwall Vein ---------------------------------------------------------------------------- BUUY-34 357.8 358.7 0.9 11.54 14 6386 San Antonio ---------------------------------------------------------------------------- BUSY-71 81.0 82.0 1.0 8.14 4 721 Vein B ---------------------------------------------------------------------------- BUSY-67 Yaragua Breccia 145.1 175.5 30.4 2.60 9 12269 and Vein B 207.65 208.8 1.15 6.86 16 24600 ---------------------------------------------------------------------------- BUUY-39 72.0 73.5 1.5 7.28 7 5733 Vein B 130.5 133.5 3.0 4.19 8 2632 ---------------------------------------------------------------------------- BUUY-38 198.9 208.2 9.3 6.37 44 4479 Vein B ---------------------------------------------------------------------------- BUUY-37 187.0 188.7 1.7 7.14 13 8906 277.1 279.3 2.2 4.18 23 4980 Vein B 285.85 287.3 1.45 14.60 98 12425 ---------------------------------------------------------------------------- BUUY-36 112.65 116.2 3.55 3.68 8 12558 Vein B 153.5 156.0 2.5 7.09 59 6168 ---------------------------------------------------------------------------- BUUY-35 172.75 174.2 1.45 10.75 5 9070 191.9 200.75 8.85 10.28 11 6839 Vein B ---------------------------------------------------------------------------- Underground drill-holes are designated BUUY- Drilling in the high grade San Antonio vein system has extended the vein system to the west (BUSY-78) and east (BUUY-34). BUSY-73 demonstrated substantial grades and thicknesses in the central part of San Antonio, as well as intersecting the high grade Footwall Vein. Gold mineralization in the San Antonio vein set has now been demonstrated over vertical and horizontal extents of more than 400 metres and this Yaragua subzone is open to depth and laterally.Drilling in the Vein B subzone has shown potentially economic thicknesses and grades over 350 metre and 300 metre vertical extents. This drilling also encountered numerous other as yet uncorrelated vein intersections in the vicinity of Vein BThe 30 metre auriferous intersection in BUSY-67 mainly comprises Yaragua Breccia-hosted mineralization which is building towards a potentially bulk mineable resource.Yaragua NorthBUSY-63, the first hole drilled north of the Yaragua vein system, intersected 1.5metres at 64.82g/t and 2.7metres at 5.87g/t gold, representing a newly discovered vein system under a lateral soil geochemical anomaly and highlights the potential for further discoveries at Buritica outside of the Yaragua and Veta Sur systemsFive surface and two underground diamond drills are currently operating on the Veta Sur the Yaragua systems as well as beginning first pass tests of several new targets based on soil geochemical anomalies.The first results of Continental's 2010 drilling program have added significantly to the potential of the Company's Buritica Gold Project. Veta Sur is proving to be a laterally and vertically extensive gold-mineralized system. The intersections of bonanza grade in this system and the recognition of the style of this (Stage II) mineralization are particularly encouraging for Buritica's prospects.Drilling in Yaragua continues to build the resource potential in this area and the discovery of another vein system north of Yaragua bodes well for further finds associated with widespread soil geochemical anomalies in this area.Technical InformationThe results of the Company's drilling program have been reviewed, verified and compiled by Vice President Exploration, Stuart Moller P.Geol., a qualified person for the purpose of NI 43-101. Mr. Moller has over 30 years of mineral exploration experience and is a Licensed Professional Geologist in the Province of British Colombia and a Fellow of the Society of Exploration Geologists.The company utilizes a rigorous, industry-standard QA/QC program. HQ and NQ diamond drill- core is sawn in half with one half shipped to a sample preparation lab in Medellin run by SGS Colombia. Samples are then shipped for analysis to SGS certified assay laboratory in Lima, Peru. The remainder of the core is stored in a secured storage facility for future assay verification. Blanks, duplicates and certified reference standards are inserted into the sample stream to monitor laboratory performance and a portion of the samples are periodically check assayed at ACME laboratories in Vancouver and/or Inspectorate Labs in Reno.About Continental Gold LimitedContinental Gold Limited is an advanced-stage exploration company with eight gold projects covering 200,000 hectares in Colombia. Spearheaded by a management team with over 40 years of exploration and mining experience in South America, the Company has begun an aggressive exploration program on its extensive portfolio of properties with a focus on its flagship high-grade gold project, Buritica and its drill-ready project, Berlin. Additional details on the Buritica project and the rest of Continental Gold's suite of gold exploration properties is available at www.ContinentalGold.comForward-Looking Statements"This press release contains or refers to forward-looking information, including statements regarding the estimation of mineral resources, exploration results, potential mineralization, exploration and mine development plans, timing of the commencement of operations and estimates of market conditions, and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to convert estimated mineral resources to reserves, capital and operating costs varying significantly from estimates, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and the other risks involved in the mineral exploration and development industry. Forward-looking statements are subject to significant risks and uncertainties, and other factors that could cause actual results to differ materially from expected results. Readers should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof and the Company assumes no responsibility to update them or revise them to reflect new events or circumstances other than as required by law."FOR FURTHER INFORMATION PLEASE CONTACT: Continental Gold Limited Naomi Nemeth Vice President, Investor Relations +1 416.643.7638 info@continentalgold.com www.continentalgold.com