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Continental Gold Drills 25.45 m @ 12.02 g/t Au and 57.4 g/t Ag at Veta Sur and Extends the Veta Sur Mineralization 350 m Vertically with the First Drill-Hole of the Buritica Deep Drilling Program

Wednesday, August 31, 2011

Continental Gold Drills 25.45 m @ 12.02 g/t Au and 57.4 g/t Ag at Veta Sur and Extends the Veta Sur Mineralization 350 m Vertically with the First Drill-Hole of the Buritica Deep Drilling Program06:30 EDT Wednesday, August 31, 2011TORONTO, ONTARIO--(Marketwire - Aug. 31, 2011) -Continental Gold Ltd. ("Continental" or the "Company") (TSX:CNL) is pleased to announce results for 16 diamond drill-holes from the Company's ongoing program at its Buriticá Project in Antioquia, Colombia. Over 80,000 metres of diamond drilling have been completed on the property to date and nine drills are currently on schedule to complete approximately 100,000 metres of surface and underground drilling by the end of 2011.HighlightsVeta Sur (Figures 1and 2)Two drill-holes extended the high grade central part of this system to the southwest and up-dip. Drill intercepts including: 25.45 m @ 12.02 g/t gold, 57.4 g/t silver, including 2.25 m @ 43.76 g/t gold and 113 g/t silver (BUSY167) 2.10 m @ 21.31 g/t gold, 31.1 g/t silver and 1.50 m @ 14.21 g/t gold and 43 g/t silver (BUSY180) Drilling in Veta Sur central continued to demonstrate the continuity of high base metal-carbonate veining and common Stage II overprints as well as high silver veins in this area. Highlights include: 1.1 m @ 3.90 g/t gold, 1424 g/t silver and 3.0 m @ 17.11 g/t gold, 15 g/t silver (BUSY165) 4.5 m @ 2.43 g/t gold, 244.1 g/t silver and 1.19 m @ 18.47 g/t gold, 56.5 g/t silver (BUSY181) 1.55 m @ 22.47 g/t gold, 56 g/t silver and 0.5 m @ 142.1 g/t gold., 96 g/t silver (BUSY185) 10.35 m @ 18.15 g/t gold, 25.1 g/t silver and 3.35 m @ 12.63 g/t gold, 11.5 g/t silver (BUSY186) BUSY192 intersected high grade gold and silver veins with relatively low base metal contents confirming the northeasterly extensions of the Veta Sur system deep under the Diatreme Fault, including: 3.24 m @ 32.7 g/t gold, 350.6 g/t silver and 4.25 m @ 24.12 g/t gold, 57.9 g/t silver BUSY164, drilling for the southwest extensions of Veta Sur, intersected several auriferous veins at depth and also a family of silver-rich veins including 3 m @ 517 g/t silver. BUSY 210 (awaiting assay), the first deep drill-hole under the Veta Sur system, encountered base metal carbonate mineralization at elevations up to 350 metres deeper than any previous drill-hole. Yaragua and Yaragua South (Figure 1)BUSY178 and BUSY182 extended the Yaragua system to the west of and underneath the Diatreme Fault, both holes encountering substantial mineralized intercepts, including: 6.60 m @ 6.01 g/t gold, 35.2 g/t silver, incl. 1.53 m @ 19.29 g/t gold, 72 g/t silver (BUSY178) 4.5 m @ 9.8 g/t gold, 7.4 g/t silver (BUSY182) BUUY58 and BUUY59 drilled across west central Yaragua each intersected several major veins from the Murcielagos family in the south and also substantial widths of lower grade mineralization, including: 2.20 m @ 55.12 g/t gold, 30.6 g/t silver (BUUY58) 4.50 m @ 6.20 g/t gold, 22.3 g/t silver and 2.6% zinc (BUUY59) In addition to encountering several new auriferous vein sets, BUSY176 and BUSY183, drilled from south of Yaragua, extended the Murcielagos family of veins deep under eastern Yaragua. High grade intercepts include: 2.0 m @ 20.44 g/t gold and 4.2 g/t silver and 0.6 m @ 22.43 g/t gold, 23.0 g/t silver (BUSY176) 1.4 m @ 14.16 g/t gold, 8.3 g/t silver (BUSY183) BUSY187 demonstrated the continuity of high silver-auriferous veins, south of the Murcielagos family of veins over 70 metres from previous drilling. Significant intercepts including: 2.90 m @ 4.53 g/t gold, 588 g/t silver, incl. 1.40 m @ 5.99 g/t gold, 1210 g/t silver DetailsContinental's 100%-owned, 22,457-hectare project, Buriticá, contains several known areas of high-grade gold and silver mineralization, of base metal-carbonate style ("Stage I") variably overprinted by texturally and chemically distinctive high-grade "Stage II" mineralization. The two most extensively explored of these areas (the Yaragua system and the Veta Sur system, Figure 1) are central to this land package. The Yaragua System has been drill-outlined along 550 metres of strike and 600 vertical metres and partially sampled in underground developments. The Veta Sur system has been drill intersected along 500 metres of strike and over 900 vertical metres, including the latest visual intercept (Figure 2). Both systems are characterized by multiple, steeply dipping veins and broader, more disseminated mineralization and both remain open at depth at high grades. Veta SurSignificant new drill intercepts in the Veta Sur system are tabulated below:DrillholeFrom (m)To (m)Interval* (m)Gold (g/t)Silver (g/t)Zinc (ppm)RL (m)BUSY16412.0015.003.000.01517.01128186017.0019.502.50<0.005119.0761185522.5024.451.95<0.005196.07571850216.60218.101.503.1255.030161670256.50261.305.801.8622.5119801630BUSY165132.08133.11.026.86320.0724001655142.7143.81.103.901424.01684001645147.00148.41.401.34306.0120001634189.3190.10.8013.0060.028001600232.15233.100.953.005.711901558305.50307.001.5018.94108.219391487342.00375.0032.003.8723.14301428incl.361.50372.0010.507.2632.92741409409.00412.003.0017.1115.034571388421.00428.507.504.153.25771373454.50454.950.4515.00100.0188001344BUSY167143.35143.750.4011.00350.020201593185.10186.701.603.449.68461553297.20300.002.802.2993.86901446319.70345.1525.4512.0257.438401430incl.324.80327.052.2543.76113.058831418335.00340.445.4423.0473.614401406400.31400.850.5413.328.52361347426.00427.001.005.3040.04671322BUSY180117.20120.002.8011.9011.420821628141.05182.7541.704.1216.012211606incl.141.05143.052.1021.3131.11106164.00165.501.5014.2143.09151588169.00173.504.504.7014.021671577349.10351.001.901.4550.3211871430BUSY181121.84123.501.662.6779.7639531657168.35172.504.152.43244.128661627incl.169.00170.001.006.51340.03305172.00172.500.501.72756.089271617192.90200.157.252.4816.92651597incl.192.90193.300.4016.1517.087292.93294.001.077.9024.013881503328.50337.448.946.4721.68101464incl.336.25337.441.1918.4756.5391342.00343.701.708.6420.413171546365.40372.206.802.055.49891431413.10414.601.505.154.419941390428.20429.000.807.957.457601376509.50512.603.103.973.16391299531.80532.200.4044.3325.01911279536.00538.902.9013.2016.32491273546.65548.652.005.5720.716381264BUSY184376.40377.000.603.3151.0>100001504BUSY18569.8070.100.304.20334.0257001714131.45133.001.5522.4756.0353551653192.37195.002.632.9530.914931593228.00228.700.701.38473.09331559283.50284.000.50142.1096.04991505320.75323.773.027.3622.75271468360.80363.602.805.0512.36091428390.13392.001.874.555.825171400393.00396.903.903.178.45311393433.00435.002.007.655.23531358444.50446.001.506.248.513001345489.30491.502.204.572.13221302BUSY186112.10112.800.7021.01549.0666001618268.10269.451.357.0736.39631462401.65412.0010.3518.1525.28851330incl.402.10404.752.6542.5942.01697414.00421.807.807.0228.211871314446.30450.003.702.7014.15061284453.00454.001.0012.3660.02101280477.30494.9017.604.159.71741249incl.484.25487.603.3512.6311.5518499.75501.201.4518.5024.512671234516.25517.150.9017.0437.64901221EOH518.65519.000.355.2021.01541215BUSY192212.00214.502.503.995.78081577282.00283.221.2218.673.914331512291.65295.003.352.8912.414111501301.00311.7010.7011.22146.29371489incl.305.08308.323.2432.70350.62006408.00410.102.104.2124.94071396417.60421.103.506.175.91961387427.75432.004.2524.1257.93011378457.30458.301.005.3522.01671352492.56493.701.146.1329.76851322499.10503.434.333.5710.72381314*Intercepts calculated at 1g/t gold-equivalent cut-off grade. True widths unknown, but mostly between 60 and 30% of the down-hole interval.Drilling at Veta Sur has focused on and been successful at:extending the system to the southwest extending and better defining the central high grade part of the system evaluating the deep extensions in the northeast and southwest Two drill-holes (BUSY167 and BUSY180) were drilled in the gap between central and western Veta Sur (Figure 1). Both intersected multiple high grade auriferous veins (for example, BUSY167 2.25 m @ 43.76 g/t gold, 113 g/t silver and BUSY180 2.10 m @ 21.31 g/t gold and 31 g/t silver) within broader intervals (for example, BUSY167 25.45 m @ 12.02 g/t gold, 57.4 g/t silver) of medium grade gold exhibiting moderate base metal contents. Four drill-holes (BUSY186, BUSY181, BUSY165 and BUSY185: Figures 1 and 2) targeted the central part of Veta Sur. Each intersected multiple high grade auriferous veins (some with high silver contents) commonly within broader mineralized intervals. These intercepts (Table 1) demonstrate strong grade continuity of vein sets along strike and dip. BUSY186 extended high grade gold mineralization down to elevations below 1250m RL in central Veta Sur (Figure 2). Each hole also displayed several intersections with Stage II overprints, significantly extending the area of influence of this high grade mineralization.BUSY192 was drilled to clarify the extensions of the Veta Sur system to the northeast, under the Diatreme Fault system. Mineralised intercepts in this drill-hole occur over a substantial depth range down to 1300m RL (Figure 2). High grade vein sets (from 305.08m down-hole, 3.24 m @ 32.70 g/t gold, 350.6 g/t silver and from 427.75 m, 4.25 m @ 24.12 g/t, 57.9 g/t silver) correlate well with those in BUSY150, BUSY90 and BUSY82 also drilled in northeast Veta Sur, extending these veins both laterally & vertically.BUSY164 expanded the Veta Sur system to the southwest (Figure 1), encountering several auriferous base metal-rich veins (Table 1) in this area.Several drill-holes added significantly to the emerging silver story in the Veta Sur system. BUSY 164 intersected a set of veins with high Ag/Au in southern Veta Sur, including 3.0 m @ 517 g/t silver. BUSY167 (0.4 m @ 11 g/t gold, 350 g/t silver) and BUSY186 (0.7 m @ 21.01 g/t gold, 549 g/t silver) intersected good silver grades on the southern side of Veta Sur (Figure 1) confirming a high silver vein set through this area. BUSY181 (1 m @ 6.51 g/t Au, 340 g/t silver), BUSY165 (1.10 m @ 3.90 g/t gold, 1424 g/t silver) and BUSY185 (0.70 m @ 1.38 g/t gold, 473 g/t silver) all encountered multiple intervals of high grade silver on the northern side of Veta Sur, adding to extents of silver-rich veins in this area.Yaragua (Figure 1)Significant new drill intercepts in the Yaragua system are tabulated below:DrillholeFrom (m)To (m)Interval (m)Gold (g/t)Silver (g/t)Zinc (ppm)Vein NameBUUY5910.2022.4012.203.5919.022693Brecciaincl.14.9019.404.506.2022.325567Murcielagos31.5035.904.402.2625.216586Murcielagos67.1071.504.403.934.2278Murcielagos76.9080.403.505.939.07019Murcielagos81.9085.103.202.983.23513Murcielagos240.00241.001.005.4446.04035Vein B364.90365.300.4015.856.51717Vein CBUUY5810.0020.0010.002.2815.1021788Murcielagos22.0035.5013.502.746.67927Murcielagos169.00170.501.503.213.1655Vein B188.50202.0013.5011.249.93526Vein Bincl199.80202.002.2055.1230.65987Vein B207.60208.601.0014.449.41143Vein B209.90211.001.108.1114.02455Vein B296.00296.700.707.4470.010500Vein C320.00321.501.503.1930.04381Vein C400.80402.601.802.8010.81977SofiaBUSY178131.00131.550.5522.8038.01009Vein A144.50146.001.505.4426.0527FW Vein161.40168.006.606.0135.24318San Aincl.164.59168.001.5319.2972.05881San A265.00267.202.203.607.81551Vein C335.50336.000.505.035.16650Vein BBUSY182138.35140.001.652.189.2604Vein A143.10144.851.752.0138.02589San A222.63237.6515.022.703.2102Vein C291.80293.301.503.0655.02896Vein B327.85342.9515.103.834.98308Murcielagosincl.329.35333.854.509.687.45977MurcielagosBUUS004NoneBUUS0064.507.503.002.962.101872FW VeinBUUS0074.506.001.503.524.92107FW Vein*Intercepts calculated at 1g/t gold-equivalent cut-off grade. True widths unknown, but mostly between 60 and 30% of the down-hole interval.BUUY- and BUUS- drill-holes collared in underground openings.Drilling in the Yaragua area has focused on and been successful in:extending the vein system to the west of previous drilling defining the main vein sets below other drilling in west-central Yaragua BUSY178 and BUSY182 (Figure 1) both intersected multiple auriferous veins (see Table 2 for vein correlations) within broader mineralized intervals that correlate well between holes. The drill intercepts are up to 100metres west of those encountered in previous drilling and demonstrate the continuity of the Yaragua system at relatively high elevations and also deep below the Diatreme Fault.BUUY58 and BUUY59 (Figure 1) drilled to north in west-central Yaragua also intersected multiple vein sets (see Table 2 for vein correlations) and broader intervals of breccias-hosted mineralization, some intercepts being deeper than previous drilling in this area. These drill holes further demonstrate the lateral and vertical continuity of the southerly and central vein sets in west-central Yaragua.BUUS006 and BUS007, short holes drilled to clarify the distribution of mineralization in the walls of underground openings, both intersected veins north of and footwall to the San Antonio vein.Yaragua South (Figure 1)Significant new intercepts from drill-holes collared in the Yaragua South area are tabulated below:DrillholeFrom (m)To (m)Interval (m)Gold (g/t)Silver (g/t)Zinc (ppm)Vein NameBUSY168noneBUSY176240.50242.502.0020.444.2491Yaragua South276.50279.753.256.5511.01871Yaragua South336.00341.005.003.0513.05988Yaragua South343.80344.300.506.8793.080300Yaragua South367.40368.000.6022.3423.066800Murcielagos457.60459.001.404.0311.08854Murcielagos473.65474.150.507.81112.024800Murcielagos516.50518.101.604.681.61289Vein B521.10522.601.505.658.610200Vein B529.30530.501.204.1119.059300Vein BBUSY17924.6025.500.907.1755.026MurcielagosBUSY18375.7078.002.303.0916.22625Yaragua South119.60120.550.954.3318.0147Yaragua South282.80284.451.655.6331.74041Murcielagos326.50327.000.505.8936.01715Murcielagos492.55502.559.954.602.9472Vein Bincl.498.50500.001.5010.505.7930Vein B501.10502.501.4014.168.3441Vein BBUSY18774.5077.402.904.53588.025784Murcielagosincl.74.5075.901.405.991210.047250Murcielagos88.9090.401.502.4974.08202Murcielagos103.35104.401.056.609.46347Murcielagos308.60310.101.504.133.2845Yaragua SouthBUSY188None*Intercepts calculated at 1g/t gold-equivalent cut-off grade. True widths unknown, but mostly between 60 and 30% of the down-hole interval.Drilling from the Yaragua South area has focused on and been successful in:evaluating the easterly and depth extensions of the southern Yaragua vein sets clarifying the distribution of auriferous and silver-rich veins south of the main Yaragua system BUSY183 and BUSY176 each intersected multiple vein sets (Table 3) of the southern Yaragua system extending these veins to depths substantially below underground openings in eastern Yaragua (Figure 1).Both drill-holes, at shallower depths, resulted in the discovery of several new auriferous vein sets in the Yaragua South area. The distribution of these intercepts and surface geochemical anomalies may indicate that these vein sets have substantial strike and depth extents.BUSY187 intersected high grade silver veins (including 1.40 m @ 5.99 g/t gold, 1210 g/t silver) south of the main Murcielagos veins, confirming substantial strike and depth extents of this silver-rich southerly system.To view the figures associated with this Press Release, please visit the following links: http://media3.marketwire.com/docs/cnl-0831-fig1.pdf http://media3.marketwire.com/docs/cnl-0831-fig2.pdf Technical Information The results of the Company's drilling program have been reviewed, verified and compiled by Vic Wall, PhD, a qualified person for the purpose of NI 43-101. Dr. Wall is a geologist with 35 years in the minerals mining, consulting, exploration and research industries. Following a career in Australian and North American academes, he held senior positions in a number of multinational major and junior minerals companies. A Fellow of the Australian Institute of Geoscientists, Dr. Wall is Principal of Taylor Wall & Associates, a Brisbane-based consultancy that provides geoscientific services to mineral companies and government agencies, worldwide.The company utilizes an 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 Medellín run by SGS Colombia. 100% of BQ diameter drill samples are shipped. 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 Limited Continental Gold Limited (TSX:CNL) is an advanced-stage exploration company with nine gold projects covering over 197,000 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 Buriticá, its flagship high-grade gold project. Additional details on the Buriticá project and the rest of Continental's suite of gold exploration properties is available at www.ContinentalGold.com. Forward-Looking Statements This press release contains or refers to forward-looking information under Canadian securities legislation, 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. 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. 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, as well as those factors discussed in the section entitled "Risks of the Business" in the Company's most recent Annual Information Form and other regulatory filings which are posted on SEDAR at www.sedar.com. 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 applicable securities law.FOR FURTHER INFORMATION PLEASE CONTACT: Elina ChowContinental Gold LimitedDirector, Investor Relations+1.416.583.5611info@continentalgold.comwww.continentalgold.com