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Press release from Marketwire

Continental Gold Announces a Maiden Resource for the Buritica Project, Colombia

Thursday, September 15, 2011

Continental Gold Announces a Maiden Resource for the Buritica Project, Colombia06:00 EDT Thursday, September 15, 2011TORONTO, ONTARIO--(Marketwire - Sept. 15, 2011) -Continental Gold Limited ("Continental" or the "Company") (TSX:CNL) is pleased to announce maiden gold, silver and zinc resource estimates for the Yaragua and Veta Sur vein systems at its 100%-owned Buriticá Project in Antioquia, Colombia. Undertaken by independent consultants, Mining Associates Pty Ltd ("MA"), the resource estimates are based on 54,200 metres of drilling and 1,600 metres of underground sampling (as at June 30, 2011) and conform to the requirements of National Instrument 43-101 ("NI 43-101"). The Company continues with a major surface and underground drilling program to expand and increase the level of confidence of these resources in Yaragua and Veta Sur and to explore new targets at Buriticá. HighlightsCombined Yaragua and Veta Sur resources (3 g/t gold cut-off, 1 metre minimum horizontal width) as at June 30, 2011: ResourceGradesMetalCategoryTonnesAu g/tAg g/tZn %Au ozAg ozZn lbMeasured40,00055.11382.470,000200,0002,100,000Indicated1,070,00016.4390.7560,0001,300,00016,600,000Total M&I1,110,00017.8420.8630,0001,500,00018,700,000Inferred6,900,00011.4430.62,500,0009,500,00088,000,000*There have been no assumptions made as to metal prices or recoveries in this resource estimate.The modeling confirms that the Buriticá Project contains multimillion ounce gold and silver resources and has the potential to grow substantially: Both Yaragua and Veta Sur are open at depth and laterally. Tonnage-grade per vertical metre estimates for the major vein domains demonstrate only marginal variability over 300-400 metre depth ranges. Current resource estimates also exclude a number of veins in these systems for which there is limited drilling as at June 30, 2011. The resource models clarify areas where further drilling is required to increase confidence levels of resource categories and potentially significantly add to resources. Ari Sussman, CEO of Continental, commented, "The strength of the Continental Gold team is the desire and effort to always achieve more. This initial resource is a reflection of their dedication and puts the Company on track to achieve its goal of commercial gold production in 2014." Details Continental'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 (Figures 2 & 3), 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. Both systems are characterized by multiple steeply-dipping veins and broader, more disseminated mineralization and both remain open at depth at high grades. MA was commissioned to undertake resource estimations for Yaragua and Veta Sur. Mr. Andrew J. Vigar (B.Sc., FAusIMM, MSEG and MA Director) has been responsible for estimations largely undertaken by Mr. Martin Recklies (BAppSc. (Geoscience)), which will be detailed in a NI 43-101 compliant Technical Report to be filed on SEDAR and on the Company's website within 45 days of this press release. There was close collaboration between MA and the Buriticá site geologists and consultants, undertaken during site visits and at MA's Brisbane offices, in particular on the selection and tagging of the vein domains in the context of existing underground and surface geology. Resource modeling was based on Continental's Buriticá database as at June 30, 2011, audited and provided by Resource and Exploration Mapping Ltd., which maintains the Company's database. A total of 41,246 assay samples comprised of approximately 40,400 metres of surface diamond drilling, 12,000 metres of underground drilling (Yaragua) and 1,600 metres of underground channel sampling (Yaragua) were utilized in the resource estimations. In view of their geology, grade distributions and potential mining methods, Yaragua and Veta Sur were modeled as sets of sub-parallel, steeply-dipping vein domains. In the case of Yaragua, 20 vein domains were interpreted from geological mapping and sampling of underground developments and drilling in the upper part of the system and extended to greater depth and along strike from drill intercepts. The resource is constrained by domains consisting of 3D geological models. The drill hole data was displayed in section and elevation slices showing assays and geology. Intercepts were selected and coded for each vein domain based on the following selection criteria, in decreasing hierarchy:Gold grade greater than 3 g/t Au; or No assays but a "vein" lithology code in the expected location; or (For breccia ("BX") only): within or near the breccia lithology zone with anomalous Au grades; or Sub-grade areas where the interpreted vein domain passed through the drill hole but was not already coded (i.e. "brought through") Vein domains were modeled using MA's proprietary software. For Veta Sur, 18 vein domains were interpreted from drilling. Intercepts (primarily utilizing a 3 g/t cut-off grade) were tagged by vein domain name and several iterations of 3D sections, plans and visualizations were done to ensure geologically consistent vein domains. Other mineralization is present outside the domains but requires further delineation drilling. In Yaragua, lower grade breccia-hosted mineralization was modeled separately from and outside of the vein domains. Informing samples were vein composites within domains, one composite sample across each vein intercept. The estimation grid size was 5m in X and Y with vein thicknesses (horizontal widths), and gold, silver and zinc grades estimated in unfolded space using Ordinary Krige estimation. The informing sample grades were capped on a domain or sub-domain basis as determined by geostatistical analysis. A minimum of three composites and a maximum of eight are required to estimate a block. As well as the tightly constrained vein domains, high grade and low grade sub-domains were used within the vein domains, as required. Results of the Krige estimation were validated against raw data statistics. Trend analysis against the informing samples and check estimates using Inverse Distance Squared and Nearest Neighbour (Polygonal) estimation techniques are in generally good agreement with the Krige estimates and grade patterns, highlighting the importance of the sub-domaining in minimizing grade "smearing" where data density was low. Results of the estimation for each vein domain are combined to a normal 3D block model with sub-block size of 2.5 m (E) by 0.25 m (N) by 2.5 m (RL). The model was screened for topography. The number of informing samples, presence of underground development or mining, kriging variance (gold) and average distance to informing samples were used to define contiguous areas defining Resource categories of Measured, Indicated and Inferred. Areas within a vein domain already taken by development and/or historical mining have been removed. Grade-Tonnage charts for 0 to 5 g/t gold cut-off grades are presented below (Figure 1) by resource category in both Yaragua and Veta Sur. These are the capped Ordinary Krige estimates for vein domains, diluted to one metre minimum horizontal widths. It should be noted that the resource tonnes tabled in Figure 1 are only for sub-grade areas contained with the tightly constrained vein domains, which were targeted at areas over 3 g/t Au, and thus do not truly reflect large quantities of undefined lower grade (less than 3 g/t Au) material outside the currently defined vein domains, such as the breccia-hosted mineralization. To view "Figure 1: Grade Tonnage plots by resource category for Yaragua and Veta Sur as at June 30, 2011", please visit the following link: http://media3.marketwire.com/docs/728277_fig_1.pdfThese results demonstrate the high grade nature of both the Yaragua and Veta Sur auriferous vein systems over significant tonnages. The results presented below are capped krige estimates at 3g/t gold cut-off grade and for one metre minimum horizontal vein thicknesses. This gold cut-off grade reflects conceptual costs for underground development, mining and treatment. Yaragua (see also Figures 2 & 3)Table 1: Yaragua Resources as at June 30, 2011 (at 3 g/t gold cut-off grade, 1 metre minimum width in vein domains)ResourceGradesMetalCategoryTonnesAu g/tAg g/tZn %Au ozAg ozZn lbMeasured40,00055.11382.470,000200,0002,100,000Indicated670,00017.3291.0380,000600,00015,100,000Total M&I710,00019.4351.1450,000800,00017,200,000Inferred4,400,00012.3390.81,700,0005,400,00075,000,000*There have been no assumptions made as to metal prices or recoveries in this resource estimate.These resources for Yaragua are mainly contained in 20 vein domains modeled over average strike extents of 400 metres and average depths extents of 300 metres. All modeled veins are open at depth and along strike. The Inferred resources also contain a small amount of breccia-hosted mineralization above the 3 g/t gold cut-off grade, part of much larger tonnages of lower grade mineralization not included in this modeling. The significant proportion of Measured plus Indicated Resources reflects the underground sampling of several of the major vein domains and also the intensity of drilling in the central part of the vein system. Veta Sur (see also Figures 2 & 3)Table 2: Veta Sur Resources as at June 30, 2011 (at 3 g/t gold cut-off grade, 1 metre minimum width in vein domains)ResourceGradesMetalCategoryTonnesAu g/tAg g/tZn %Au ozAg ozZn lbIndicated390,00014.7570.2190,000700,0001,500,000Inferred2,600,0009.8490.2800,0004,100,00013,000,000*There have been no assumptions made as to metal prices or recoveries in this resource estimate.These resources for Veta Sur are contained in 18 vein domains modeled over average strike extents of 250 metres and average depths extents of 300 metres. All modeled veins are open to depth and along strike. Indicated resources are currently confined to the more intensively drilled central part of the Veta Sur system. Combined Yaragua and Veta Sur Resources (see also Figures 2 & 3)Table 3: Combined Yaragua and Veta Sur Resources as at June 30, 2011(at 3 g/t gold cut-off grade, 1 metre minimum width in vein domains)ResourceGradesMetalCategoryTonnesAu g/tAg g/tZn %Au ozAg ozZn lbMeasured40,00055.11382.470,000200,0002,100,000Indicated1,070,00016.4390.7560,0001,300,00016,600,000Total M&I1,110,00017.8420.8630,0001,500,00018,700,000Inferred6,900,00011.4430.62,500,0009,500,00088,000,000*There have been no assumptions made as to metal prices or recoveries in this resource estimate.The tabulated resources are for areas in the Yaragua and Veta Sur systems with adequate sampling densities to permit estimation. Further drilling at Buriticá has continued to demonstrate that both systems are open along strike and at depth. Dr. Vic Wall, Special Advisor to Continental, oversaw the resource modeling and noted, "The Mining Associates resource model for the Yaragua and Veta Sur vein systems is well constrained geologically and conservative in its estimations. I am confident in the results which are reinforced by more recent drilling. The gold and silver resources in both systems are likely to grow substantially from infill and step-out drilling. Drilling of other (to-date largely untested) targets will likely contribute to realizing the multimillion ounce precious metal potential of Continental's broader Buriticá project." Technical Information Mark Moseley-Williams (B.Sc., Mining Engineering), Continental's President and Chief Operating Officer and a Qualified Person ("QP") for the purpose of NI 43-101, has reviewed, verified and approved the technical data disclosed in this news release, including sampling, analytical and test data underlying the technical information included herein, and the mineral resource estimate disclosed herein. Mr. Moseley-Williams has over 16 years of experience in mine construction, expansion projects and operations in North, Central and South America. The technical information in this press release relating to mineral resource estimates is based on technical information prepared under the direction and supervision of Andrew J. Vigar, a consultant geologist (FAusIMM, MSEG) holding a B.Sc (Applied Geology), with over 30 years' experience and specialist experience in resource evaluation and mining in gold deposits. Mr. Vigar, an independent QP (as defined in the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves and NI 43-101) has reviewed this press release and consented to the inclusion in this press release of extracts from, or a summary of, the technical information prepared under his direction and supervision. 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 commenced 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 certain "forward-looking statements". All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements relating to the Buriticá project) with respect to estimates of mineral resource quantities, mineral resource qualities, the potential scope and context of the mineralized area, the potential for upgrading the mineral resource estimate and the Company's exploration and drilling targets, goals, objectives and plans. These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking statements are subject to a number of significant risks and uncertainties and other factors that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. Factors that could cause actual results or events to differ materially from current expectations include, but are not limited to: failure to establish estimated mineral resources; the grade, quality and recovery of mineral resources varying from estimates; risks related to the exploration stage of the Company's properties; the possibility that future exploration results will not be consistent with the Company's expectations (including identifying additional and/or deeper mineralization); changes in the price of gold; changes in equity markets; political developments in Colombia; uncertainties relating to the availability and costs of financing needed in the future; changes to regulations affecting the Company's activities; delays in obtaining or failures to obtain required regulatory approvals; the uncertainties involved in interpreting drilling and exploration results and other geological data and other factors (including exploration, development and operating risks); as well as those further discussed in the section entitled "Description of the Business: Risks of the Business" in the Company's most recent Annual Information Form and other regulatory filings which are filed on SEDAR at www.sedar.com. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not a guarantee of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.To view Figure 2: 3D Model of Yaragua and Veta Sur Systems with Proposed Developments (Plan View), please visit the following link: http://media3.marketwire.com/docs/728277_fig_2.pdf To view Figure 3: 3D Model of Yaragua and Veta Sur Systems with Proposed Developments (Looking West), please visit the following link: http://media3.marketwire.com/docs/728277_fig_3.pdfFOR FURTHER INFORMATION PLEASE CONTACT: Elina ChowContinental Gold LimitedDirector, Investor Relations+1.416.583.5611info@continentalgold.comwww.continentalgold.com