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Press release from Marketwire

Continental Gold Drills a New High-Grade Gold and Silver Discovery Over 1,200 Vertical Metres at Buritica, Colombia

Thursday, September 13, 2012

Continental Gold Drills a New High-Grade Gold and Silver Discovery Over 1,200 Vertical Metres at Buritica, Colombia06:30 EDT Thursday, September 13, 2012TORONTO, ONTARIO--(Marketwire - Sept. 13, 2012) -Continental Gold Limited (TSX:CNL)(OTCQX:CGOOF) ("Continental" or the "Company") is pleased to announce the results of initial drilling and underground channel sampling of old workings in the La Estera and La Mano areas, new mineralized vein systems south of the Yaraguá and Veta Sur deposits in the Company's 100%-owned Buriticá project in Antioquia, Colombia. HighlightsLa Estera (Figures 1 and 2)Drilling and underground channel sampling of old workings in the La Estera area has resulted in the discovery of up to three high-grade silver and gold vein systems (Northern, Central and Southern La Estera), located approximately between 100 and 300 metres to the south of the Veta Sur deposit.Drilling has intersected multiple intervals of vein mineralization exhibiting high silver-gold in the Southern La Estera vein system and high-grade gold in the Northern La Estera vein system, particularly at depth. Significant intercepts include:BUSY292 intersected 3.58 m @ 6.8 g/t Gold and 1,061 g/t Silver (28.0 g/t Gold equivalent) 1.3 m @ 11.1 g/t Gold and 121 g/t Silver (13.5 g/t Gold equivalent) 1.3 m @ 10.1 g/t Gold and 88 g/t Silver (11.9 g/t Gold equivalent)BUSY282 intersected4.4 m @ 8.3 g/t Gold and 41 g/t Silver (9.1 g/t Gold equivalent) 2.0 m @ 10.6 g/t Gold and 8 g/t Silver (10.8 g/t Gold equivalent)The high-grade gold intercepts in BUSY282 are among the deepest obtained to date in all drilling at the Buriticá project. These intercepts project vertically up to extensive shallow artisanal workings, suggesting vertical extents of precious metal mineralization of more than 1,200 metres in the Northern La Estera vein system. This target remains open along strike in all directions and at depth.Channel sampling of shallow historical workings at La Estera has encountered high-grade silver-gold veins:6.2 g/t Gold and 362 g/t Silver (13.4 g/t Gold equivalent) over an average width of 1 m, including 27.5 g/t Gold and 1,581 g/t Silver (59.1 g/t Gold equivalent) over 0.2 m, along 22 metres6.8 g/t Gold and 454 g/t Silver (15.9 g/t Gold equivalent) over an average width of 1.2 m, including 41 g/t Gold and 2,747 g/t Silver (95.9 g/t Gold equivalent) over 0.2 m, along 10 metresThe high-grade silver and gold intercepts in BUSY292 are up to 120 metres along strike and up to 400 metres deeper than historical workings in the Central La Estera vein system. This system remains open along strike and at depth. The distribution of silver and gold soil geochemical anomalies and artisanal workings suggest that both the Southern, Central and Northern La Estera vein systems may have substantial lateral extents.La Mano (Figure 1)Located approximately 300 to 400 metres south of the Yaraguá deposit, the first drilling in Southern La Mano has also intersected multiple intervals of vein mineralization exhibiting both high and moderate gold-silver. Significant intercepts under extensive soil geochemical anomalies include:1.0 m @ 9.1 g/t Gold and 1 g/t Silver (BUSY263)1.65 m @ 6.6 g/t Gold and 9 g/t Silver (BUSY263)0.42 m @ 11.3 g/t Gold and 187 g/t Silver (BUSY269)0.4 m @ 10.1 g/t Gold and 153 g/t Silver (BUSY276)Additional drilling and surface sampling of the La Mano and La Estera systems is underway and will confirm, among other things, if the Northern La Estera and the Southern La Mano systems are contiguous and continuous over 1,000 metres of potential strike length as satellite imagery and mapping seemingly indicates."Our team continues to be successful in unlocking value at Buriticá and they should be congratulated for their efforts," commented Ari Sussman, CEO. "We continue to take an aggressive exploration and development stance, which, in this instance, resulted in new discoveries at La Mano and at La Estera with over 1,200 metres of vertical potential already outlined. Shortly after the announcement of our updated mineral resource estimate, which remains on track for completion prior to month's end, we plan to announce a revised exploration and development plan for Buriticá, which will include aggressive drilling of the La Estera and La Mano systems."DetailsContinental's 100%-owned 28,920-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 Yaraguá and Veta Sur systems) are central to this land package. The Yaraguá system has been drill-outlined along 900 metres of strike and 1,300 vertical metres, and partially sampled in underground developments. The Veta Sur system has been drill intersected along 570 metres of strike and 1,180 vertical metres. Both systems are characterized by multiple, steeply-dipping veins and broader, more disseminated, mineralization and both remain open at depth and along strike, at high grades. See "About Continental Gold" (below) for a précis of the maiden mineral resource estimate for Buriticá. This release examines new precious metal discoveries in the La Estera and La Mano areas, located to the south of Veta Sur and Yaraguá, respectively.La Estera Significant drill intercepts in the La Estera system are tabulated below in Table I and are referenced in Figures 1 and 2. Table I: Drilling Highlights - La EsteraDrill-holeFrom (m)To (m)Interval* (m)Gold (g/t)Silver (g/t)Zinc (%)Elevation (m)BUSY065**17.8519.501.650.0251.00.03189628.5034.506.000.0256.30.02188837.5039.001.500.87146.02.55188140.5046.105.600.0161.00.02187854.0060.006.000.0243.50.061866115.50131.7011.900.0276.40.051813BUSY135**34.5035.801.300.01139.00.13189241.0042.301.300.0234.00.04188658.5060.902.400.01156.00.031871BUSY2820.001.001.000.2388.00.511913233.90235.001.101.32329.01.771695301.80302.100.303.495.00.111631330.10330.400.307.836.60.081604467.90469.401.500.9936.52.671475520.35521.401.051.99217.23.881425584.60586.101.501.6112.41.0013651154.601159.004.408.2541.00.25832incl.1155.601156.550.9532.30154.41.068311254.501255.000.505.9624.00.017391358.001359.001.005.005.30.016411378.001379.001.007.188.30.016231381.001383.002.0010.628.10.00620BUSY292210.40210.880.481.1082.30.061714247.97248.270.301.16381.00.321679276.87280.453.586.761060.52.551651incl.276.87277.210.346.322480.02.581651279.70280.100.406.252060.06.911648296.00300.174.172.3533.20.391633339.50339.800.309.668.70.201591364.50365.791.293.9715.20.251567436.20437.301.103.1569.51.141499532.00533.201.200.40268.00.471407567.19577.9110.723.8055.61.031373incl568.20569.501.3011.11121.10.601372571.10572.401.3010.1488.02.061370593.85594.250.404.5354.34.0213481033.641034.600.961.005.80.20927BUSY305249.97250.500.532.857.40.001681274.19276.472.281.8469.90.681658301.50302.621.123.5737.50.711632337.78338.791.012.845.20.091598362.20363.000.800.1138.20.051575534.45534.800.351.334.80.071414633.40633.830.433.7826.71.691322671.75672.100.351.716.30.741286883.95886.302.352.008.20.9810901305.201305.600.401.642.70.01705* Intercepts calculated at 1 g/t gold and 30 g/t silver cut-off grades with up to 20% internal dilution and generally tabulated if greater than 10 gram*metres gold equivalent. True widths not accurately known but generally are between 30% and actual true width of the down-hole interval.** Drill-holes previously released and never reached target depths due to drill limitations, significant intervals are recalculated herein. Drilling in La Estera targeted soil and rock chip geochemical anomalies. All three drill-holes intersected multiple gold and silver-mineralized intervals which included high-grade intercepts through extensive vertical and horizontal ranges. The related families of veins lie 100 to 300 metres to the south of the Veta Sur deposit and are geochemically distinct from the latter. Up to down-hole depths of around 500 metres (RL's from 1,900 m to 1,400 m), drill-holes BUSY282, BUSY292 and BUSY305 each intersected multiple vein sets with moderate to high silver-gold (Table I, Figure 2). BUSY065, drilled on a more westerly azimuth, also intersected very high silver-gold veins at high RL's and shallow depths (Table I, Figure 2). Artisanal workings above and to the east and west of these drill intercepts are consistent with extensions of the Southern La Estera vein system outside of the drilling area. Channel sampling shallow underground historical workings at La Estera (further north of the most southerly veins) encountered high silver and gold grades with numerous samples assaying more than 1,000 g/t Silver. Continuous sampling intervals include:6.2 g/t Gold and 362 g/t Silver (13.4 g/t Gold equivalent) over an average width of 1 m, including 27.5 g/t Gold and 1,581 g/t Silver (59.1 g/t Gold equivalent) over 0.2 m, along 22 metres (RL 1,787 m)6.8 g/t Gold and 454 g/t Silver (15.9 g/t Gold equivalent) over an average width of 1.2 m, including 41 g/t Gold and 2,747 g/t Silver (95.9 g/t Gold equivalent) over 0.2 m, along 10 metres (RL 1,778 m)The silver-rich intercept in BUSY292 from 276.87 m (RL 1,651 m), 3.58 m @ 6.8 g/t Gold, 1,061 g/t Silver (28.0 g/t Gold equivalent) and 2.6 % Zinc(including 0.34 m @ 6.3 g/t Gold, 2,480 g/t Silver (55.9 g/t Gold equivalent) and 0.4 m @ 6.3 g/t Gold and 2,060 g/t Silver (47.5 g/t Gold equivalent)) lies further west of and 130 metres deeper than the La Estera underground historical workings. A 300-metre deeper gold-rich intercept in BUSY292, from 567.19 metres (RL 1,373 metres) yielding 10.72 m @ 3.8 g/t Gold and 56 g/t Silver (4.92 g/t Gold equivalent), including 1.3 m @ 11.1 g/t Gold, 121 g/t Silver (13.5 g/t Gold equivalent) and 1.3 m @ 10.1 g/t Gold, 88 g/t Silver (11.9 g/t Gold equivalent) may also be correlated with the Central La Estera vein system. These drill intercepts and the near surface sampling are consistent with a vertically-extensive Central La Estera vein system and more than 120 metres of lateral strike. The Central La Estera vein system remains open along strike and at depth. Gold and silver soil geochemical anomalies and artisanal workings potentially relating to this vein system extend along strike for over 1,000 metres to the east-southeast of the Central La Estera vein system (Figure 1). More than 200 metres further north of the Central La Estera vein system, BUSY282 had several high-grade gold intercepts, with both high and low base metal contents, but geochemically distinct for the Veta Sur system, 100 metres to the north. These intersections are among the deepest obtained to date in drilling at the Buriticá project and include:from 1,154.6 m (RL 832 m),4.4 m @ 8.3 g/t Gold and 41 g/t Silver (9.1 g/t Gold equivalent), including 0.95 m @ 32.3 g/t Gold and 154 g/t Silver (35.4 g/t Gold equivalent)from 1,381 m (RL 620 m), 2.0 m @ 10.6 g/t Gold and 8 g/t Silver (10.8 g/t Gold equivalent)The BUSY282 intercepts project vertically to extensive shallow artisanal workings suggesting vertical extents of precious metal mineralization of more than 1,200 metres in the Northern La Estera vein system and remains open along strike and at depth (Figure 2). Surface sampling and results from BUSY135 (Table I) are consistent with high silver-gold for the shallow, high elevation mineralization at the Northern La Estera vein system. The distribution of artisanal workings and soil precious metal anomalies in the Northern La Estera vein system (Figure 1) may indicate this system has substantial untested lateral strike extent. La Mano Significant new drill intercepts in the Southern La Mano area are listed below in Table II and are referenced in Figure 1. Table II: Drilling Highlights - La ManoDrill-holeFrom (m)To (m)Interval (m)Gold (g/t)Silver (g/t)Zinc (%)Elevation (m)BUSY2437.0011.004.001.7328.80.141463350.50351.200.700.02139.00.061156BUSY26315.0018.003.002.3858.00.32145433.2234.501.283.473.40.07143664.5065.501.000.3786.00.06140580.5081.000.502.32102.00.221390148.90150.101.201.7634.00.031322235.00236.001.009.101.40.011237248.30249.951.656.629.40.011224269.56271.001.444.868.90.011202282.35283.501.154.470.40.011190BUSY26912.3013.501.207.6017.00.21145855.0055.300.303.771.70.15142057.6058.350.751.145.60.251417132.60133.500.901.1321.00.051350190.75191.170.4211.25187.02.831299211.40211.800.406.7418.02.071280227.70228.500.802.347.00.531266238.00238.300.306.298.50.591256325.95326.400.453.6811.00.261178362.35371.509.151.5112.60.121145incl.370.50371.501.003.7742.00.491138379.10379.800.702.132.01.331130414.95415.951.002.283.70.251099523.37524.000.631.9314.00.011002BUSY27629.8030.200.4010.10153.00.10144484.4585.501.053.014.00.091398118.00119.101.101.991.30.011369* Intercepts calculated at 1 g/t gold and 30 g/t silver cut-off grades with up to 20% internal dilution. True widths not accurately known but generally are between 30% and actual true width of the down-hole interval.** Drill-holes previously released and never reached target depths due to drill limitations, significant intervals are recalculated herein.The first drilling in Southern La Mano, 300 to 400 metres south of the Yaraguá deposit, targeted extensive precious and base metal soil anomalies. All four drill-holes intersected multiple intervals of vein mineralization within broad, lower grade envelopes, exhibiting both high and moderate gold-silver. BUSY263 examined a limited area, but encountered mineralization over an elevation range of 250 metres. Most significant intercepts in this drill-hole are 1.0 m @ 9.1 g/t Gold and 1 g/t Silver from235 m down-hole and 1.65 m @ 6.6 g/t Gold and 9 g/t Silver from 248.3 m down-hole. BUSY269, drilled more across strike, encountered numerous veins over a 450 metre range of vertical elevations, with a best intercept of 0.42 m @ 11.3 g/t Gold, 187 g/t Silver and 2.8 % Zinc starting at 190.75 m down-hole. BUSY276 intersected vein mineralization including 0.4 m @ 10.1 g/t Gold and 153 g/t Silver at 29.8 m down-hole, before being abandoned short of its target. BUSY243 was drilled to the north and intersected silver-gold mineralization down to elevations of 1,150 m, south of the southern-most Yaraguá vein families. The distribution of soil precious anomalies and artisanal workings in the Southern La Mano area (Figure 1) indicates that the La Mano mineralization is more laterally extensive than drilled to date and may prove to be contiguous with the Northern La Estera mineralization. Ongoing drilling and surface sampling is testing the continuity of both the La Mano and La Estera systems, in particular to clarify if the Northern La Estera and Southern La Mano systems are contiguous and continuous over 1,000 metres of potential lateral extent. Technical Information Vic Wall, PhD, special advisor to the Company and a qualified person for the purpose of NI 43-101, has prepared or supervised the preparation of, or approved, as applicable, the technical information contained in this press release. Dr. Wall is a geologist with 35 years' experience 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 Vic Wall & Associates, a Brisbane-based consultancy that provides geoscientific services to mineral companies and government agencies, worldwide. The Company utilizes a rigorous, industry-standard QA/QC program. Core is sawn in half with one-half shipped to a sample preparation lab in Medellín run by ALS Colombia Limited ("ALS") in Colombia. Samples are then shipped for analysis to an ALS-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 Analytical Laboratories in Vancouver, British Columbia and/or Inspectorate America Corp. in Reno, Nevada. The Company does not receive assay results for drill-holes in sequential order; however, all significant assay results are publicly-reported. A complete listing of assay results to date for the Yaraguá and Veta Sur Systems is available on the Company's website at www.continentalgold.com. Gold equivalent grade is calculated by dividing silver grades by 50 and adding this figure to the gold grade, assuming 100% metallurgical recovery. For additional technical information on the Buriticá project, please refer to the Company's technical report (the "Technical Report") entitled "Mineral Resource Estimate of the Buriticá Gold Project, Colombia" dated October 24, 2011 as amended November 23, 2011, prepared by Andrew J Vigar, BAppSc Geo, FAusIMM, MSEG, and Martin Recklies, BAppSC Geo, MAIG, each of Mining Associates Pty Limited, available on SEDAR at www.sedar.com, on the OTCQX at www.otcmarkets.com and on the Company website at www.continentalgold.com. About Continental Gold Continental Gold Limited is an advanced-stage exploration and development company with an extensive portfolio of 100%-owned gold projects in Colombia. Spearheaded by a team with over 40 years of exploration and mining experience in Colombia, the Company is focused on advancing its high-grade Buriticá gold project to production. A maiden mineral resource estimate for the Buriticá project prepared in accordance with NI 43-101 covers two major vein systems, with combined measured and indicated mineral resources of 1,110,000 tonnes of mineralized material containing 630,000 ounces of gold grading 17.8 g/t gold, 1,500,000 ounces of silver grading 42 g/t silver, and 18,700,000 pounds of zinc grading 0.8% zinc. The inferred mineral resource is 6,900,000 tonnes of mineralized material containing 2,500,000 ounces of gold grading 11.4 g/t gold, 9,500,000 ounces of silver grading 43 g/t silver and 88,000,000 pounds of zinc grading 0.6% zinc. For additional technical information on the Buriticá project, please refer to the Technical Report. In August 2012, Continental achieved an important milestone, receiving formal approval for the modification of its existing Environmental Impact Assessment. The amendment allows the Company to build a six-kilometre switchback road and begin underground development by constructing a one-kilometre access tunnel. With a goal of being the first modern-day gold producer in Colombia, Continental will commence the construction of the access tunnel in H2 2012, initially providing access for underground drilling and eventually used for commercial production. A Phase III drill program is underway at the Buriticá project to further delineate the resource and drill new target zones identified within its concessions.Additional details on the Buriticá project and the rest of Continental's suite of gold exploration properties are 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 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 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.Differences in Reporting of Resource Estimates This press release was prepared in accordance with Canadian standards which differ in some respects from United States standards. In particular, and without limiting the generality of the foregoing, the terms "inferred mineral resources," "indicated mineral resources," "measured mineral resources" and "mineral resources" used or referenced in this press release are Canadian mining terms as defined in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") Standards on Mineral Resources and Mineral Reserves (the "CIM Standards"). The CIM Standards differ significantly from standards in the United States. While the terms "mineral resource," "measured mineral resources," "indicated mineral resources," and "inferred mineral resources" are recognized and required by Canadian regulations, they are not defined terms under standards in the United States. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian securities laws, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. Readers are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into reserves. Readers are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable. Disclosure of "contained ounces" in a resource is permitted disclosure under Canadian regulations; however, United States companies are only permitted to report mineralization that does not constitute "reserves" by standards in the United States as in place tonnage and grade without reference to unit measures. Accordingly, information regarding resources contained or referenced in this press release containing descriptions of our mineral deposits may not be comparable to similar information made public by United States companies. To view "Figure 1 - Plan view of drilling highlights, near surface sampling and artisanal workings on LIDAR topographic base", please visit the following link: http://media3.marketwire.com/docs/cnl_f1_913.pdfTo view "Figure 2 - North-South section showing drilling highlights, near surface sampling and artisanal workings", please visit the following link: http://media3.marketwire.com/docs/cnl_f2_913.pdf FOR FURTHER INFORMATION PLEASE CONTACT: Nisha HasanContinental Gold LimitedDirector, Investor Relations+1.416.583.5611info@continentalgold.comwww.continentalgold.com