06:30 EDT Tuesday, July 12, 2011

TORONTO, ONTARIO--(Marketwire - July 12, 2011) - Continental Gold Limited ("Continental" or the "Company") (TSX:CNL) is pleased to announce results for nineteen diamond drill-holes from the Company's ongoing program at its Buriticá Project in Antioquia, Colombia. Over 69,000 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.

Highlights

• Drilling on Veta Sur system focused on easterly and westerly parts of the system with two holes in the central zone. Significant new intercepts include:
  
  
  
  18.1 m @ 24.89 g/t Au and 63 g/t Ag including 5.8 m @ 55.77 g/t Au and 123 g/t Ag in BUSY-163, interpreted as part of a plunging high grade gold shoot
  
  
  
  
• Drilling around the margins of Veta Sur has added to the Buriticá silver story:
  • BUSY-166 intersected 11.9 m @ 3.19 g/t Au and 216 g/t Ag with 8.6% zinc and 3.3% lead in a sulphide matrix breccia hosted by silicified basement sediments in southwest Veta Sur, a newly recognized style of mineralization at Buriticá
  • BUSY-174 intersected 0.55 m @ 2.05 g/t Au, 2,906 g/t Ag with 2.6% zinc and 0.16% lead on the margin of silicified sediments to the northeast of Veta Sur
  • These intercepts demonstrate the potential of the 1,200m x 1,000m polymetallic soil anomaly to the south and east of Veta Sur, much of which is underlain by basement sediments and is yet to be drilled
    
    
    
    
• Five holes were drilled in the western part of the Yaragua system and were successful in intersecting both the main northern and southern vein systems above and below the Diatreme Fault. A newly recognized WNW-trending vein set yielded two high grade intercepts including 1.52 m @ 40.0 g/t Au and 330.0 g/t Ag
  
  
  
  
• Drilling in the eastern part of Yaragua and Yaragua South (although primarily for geotechnical purposes) has resulted in the recognition of a new vein south of the Murcielagos vein family, which has also been extended to substantial depths below historical developments
  
  
  
  
• A new longitudinal section that incorporates all drilling and underground channel sampling shows that +10 g/t Au intercepts occur along 1,000 metres of combined Yaragua-Veta Sur strike and are open below the 600 vertical metres drill tested to date. The shell defined by those dimensions is 70-200 metres wide and contains 4-12 individual high-grade veins

Details

Continental's 100%-owned, 22,457-hectare project, Buriticá, contains several known areas of high-grade vein 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 470 vertical metres. Both systems are characterized by multiple veins and both remain open at depth at high grades.

Veta Sur Area

Table 1 presents a summary of results for the eight holes recently drilled in the Veta Sur system.

Holes BUSY-111 and BUSY-163 (Figure 1 and Figure 2) were drilled in the central part of the vein corridor. BUSY-163 cut five significant veins, with the main intercept being 18.1 m @ 24.89 g/t Au and 63 g/t Ag, including 5.8 m @ 55.77 g/t Au and 123 g/t Ag. As can be seen in the longitudinal section (Figure 2), this intersection further defines the deeper part of a high grade shoot which appears to plunge to the southwest in this part of the vein. BUSY-111 hit four veins including 2.7 m @ 11.01 g/t Au and 85 g/t Ag. This grade is similar to other intersections in this area which is (vertically) between the two known high grade shoots.

Drilling around the margins of Veta Sur has continued to add to the emerging silver story in these areas:

BUSY-166, in the southwest of Veta Sur (Figure 1) cut 11.9 m @ 3.19 g/t Au, 216 g/t Ag, 8.66% Zn, and 3.06% Pb in a style of mineralization previously not recognized at Buriticá. The intersection is in a massive sulfide-cemented, matrix supported breccia characterized by sphalerite and galena with lesser pyrite. The host rock is present as breccia fragments of entirely silica-replaced sedimentary rocks from the Cretaceous basement sequence, which crops out just to the south.

Hole BUSY-174 was drilled 150 metres to the east of the Veta Sur trend (Figures 1 and 2) and also intersected the intrusion-basement sediment contact. The hole intersected several intervals of high Ag/Au mineralization including 0.55 m @ 2.05 g/t Au, 2,906 g/t Ag, 2.59% Zn, and 0.16% Pb. BUSY-174 also intersected a gold-rich vein, the first encountered in this area.

BUSY-166 & BUSY-174 demonstrate potential for more silver-rich mineralization in or around the altered basement sediments, which underlie much of the greater than one square kilometre, Au-Ag-Zn-Pb soil anomaly south and east of Veta Sur (see Press Release dated August 9, 2010 at www.continentalgold.com). The great majority of this area is yet to be drilled.

BUSY-157 and BUSY-171 intersected high Ag/Au mineralization respectively to the north and south of main Veta Sur trend (Figure 1) extending the silver rich vein sets in these areas.

In northeastern Veta Sur, BUSY-177 intersected 0.52 m of 2.05 g/t Au, 1,040 g/t Ag among a group of more gold-rich veins Veta Sur. The silver-rich mineralization may correlate with veins further to the east and the intersection also shows that silver rich mineralization may occur relatively deeply in the Veta Sur system.

Yaragua Area

Table 2 presents results for new holes drilled in the Yaragua area.

BUSY-159, -169, -172 were drilled in the western part of the Yaragua corridor (Figure 1). As is typical of holes in the Yaragua system, as many as six individual veins are present in the holes. The best intercepts include: 1.0 m @ 23.03 g/t Au and 9 g/t Ag in BUSY-159; 1.52 m @ 40.00 g/t Au and 330 g/t Ag in BUSY-169; and 1.6 m @ 16.47 g/t Au and 41 g/t Ag in BUSY-173. Although uncertain due to proximity of the Diatreme Fault system, correlations with modeled veins further east in the Yaragua system are given in Table 2. High grade intersections in BUSY-159 and BUSY-169 are correlated with the recently modeled NW Vein set which has a Centena vein-like orientation about 30 degrees north of the main Yaragua vein orientation. Such high grade vein sets are increasingly recognized in Yaragua. The high grade intercept (0.5 m @ 31.12 g/t Au and 401 g/t Ag) in BUSY-172 is correlated with the San Antonio vein in the footwall of the Diatreme Fault.

BUUY-056 & BUUY-057 were also drilled into western Yaragua, targeting mineralization in the footwall of the Diatreme Fault. Both drill-holes intersected thick intervals of breccia hosted mineralization and potentially economic grades and thicknesses in the Murcielagos Family of veins, Vein B and (in BUUY 57) Vein C. Unfortunately, both holes were lost before reaching the targeted San Antonio vein set, deep in the footwall of the Diatreme Fault. Vein B has now been intersected along a minimum 300 metres of strike.

BUUS-001 to BUUS-003 are the first of a program of short diamond holes (utilizing a small underground rig) to augment the underground channel sampling of Yaragua vein sets (CNL Press Release, March 3, 2011). Whereas the channel sampling demonstrated the very high grades of the Yaragua vein sets sampled, mineralization was commonly observed in the tunnel walls and thus the thickness of the vein sets was underestimated in some segments. BUUS-001 encountered 4.60 m (true width) @ 12.26 g/t Au in the hanging wall (HW) vein to the south of the San Antonio. BUUS-002 added a 5.60 m (true width) @ 7.28 g/t Au and 21 g/t Ag on the northern side of the San Antonio vein.

Yargagua South

BUSY-173 is the first of a series of holes targeting the largely undrilled eastern Yaragua vein sets (Figure 1). It encountered a new vein, Murcielagos South (0.75 m @ 12.96 g/t Au and 89 g/t Ag) and also intersected a further six veins of potentially economic grade in the Murcielagos Family at depths substantially below historical development on this vein set (Figure 3).

BUSY-151 and BUSY-170 were drilled primarily to investigate ground conditions on the path of the proposed ramp, which is planned to provide access for underground deep exploration drilling, delineation drilling and ultimately development of the Buriticá mine. Lithologies drilled and the limited degree of alteration seen in the holes is consistent with generally good ground conditions. Both drill holes had intercepts that correlate with the newly defined Murcielagos South vein (see above), indicating that this vein has a strike length of more than 200 metres and a substantial vertical extent. BUSY-151 was completed deep in the Murcielagos family of veins. This drill hole also encountered a previously unknown vein, South Yaragua, deep below a surface geochemical anomaly.

Yaragua-Veta Sur Longitudinal Section

Figure 3 is a longitudinal section looking north through all drilling and underground sampling done to date on the Yaragua and Veta Sur vein systems. This section appears to foreshorten the Veta Sur system and is a projection of up to 12 vein sets onto the section plane. However, it usefully illustrates the lateral and vertical extents of Buriticá mineralization explored to date. About 1,000 strike metres have been drill tested in the combined Yaragua and Veta Sur systems to a maximum depth of over 600 metres. High-grade gold (including many intercepts of over 100 g/t) has been encountered over these full horizontal and vertical extents and is open downward in all areas.

A significant characteristic of this type of carbonate base metal gold system world-wide is a very large vertical extent of economic gold mineralization (ex, Porgera, Kelian). Construction of a 1,100-metre tunnel programmed to begin later in 2011 will eventually provide deep access for underground drilling from about the 1,200-metre level. In the shorter term, Continental is mobilizing a larger surface drill capable of testing the system to at least the 900-metre level.