Continental Gold Drills 28.4 metres @ 20.5 g/t Gold and 135 g/t Silver and Significantly Extends the Veta Sur Vein System Along Strike and at Depth

TORONTO, ONTARIO--(Marketwired - Aug 27, 2013) - Continental Gold Ltd. (TSX:CNL)(OTCQX:CGOOF) ("Continental" or the "Company") is pleased to announce results for six diamond drill-holes in the Veta Sur vein system and two drill-holes in the La Estera area, as part of the Company's ongoing exploration program at the Buriticá Project in Antioquia, Colombia. Eight drills are currently on site as part of the Company's Phase IV diamond drill program for 2013-2014, with a goal of delivering robust mineral resource growth and upgrading inferred resources into the measured and indicated categories under National Instrument 43-101 ("NI 43-101") guidelines.

Highlights (referenced in Figures 1 and 2)

• All five underground drill-holes and a more deeply drilled, surface-collared hole in central Veta Sur were successful in infilling the deposit, extending existing veins and encountering new veins outside of the current resource envelope.
  
  
• BUUY126 extended two broad high-grade subzones in central Veta Sur. Intercepts include:
  
  
  • 28.4 metres @ 20.5 g/t gold and 135 g/t silver (elevation of 1,611 metres), including 1.35 metres @ 82.1 g/t gold and 54 g/t silver plus 2.15 metres @ 135.3 g/t gold and 921 g/t silver; and
    
    
  • 10.9 metres @ 10.8 g/t gold and 85 g/t silver (elevation of 1,531 metres), including 1 metre @ 97.4 g/t gold and 510 g/t silver.
    
    

These intercepts exhibit Stage II visible gold-bearing mineralization.

• Portions of several drill-holes aimed at infilling the central Veta Sur vein system intersected vein domains with significantly higher grades and/or thicknesses than in the current mineral resource model (see "Technical Information" below). Such intercepts, include:
  
  
  • 3 metres @ 86.8 g/t gold and 26 g/t silver (BUSY349, elevation of 1,420 metres; exhibits Stage II, visible gold-bearing mineralization); and
    
    
  • 3.9 metres @ 10.1 g/t gold and 35 g/t silver (BUSY349, elevation of 1,432 metres);
    
    

and higher in the Veta Sur system:

• 5.75 metres @ 9.7 g/t gold and 71 g/t silver, including 1.3 metres @ 29 g/t gold and 127 g/t silver (BUUY138, elevation of 1,693 metres); and
  
  
• 7.25 metres @ 9.1 g/t gold and 72 g/t silver, including 1.6 metres @ 31.1 g/t gold and 262 g/t silver (BUUY142, elevation of 1,675 metres).
  
  

• Several of the drill-holes intersected vein domains outside of the current Veta Sur mineral resource envelope. Significant intercepts, extending vein domains, include:
  
  
  • 0.65 metres @ 41.5 g/t gold and 18 g/t silver, (BUUY126, elevation of 1,671 metres);
    
    
  • 0.5 metres @ 2.7 g/t gold and 634 g/t silver (BUUY130, elevation of 1,730 metres);
    
    
  • 2.25 metres @ 40.8 g/t gold and 48 g/t silver, including 1.05 metres @ 86 g/t gold and 95 g/t silver (BUUY138, elevation of 1,701 metres); and
    
    
  • 2.8 metres @ 4 g/t gold and 480 g/t silver (BUUY142, elevation of 1,564 metres).
    
    
• BUSY343, drilled to the north from La Estera, encountered multiple mineralized intervals at deep elevations. Significant intercepts include:
  
  
  • 0.58 metres @ 35.1 g/t gold and 36 g/t silver (elevation of 576 metres);
    
    
  • 0.52 metres @ 20.9 g/t gold and 12 g/t silver (elevation of 570 metres);
    
    
  • 2.66 metres @ 5.3 g/t gold and 19 g/t silver, including 1.13 metres @ 11 g/t gold and 40 g/t silver (elevation of 505 metres); and
    
    
  • 0.65 metres @ 14.1 g/t gold and 3 g/t silver (elevation of 409 metres).
    
    

At up to 250 metres to the southwest of, and 400 metres below, the current mineral resource envelope at Veta Sur, these intercepts are the furthest step-out and vertical extensions of the Veta Sur system to date.

• BUSY346, drilled to test the northern portion of the La Estera Area, is interpreted to have intersected the easterly Laurel vein family. Significant intercepts include:
  
  
  • 2.27 metres @ 6.4 g/t gold and 163 g/t silver, including 1.1 metres @ 12 g/t gold and 261 g/t silver (elevation of 1,698 metres).
    
    

"Buriticá continues to deliver robust surprises," commented Ari Sussman, CEO. "BUSY343 deviated significantly to the northeast from its intended location, yet ended up significantly extending Veta Sur. The drilled dimensions of the Veta Sur vein system have now increased at depth to approximately 700 metres along strike by 1,300 metres vertically. Additionally, new silver-rich veins continue to be intersected to the north of the system. With over 50 holes in the cue for logging, cutting and assaying, and eight drill rigs turning, we anticipate the latter part of 2013 will provide a great deal of useful information for the next resource estimate update."

Details

Continental's 100%-owned, 58,773-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-outlined along 700 metres of strike and 1,300 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 updated mineral resource estimates for the Buriticá project prepared in accordance with NI 43-101. This release documents the results of infill and extension drilling of the Veta Sur vein system and further drilling to the south and west of this system through the La Estera area.

Significant new drill intercepts are listed below in Table I and are referenced in Figures 1 and 2.

Table I: Drilling Highlights

All five underground drill-holes (BUUY126, BUUY130, BUUY134, BUUY138 and BUUY142) and a more deeply-drilled, surface-collared hole (BUSY349) in central Veta Sur were successful in infilling the deposit, extending existing veins and encountering new veins outside of the current mineral resource envelope.

BUUY126 laterally extended a broad high-grade subzone at relatively high elevations (from elevation of 1,611 metres) with an intercept of:

• 28.4 metres @ 20.5 g/t gold and 135 g/t silver, including 1.35 metres @ 82.1 g/t gold and 54 g/t silver, plus 2.15m @ 135.3 g/t gold and 921 g/t silver plus 1.9 metres @ 33.4 g/t gold and 527 g/t silver.

BUUY126 also vertically extended a separate high-grade subzone at lower elevation (from elevation of 1,531 metres), with a broad intercept of:

• 10.9 metres @ 10.8 g/t gold and 85 g/t silver, including 1 metre @ 97.4 g/t gold and 510 g/t silver.

Both high-grade subzones remain open vertically and exhibit visible gold-bearing Stage II style mineralization.

Several drill-holes aimed at infilling the central Veta Sur system intersected vein domains with significantly higher grades and/or thicknesses than in the current mineral resource model. Such intercepts, at moderate elevations in BUSY349, include:

• 3.9 metres @ 10.1 g/t gold and 35 g/t silver (elevation of 1,432 metres); and
  
  
• 3 metres @ 86.8 g/t gold and 26 g/t silver (elevation of 1,420 metres; among the deeper occurrences of Stage II, visible gold-bearing mineralization).
  
  

In other drill-holes, higher in the Veta Sur system, intercepts include:

• 5.75 metres @ 9.7/t gold and 71 g/t silver, including 1.3 metres @ 29 g/t gold and 127 g/t silver (BUUY138, elevation of 1,693 metres); and
  
  
• 7.25 metres @ 9.1 g/t gold and 72 g/t silver, including 1.6 metres @ 31.1 g/t gold and 262 g/t silver (BUUY142, elevation of 1,675 metres).
  
  

All drill-holes intersected vein domains outside of the current Veta Sur mineral resource envelope. Significant intercepts, extending vein domains to higher elevations, include:

• 0.65 metres @ 41.5 g/t gold and 18 g/t silver (BUUY126, elevation of 1,671 metres); and
  
  
• 2.25 metres @ 40.8 g/t gold and 48 g/t silver, including 1.05 metres @ 86 g/t gold and 95 g/t silver (BUUY138, elevation of 1,701 metres).
  
  

Intersections in all drill-holes to the north of the current mineral resource envelope (Figure 1) exhibit relatively high silver/gold and some high-grade silver. Significant intercepts in these as-yet unmodelled vein domains include:

• 0.5 metres @ 2.7 g/t gold and 634 g/t silver (BUUY130, elevation of 1,730 metres);
  
  
• 0.50 metres @ 0.7 g/t gold and 369 g/t silver (BUUY138, elevation of 1,638 metres);
  
  
• 2.8 metres @ 4 g/t gold and 480 g/t silver (BUUY142, elevation of 1,564 metres); and
  
  
• 2.85 metres @ 1.1 g/t gold and 341 g/t silver (BUUY142, elevation of 1,517 metres).
  
  

BUSY343, drilled to the north from the La Estera area (Figure 1), encountered multiple mineralized intervals at deep elevations (Figure 2). Significant intercepts, over a vertical range of 170 metres, include:

• 0.58 metres @ 35.1 g/t gold and 36 g/t silver (elevation of 576 metres);
  
  
• 0.52 metres @ 20.9 g/t gold and 12 g/t silver (elevation of 570 metres);
  
  
• 2.66 metres @ 5.3 g/t gold and 19 g/t silver, including 1.13 metres @ 11.0 g/t gold and 40 g/t silver (elevation of 506 metres); and
  
  
• 0.65 metres @ 14.1 g/t gold and 3 g/t silver (elevation of 409 metres).
  
  

More than 1,300 metres below surface geochemical anomalies, these intercepts are interpreted as deep extensions of the Veta Sur system, some 250 metres to the southwest and up to 400 metres deeper than the current mineral resource envelope. Mineralization in BUSY349 is commonly zinc-poor, pyrrhotite-bearing and geochemically similar to other deep mineralization in the Veta Sur and Yaraguá systems.

BUSY346, drilled to the south of Veta Sur to test the northern La Estera Area, is interpreted to have intersected easterly extensions of the Laurel vein family at high elevations. Significant intercepts include:

• 1.5 metres @ 5.4 g/t gold and 69 g/t silver (elevation of 1,702 metres); and
  
  
• 2.27 metres @ 6.4 g/t gold and 163 g/t silver, including 1.1 metres @ 12 g/t gold and 261 g/t silver (elevation of 1,698 metres).
  
  

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. HQ core is sawn or split 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 Buriticá project is available on the Company's website at www.continentalgold.com.

For additional technical information on the Buriticá project, please refer to the Company's technical report (the "Technical Report") entitled "2012 Mineral Resource Estimate of the Buriticá Gold Project, Colombia" dated November 15, 2012 with an effective date of October 22, 2012, 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 Ltd. 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. On October 1, 2012, the Company announced an updated mineral resource estimate for the Buriticá project prepared in accordance with NI 43-101 which covers two major vein systems, with combined Measured and Indicated mineral resource of 3,740,000 tonnes of mineralized material containing 1,640,000 ounces of gold grading 13.6 g/t gold, 4,600,000 ounces of silver grading 38 g/t silver, and 55,800,000 pounds of zinc grading 0.7% zinc. The combined Inferred mineral resource is 13,330,000 tonnes of mineralized material containing 3,760,000 ounces of gold grading 8.8 g/t gold, 14,200,000 ounces of silver grading 33 g/t silver and 156,500,000 pounds of zinc grading 0.5% zinc.

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 newest hard rock gold producer in Colombia, Continental has commenced the construction of the access tunnel, which will initially provide access for underground drilling and eventually used for commercial production. A Phase IV drill program is underway at the Buriticá project to further delineate the mineral 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, and 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 Figures 1 and 2, please visit the following links:

http://media3.marketwire.com/docs/cnl-0827-fig1.pdf

http://media3.marketwire.com/docs/cnl-0827-fig2.pdf