Continental Gold Drills Broad and High-Grade Intervals in Infill and Extensions of the Yaraguá Vein System at Buriticá, Colombia

TORONTO, ONTARIO--(Marketwired - Feb 19, 2015) - Continental Gold Ltd. (TSX:CNL) (OTCQX:CGOOF) ("Continental" or the "Company") is pleased to announce results for 20 diamond drill-holes through the eastern Yaraguá vein system at the Company's 100%-owned Buriticá project in Antioquia, Colombia. Drilling continues with the goal of upgrading Inferred resources into the Measured and Indicated categories under National Instrument 43-101 ("NI 43-101") guidelines, and delivering overall robust mineral resource growth. The Company recently released a Preliminary Economic Assessment (the "2014 PEA") of the Buriticá Project. The 2014 PEA (entitled "Buritica Gold Project, NI 43-101 Technical Report Preliminary Economic Assessment, Antioquia, Colombia", and dated December 22, 2014 with an effective date of November 17, 2014) is preliminary in nature and includes inferred mineral resources that are considered to be too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty the 2014 PEA will be realized. Further, mineral resources are not mineral reserves and have not demonstrated economic viability.

Highlights (referenced in Figures 1, 2 and 3)

• Drilling, largely at near true width angles to the vein domains, was successful in extending and infilling sections of the eastern Yaraguá vein system through more than 400 metres of vertical and 350 metres of lateral extents.
  
  
• Infill drill-holes encountered multiple vein families with grades X thicknesses that are substantially greater than those expected from the current mineral resource block model for Yaraguá. Broad and/or high-grade intercepts (intervals 70% or more of true width) in related master veins include:
  
  
  • 1.1 metres @ 18.3 g/t gold and 22 g/t silver (BUUY279, VNC, elevation of 1,065 metres);
  • 4.1 metres @ 17.8 g/t gold and 17 g/t silver, including 1.2 metres @ 55.9 g/t gold and 51 g/t silver (BUUY281, VNE, elevation of 1,104 metres);
  • 0.93 metres @ 52.8 g/t gold and 40 g/t silver (BUUY284, MU4, elevation of 1,155 metres);
  • 2.82 metres @ 100.1 g/t gold and 10 g/t silver (BUUY285D01, HWV, elevation of 1,227 metres);
  • 1.4 metres @ 151.6 g/t gold and 37 g/t silver (BUUY293, VNA, elevation of 1,177 metres);
  • 19.15 metres @ 11.1 g/t gold and 28 g/t silver, including 2.72 metres @ 56 g/t gold and 75 g/t silver (BUUY294, MUS, elevation of 1,254 metres);
  • 2.8 metres @ 24.1 g/t gold and 114 g/t silver, including 1.05 metres @ 62.1 g/t gold and 296 g/t silver (BUUY297, MU10, elevation of 1,052 metres);
  • 1.3 metres @ 56.5 g/t gold and 27 g/t silver (BUUY299, MU1, elevation of 1,082 metres);
  • 0.65 metres @ 43.5 g/t gold and 4 g/t silver (BUUY300, FWV, elevation of 1,177 metres);
  • 1.07 metres @ 24.4 g/t gold and 146 g/t silver (BUUY303, MU1, elevation of 1,145 metres);
  • 3.12 metres @ 8.9 g/t gold and 31 g/t silver (BUUY303, MU, elevation of 1,132 metres);
  • 1.21 metres @ 17.2 g/t gold and 20 g/t silver (BUUY303, SAV, elevation of 1,107 metres); and
  • 2.65 metres @ 21.5 g/t gold and 21 g/t silver (GEOMK15, MU1, elevation of 1,484 metres).
• These and other intercepts in the 1,000-1,400-metre range of elevations will contribute to increased confidence levels of high-grade gold and silver mineral resources within the master veins located in eastern Yaraguá. The grade X thicknesses of these veins are particularly encouraging as this area is proximal to the main haulage developments proposed in the 2014 PEA and more importantly restricted the influence of an area within Yaraguá that was previously modelled as containing predominately low to medium precious metal grades.
  
  
• Step-out drilling also intersected multiple veins below or to the south of the current Yaraguá mineral resource envelope, significantly extending the vertical extents of most vein families in eastern Yaraguá. Key intercepts, below the current mineral resource envelope, include:
  
  
  • 0.65 metres @ 32.4 g/t gold and 18 g/t silver (BUUY281, elevation of 1,136 metres);
  • 3.95 metres @ 9.4 g/t gold and 14 g/t silver (BUUY283, elevation of 966 metres);
  • 2.55 metres @ 9.1 g/t gold and 11 g/t silver (BUUY283, elevation of 912 metres);
  • 0.53 metres @ 20.7 g/t gold and 5 g/t silver (BUUY287, elevation of 1076 metres);
  • 0.5 metres @ 41.2 g/t gold and 61 g/t silver (BUUY287, elevation of 1068 metres);
  • 0.8 metres @ 18.6 g/t gold and 4 g/t silver (BUUY293, elevation of 1,174 metres);
  • 1.1 metres @ 10.6 g/t gold and 50 g/t silver (BUUY295, elevation of 968 metres);
  • 0.6 metres @ 12.3 g/t gold and 198 g/t silver (BUUY295, elevation of 870 metres); and
  • 0.5 metres @ 30.7 g/t gold and 235 g/t silver (BUUY302, elevation of 1,127 metres).
• These and other extensions of the Yaraguá system shown in Table 1 are all in proximity to mining development proposed in the 2014 PEA. Most of the vein families in Yaraguá east remain open to depth and grades encountered in this area are encouraging for resource growth.
  
  

"The 2014 infill and extension drilling program at Yaraguá has commonly achieved better results than expected from the current mineral resource estimate," commented Ari Sussman, CEO of Continental. "We look forward to the next mineral resource estimate for the Buriticá project, anticipated in late Q2 2015, and expect to see internal growth in the Measured and Indicated ounces plus overall growth in total ounces."

Details

Continental's 100%-owned, 62,348-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 1,100 metres of strike and 1,700 vertical metres and partially sampled in underground developments. The Veta Sur system has been drill-outlined along 1,000+ metres of strike and 1,800 vertical metres and has been partially sampled in underground developments. 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 2014 PEA prepared in accordance with NI 43-101. This release documents the results of infill and extension drilling through the Yaraguá vein system. Significant new drill intercepts are listed below in Table I and are referenced in Figures 1, 2 and 3.

Table I: Drilling Highlights

* Intercepts calculated at 1 g/t gold + 50 g/t silver cut-off grades for minimum intervals of 0.5 metres, with up to 30% internal dilution. True widths not accurately known but generally are between 70% of the down-hole interval and near true width (for GEOMK15, about 50%). Drill-holes designated "BUUY" were collared from underground, and drill-holes designated "BUSY" were collared at surface. Holes directionally-drilled from "mother holes" (BUUYDxxx or BUSYDxxx) are designated BUUYxxxDxx or BUSYxxxDxx), as the case may be.

** Intercepts in vein domains are respectively nominated by vein code (e.g. VNC) whereas other intercepts are designated as below or outside of the current Yaraguá mineral resource envelope. Intercepts with grades X thicknesses apparently significantly greater than for the corresponding vein domains in the current mineral resource block model are also highlighted in bold.

Infill and extension drilling of eastern Yaraguá comprised four fans (for 19 underground drill-holes) drilled from chambers set up in the Higabra tunnel, at around elevation of 1,170 metres (Figures 1 and 2). Drill-holes were broadly north-directed and shallowly inclined to achieve very high angle intersections with master vein sets through most of the Yaraguá vein families. Unfortunately, planned drilling from the eastern-most chamber in the Higabra tunnel was not completed due to high water inflows causing holes to terminate before hitting planned targets. However, these holes successfully dewatered broad areas of eastern Yaraguá. A geomechanical hole (GEOMK15) was drilled from surface, primarily for geotechnical purposes, but also infilled parts of the Yaraguá system at higher elevations than the underground holes.

Drill-holes encountered multiple vein families, covering an area of over 400 metres of vertical and 350 metres of lateral extents, with apparent grades X thicknesses generally comparable with or significantly greater than those expected from the current mineral resource block model. Broad and/or high-grade intercepts in related master veins include:

• 0.75 metres @ 14.5 g/t gold and 110 g/t silver (BUUY278, MU, elevation of 1,158 metres);
• 1.1 metres @ 18.3 g/t gold and 22 g/t silver (BUUY279, VNC, elevation of 1,065 metres);
• 0.5 metres @ 20.1 g/t gold and 19 g/t silver (BUUY279, SAV, elevation of 1,054 metres);
• 4.1 metres @ 17.8 g/t gold and 17 g/t silver, including 1.2 metres @ 55.9 g/t gold and 51 g/t silver (BUUY281, VNE, elevation of 1,104 metres);
• 0.95 metres @ 15.1 g/t gold and 245 g/t silver (BUUY284, MU1, elevation of 1,160 metres);
• 0.93 metres @ 52.8 g/t gold and 40 g/t silver (BUUY284, MU4, elevation of 1,155 metres);
• 2.82 metres @ 100.1 g/t gold and 10 g/t silver (BUUY285D01, HWV, elevation of 1,227 metres);
• 1.4 metres @ 151.6 g/t gold and 37 g/t silver (BUUY293, VNA, elevation of 1,177 metres);
• 19.15 metres @ 11.1 g/t gold and 28 g/t silver, including 2.72 metres @ 56 g/t gold and 75 g/t silver BUUY294, MUS, elevation of 1,254 metres);
• 2.8 metres @ 24.1 g/t gold and 114 g/t silver, including 1.05 metres @ 62.1 g/t gold and 296 g/t silver (BUUY297, MU10, elevation of 1,052 metres);
• 1.3 metres @ 56.5 g/t gold and 27 g/t silver (BUUY299, MU1, elevation of 1,082 metres);
• 0.65 metres @ 43.5 g/t gold and 4 g/t silver (BUUY300, FWV, elevation of 1,177 metres);
• 0.64 metres @ 4.5 g/t gold and 702 g/t silver (BUUY302, FWV, elevation of 1,082 metres);
• 2.1 metres @ 9.8 g/t gold and 39 g/t silver (BUUY302, N10, elevation of 1,073 metres);
• 1.07 metres @ 24.4 g/t gold and 146 g/t silver (BUUY303, MU1, elevation of 1,145 metres);
• 3.12 metres @ 8.9 g/t gold and 31 g/t silver (BUUY303, MU, elevation of 1,132 metres);
• 1.21 metres @ 17.2 g/t gold and 20 g/t silver (BUUY303, SAV, elevation of 1,107 metres);
• 2.65 metres @ 21.5 g/t gold and 21 g/t silver (GEOMK15, MU1, elevation of 1,484 metres); and
• 1.35 metres @ 10.6 g/t gold and 42 g/t silver (GEOMK15, MU2, elevation of 1,396 metres).

These and other intercepts in the 1,000-1,400-metre range of elevation will contribute to increased confidence levels of high-grade gold and silver mineral resources in master veins of eastern Yaraguá. The grade X thicknesses of these veins are encouraging for future development of an area that is located close to proposed stopes and main haulage developments outlined in the 2014 PEA. Drilling has been successful in limiting areas of several vein families that have previously been modelled to contain low to medium gold grades.

Drilling also intersected multiple veins below or to the south of the current Yaraguá mineral resource envelope, extending the vertical extents of most vein families in eastern Yaraguá by as much as 200 metres. Key intercepts, below the current mineral resource envelope, include:

• 0.65 metres @ 32.4 g/t gold and 18 g/t silver (BUUY281, elevation of 1,136 metres);
• 3.95 metres @ 9.4 g/t gold and 14 g/t silver (BUUY283, elevation of 966 metres);
• 2.55 metres @ 9.1 g/t gold and 11 g/t silver, including 1.25 metres @ 16.4 g/t gold and 19 g/t silver (BUUY283, elevation of 912 metres);
• 0.53 metres @ 20.7 g/t gold and 5 g/t silver (BUUY287, elevation of 1,076 metres);
• 0.5 metres @ 41.2 g/t gold and 61 g/t silver (BUUY287, MU1, elevation of 1,068 metres);
• 0.8 metres @ 18.6 g/t gold and 4 g/t silver (BUUY293, elevation of 1,174 metres);
• 1.1 metres @ 10.6 g/t gold and 50 g/t silver (BUUY295, elevation of 968 metres);
• 0.6 metres @ 12.3 g/t gold and 198 g/t silver (BUUY295, elevation of 870 metres); and
• 0.5 metres @ 30.7 g/t gold and 235 g/t silver (BUUY302, elevation of 1,127 metres).

These and other extensions of the Yaraguá system shown in Table 1 are all in proximity to mining development proposed in the 2014 PEA. Most of the vein families in Yaraguá east remain open to depth and grades encountered in this drilling are encouraging for mineral resource growth in this area.

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 and NQ core is sawn or split with one-half shipped to a sample preparation lab in Medellín run by ALS Colombia Limited ("ALS") in Colombia, whereas BQ core samples are full core. 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 SGS Colombia S.A., a certified assay laboratory in Medellín, Colombia.

The Company does not receive assay results for drill-holes in sequential order; however, all significant assay results are publicly reported. A listing of assay results to date for the Buriticá project is available on the Company's website at www.continentalgold.com.

For additional information on the Buriticá project, please refer to the 2014 PEA, led by M3 Engineering and Technology of Tucson, Arizona, with contributions from other independent consultants including NCL Ingeneria y Construccion SPA, which was responsible for the underground mine plan for the Buriticá project. The 2014 PEA is 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 November 17, 2014, the Company announced the 2014 PEA, the results of which included an 18-year mine life based on 20,055,000 tonnes grading 7.80 g/t gold and 19.35 g/t silver, resulting in 4,777,000 ounces of recovered gold and 7,088,000 ounces of recovered silver, and utilized the May 2014 mineral resource estimate prepared in accordance with NI 43-101. The 2014 PEA concludes an after-tax net present value at a 5% discount of $1.08 billion and an after-tax internal rate of return of 31.5% on an initial capital cost of $390.3 million with a payback of 2.8 years.

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 achieved major advances with the access tunnel, which is providing access for underground drilling and will eventually be used for commercial production. A Phase VII drill program is underway at the Buriticá project to further delineate mineral resources 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, results of the 2014 PEA, advancing the Buriticá project, exploration results, potential mineralization, potential development of mine openings, potential improvement of mining dilution grades, timing of an updated mineral resource estimate, and exploration and mine development plans, and is based on current expectations that involve a number of significant business risks and uncertainties. Forward-looking statements are subject to 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, an inability to advance the Buriticá project to the next level, 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. Specific reference is made to the most recent Annual Information Form on file with Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying forward-looking statements. All of the forward-looking statements made in this press release are qualified by these cautionary statements, and are made as of the date hereof. 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, 2 and 3, visit the following links:

http://media3.marketwire.com/docs/992855a.pdf

http://media3.marketwire.com/docs/992855b.pdf

http://media3.marketwire.com/docs/992855c.pdf