Continental Gold Drills 16.7 Metres @ 58.7 g/t Gold and 233 g/t Silver in Veta Sur and Extends the La Estera System at Its Buriticá Project, Colombia

TORONTO, ONTARIO--(Marketwired - Jul 9, 2013) - Continental Gold Ltd. (TSX:CNL) (OTCQX:CGOOF) ("Continental" or the "Company") is pleased to announce results for the initial four underground diamond drill-holes from the Veta Sur vein system and two additional surface holes from the La Estera vein system, 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 growth to the total number of mineral resource ounces while simultaneously upgrading existing inferred ounces into the measured and indicated resource categories under National Instrument 43-101 ("NI 43-101") guidelines ahead of a prefeasibility study scheduled for 2014.

Highlights

Veta Sur System (Referenced in Figures 1 and 2)

• All four initial underground drill-holes at Veta Sur were successful in infilling the deposit, extending existing veins and encountering new veins outside the current mineral resource envelope.
  
  
• BUUY121 and BUUY118, intersected, respectively:
  
  
  • 16.7 metres @ 58.7 g/t gold and 233 g/t silver, including 5.15 metres @ 184 g/t gold and 671 g/t silver (elevation of 1,639 metres); and
  • 18.7 metres @ 22.4 g/t gold and 80 g/t silver, including 3.8 metres @ 99.6 g/t gold and 254 g/t silver (elevation of 1,654 metres).

These intercepts, characterized by Stage II visible gold-bearing mineralization, extend a broad high-grade subzone that is open vertically in central Veta Sur.

• Portions of the four drill-holes aimed at infilling the 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:
  
  
  • 7.42 metres @ 7.7 g/t gold and 12 g/t silver, including 0.5 metres @ 91.9 g/t gold and 44 g/t silver (BUUY110, elevation of 1,688 metres);
  • 3.4 metres @ 8.3 g/t gold and 178 g/t silver, including 1.2 metres @ 16.7 g/t gold and 340 g/t silver (BUUY116, elevation of 1,710 metres);
  • 0.5 metres @ 11.2 g/t gold and 105 g/t silver (BUUY121, elevation of 1,557 metres); and
  • 0.5 metres @ 8.9 g/t gold and 246 g/t silver (BUUY121, elevation of 1,493 metres).
    
    
• Each of the four underground drill-holes at Veta Sur also intersected vein domains outside of the current mineral resource envelope. Significant intercepts, extending vein domains, include:
  
  
  • 1.8 metres @ 18.8 g/t gold and 8 g/t silver, (BUUY110, elevation of 1,703 metres);
  • 3.5 metres @ 5.2 g/t gold and 8 g/t silver, including 1 metre @ 13 g/t gold and 11 g /t silver (BUUY116, elevation of 1,710 metres);
  • 1 metre @ 11.3 g/t gold and 28 g/t silver (BUUY118, elevation of 1,444 metres; new northerly vein); and
  • 0.51 metres @ 6.9 g/t gold and 11 g/t silver (BUUY121, elevation of 1,692 metres).

La Estera System

• BUSY337, in western La Estera, extended the Laurel vein family to the west and vertically. Significant intercepts include:
  
  
  • 0.4 metres @ 12.9 g/t gold and 32 g/t silver (elevation of 1,014 metres);
  • 0.4 metres @ 23 g/t gold and 53 g/t silver (elevation of 992 metres); and
  • 1.25 metres @ 5.7 g/t gold and 17 g/t silver (elevation of 957 metres).
    
    
• Some 600 metres further to the northeast, BUSY342 intersected a broad zone of base metal-rich veining, interpreted as the Laurel vein family, including:
  
  
  • 3.5 metres @ 13.3 g/t gold, 181 g/t silver and 5.3% zinc, including 1 metre @ 21.3 g/t gold, 362 g/t silver and 8.2% zinc (elevation of 1,753 metres).
    
    
• Further to the south and deeper, BUSY342 also intersected a family of veins, the most southerly yet encountered in the La Estera area, including:
  
  
  • 0.55 metres @ 16.2 g/t gold and 23 g/t silver (elevation of 596 metres).

"Drilling at Veta Sur is a priority for the balance of the year as there remains significant near-term potential to add additional ounces at depth, as the veins in our current mineral resource estimate measure 450 metres vertically on average versus a maximum drill-tested depth that is approximately 750 metres lower," commented Ari Sussman, CEO. "In order to be prudent in this lower metals-price environment, our eight-rig drilling program (three surface and five underground) has been reduced by approximately 33% to 62,000 metres in 2013 and will focus for the remainder of the year primarily on infill and extensions at Veta Sur and Yaraguá, where we believe we can upgrade and grow our mineral resource base much faster and more economically than drilling new discoveries."

Details

Continental's 100%-owned, 57,594-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 vein systems) are central to this land package. The Yaraguá vein system has been drill-outlined along 900 metres of strike and 1,300 vertical metres and partially sampled in underground developments. The Veta Sur vein 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 updated mineral resource estimates for the Buriticá project prepared in accordance with NI 43-101. This news 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 into the La Estera area.

Veta Sur System

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

Table I: Drilling Highlights, Veta Sur

The initial four underground diamond drill-holes completed at Veta Sur (BUUY110, BUUY116, BUUY118 and BUUY121, Figures 1 and 2) targeted both infill and extensions to the Veta Sur mineral resource model. Each drill-hole intersected multiple families of veins. Intercepts within the current mineral resource model (see "Technical Information" below) were generally consistent with this model. BUUY121 and BUUY118, however, made several intersections of significantly higher grade and/or thickness than comparable locations in the mineral resource model, including:

• 16.7 metres @ 58.7 g/t gold and 233 g/t silver, including 5.15 metres @ 184 g/t gold and 671 g/t silver (BUUY121, elevation of 1,639 metres); and
• 18.7 metres @ 22.4 g/t gold and 80 g/t silver, including 3.8 metres @ 99.6 g/t gold and 254 g/t silver (BUUY118, elevation of 1,654 metres).

These intercepts, characterized by Stage II visible gold-bearing mineralization, extend a very high-grade sub-zone that is open vertically in central Veta Sur.

Other intercepts, with significantly higher grades and/or thicknesses than in the current resource envelope, include:

• 7.42 metres @ 7.7 g/t gold and 12 g/t silver, including 0.5 metres @ 91.9 g/t gold and 44 g/t silver (BUUY110, elevation of 1,688 metres );
• 3.4 metres @ 8.3 g/t gold and 178 g/t silver, including 1.2 metres @ 16.7 g/t gold and 340 g/t silver (BUUY116, elevation of 1,710 metres);
• 0.5 metres @ 11.2 g/t gold and 105 g/t silver (BUUY121, elevation of 1,557 metres);
• 0.8 metres @ 6.4 g/t gold and 265 g/t silver (BUUY121, elevation of 1,504 metres); and
• 0.5 metres @ 8.9 g/t gold and 246 g/t silver (BUUY121, elevation of 1,493 metres).

In addition, each of the underground drill-holes intersected vein domains outside of the current Veta Sur mineral resource envelope. Significant intercepts, extending vein domains vertically, include:

• 1.8 metres @ 18.8 g/t gold and 8 g/t silver (BUUY110, elevation of 1,703 metres);
• 3.5 metres @ 5.2 g/t gold and 8 g/t silver, including 1 metre @ 13 g/t gold and 11 g/t silver (BUUY116, elevation of 1,710 metres); and
• 0.51 metres @ 6.9 g/t gold and 11 g/t silver (BUUY121, elevation of 1,692 metres).

New veins discovered to the north of the current mineral resource envelope include:

• 1 metre @ 11.3 g/t gold and 28 g/t silver (BUUY118, elevation of 1,444 metres; new northerly vein, central Veta Sur);
• 2.2 metres @ 0.4 g/t gold, 289 g/t silver and 3.3% zinc (BUUY118, elevation of 1,466 metres; new northerly vein, central Veta Sur); and
• 1.4 metres @ 0.4 g/t gold and 101 g/t silver (BUUY110, elevation of 1,616 metres; new northerly vein, northeastern Veta Sur).

La Estera System

Significant new drill intercepts in the La Estera system are listed below in Table II and are referenced in Figure 1.

Table II: Drilling Highlights, La Estera

BUSY337 was drilled in western La Estera (Figure 1) to test for extensions of vein families into this area. After intersecting the La Estrella vein package (from 566 metres down-hole, 1.24 metres @ 3.4 g/t gold and 131 g/t silver (elevation of 1,373 metres)), BUSY337 intersected a base metal-poor vein package, interpreted to represent westerly and vertical extensions of the Laurel vein family. Significant intercepts include:

• 0.4 metres @ 12.9 g/t gold and 32 g/t silver (elevation of 1,014 metres);
• 0.4 metres @ 23 g/t gold and 53 g/t silver (elevation of 992 metres); and
• 1.25 metres @ 5.7 g/t gold and 17 g/t silver (elevation of 957 metres).

Further down-hole to the north, BUSY337 intersected a vein family which may represent deep extensions (at elevations between 590-513 metres, Table II) of the Veta Sur vein system, 200 metres southwest of the current Veta Sur mineral resource envelope.

Some 600 metres further to the northeast of BUSY337, drill-hole BUSY342 intersected a broad zone of base metal-rich veining, interpreted as the Laurel vein family, including:

• 3.5 metres @ 13.3 g/t gold, 181 g/t silver and 5.3% zinc, including 1 metre @ 21.3 g/t gold, 362 g/t silver and 8.2% zinc (elevation of 1,753 metres).

Further down-hole, BUSY342 intersected veins that may represent extensions of the La Estrella vein family, 600 metres east of intercepts in BUSY337. Significant intercepts include:

• 0.5 metres @ 7.5 g/t gold, 18 g/t silver and 2.6% zinc (elevation of 937 metres).

Further to the south, BUSY342 intersected a family of veins, the most southerly yet encountered in the La Estera area, with significant intercepts including:

• 0.55 metres @ 16.2 g/t gold and 23 g/t silver (elevation of 596 metres).

Assays were also received for deeper parts of BUSY338 (see April 3, 2013 news release). An intersection (1.31 metres @ 3.1 g/t gold, 27 g/t silver and 3.9% zinc), from 696.89 metres down-hole, appears to represent a newly-discovered vein under a precious metal soil anomaly. A deeper intercept (from 1,038.6 metres down-hole, 0.42 metres @ 1.9 g/t gold, 38 g/t silver and 16.3% zinc) may indicate continuity of the La Estrella vein system between BUSY337 and BUSY342.

Revised 2013 Drill Program

The Company has revised its previous exploration guidance as part of efforts to reflect conservatism in the current challenging metals-price environment. The calendar 2013 drill program has been reduced from 95,000 metres to 62,000 metres as follows:

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 over 35 years of 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 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, results of a prefeasibility study, 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 "Figure 1 - Plan View of new drilling highlights, showing the surface projection of veins in the October 2012 mineral resource model on geology-topography", please visit the following link: http://media3.marketwire.com/docs/709cnl%2010.pdf.

To view "Figure 2 - Long Section, Veta Sur, showing new drilling highlights against the outlines of the October 2012 mineral resource envelope", please visit the following link: http://media3.marketwire.com/docs/709cnl%2011.pdf.