Continental Gold Limited Announces $57,000,000 Private Placement Financing

TORONTO, Aug. 31, 2010 - Continental Gold Ltd. ("Continental" or the "Company") (TSX: CNL), is pleased to announce that it has entered into a financing agreement pursuant to which a syndicate co-led by TD Securities Inc. and Clarus Securities Inc. (together, the "Underwriters"), has offered to purchase, on a bought deal private placement basis, 10,000,000 units (the "Units") of the Company at a price of $5.70 per Unit (the "Issue Price") for total gross proceeds of $57,000,000 (the "Offering"). Continental Gold has also granted the Underwriters an option to purchase up to an additional 2,000,000 Units, which is exercisable by the Underwriters at any time up to 2 business days prior to closing.

Each Unit will consist of one common share and one-half of one common share purchase warrant. Each whole warrant shall entitle the holder to acquire an additional common share at a price of $7.50 during the period ending 24 months following the closing of the Offering. In the event that the closing sale price of the Company's common shares on the Toronto Stock Exchange is greater than $9.75 per share for a period of 20 consecutive trading days at any time after closing of the Offering, the Company may accelerate the expiry date of the Warrants by giving notice to the holders thereof and in such case the Warrants will expire on the 30th day after the date on which such notice is given by the Company.

The Units issued with respect to the Offering will be subject to a four month hold period in accordance with applicable Canadian securities laws.

The closing of the Offering is expected to occur on or about September 16, 2010 and is subject to receipt of all necessary regulatory approvals including that of the Toronto Stock Exchange.

The net proceeds from the Offering will be used to fund development of the Company's mineral properties in Colombia and for general corporate purposes.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless an exemption from such registration is available.


About Continental Gold Limited

Continental Gold Limited is an advanced-stage exploration company with eight gold projects covering 200,000 hectares in Colombia. Spearheaded by a management team with over 40 years of exploration and mining experience in South America, the Company has begun an aggressive exploration program on its extensive portfolio of properties with a focus on its flagship high-grade gold project, Buriticá and Berlin, a second project with an aggressive exploration mapping and drilling program underway. Additional details on the Buriticá project and the rest of Continental Gold´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, including statements regarding the estimation of mineral resources, exploration results, potential mineralization, exploration and mine development plans, timing of the commencement of operations and estimates of market conditions, and is based on current expectations that involve a number of business risks and uncertainties. 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."

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES



For more information, please contact

Continental Gold Limited
Naomi Nemeth, Vice President, Investor Relations
+1 416.643.7638
info@continentalgold.com
www.ContinentalGold.com