Continental Gold Closes Transaction to Acquire Property Interests in Colombia

TORONTO, ONTARIO--(Marketwire - May 6, 2011) -Continental Gold Limited ("Continental" or the "Company") (TSX:CNL) is pleased to announce the closing of the previously-announced transaction relating to the purchase of (i) title to six mineral concession contracts and rights to two mineral applications totaling 6,950.6 hectares adjacent to the Buriticá project; and (ii) title to three concession contracts totaling 2,293 hectares adjacent to the Dominical project (the "Properties"), located in Colombia. In consideration for the Properties, the Company paid US$2,000,000 in cash and issued 495,106 common shares of the Company (having a deemed value of US$4,500,000) to Bullet Holding Corp., a company controlled by Robert Allen. Mr. Allen is the Chairman of the Company and beneficially holds 26,827,189 common shares of the Company, including the common shares issued pursuant to this transaction, through Bullet Holding Corp., Coastal Financing Corp., Reindeer Capital Limited and Groupo de Bullet S.A.

Closing of the transaction was subject to receipt of all necessary regulatory approvals, including that of the Toronto Stock Exchange.

About Continental Gold Limited

Continental Gold Limited (TSX:CNL) is an advanced-stage exploration company with nine gold projects covering approximately 134,000 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. Additional details on the Buriticá project and the rest of Continental Gold's suite of gold exploration properties is 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.