Continental Gold Reports on First Quarter 2014

TORONTO, ONTARIO--(Marketwired - May 8, 2014) - Continental Gold Limited (TSX:CNL)(OTCQX:CGOOF) ("Continental" or the "Company") is pleased to report the following highlights from the first quarter of 2014 and updates for the Buriticá project in Antioquia, Colombia.

First Quarter 2014 Highlights and Significant Events

• Completed approximately 15,530 metres of diamond drilling during the three months ended March 31, 2014 for an overall project life total of approximately 230,830 metres to March 31, 2014.
  
  
• The Company announced drilling results on January 9, 2014 and February 5, 2014 for a total of 24 drill holes in the Yaraguá, Veta Sur and La Estera vein systems. All drill holes in the Yaraguá and Veta Sur vein system were successful in infilling the deposits, extending existing veins or encountering new veins outside of the mineral resource envelope. BUUY191 intersected 36.48 metres @ 9.4 g/t gold and 43 g/t silver, including 1.8 metres @ 34.8 g/t gold and 61 g/t silver plus 2.6 metres @ 36.3 g/t gold and 47 g/t silver.
  
  
• Channel sampling in the new Yaraguá ramp extended high grades in the Murcielagos South vein family to higher elevations (1,520 metres), resulting in significant intervals including: 0.5 metres @ 24.7 g/t gold, 215 g/t silver and 8.4% zinc; and 1.0 metre @ 10.9 g/t gold, 90 g/t silver and 3.7% zinc.
  
  
• Continued underground development of the main access tunnel in the Higabra valley at an elevation of 1,150 metres above sea-level. Underground development pace improved steadily during the quarter and passed through the Tonusco fault, the main regional fault in the area. The Company's goal is to provide underground drilling access from multiple drilling stations to both grow and infill the mineral resource estimates for the Yaraguá and Veta Sur vein systems ahead of a pre-feasibility study (the "PFS").
  
  
• Underground drilling commenced from the first drilling station in the Higabra Valley tunnel. Initially, shallowly-inclined drill-holes are planned to transect the entire vein system in eastern Yaraguá at an elevation of approximately 1,200 metres.
  
  
• On March 7, 2014, the Company signed an Acta De Intenciones (Memorandum of Understanding) with the Ministry of Mines and Energy, the National Mining Agency and Corantioquia, outlining a framework to formalize small-scale mining taking place at the Company's Buriticá project. The Company is proceeding with the formalization process and anticipates executing sub-contracts with small-scale miners in the third quarter of 2014.
  
  
• The Company remains debt-free and well-funded, ending the quarter with US$103 million in its treasury.
  
  

Exploration

The Company resumed drilling in 2014 with the goal of delivering robust mineral resource growth and upgrading inferred resources into the measured and indicated categories. On February 5, 2014, the Company announced results for 13 diamond drill-holes and underground sampling from the Yaraguá vein system. Ten drill-holes were successful in extending the Yaraguá vein system, whereas drilling and underground sampling infilled vein families in eastern Yaraguá. Multiple drill intersections were made to the east, south and to depth of the current block model for the Yaraguá system. These intersections, covering over 200 metres of lateral and vertical extents, represent extensions of the Yaraguá southern vein families, which remain open to the east and to depth. Channel sampling in the new Yaraguá ramp extended high grades in the Murcielagos South vein family to higher elevations. Elsewhere, in eastern Yaraguá, infill drilling continued to encounter vein grades and/or thicknesses better than expected from the current Yaraguá mineral resource block model over significant vertical and horizontal extents.

Drilling at the Veta Sur vein system continued to successfully extend and infill vein families. Nine drill holes encountered a series of veins located north of the current block model for the Veta Sur vein system. These as-yet unmodeled veins were intersected over strike lengths of up to 400 metres and vertical extents of up to 500 metres and remain open along strike and to depth. Three drill-holes intersected a series of veins located to the south of the current block model for the Veta Sur system. Elsewhere, several drill-holes extended veins within the Veta Sur mineralized envelope to greater depths and to higher elevations than in the current mineral resource model. In addition, infill drilling continued to encounter better than expected vein grades and/or thicknesses from the Veta Sur resource block model.

Pre-Development

Many of the pre-development activities at the Buriticá project continued throughout the three months ended March 31, 2014, including advancing the following studies which will form the foundation of the PFS: civil, metallurgical, hydrological, geotechnical, water management and electrical studies.

The Company continued with underground development of the main access tunnel in the Higabra valley at an elevation of 1,150 metres above sea-level and recently passed through the Tonusco fault, the major regional fault in the area. The Company's initial goal is to provide underground drilling access to grow the measured and indicated portion of the mineral resource estimate for both the Yaraguá and Veta Sur vein systems ahead of the PFS.

On March 7, 2014, the Company signed an Acta De Intenciones (Memorandum of Understanding) with the Ministry of Mines and Energy, the National Mining Agency and Corantioquia, outlining a framework to formalize small-scale mining taking place at the Company's Buriticá project. The Company is proceeding with the formalization process and anticipates executing sub-contracts with small-scale miners in the third quarter of 2014.

About Continental Gold

Continental Gold Limited 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.

An animation video providing an overview of the Buriticá project and the exploration potential is available in the following link: http://bit.ly/Z6HBh9. Please note that any future production decision will be based on, among other things, the positive outcome of a pre-feasibility study in 2015.

The scientific and technical information contained in this press release has been reviewed and approved by Mark Moseley-Williams, President and Chief Operating Officer of the Company, who is a qualified person within the meaning of NI 43-101.

For additional technical information on the Buriticá project, please refer to the technical report entitled "2012 Mineral Resource Estimate of the Buriticá Gold Project, Colombia" dated November 15, 2012, effective as at October 22, 2012, available on SEDAR at www.sedar.com, on the OTCQX at www.otcmarkets.com and on the Company website at www.continentalgold.com. Additional details on the rest of Continental's suite of gold exploration properties are also 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 PFS, submission of the second and final modification to the existing Environmental Impact Assessment, exploration and mine development plans, and timing of the commencement of construction and 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.