Continental Gold Drills High-Grade Gold at Yaragua and Further Extends the Laurel System at Buritica, Colombia

TORONTO, ONTARIO--(Marketwired - Jul 28, 2014) - Continental Gold Ltd. (TSX:CNL)(OTCQX:CGOOF) ("Continental" or the "Company") is pleased to announce results for 12 diamond drill-holes through the Yaraguá and Laurel vein systems at the Company's 100%-owned Buriticá project in Antioquia, Colombia. Drilling continues throughout 2014 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.

Highlights (referenced in Figures 1, 2 and 3)

Yaraguá Vein System

• Drilling from underground was successful in infilling eastern areas of the May 2014 Yaraguá mineral resource envelope across 200 metres of lateral strike by 400 metres of vertical strike. Importantly, the infill drill-holes are all within 200 vertical-metre ranges above and below the elevation of the Higabra Valley Tunnel (approximately 1,190 metres above sea level), where drilling is focused on converting existing Inferred resources into the Measured and Indicated categories.
• Drilling through most of the central and southern Yaraguá vein envelope commonly encountered vein grades X thicknesses that are significantly above those expected from the May 2014 mineral resource block model. Related intercepts and veins include:

• 1.35 metres @ 190.5 g/t gold and 95 g/t silver (BUUY222, MUS1, elevation of 1,211 metres);
• 0.9 metres @ 64 g/t gold and 6 g/t silver (BUUY225, VNC2, elevation of 1,354 metres);
• 2.5 metres @ 20.4 g/t gold and 44 g/t silver (BUUY225, MU1, elevation of 1,172 metres);
• 3.95 metres @ 50.2 g/t gold and 26 g/t silver (BUUY253, PRE, elevation of 1,299 metres);
• 0.5 metres @ 70 g/t gold and 19 g/t silver (BUUY253, MU2, elevation of 1,248 metres);
• 0.58 metres @ 752 g/t gold and 124 g/t silver (BUUY258, MU, elevation of 1,231 metres);
• 4.2 metres @ 25 g/t gold and 18 g/t silver (BUUY264, PRE, elevation of 1,284 metres);
• 2.4 metres @ 28 g/t gold and 9 g/t silver (BUUY264, MU, elevation of 1,201 metres);
• 1.0 metres @ 219.4 g/t gold and 72 g/t silver (BUUY269, VNB, elevation of 1,301 metres);
• 4.1 metres @ 17.4 g/t gold and 170 g/t silver (BUUY272, MU3, elevation of 1,288 metres);
• 3.8 metres @ 62.4 g/t gold and 249 g/t silver (BUUY274, VNC, elevation of 1,352 metres);
• 0.55 metres @ 66.2 g/t gold and 15 g/t silver (BUUY274, MU, elevation of 1,277 metres);
• 0.6 metres @ 22.3 g/t gold and 5 g/t silver (BUUY275, MU2, elevation of 1,273 metres); and
• 3.2 metres @ 12.7 g/t gold and 93 g/t silver (BUUY276, PRE, elevation of 1,277 metres).

• Step-out drilling in nine holes intersected multiple veins below the south-eastern Yaraguá mineral resource envelope. High-grade intercepts include:

• 0.5 metres @ 17.4 g/t gold and 9 g/t silver (BUUY264, elevation of 1,085 metres);
• 0.5 metres @ 10.4 g/t gold and 13 g/t silver (BUUY269, elevation of 1,032 metres); and
• 2.0 metres @ 7.4 g/t gold and 3 g/t silver (BUUY269, elevation of 1,022 metres).

Laurel Vein System

• Further to the south, step-out drilling up to 300 metres along strike in three holes encountered multiple veins interpreted as relatively deep, eastern extensions of the Laurel vein system. These holes extended the strike length of Laurel to approximately 1,100 metres, with the system remaining open to the southwest, northeast and at depth. High-grade intercepts include:

• 1.45 metres @ 84 g/t gold and 7 g/t silver (BUUY258, elevation of 976 metres); and
• 0.6 metres @ 9.2 g/t gold and 20 g/t silver (BUUY269, elevation of 990 metres).

"It's pleasing to see the underground infill drilling successfully demonstrate consistent and even higher-grade intercepts at elevations around the Higabra Valley Tunnel, as this is pivotal for our goal of upgrading current Inferred resources at these elevations into the Measured and Indicated categories", commented Ari Sussman, CEO of Continental. "Additionally, the size of the Laurel vein system target continues to grow impressively and we are hopeful that over time, it will prove economic and represent another mineable front at Buriticá."

Details

Continental's 100%-owned, 59,095-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 1,120 metres of strike and 1,300 vertical metres and partially sampled in underground developments. The Veta Sur system has been drill-outlined along 1,040 metres of strike and 1,400 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 updated mineral resource estimates for the Buriticá project prepared in accordance with NI 43-101. The Laurel vein system, to the south of Yaraguá and Veta Sur, is at an earlier stage of drilling definition.

This release documents the results of infill and extension drilling (completed after the December 31, 2013 closure of the database for the Buriticá 2014 mineral resource estimate) through eastern Yaraguá and to the south of 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

Two fans of holes were drilled to the south of Yaraguá, from underground platforms in the Yaraguá mine (Figure 1). Drilling was primarily focused on infilling the Yaraguá mineral resource envelope, but some holes also targeted depth extensions of the Yaraguá vein system and, further south, possible extensions to the Laurel vein system (Figures 2 and 3).

Within the Yaraguá mineral resource envelope, drilling through most of the central and southern Yaraguá vein system commonly encountered vein grades X thicknesses that are significantly above those expected from the May 2014 mineral resource block model. Related intercepts and veins include:

• 1.35 metres @ 190.5 g/t gold and 95 g/t silver (BUUY222, MUS1, elevation of 1,211 metres);
• 0.9 metres @ 64 g/t gold and 6 g/t silver (BUUY225, VNC2, elevation of 1,354 metres);
• 2.5 metres @ 20.4 g/t gold and 44 g/t silver, including 1.5 metres @ 32.4 g/t gold and 70 g/t silver (BUUY225, MU1, elevation of 1,172 metres);
• 2.25 metres @ 7.9 g/t gold and 9 g/t silver, including 1.25 metres @ 12.8 g/t gold and 2 g/t silver (BUUY242, VNB, elevation of 1,292 metres);
• 0.6 metres @ 39.1 g/t gold and 47 g/t silver (BUUY242, PRE, elevation of 1,288 metres);
• 2.45 metres @ 9.1 g/t gold and 8 g/t silver, including 1.45 metres @ 13.5 g/t gold and 12 g/t silver (BUUY242, CNT, elevation of 1,219 metres);
• 1.25 metres @ 25.2 g/t gold and 1 g/t silver (BUUY253, CBE, elevation of 1,324 metres);
• 3.95 metres @ 50.2 g/t gold and 26 g/t silver, including 2.45 metres @ 74.3 g/t gold and 35 g/t silver (BUUY253, PRE, elevation of 1,299 metres);
• 2.9 metres @ 14 g/t gold and 22 g/t silver (BUUY253, MU3, elevation of 1,294 metres);
• 0.5 metres @ 70 g/t gold and 19 g/t silver (BUUY253, MU2, elevation of 1,248 metres);
• 0.7 metres @ 26.3 g/t gold and 40 g/t silver (BUUY253, CNT, elevation of 1,242 metres);
• 1.05 metres @ 1.11 g/t gold and 880 g/t silver (BUUY258, PRE, elevation of 1,302 metres);
• 0.58 metres @ 752 g/t gold and 124 g/t silver (BUUY258, MU, elevation of 1,231 metres);
• 4.2 metres @ 25 g/t gold and 18 g/t silver, including 1.6 metres @ 61.4 g/t gold and 24 g/t silver (BUUY264, PRE, elevation of 1,284 metres);
• 0.6 metres @ 41.1 g/t gold and 61 g/t silver (BUUY264, VNE, elevation of 1,265 metres);
• 2.4 metres @ 28 g/t gold and 9 g/t silver (BUUY264, MU, elevation of 1,201 metres);
• 1.0 metres @ 219.4 g/t gold and 72 g/t silver (BUUY269, VNB, elevation of 1,301 metres);
• 0.7 metres @ 36.4 g/t gold and 121 g/t silver (BUUY269, MU3, elevation of 1,286 metres);
• 4.1 metres @ 17.4 g/t gold and 170 g/t silver, including 1.2 metres @ 42 g/t gold and 487 g/t silver (BUUY272, MU3, elevation of 1,288 metres);
• 7.6 metres @ 8.9 g/t gold and 16 g/t silver, including 3.4 metres @ 17.3 g/t gold and 14 g/t silver (BUUY272, MU, elevation of 1,215 metres);
• 3.8 metres @ 62.4 g/t gold and 249 g/t silver, including 1.0 metres @ 171.8 g/t gold and 496 g/t silver (BUUY274, VNC, elevation of 1,352 metres);
• 0.55 metres @ 66.2 g/t gold and 15 g/t silver (BUUY274, MU, elevation of 1,277 metres);
• 0.6 metres @ 22.3 g/t gold and 5 g/t silver (BUUY275, MU2, elevation of 1,273 metres);
• 3.2 metres @ 12.7 g/t gold and 93 g/t silver (BUUY276, PRE, elevation of 1,277 metres); and
• 6.35 metres @ 8.9 g/t gold and 34 g/t silver, including 2.15 metres @ 16.1 g/t gold and 30 g/t silver (BUUY276, MU3, elevation of 1,269 metres).

Elsewhere, within the mineral resource envelope, intercepts were generally of grade X thicknesses consistent with the May 2014 Yaraguá mineral resource block model. Intercepts between modelled vein domains are presented in Table 1 without vein domain names.

Nine drill-holes intersected multiple veins below the south-eastern Yaraguá mineral resource envelope, representing extensions at depth of the southern Yaraguá vein system. Higher-grade intercepts included:

• 0.8 metres @ 7.9 g/t gold and 3 g/t silver (BUUY253, elevation of 954 metres);
• 0.5 metres @ 17.4 g/t gold and 9 g/t silver (BUUY264, elevation of 1,085 metres);
• 0.5 metres @ 10.4 g/t gold and 13 g/t silver (BUUY269, elevation of 1,032 metres); and
• 2.0 metres @ 7.4 g/t gold and 3 g/t silver (BUUY269, elevation of 1,022 metres).

The southern Yaraguá vein system remains open at depth and to the west and east of these intersections.

Further to the south, three drill-holes encountered multiple veins interpreted as relatively deep, eastern extensions of the Laurel vein system, up to 300 metres to the northeast of previous drill intercepts. High-grade intersections included:

• 1.45 metres @ 84 g/t gold and 7 g/t silver (BUUY258, elevation of 976 metres); and
• 0.6 metres @ 9.2 g/t gold and 20 g/t silver (BUUY269, elevation of 990 metres).

All of the infill drill intercepts and also extensions to the vein systems are within 200 vertical-metre ranges above and below the 1,190-metre elevation of proposed development infrastructure from the Higabra Valley Tunnel (Figures 2 and 3).

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 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 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 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 "Independent Technical Report and Resource Estimate on the Buriticá Gold Project 2013" with an effective date of December 31, 2013, 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 May 13, 2014, the Company announced an updated mineral resource estimate for the Buriticá project prepared in accordance with NI 43-101. This estimate covers the Yaraguá and Veta Sur vein systems, with a combined Measured mineral resource of 0.99 million tonnes of mineralized material containing 0.65 million ounces of gold grading 20.4 g/t gold, 1.54 million ounces of silver grading 48 g/t silver, and 15.0 million pounds of zinc grading 0.7% zinc, and a combined Indicated mineral resource of 7.41 million tonnes of mineralized material containing 2.15 million ounces of gold grading 9.0 g/t gold, 6.89 million ounces of silver grading 29 g/t silver, and 75.1 million pounds of zinc grading 0.5% zinc. The combined Inferred mineral resource is 16.7 million tonnes of mineralized material containing 4.2 million ounces grading 7.8 g/t gold, 13.1 million ounces of silver grading 24 g/t silver and 111 million pounds of zinc grading 0.3% 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 achieved major advances with the access tunnel, which is providing access for underground drilling and will eventually be used for commercial production. A Phase V drill program is underway at the Buriticá project to further delineate the 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, exploration results, potential mineralization, and exploration and mine development plans, 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. 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 highlights of new drilling, please click the following link: http://www.marketwire.com/library/20140725-July282014_Figure1.jpg

To view Figure 2 - Long Section, (line A-B on Figure 1), please click the following link: http://www.marketwire.com/library/20140725-July282014_Figure2.jpg

To view Figure 3 - Cross Section (line C-D on Figure 1), please click the following link: http://www.marketwire.com/library/20140725-July282014_Figure3.jpg