Continental Gold Limited Announces Closing of $68,400,000 Private Placement Financing

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

TORONTO, ONTARIO -- (Marketwire - Sept. 16, 2010) - Continental Gold Ltd. ("Continental" or the "Company") (TSX: CNL), is pleased to announce the closing of its previously announced financing with a syndicate co-led by TD Securities Inc. and Clarus Securities Inc. and including Dundee Securities Corporation, GMP Securities L.P. and Macquarie Capital Markets Canada Ltd. (collectively, the "Underwriters") pursuant to which the Company issued, on a private placement basis, 12,000,000 units (the "Units") of the Company at a price of $5.70 per Unit (the "Issue Price") for total gross proceeds of $68,400,000 (the "Offering"). The financing included the initial agreement to acquire 10,000,000 Units and the exercise, in full, by the Underwriters of an Underwriters' option granted to the Underwriters to arrange for purchasers of an additional 2,000,000 Units. PowerOne Capital Markets Limited acted as a financial advisor with respect to the Offering.

Each Unit consists of one common share and one-half of one common share purchase warrant. Each whole warrant entitles 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 net proceeds from the Offering will be used to fund development of the Company's mineral properties in Colombia and for general corporate purposes.

All securities issued with respect to the Offering will be subject to a four month hold period in accordance with applicable Canadian securities laws. In connection with the Offering, the Underwriters are to be issued that number of compensations options equal to 6.0% of the number Units sold pursuant to the Offering, subject to shareholder and regulatory approval. Each compensation option entitles the holder to acquire one Unit for period of 24 months after the closing date.

The total number of common shares issuable pursuant to the Offering on a fully-diluted basis (assuming the exercise of: (i) all warrants; (ii) compensation options; and (iii) warrants issuable upon exercise of the compensation options) totals 19,080,000 shares and would represent 25.7% of the Company's 74,304,365 common shares issued and outstanding upon announcement of the Offering on August 31, 2010. The Toronto Stock Exchange (the "TSX") generally requires that a majority of shareholders approve of such a private placement, as a condition of is completion, where the issuer issues, or may at some point in the future issue, that number of listed securities equal to or greater than 25% of its then issued and outstanding listed securities. Exclusive of the compensation options, the total number of listed securities issuable pursuant to the Offering (on a fully-diluted basis) totals 18,000,000; less than 25% of the issued and outstanding common shares.

The TSX has permitted the Offering to close with issuance of the Compensation Options subject to delivery of written evidence that holders of more than 50% of the voting securities of the listed issuer are familiar with the terms of the proposed transaction and are in favour of it. The Offering has not had any effect on control of the Company, and there is no participation by insiders. The Company has received the requisite written evidence from a majority of the holders of voting shares approving the Offering and, therefore, issuance of the Compensation Options will be made on September 23, 2010, subject to TSX approval.

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, proposed use of financing proceeds, 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.



For more information, please contact

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