Continental Gold Receives an Environment Permit to Begin Construction of an Underground Tunnel and Road at Its Buritica Project

TORONTO, ONTARIO--(Marketwire - Aug. 30, 2012) - Continental Gold Limited (TSX:CNL)(OTCQX:CGOOF) ("Continental" or the "Company") is pleased to announce that it has received formal approval for the modification of its existing Environmental Impact Assessment. The modification approval was received from Corantioquia, the autonomous regional corporation responsible for issuing and controlling environmental permits in Antioquia, Colombia.

The environmental permit amendment allows the Company to build a six-kilometre switchback road originating from the existing paved road at Buriticá down into the Higabra valley, the future site of planned mining and milling operations at the Buriticá project. Additionally, the permit amendment allows the Company to begin underground development in the Higabra valley by constructing a one-kilometre access tunnel measuring 5 metres x 4.5 metres. The tunnel, which will eventually serve as the main access for all underground development, will initially provide the Company with much-needed underground drilling access in order to infill drill existing mineral resources categorized in accordance with National Instrument 43-101 ("NI 43-101") for the Yaraguá and Veta Sur systems. As well, the Company will embark on an aggressive exploration drill program to confirm and expand upon the limited deep-drilling results received to date at Yaraguá (BUSY258, 4.5 metres @ 20.3 g/t Gold and 102 g/t Silver) and Veta Sur (BUSY221, 10.2 metres @ 83.8 g/t Gold and 285 g/t Silver) with the aim of adding to the existing mineral resource estimate categorized in accordance with NI 43-101.

The Company intends to immediately begin mobilizing contractors and expects to commence construction of the road and access tunnel in the fourth quarter of 2012. With this first amendment successfully completed, the Company anticipates filing a second amendment to its existing Environmental Impact Assessment in the second quarter of 2013, which is expected to encompass the remaining infrastructure required to build a mine at Buriticá.

"The environmental permit amendment is a major milestone for Continental and an important first step in what we anticipate will be a straight-forward permitting process towards production," commented Ari Sussman, CEO. "Although this tunnel will eventually serve as the main access level for an underground mine at the Buriticá project, the short term excitement will be the access provided for underground drilling to grow the resource base of the project at depth. On behalf of Continental and all of its shareholders, I would like to thank Corantioquia for the efficient and professional manner in which they handled this process, and the local communities for the unwavering support for the project."

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. A maiden mineral resource estimate classified in accordance with NI 43-101 for its Buriticá project covers two major vein systems, with combined measured and indicated mineral resources of 1,110,000 tonnes of mineralized material containing 630,000 ounces of gold grading 17.8 g/t gold, 1,500,000 ounces of silver grading 42 g/t silver, and 18,700,000 pounds of zinc grading 0.8% zinc. The inferred mineral resource is 6,900,000 tonnes of mineralized material containing 2,500,000 ounces of gold grading 11.4 g/t gold, 9,500,000 ounces of silver grading 43 g/t silver and 88,000,000 pounds of zinc grading 0.6% zinc. For additional technical information on the Buriticá project, please refer to the Company's technical report entitled "Mineral Resource Estimate of the Buriticá Gold Project, Colombia" dated October 24, 2011, as amended November 23, 2011, 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. Additional details on the Buriticá project and the rest of Continental's suite of gold exploration properties are available at www.continentalgold.com. 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.

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, 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.

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.