Continental Gold Continues to Drill High-Grade Gold Over 1,200 Vertical Metres at Veta Sur While Extending the Mineral Resource Envelope

Highlight Drilling intercepts include 4.70 metres @ 161.33 g/t gold and 31 g/t silver

Toronto, Ontario, August 20, 2018 – Continental Gold Inc. (TSX:CNL; OTCQX:CGOOF) (“Continental” or the “Company”) is pleased to announce results from nine diamond drill holes into the Veta Sur system as part of its 2018 drilling program at its 100%-owned Buriticá project in Antioquia, Colombia. The Company currently has 14 diamond drill rigs in operation, focusing on increasing and upgrading the mineral resources to higher classification categories by testing for high-grade and broad mineralized zones within the mineral reserve and resource envelopes and testing high-impact targets along strike and below existing mineral resources, as well as grassroots targets proximal to existing and proposed infrastructure. The Company has US$208 million of available liquidity as of June 30, 2018.

“With excellent progress being made in underground development for the mine, we are becoming much better-positioned to drill the orebodies from short distances,” commented Ari Sussman, CEO. “The analytical results today continue to confirm our hypotheses for the Veta Sur system—namely that infill drilling improves the grade of master veins, which will provide the bulk of mine production, and that the vertical dimension of high-grade veins remains continuous at depth, providing additional mining flexibility and potential for production to continue many years past the feasibility mine plan.”

Veta Sur System (see Figures 1, 2, 3 and 4)

Nine drill holes intersected the Veta Sur system over 1,200 vertical metres validating the sheer scale of the precious metal system by confirming excellent continuity at high-grades. Key highlight intercepts are as follows:

  • 2.0 metres @ 53.87 g/t gold and 40.2 g/t silver (BUUY376, elevation 1,559 metres);
  • 4.70 metres @ 161.33 g/t gold and 31.1 g/t silver (BUUY389, elevation 1,515 metres);
  • 3.25 metres @ 18.64 g/t gold and 9.3 g/t silver (BUUY381, elevation 1,513 metres);
  • 1.0 metres @ 51.45 g/t gold and 388 g/t silver (BUSY374D04, elevation 875 metres);
  • 2.60 metres @ 131.96 g/t gold and 21.9 g/t silver (BUSY374D05, elevation 821 metres); and
  • 1.1 metres @ 36.7 g/t gold and 18.6 g/t silver (BUUY349D03, elevation 677 metres).

Current and previously-announced results of Veta Sur drilling are having the following three impacts (at a 3 g/t gold cut-off):

  • The shallower drill intercepts (BUUY376, BUUY378, BUUY381, BUUY385) continue to demonstrate an improvement of grades in the master vein sets versus the mineral resource block model;
  • Drill-hole series BUSY374D1-D5, which have intersected the Veta Sur system up to 350 metres below the Higabra Tunnel, have potentially extended the vertical dimension of the Indicated mineral resource estimate boundary; and
  • Drill-hole series BUSY349D1-D3 have successfully extended high-grade gold some 300-400 metres below the current Inferred mineral resource limit.

The following is a complete list of results from diamond drill-holes announced in this news release:

Hole ID From

(m)
To

(m)
Intercept

Interval*

(m)
Gold**

(g/t)
Silver**

(g/t)
Gold

Equivalent**

(g/t)
Mid-Point

Elevation

(m)
Vein
BUUY376 174.95 176.70 1.75 2.52 56.5 3.32 1580 120
  211.20 217.00 5.80 3.11 14.2 3.31 1563 75
incl 213.80 215.70 1.90 6.09 22.0 6.41 1563  
  222.60 224.60 2.00 53.87 40.2 54.44 1559 65
incl 222.60 223.10 0.50 207.00 92.7 208.32 1560  
  235.50 237.60 2.10 8.13 10.8 8.28 1554 51
                 
BUUY378 150.00 150.50 0.50 15.80 56.0 16.60 1594 110
  155.15 156.30 1.15 6.97 42.8 7.58 1592 90
EV 167.10 167.90 0.80 5.62 31.8 6.07 1588  
  176.00 177.05 1.05 21.61 201.1 24.48 1585 65
  187.55 191.65 4.10 6.89 242.7 10.36 1581 51
incl 187.55 188.15 0.60 24.20 1595.0 46.99 1582  
and 189.65 190.15 0.50 19.85 24.4 20.20 1581  
  213.50 214.00 0.50 17.25 29.4 17.67 1573 39
                 
BUUY381 171.60 174.15 2.55 1.48 35.1 1.98 1556 120
  225.35 226.85 1.50 10.12 52.9 10.87 1530 65
incl 226.35 226.85 0.50 15.05 48.6 15.74 1530  
  245.50 250.70 5.20 1.71 8.6 1.83 1518 48
  251.70 255.90 4.20 1.70 5.4 1.78 1516 43
  257.60 260.85 3.25 18.64 9.3 18.78 1513 39
incl 257.60 258.10 0.50 68.60 25.7 68.97 1515  
and 258.60 259.10 0.50 45.60 24.3 45.95 1514  
                 
BUUY385 189.20 192.05 2.85 4.98 22.0 5.29 1573 70
incl 191.50 192.05 0.55 18.25 15.2 18.47 1573  
  193.25 195.50 2.25 2.56 8.5 2.69 1571 65
  197.90 199.00 1.10 19.58 690.3 29.44 1570 62
incl 197.90 198.45 0.55 37.60 1360.0 57.03 1570  
  205.00 208.85 3.85 1.26 9.0 1.39 1566 51
  218.55 220.00 1.45 7.42 17.0 7.66 1561 43
incl EV 219.20 220.00 0.80 11.61 12.4 11.79 1561  
  230.55 234.45 3.90 2.98 23.9 3.32 1554 39
incl 233.40 233.95 0.55 8.97 16.3 9.20 1555  
                 
BUUY389 204.50 209.20 4.70 161.33 31.1 161.77 1515 110
incl 207.60 208.10 0.50 1495.00 187.0 1497.67 1516  
  261.80 269.00 7.20 4.30 11.5 4.46 1477 62
incl 266.85 267.40 0.55 23.40 8.4 23.52 1478 51
  271.10 275.05 3.95 2.36 8.9 2.49 1473 48
  276.75 281.00 4.25 2.20 14.9 2.41 1470 43
  285.75 287.25 1.50 15.19 37.8 15.73 1466 42-39?
incl 286.75 287.25 0.50 39.40 40.0 39.97 1466  
                 
BUUY349D03 267.80 268.90 1.10 36.70 18.6 36.97 677 120
  273.00 274.35 1.35 3.68 1.3 3.70 674 110
  333.40 334.10 0.70 14.35 42.4 14.96 640 62
  361.65 362.80 1.15 5.79 1.7 5.81 624 48
  365.40 366.70 1.30 5.75 10.4 5.89 622 48
  602.40 602.90 0.50 12.65 18.9 12.92 504 22
  634.40 638.40 4.00 6.32 5.3 6.40 491 New
incl 636.10 636.65 0.55 34.90 24.1 35.24 491  
  681.65 684.20 2.55 2.98 5.0 3.05 474 16
                 
BUUY349D04 66.15 66.65 0.50 52.20 13.7 52.40 781 New
                 
BUSY374D04 269.65 270.15 0.50 18.35 10.9 18.51 956 185
  503.90 504.90 1.00 51.45 388.0 56.99 875 39
  522.05 522.55 0.50 11.95 45.9 12.61 869 32
  525.30 527.30 2.00 11.35 27.6 11.74 868 31
incl 526.30 526.80 0.50 41.60 90.7 42.90 868  
                 
BUSY374D05 136.10 136.60 0.50 11.20 129.0 13.04 984 New
  197.40 198.00 0.60 17.85 89.7 19.13 958 New
  210.70 211.20 0.50 57.20 7.5 57.31 952 New
  236.00 237.25 1.25 9.17 4.9 9.24 941 185
  485.20 489.80 4.60 4.90 34.7 5.39 837 42
incl 486.20 486.75 0.55 20.90 192.0 23.64 838  
  498.00 499.10 1.10 7.52 13.5 7.71 833 New
  500.90 504.10 3.20 2.19 7.2 2.29 831 New
  511.50 514.70 3.20 8.72 8.5 8.84 827 34
incl 512.10 512.70 0.60 38.40 14.8 38.61 827  
  517.50 519.75 2.25 2.72 2.3 2.75 824 32
  526.60 529.20 2.60 131.96 21.9 132.27 821 31
  528.65 529.20 0.55 615.00 96.0 616.37 821 New
  534.00 535.60 1.60 3.95 3.0 4.00 818 30
  555.00 556.90 1.90 3.05 4.9 3.12 810 New
  560.20 565.70 5.50 7.16 8.9 7.28 806 New
incl 563.60 565.00 1.40 21.87 22.5 22.20 807 24
                 

* Intercepts calculated at a composite 4.8 grams X metre gold equivalent (70:1 Au/Ag) for minimum intervals of 0.5 metres, with generally no more than 20% internal dilution. True widths are generally estimated to be between 80-100%.
** Grades herein are reported as uncapped values.
Note: Drill holes designated “BUUY” were collared from underground.

Figure 1 – Plan View of the Laurel and Veta Sur Systems

Figure 2 – Cross Section A to A’ of the Laurel and Veta Sur Systems

Figure 3 – Long Section of the Veta Sur System with Mineral Resource Envelopes

Figure 4 – Long Section B to B’ of Vein 39 from the Veta Sur System

Geological Description of the Buriticá Project
Continental’s 100%-owned, 75,023-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 1,100 metres of strike and 1,700 vertical metres and partially sampled in underground developments. The Veta Sur system has been drill-outlined along 1,000+ metres of strike and 1,800 vertical metres and has been partially sampled in underground developments. 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.

Technical Information
Mauricio Castañeda, Vice-President, Exploration of the Company and a qualified person for the purpose of Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43 101”), has prepared or supervised the preparation of, or approved, as applicable, the technical information contained in this press release.

The Company utilizes a rigorous, industry-standard QA/QC program. HQ and NQ 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 SGS Colombia S.A., a certified assay laboratory in Medellín, Colombia.

The Company does not receive assay results for drill holes in sequential order; however, all significant assay results are publicly reported.

For information on the Buriticá project, please refer to the technical report, prepared in accordance with NI 43 101, entitled “Buriticá Project NI 43–101 Technical Report Feasibility Study, Antioquia, Colombia” and dated March 29, 2016 with an effective date of February 24, 2016, led by independent consultants JDS Energy & Mining Inc. The technical report is 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 Inc. is an advanced-stage exploration and development company with an extensive portfolio of 100%-owned gold projects in Colombia. Formed in April 2007, the Company – led by an international management team with a successful track record of discovering and developing large high-grade gold deposits in Latin America – is focused on advancing its fully-permitted high-grade Buriticá gold project to production with first gold pour on track for H1 2020. Additional details on Continental Gold’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 timing of a production decision and length of life-of-mine, advancing the Buriticá project, exploration results, potential mineralization, potential development of mine openings, potential improvement of mining dilution grades, increasing the drill program and exploration and mine development plans and is based on current expectations that involve a number of significant business risks and uncertainties. Forward-looking statements are subject to 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, an inability to advance the Buriticá project to the next level, 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. Specific reference is made to the most recent Annual Information Form on file with Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying forward-looking statements. All forward-looking statements made in this press release are qualified by these cautionary statements and are made as of the date hereof. 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” that may be 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.