Drilling at Continental Gold’s Buriticá Project Discovers BMZ4, a New High-Grade and Broad Mineralized Zone

Toronto, Ontario, May 16, 2019 — Continental Gold Inc. (TSX:CNL; OTCQX:CGOOF) (“Continental” or the “Company”) is pleased to announce high-grade assay results from the initial 12 holes drilled into BMZ4, a new discovery located in the eastern-most part of the Yaraguá system at its 100%-owned Buriticá project in Antioquia, Colombia. The Company plans to drill up to 73,500 metres in 2019, consisting of approximately 55,000 metres of capitalized definition drilling and approximately 18,500 metres of exploration drilling targeting broad mineralized zone (“BMZ”) targets. Supporting information for results discussed in this release can be found in Table 1 and Figures 1 and 2.

Highlights

  • Twelve surface diamond drill-holes were completed into the far east portion of the Yaraguá system to test if a new broad mineralized zone (“BMZ4”) exists in this location. The target was generated on the hypothesis that the Tonusco Fault, located at the eastern edge of the Yaraguá system, is a fluid conduit for precious metal deposition in its vicinity and such deposition would specifically be pronounced at the junction where the Centena vein crosses the Murciélagos master vein family.
  • The discovery hole, BUSY407, intercepted multiple continuous high-grade zones through the BMZ4 structure at an excellent angle to the geometry of the zone with results including:
    • 12.30 metres @ 10.17 g/t gold and 4.4 g/t silver (BUSY407)
    • 8.70 metres @ 6.49 g/t gold and 57.2 g/t silver (BUSY407)
  • Each hole sequentially drilled following the discovery hole (BUSY407) intercepted BMZ4 at or near perpendicular angles to the strike of the zone. Additionally, the majority of the holes intercepted more than one thick interval of remarkably continuous mineralization within the zone. Narrow bands of visible gold were also observed. Key results are as follows:
    • 15.50 metres @ 7.03 g/t gold and 9.1 g/t silver (BUSY409)
    • 14.75 metres @ 4.82 g/t gold and 15.4 g/t silver (BUSY410)
    • 5.65 metres @ 18.69 g/t gold and 38.7 g/t silver (BUSY411)
    • 11.45 metres @ 8.24 g/t gold and 17.3 g/t silver (BUSY412)
    • 5.10 metres @ 17.32 g/t gold and 39.6 g/t silver (BUSY415)
    • 27.90 metres @ 7.04 g/t gold and 7.5 g/t silver (BUSY416)
    • 7.55 metres @ 7.66 g/t gold and 12.4 g/t silver (BUSY417)
  • BMZ4, which is located approximately 60 metres east of BMZ2 in the eastern portion of the Yaraguá system, has been intersected by drilling for more than 200 vertical metres and measures between 25 – 45 metres in thickness. Mineralization encountered in BMZ4 is expected to add new ounces to the multi-million-ounce global mineral resource inventory for the project. BMZ4 remains open at depth with extension drilling currently underway. Three diamond drill rigs are actively turning on this promising new discovery.
  • In light of this new discovery, initially definition drilling will start into the very upper part of BMZ4 where underground development has been advancing in the upper eastern Yaraguá area with a crosscut to the Murciélagos vein. The zone will be more intensively drilled as a ramp is developed deeper in this area and additional drill chambers constructed. The Company expects to incorporate ongoing results from BMZ4 into the mine plan and will be looking to design wider stopes with potential to use bulk-style mining, including transverse extraction using primary and secondary stopes.

“Discovering BMZ4 is an excellent outcome for the Company and our geology team deserves credit for successfully proving the concept with drilling,” commented Ari Sussman, CEO. “BMZ4 continues to highlight the upside at Buriticá as this discovery will ultimately add high-grade ounces to the global mineral resource inventory of the project. More importantly, we are hopeful that we will be able to successfully delineate new stopes in this area and be producing gold from the zone in 2020.”

Details

Two diamond drill holes were completed in the eastern-most area of the Yaraguá system. The initial two holes, BUSY405 and BUSY406, were drilled too far east and consequently passed through the Tertiary dioritic intrusion host rock of the Yaraguá system into the Tonusco fault before finally passing into Cretaceous basalt on the eastern side of the fault and out of the system. BUSY408 ran into technical difficulties and was abandoned shortly after coring reached 32 metres down hole. The remaining 10 drill holes (BUSY407 and BUSY409-417) all successfully intercepted high-grade gold over varying thicknesses in BMZ4 with drill intercepts over 200 vertical metres in elevation. BMZ4 remains open in high-grade mineralization at depth.

The majority of the drill holes intersected more than one continuous run of thicker mineralization; all broad intervals encountered demonstrated excellent continuity at 1 g/t gold or greater along the axis of the hole. Additionally, detailed core logging of holes indicates that the orientation of drilling was done at or near perpendicular angles to the strike of the mineralized structures of BMZ4.

Three diamond rigs are now actively drilling BMZ4 and will continue to test the depth extension potential of the zone. Additionally, drilling from underground development recently excavated close to BMZ4 will allow more intensive definition drilling to commence shortly. Finally, results from the intensive definition drilling will allow the Company’s mine planning team to begin preliminary designs for BMZ4 in order to assess the potential for mining the zone early in the production schedule. A particular focus in this work will be to evaluate the potential to use bulk-style mining, including transverse extraction using primary and secondary stopes.

Assay results for all drill-holes reported in this release are reported in the table below:

Table I: Drill Hole Results

Hole ID From
(m)
To
(m)
Intercept
Interval*
(m)
Gold**
(g/t)
Silver**
(g/t)
Gold
Equivalent**
(g/t)
Mid-Point
Elevation
(m)
BUSY405 29.50 39.50 10.00 2.23 4.6 2.29 1425
  44.20 48.00 3.80 7.79 10.3 7.93 1422
incl 46.00 46.60 0.60 25.90 10.8 26.04 1423
BUSY406 36.90 38.40 1.50 2.60 31.5 3.02 1357
BUSY407 56.15 58.70 2.55 2.91 2.9 2.95 1395
  75.95 77.50 1.55 3.39 1.7 3.41 1380
  84.40 96.70 12.30 10.17 4.4 10.23 1365
incl 84.40 84.95 0.55 21.90 2.3 21.93 1374
and 90.50 91.05 0.55 58.80 19.8 59.06 1370
and 94.00 94.60 0.60 44.60 10.2 44.74 1367
  98.55 101.90 3.35 2.07 1.3 2.09 1361
  103.10 110.70 7.60 3.00 3.8 3.05 1354
incl 107.80 108.40 0.60 11.50 3.8 11.55 1356
  112.50 114.75 2.25 3.06 3.7 3.11 1351
  122.60 124.40 1.80 8.27 2.2 8.30 1344
  136.50 140.40 3.90 4.08 7.1 4.18 1331
  149.15 154.35 5.20 1.49 8.4 1.60 1320
  155.50 165.60 10.10 4.03 14.1 4.22 1312
incl 159.35 160.35 1.00 10.30 7.8 10.40 1316
  174.20 179.75 5.55 1.50 11.1 1.65 1301
  193.00 201.70 8.70 6.49 57.2 7.25 1284
incl 195.70 197.45 1.75 19.03 191.6 21.58 1287
BUSY409 73.80 89.30 15.50 7.03 9.1 7.15 1382
incl 74.80 75.30 0.50 22.90 13.7 23.08 1391
and 88.70 89.30 0.60 49.40 20.4 49.67 1381
  89.85 93.80 3.95 1.56 5.0 1.62 1379
  98.30 99.80 1.50 7.52 13.3 7.70 1375
BUSY410 80.20 81.20 1.00 16.63 22.6 16.93 1328
  179.40 185.90 6.50 5.43 3.0 5.47 1257
incl 179.40 180.00 0.60 22.00 11.5 22.15 1261
and 185.40 185.90 0.50 34.60 6.9 34.69 1257
  218.30 221.80 3.50 4.17 2.2 4.20 1234
incl 221.20 221.80 0.60 10.00 0.8 10.01 1234
  266.95 281.70 14.75 4.82 15.4 5.03 1195
incl 271.40 272.00 0.60 31.20 7.9 31.31 1201
  302.70 306.40 3.70 9.60 59.0 10.39 1179
incl 304.80 306.40 1.60 15.34 100.3 16.68 1179
BUSY411 91.20 96.70 5.50 4.15 7.2 4.24 1370
incl 93.00 93.50 0.50 24.10 3.2 24.14 1372
  112.50 118.15 5.65 18.69 38.7 19.20 1354
incl 115.65 116.65 1.00 47.45 146.0 49.40 1355
and 117.15 117.65 0.50 80.60 78.4 81.65 1354
  121.30 126.50 5.20 2.26 3.4 2.31 1348
  134.70 148.00 13.30 5.71 10.7 5.85 1332
incl 136.30 137.60 1.30 21.42 5.8 21.50 1340
and 141.75 142.25 0.50 13.20 32.8 13.64 1336
  157.10 163.50 6.40 4.08 35.5 4.55 1321
incl 162.50 163.00 0.50 12.05 78.1 13.09 1321
BUSY412 160.00 161.10 1.10 3.29 6.6 3.38 1261
  183.90 194.80 10.90 3.50 7.1 3.60 1234
incl 193.15 193.70 0.55 15.20 19.3 15.46 1237
and 194.30 194.80 0.50 24.90 19.1 25.15 1236
  205.85 206.35 0.50 18.25 9.7 18.38 1227
  211.55 219.60 8.05 2.05 2.6 2.09 1217
  230.95 242.40 11.45 8.24 17.3 8.47 1200
incl 233.10 235.25 2.15 37.80 19.6 38.06 1205
and 234.20 234.70 0.50 146.00 10.9 146.15 1206
  254.00 257.30 3.30 7.13 5.4 7.20 1189
incl 254.50 255.00 0.50 24.20 17.3 24.43 1190
  269.80 271.90 2.10 3.12 12.4 3.28 1177
BUSY413 72.40 76.20 3.80 1.92 3.4 1.96 1392
  96.00 102.50 6.50 3.66 10.0 3.79 1376
incl 101.50 102.00 0.50 23.80 42.8 24.37 1376
  112.60 118.60 6.00 5.39 10.6 5.53 1365
incl 112.60 113.20 0.60 12.90 27.0 13.26 1369
and 114.25 115.50 1.25 12.23 8.3 12.34 1368
  122.30 137.70 15.40 3.48 19.7 3.74 1353
incl 129.50 130.00 0.50 11.00 51.0 11.68 1358
and 130.50 131.00 0.50 14.55 37.1 15.04 1358
BUSY414 58.20 58.90 0.70 4.40 0.7 4.41 1344
  198.50 199.60 1.10 3.66 1.5 3.68 1252
  202.40 202.90 0.50 2.80 211.0 5.81 1249
  222.70 224.20 1.50 4.19 5.7 4.28 1236
  251.00 252.20 1.20 2.97 18.6 3.24 1219
  265.30 265.80 0.50 7.58 13.8 7.78 1210
  290.00 295.30 5.30 4.73 4.8 4.79 1193
incl 290.00 290.50 0.50 25.30 3.8 25.35 1196
BUSY415 27.50 32.60 5.10 17.32 39.6 17.89 1416
incl 28.00 28.50 0.50 25.80 6.9 25.90 1419
and 30.50 32.10 1.60 41.10 107.0 42.63 1417
  90.50 91.00 0.50 24.20 1.4 24.22 1370
  104.50 113.10 8.60 5.03 12.4 5.21 1358
incl 109.90 110.40 0.50 15.50 5.3 15.58 1355
and 112.60 113.10 0.50 23.90 13.8 24.10 1353
  121.00 122.60 1.60 3.14 7.4 3.24 1345
  129.00 135.40 6.40 4.40 3.8 4.46 1335
incl 132.35 132.90 0.55 25.70 2.4 25.73 1337
  148.95 151.25 2.30 3.18 19.2 3.45 1323
  157.55 159.20 1.65 3.66 13.0 3.84 1317
  164.85 170.75 5.90 4.25 22.4 4.57 1308
incl 168.00 168.70 0.70 11.55 31.5 12.00 1309
  190.50 193.20 2.70 3.70 7.8 3.81 1290
BUSY416 75.10 87.30 12.20 5.11 10.9 5.27 1387
incl 81.00 82.00 1.00 43.05 20.0 43.34 1391
  90.40 91.60 1.20 4.01 4.3 4.07 1385
  100.20 128.10 27.90 7.04 7.5 7.15 1363
incl 109.50 110.00 0.50 41.00 24.1 41.34 1373
and 113.20 114.00 0.80 35.00 7.3 35.10 1371
and 117.40 118.10 0.70 41.50 3.5 41.55 1369
  133.00 140.60 7.60 3.85 33.7 4.33 1355
incl 139.10 139.65 0.55 12.15 73.7 13.20 1355
BUSY417 55.30 55.80 0.50 5.94 3.2 5.99 1340
  69.65 70.15 0.50 77.20 49.8 77.91 1329
  228.50 230.85 2.35 4.67 5.0 4.74 1208
incl 230.20 230.85 0.65 14.20 1.5 14.22 1208
  235.20 236.20 1.00 4.02 11.4 4.18 1204
  266.00 273.55 7.55 7.66 12.4 7.83 1178
incl 268.20 268.70 0.50 81.90 4.3 81.96 1181
  278.00 291.20 13.20 3.69 33.6 4.17 1165
incl 287.40 287.90 0.50 12.95 146.0 15.04 1167
and 290.00 290.60 0.60 30.50 58.8 31.34 1165
  297.85 299.00 1.15 3.06 17.9 3.32 1160
  319.25 319.75 0.50 7.67 38.3 8.22 1144

* Intercepts calculated at a composite 4.8 grams X metre gold equivalent for minimum intervals of 0.5 metres, with generally no more than 10% internal dilution.
** Grades herein are reported as uncapped values. Gold equivalent in this release and table was calculated at Au:Ag ratio of 1:75 with no assumptions made for metallurgical recovery rates.
*** True widths for intercepts of modelled veins outside of the BMZs are estimated to be between 75-100%. Mineralization intercepted with BMZ4 is generally estimated to be within 70-100% of true widths.

Figure 1 – Plan View of Drilling in Eastern Yaraguá System Targeting BMZ4

Figure 2 – Cross Section A-A’ of Drilling into BMZ4

Geological Description of the Buriticá Project
Continental’s 100%-owned, 75,583-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 1,350 metres of strike and 1,800 vertical metres and partially sampled in underground developments. The Veta Sur system has been drill-outlined along 1,300+ 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.

BMZ Details
The BMZ consists of a group of modelled precious metal-bearing veins in the current mineral resource estimate block model with mineralization occurring between these veins, generally in the form of veinlets at oblique angles to strike. The majority of the mineralization between modelled veins is not in the current mineral resource estimate, providing potential upside both in terms of identifying significantly broader and more productive zones for mining and increased mineral resources. To date, the Company has identified up to seven BMZ targets for testing and will systematically drill each target zone as underground mine development advances.

BMZ4 is a three-dimensional orebody interpretation and modelling with variability in width, thickness along a vertical extension. Additional core drilling is been planned to define its characteristics, such as gold/silver grades, geometry and geomechanical properties.

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

Besides rigorous chain-of-custody procedures, the Company utilized a comprehensive quality control/quality assurance program for the channel samples. All quality control anomalies were addressed and/or corrected as necessary to assure reliable assay results; no material quality control issues were encountered in the course of the program. Crush rejects and pulps are kept and stored in a secured storage facility for future assay verification.

For exploration and infill core drilling, the Company applied its standard protocols for sampling and assay. HQ and NQ core is sawn or split with one-half shipped to a sample preparation laboratory in Medellín run by ALS Colombia Limited (“ALS”), 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 necessarily 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 “NI 43‐101 Buriticá Mineral Resource 2019‐01, Antioquia, Colombia” and dated March 18, 2019 with an effective date of January 30, 2019, led by independent consultants Ivor Jones Pty Ltd. 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 is the leading large-scale gold mining company in Colombia and is presently developing it’s 100% owned Buriticá project in Antioquia. Buriticá is one of the largest and highest-grade gold projects in the world and is being advanced utilizing best practices for mine construction, environmental care and community inclusion. Led by an international management team with a successful record of discovering, financing and developing large high-grade gold deposits in Latin America, the Buriticá project is on schedule with first gold pour anticipated during the first half of 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 drill results and first gold pour; advancing the Buriticá project; exploration results; potential mineralization; potential development of mine openings; potential improvement of mining dilution grades; reducing start-up risks; 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 the 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 for reporting of mineral resource estimates, which differ in some respects from U.S. 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 release are Canadian mineral disclosure terms as defined in accordance with NI 43-101 –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”). Until recently, the CIM Standards differed significantly from standards in the U.S. The U.S. Securities and Exchange Commission (the “SEC”) has adopted amendments to its disclosure rules to modernize the mineral property disclosure requirements for issuers whose securities are registered with the SEC under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). These amendments became effective February 25, 2019 (the “SEC Modernization Rules”) with compliance required for the first fiscal year beginning on or after January 1, 2021. The SEC Modernization Rules replace the historical property disclosure requirements for mining registrants that were included in SEC Industry Guide 7, which will be rescinded from and after the required compliance date of the SEC Modernization Rules. As a result of the adoption of the SEC Modernization Rules, the SEC now recognizes estimates of “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources”. In addition, the SEC has amended its definitions of “proven mineral reserves” and “probable mineral reserves” to be “substantially similar” to the corresponding definitions under the CIM Standards, as required under NI 43-101. Accordingly, during this period leading up to the compliance date of the SEC Modernization Rules, information regarding mineral resources or mineral reserves contained or referenced in this release may not be comparable to similar information made public by United States companies. Readers are cautioned that “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 rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies, except in limited circumstances. The term “resource” does not equate to the term “reserves”. Readers should not assume that all or any part of measured or indicated mineral resources will ever be converted into mineral 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.