TORONTO, ONTARIO--(Marketwire - Oct. 22, 2012) - Continental Gold Limited (TSX:CNL)(OTCQX:CGOOF)("Continental" or the "Company") is pleased to provide a revised development plan, including the commencement of a Pre-Feasibility Study ("PFS"), and an exploration update for its 100%-owned Buriticá project located in Antioquia, Colombia.

Pre-Feasibility Study

The Company has made the decision to commence with a PFS, which will determine the mining and processing parameters and establish the associated capital expenditures and operating costs for Buriticá.

On October 1, 2012, the Company announced an updated mineral resource estimate prepared in accordance with National Instrument 43-101 ("NI 43-101"), consisting of Measured and Indicated mineral resources of 3,740,000 tonnes of mineralized material containing 1,640,000 ounces of gold grading 13.6 g/t gold, 4,600,000 ounces of silver grading 38 g/t silver, and 55,800,000 pounds of zinc grading 0.7% zinc. The Inferred mineral resource is 13,330,000 tonnes of mineralized material containing 3,760,000 ounces of gold grading 8.8 g/t gold, 14,200,000 ounces of silver grading 33 g/t silver and 156,500,000 pounds of zinc grading 0.5% zinc.

The Company's decision to commence a PFS is based on the larger than anticipated increase in the Measured and Indicated resources in the updated mineral resource estimate and as a result of the recent clarifications by the Canadian Securities Administrators governing expectations for preliminary economic assessments ("PEA"). The Company's PFS replaces the previously-announced plan to commence a PEA (see March 28, 2012 press release). The Company believes that, with the planned underground development, it will be able to significantly increase the number of Measured and Indicated ounces with aggressive underground drilling ahead of the study. The study is anticipated to be completed in the first half of 2014.

Development Update

On August 30, 2012, the Company received formal approval for the modification of its existing Environmental Impact Assessment from Corantioquia, the autonomous regional corporation responsible for issuing and controlling environmental permits in Antioquia, Colombia. The environmental permit amendment allows the Company to commence underground development and the construction of a six-kilometre switchback road originating from the existing paved road at Buriticá down into the Higabra valley. The development schedule remains on track with the following items:

• Construction of an approximately one-kilometre underground access tunnel measuring 4.5 metres x 5.0 metres in the Higabra Valley is expected to commence by late November 2012. Although this tunnel will eventually serve as the main access for all underground development by connecting with planned ramps at both the Yaraguá and Veta Sur vein deposits, the initial use will be for underground definition and vertical expansion drilling of the Yaraguá and Veta Sur vein deposits and exploration drilling of the La Mano and La Estera vein systems. Diamond drilling is expected to commence from this tunnel in Q2/Q3 2013 once 650 metres of development is completed and has crossed west of the Tonusco fault (Figure 1);
  
  
• Construction of an approximately three-kilometre ramp measuring 3.5 metres x 3.5 metres to access the Veta Sur vein deposit will commence in December 2012. The ramp entrance will start at a slightly higher altitude than the top of the deposit at approximately 1,700 metres above sea-level and will culminate at approximately 1,450 metres above sea-level. Infill diamond drilling from underground will commence from the ramp once 150 metres of development is complete. Subsequent drill-chambers are planned at 100 metre intervals as development continues to advance (Figure 2); and
  
  
• Construction of a six kilometre-long switchback road will commence during Q2 2013, connecting the existing main paved Buriticá road that traverses the project at higher elevations with the future infrastructure site in the Higabra Valley at approximately 1,000 metres above sea level.
  
  

"Mobilization of equipment and personnel into the Higabra Valley is underway with both jumbos required for each development already at site," commented Mark Moseley-Williams, President and COO. "Once some development has been completed, we will update our shareholders on anticipated advance rates and timelines."

Exploration Update (Figures 3 and 4)

The Company has generated multiple exploration targets through geophysics and systematic soil geochemistry surrounding the Yaraguá and Veta Sur vein deposits, within the greater Buriticá area. The Company intends to further explore the Yaraguá and Veta Sur vein deposits and conduct a first-pass diamond-drilling program on each of the additional targets. The following exploration program is scheduled for the next 12 months:

• On October 1, 2012, a Phase IV, minimum 100,000 metre diamond drilling program commenced with five surface and two underground drill-rigs. The Company expects its drill productivity to increase to 8,000 metres per month between November 2012 and March 2013, reflecting an increase of 2,000 metres per month over the average of the recently-completed Phase III drill program. At least one additional surface drill-rig and two additional underground drill-rigs will be added to the program by the end of Q1 2013, which will further increase the productivity rate to 10,000 metres per month.
  
  
• Multiple new drill-holes have been completed at the Yaraguá and Veta Sur vein deposits with an emphasis on drilling outside of the updated mineral resource estimate block model. Of potential significance are drill-holes BUSY278, which tested Veta Sur at depth, and BUSY291, which tested Veta Sur at modest depths and more importantly, the western portion of Yaraguá at greater depths. Both holes were completed using a high-power rig culminated at greater than 1,000 metres down-hole. Assay results from these and other holes into the Yaraguá and Veta Sur vein deposits are expected prior to the end of October 2012.
  
  
• Based on the initial positive diamond drill results for the La Estera and La Mano vein systems (see September 13, 2012 press release), three drill rigs were mobilized in late September in order to expedite productivity. Four new drill holes have been completed (BUSY319, BUSY322, BUSY325 and BUSY327) and each has visually intersected multiple veins. Three additional holes are currently underway (BUSY328, BUSY330 and BUSY331), with visual intersections of multiple veins in BUSY328 and BUSY331, while drill-hole BUSY330 has only just ensued and has not yet reached its initial target depth. Results will be released in a timely fashion with first assays expected towards the end of November 2012.
  
  
• A visual discovery of a potentially new vein system called San Agustin has been made in BUSY324. San Agustin is located approximately 200 metres NNW of the Yaraguá vein deposit. BUSY324 was drilled for over 1,200 metres and initially tested the outside western edge of the block model for the Yaraguá vein deposit. The hole then continued north and successfully intersected San Agustin veins laterally below significant artisanal workings at surface. Given the visual intersections of veins at over 1,000 metres down-hole, a second drill-hole (BUSY329) was immediately collared from the same pad and is currently underway. Results from BUSY324 are expected in late November 2012.
  
  
• Ground truthing continues on regional Buriticá targets and it is expected that initial drilling will begin in Q1 2013 on Pinguro, Guarco and Pajarito (Figure 4).
  
  

"Overall activity has picked up significantly in recent weeks and our team is elated about the tasks in front of them," commented Ari Sussman, CEO. "Drilling our new discoveries at La Estera and La Mano is truly exciting. We are going to be aggressive as possible to determine the potential of these targets, as well as additional targets in the greater Buriticá area."

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.

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 first modern-day gold producer in Colombia, Continental will commence the construction of the access tunnel in H2 2012, initially providing access for underground drilling and eventually used for commercial production. A Phase IV drill program is underway at the Buriticá project to further delineate the mineral resource 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.

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.

For additional technical information on the Buriticá project, please refer to the technical report entitled "Mineral Resource Estimate of the Buriticá Gold Project, Colombia" dated October 24, 2011, as amended November 23, 2011, available on SEDAR at www.sedar.com, on the OTCQX at www.otcmarkets.com and on the Company website 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, exploration and mine development plans, timing of the commencement of operations 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. 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.

To view the figures associated with this press release, please visit the following links:

Figure 1: http://media3.marketwire.com/docs/CNL1019figure1.pdf

Figure 2: http://media3.marketwire.com/docs/CNL1019figure2.pdf

Figure 3: http://file.marketwire.com/release/1019CNL_figure3.pdf

Figure 4: http://media3.marketwire.com/docs/1019CNL_figure4.pdf