TORONTO, ONTARIO -- (Marketwired) -- 06/25/13 -- Continental Gold Limited (TSX: CNL)(OTCQX: CGOOF) ("Continental" or the "Company") is pleased to provide a development update for its Buritica project in Antioquia, Colombia. The Company remains debt-free and well-funded with approximately $145 million of cash in its treasury, and is spending approximately $3.5 million per month - increasing to $4 million per month by the fourth quarter of 2013.
Highlights-- Successful integration of 12 individual licences into one new 1,894- hectare exploitation (mining) licence valid for 30 years (until March 30, 2043). This exploitation licence covers essentially all of the Yaragua and Veta Sur vein deposits and their potential exploration extensions.-- On track to submit the second and final modification required to the existing Environmental Impact Assessment to Corantioquia at the beginning of the fourth quarter of 2013.-- Well ahead of schedule in purchasing surface rights in advance of a construction decision in 2014, owning approximately 90% of the total areas required.-- Geotechnical, hydrological, metallurgical and electrical studies continue to advance smoothly ahead of a pre-feasibility study ("PFS") scheduled for 2014, prepared in accordance with National Instrument 43- 101 ("NI 43-101"). Of particular importance are preliminary geotechnical study results indicating that future infrastructure will not have to be secured through piling to bedrock, but rather can be stabilized with in- situ cement-based reinforcement into the colluvium material in the Higabra Valley.-- Planned construction of a 3.5-metre x 3.5-metre ramp towards the Yaragua deposit will commence on schedule early in the fourth quarter of 2013. A dirt access road and surface work located at the planned box-cut location of the ramp are already progressing. This ramp will be the final surface access point required to prepare the project for future production, subject to delivery of a successful PFS in 2014 (see Figures 1 and 2).-- Both the Higabra Valley tunnel and the Veta Sur ramp continue to progress within budgeted parameters with approximately 300 metres and 525 metres completed, respectively (see Figures 1 and 2).-- Construction of a six-kilometre two-lane paved road will commence in the fourth quarter of 2013, connecting the existing two-lane paved road traversing Buritica with the Higabra Valley future infrastructure site. This construction is expected to take 12-18 months to be completed (see Figure 2).
"Continental is in the fortunate position of being well-funded and endowed with a high-grade multi-million ounce precious metal project," commented Ari Sussman, CEO. "In these challenging times for the natural resources industry where work programs on metals projects for the majority of the industry are either slowing down or stalling completely, Continental plans to continue on with its plans at Buritica. We intend to emerge from these difficult economic times an even stronger company than we are today, with a project that is further de-risked and advanced towards ultimate production. Furthermore, in this time frame, we fully intend to deliver robust growth to our total number of mineral resource ounces while simultaneously upgrading the ounce-quality of the deposit by converting existing inferred ounces into the measured and indicated categories under NI 43-101 guidelines."
With the PFS progressing towards completion in 2014, Continental is rapidly advancing on a number of critical items required ahead of the formal construction decision, which will be based on the success of the PFS.
The Company remains on track to submit to Corantioquia, at the beginning of the fourth quarter of 2013, the second and final modification to its existing Environmental Impact Assessment. Corantioquia is the Autonomous Regional Corporation responsible for issuing and controlling environmental permits in Antioquia, and is the same agency that approved the Company's first environmental permit modification on August 30, 2012. The Company continues to meet with Corantioquia on a regular basis in order to update them on the modification plans ahead of the formal submission in the fourth quarter.
Empresas Publicas de Medellin ("EPM") approved the Company's proposal to connect to EPM's substation at Chorodo, Antioquia, located 32.5 kilometres from the proposed infrastructure site, with a 110-kilo volt line and an estimated power consumption requirement of up to 12 megavolt amps. Pre-feasibility stage engineering for this project is underway.
Engineering is progressing ahead of schedule on the selected water management solutions for the future infrastructure site in the Higabra Valley, and costing will be completed ahead of the PFS in 2014.
A preliminary geotechnical study concluded that the processing plant foundations in the Higabra Valley will not have to be piled to bedrock. The colluvium in the Higabra Valley is consolidated enough for in-situ cement-based reinforcement. Engineering will begin shortly to design and cost this initiative ahead of the PFS and it is expected that this alternative will be less costly than piling to bedrock depths of up to 60 metres.
Underground development at the Veta Sur ramp and the Higabra Valley tunnel continues with advances completed to date of approximately 525 metres and 300 metres, respectively. The overall development budget is in line with the Veta Sur ramp being approximately 15% under budget and the Higabra Valley tunnel being 20% over budget. Although difficult ground conditions were anticipated in the Higabra Valley, development has progressed slightly slower than expected. The Higabra Valley tunnel will continue to advance slowly for another 300-350 metres in fractured basalts until encountering the Tonusco fault, which will require an additional 50-60 metres of development to cross. At this point, the development will enter the same highly-competent andesitic rock package currently present at the Yaragua Mine, where 4,000 lateral metres x 150 vertical metres of development has been completed on a small scale since 1992. Once development crosses the Tonusco fault, the Company does not anticipate any future requirement to advance in fractured basalts (see Figures 1 and 2).
The third working front at Buritica, located at the Yaragua Mine, is currently on schedule for ramp development beginning early in the fourth quarter of 2013. Presently, an access road to the portal is being constructed and pre-development work for the portal box-cut is underway. The size of this ramp will be 3.5-metres x 3.5-metres at a -13% gradient and, in similar fashion to the other two working fronts presently advancing, will provide vital underground drill-access locations. Drilling is expected to commence from this ramp in early 2014. The Yaragua ramp is the third and final access point from surface required to prepare Buritica for eventual production subject to a positive PFS in 2014 (see Figures 1 and 2).
The Company successfully integrated 12 individual licences at Buritica into one new exploitation licence. This 1,894-hectare licence is valid for 30 years, expiring on March 30, 2043, and covers essentially all of the Yaragua and Veta Sur vein deposits and their potential exploration extensions.
In addition, the Company has purchased approximately 90% of the land required for future infrastructure and remains on track and within budget to complete the remaining land purchases ahead of construction.
The Company is preparing to begin the construction of a six-kilometre paved road connecting the existing two-lane paved road that traverses Buritica to the Higabra Valley, where future infrastructure is planned. Construction is expected to begin in October 2013 and is estimated to take 12-18 months to complete (see Figure 2).
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 Buritica gold project to production. On October 1, 2012, the Company announced an updated mineral resource estimate for the Buritica project prepared in accordance with NI 43-101 which covers two major vein systems, with combined Measured and Indicated mineral resource 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 combined 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.
An animation video providing an overview of the Buritica project and the exploration potential is available in the following link: http://bit.ly/Z6HBh9. Please note that any future production decision will be based on the positive outcome of a pre-feasibility study in 2014.
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 Buritica project, please refer to the technical report entitled "2012 Mineral Resource Estimate of the Buritica Gold Project, Colombia" dated November 15, 2012, effective as at October 22, 2012, 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 rest of Continental's suite of gold exploration properties are also available at www.continentalgold.com.
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, results of the PFS, submission of the second and final modification to the existing Environmental Impact Assessment, exploration and mine development plans, and timing of the commencement of construction and 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 Figure 1 - Plan View of Existing and New Development, please visit the following link: http://media3.marketwire.com/docs/cnl-0625-fig1.pdf
To view Figure 2 - Long Section of Development Plans and Proposed Infrastructure, please visit the following link: http://media3.marketwire.com/docs/625cnl_fig2.pdf
Continental Gold Limited
Chief Financial Officer