Continental Gold Reports on 2014 Activities - Seite 2

The first five years of production will average approximately 314,000 ounces of gold and 507,000 ounces of silver annually, at a total cash cost of $389 per ounce of gold. Life of mine production will average 265,000 ounces of gold and 394,000 ounces of silver annually, at a total cash cost of $431 per ounce of gold, placing Buriticá in the lowest cash cost quartile globally;

The after-tax net present value at a 5% discount ("NPV5") amounts to $1.08 billion;

The after-tax internal rate of return ("IRR") is 31.5% on an initial capital cost of $390.3 million with a payback of 2.8 years;

Longitudinal Bench and Fill (long-hole) has been selected as the mining method, as both vein systems are steeply dipping and the host rock is competent. Drifts will measure 4 x 4 metres and the benches will be 8 metres in height; and

Mining dilution of 58% was calculated under the assumption that all material located outside the hard boundaries of modeled veins is assigned a value of 0 g/t gold and silver. However, based on initial channel sampling results announced on October 28, 2014 for the Veta Sur deposit, including 30 metres (true horizontal width) @ 9.6 g/t gold and 47 g/t silver, significant potential exists to improve the dilution grade assumption in future economic studies.

All cash cost information is net of silver by-product credits. The PEA is preliminary in nature and includes inferred mineral resources that are considered to be too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. Further, mineral resources that are not mineral reserves do not have demonstrated economic viability.

Exploration

Exploration activities during the year consisted of topographic and geological mapping, geochemical soil surveys and other surface sampling, underground mapping and channel sampling and diamond drilling at the Yaraguá, Veta Sur and Laurel vein systems. Underground drilling from the three access tunnels also commenced during the year with the goal of converting inferred ounces into the measured and indicated categories, as well as growing the overall mineral resource. Drilling extended several vein sets and identified new veins outside of the current mineral resource.