Continental Gold Provides Update on the Colombian Government Operation to Permanently Close All Illegal Mines in Buritica

TORONTO, ON--(Marketwired - May 26, 2016) - Continental Gold Inc. (TSX: CNL) (OTCQX: CGOOF) ("Continental" or the "Company") announces that it has been informed by the Colombian Government that the major joint operation initiated on April 23, 2016 -- to permanently close all illegal mines and processing plants operating within the Company's exploitation and exploration licenses at the Buriticá project -- has thus far advanced peacefully and according to plan. The joint operation includes the National Government of Colombia, the State Government of Antioquia and the Municipal Government of Buriticá. Additionally, the Company's small-scale operating mine remains unaffected by the intervention.

In a publicly-aired address to media in Medellín, Colombia on May 24, 2016, the Governor of Antioquia, Luis Perez, noted that the intervention plan against illegal mining has "advanced 64% to date," and stated: "We will stay there [Buriticá] for a while; if someone there is in hiding, believing that we will leave this coming Sunday, he will have to wise up because if we need to remain at Buriticá for three, six, nine months or a year, we will do it. We will ensure Buriticá becomes an example of peaceful mining." The Governor added, in reference to the conditions at Buriticá and nearby towns: "Regulated conditions are in the process of returning to these municipalities. They have become normal -- the markets, food, housing prices and invasions [by non-residents] have diminished substantially."

The intervention is a direct result of the National Government's initiative to eliminate illegal mining, through which there have been several similar interventions recently in other parts of the country. It also reflects the newly-elected (January 1, 2016) State Government of Antioquia's full alignment with the National Government's agenda to support legal, private sector mining, as well as the formalization of small-scale local traditional miners. These efforts are also in response to the January 20, 2016 Resolution No. VSC-055 issued by the National Mining Agency of Colombia (ANM) in which illegal mines at Buriticá were ordered to be permanently closed, due to significant safety concerns generated by unsafe and non-technical practices.