SHG.L Regulatory News (SHG)

 11 May 2012

Shanta Gold Limited

("Shanta Gold" or the "Company")

Completion of Drilling Programme at New Luika Gold Mine

Shanta Gold (AIM: SHG), the near-term gold producer with operations in Tanzania, is pleased to announce final assay results following the completion of the upgrade drilling campaign at its flagship project, the New Luika Gold Mine ("New Luika"), located in the Lupa gold region. The previous New Luika resource of 9.7 million tonnes with an average grade of 3.12g/t containing 974,153 ounces (1.0g/t cut-off) was announced in May 2011. Today's assay results follow on from the highly prospective initial drilling results announced 30 January 2012, which will be incorporated into an enlarged resource for New Luika during Q2 2012. The drilling campaign focussed on the optimisation of New Luika's main ore deposits, Bauhinia Creek and Luika, which form the first two of the 13 open pits which, subject to drilling results, will feed the central processing plant.

Highlights:

·; Bauhinia Creek latest assay results from its upgrade drilling programme include:

o CSR340 - 10m at 18.26g/t, 130-140m below surface

o CSR341 - 10m at 3.8g/t, 160-170m below surface

o CSR342 - 5m at 3.21g/t, 200-210m below surface

·; Additional strike expression of mineralisation at depth has been proved. The strike extent of the Bauhinia Creek mineralised body has increased to approximately 500m

·; The increase in both depth and strike expression will be incorporated into a forthcoming resource update due during Q2 2012, which is expected to result in a new pit design that will exploit high grade ore to a depth substantially deeper than the current planned 120m vertical depth

·; Luika latest assay results from its upgrade drilling programme include:

o CSR348 - 11m at 5.24g/t, 120-130m below surface

o CSR349 - 6m at 9.02g/t, 160-165m below surface

o CSR350 - 9m at 9.94g/t, 130-140m below surface

o CSR356 - 10m at 4.04g/t, 145-155m below surface

·; The New Luika construction project remains on target for first gold production in Q3 2012

Gareth Taylor, Chief Executive Officer, commented;

"These significant results are very encouraging and further support the expectations that the current conceptual pit shells at Bauhinia Creek and Luika will be enlarged. We look forward to the completion of an updated resource statement during Q2 2012 which should be positively influenced by these results as the mineable resources increase and are re-categorised. The results will also provide further clarity on the depths at which mining can take place at both the Bauhinia Creek and Luika open pits."

Bauhinia Creek Deposit

The drilling programme was commissioned to clearly identify the down-dip extensions of the ore bodies delineated during earlier phases of drilling. Today's results complete the raw data from the completed Bauhinia Creek upgrade drilling programme, and supplement the results indicated below, which were previously released to the shareholders on 30 January 2012.

·; Borehole CSR332 - 10m at 26.9g/t, 80-100m below surface *

·; Borehole CSR324 - 11m at 21.71g/t, 100-120m below surface *

·; Borehole CSR325 - 31m at 12.97g/t in total, including 14m at 18.49g/t, 100-20m below surface*

·; Borehole CSR338 - 14m at 11.6g/t, 120-150m below surface*

·; Borehole CSR330 - 13m at 8.19g/t in total, 150 - 200m below surface*

·; Borehole CSR331 - 6m at 11.93g/t and 8m at 13.24g/t in total, 150 - 200m below surface*.

*as announced on 30 January 2012

The latest results from Bauhinia Creek are summarised in Table 1.

Luika Deposit

The upgrade drilling campaign at the Luika deposit, located approximately 400m northwest of Bauhinia Creek, was undertaken to investigate the continuity of mineralisation at depth. Current provisional pit designs at the Luika deposit do not include any inferred resources, and are limited to a vertical depth of approximately 130m. The mineralisation at Luika is known to occur in a laterally continuous structurally deformed horizon characterised by alternating low grade and high grade zones. The "payshoots" were identified and mapped by early colonial miners when the Luika deposit was exploited as an underground mine pre-1960.

Despite intersecting moderate gold grades in some of the latest drill holes the Company is satisfied that the continuity of payshoots at depth has been delineated during the latest drilling campaign. A comprehensive summary of drilled intersections achieved appears in Table 2.

Strike expression of the Luika mineralised body is currently approaching 700m, with continuity of mineralisation proven down to approximately 175m vertical depth. It is envisaged that optimisation of newly received data may result in the enlarging of the conceptual Luika pit shell, such that ore located below 130m vertical may be exploited.

Data derived from the upgrade drilling campaign is being integrated into the superseding geological database with the view to publish an updated resource statement in the foreseeable future.

Luika Slope Scree Gravel Material

In addition to mining the Bauhinia Creek open pit, Shanta Gold is currently focussing on the stripping of slope scree gravels that fall within the footprint of a conceptual Luika pit. The Company is screening and stockpiling the +10mm gravel material at the New Luika plant site. Although this material does not form part of the Company's resources as currently stated, the +10mm gravel fraction has been sampled and found to be gold bearing. It is envisaged that this material will be used during the commissioning phase of the start-up operations.

Project Update

Construction of the New Luika plant is ongoing and first gold production remains on target for Q3 2012. A detailed announcement on the project progress will be released to the market in due course.

Table 1: Bauhinia Creek drill intersections and assay results

Table 2: Luika upgrade drilling intersections

1CSR363 - Interpreted to represent drilling sub-parallel to localised faulted zone responsible for slight displacement of the Luika mineralised ore zone.

Qualified Person

Braam (J.A.C.) Jankowitz, M.Sc., Pr.Nat.Sci. (400127/93), Shanta's Technical Services Manager is a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies, June 2009, of the London Stock Exchange, and has reviewed and approved the technical information contained in this announcement.

Enquiries:

About Shanta Gold Limited

Shanta Gold is a Tanzania focussed gold explorer and mine developer. It currently has defined ore resources on the New Luika, Singida and Mgusu projects and holds exploration licences over a number of additional properties. The New Luika Gold Mine is currently under construction and is expecting first production in 2012. The Company is admitted to trading on AIM and has approximately 319 million shares in issue.

For further information visit the Company's website: www.shantagold.com.