SHG.L Regulatory News (SHG)

5 September 2012

Shanta Gold Limited

("Shanta Gold" or the "Company")

Encouraging Exploration Results from Shanta Gold-GBG Joint Venture

Shanta Gold, the East African focused gold mining company, is pleased to announce encouraging early stage exploration results achieved from tenements in the Shanta Gold-Great Basin Gold Joint Venture ("JV") portfolio of properties.

The Company entered into a JV agreement with Great Basin Gold (TSX/NYSE/JSE: GBG) in 2011, thus enabling Shanta Gold exploration crews to conduct reconnaissance and exploration activities over a large consolidated permit holding in the Lupa Goldfields, the second largest goldfields in Tanzania. Great Basin Gold, through subsidiary Tanzanian registered companies, holds the majority of exploration tenements in the Lupa Goldfields in south western Tanzania.

The JV agreement provides for Shanta Gold earning up to 80% of discovered resources, subject to conditions set out in the agreement which are outlined in the Shanta Gold announcements dated 1 June 2011 and 13 October 2011. Under the agreement, Shanta Gold is committed to expenditure of no less than $12 million on exploration activities in the Joint Venture portfolio of properties before 31 December 2014.

Highlights

·; Nine new mineralised prospect areas identified by means of grab sampling and trenching

·; Encouraging gold values achieved with both grab and trench channel sampling

·; Three of the newly identified prospect areas have been targeted with first-pass Reverse Circulation ("RC") drilling, and encouraging mineralised intersections have been achieved at depth

Exploration Statistics to 30 June 2012

·; 1,075 Grab samples collected and analysed

·; Grab sampling assays suggest that a total mineralised strike length of 3.59km has thus far been identified

·; 61 Exploration trenches totalling 1,270m of linear trenching have been completed

·; A total of 64 RC drillholes totalling 4,476m of drilling have been completed at three mineralised prospects

Results

Reconnaissance grab samples collected at numerous mineralised prospects located to the north, northeast and northwest of Shanta Gold's New Luika Gold Mine yielded very encouraging results, with gold values of up to 50 g/t achieved. The grab sampling information enabled Company field crews to prioritise the exploration at certain mineralised prospects.

Exploration trenches excavated at several of the mineralised prospects confirm the presence of in-situ mineralised structural deformational features identified by means of grab sampling. Table 1 contains some of the trench channel sampling values achieved.

Table 1: Significant trench channel sampling - Shanta Gold-GBG JV

Big Vein 1 Prospect

Big Vein 2 Prospect

Tanganyika Prospect

Tanganyika South Prospect

Mbuga Prospect

Reverse circulation drilling commissioned at three prospects located in the direct vicinity of the New Luika Gold Mine site intersected encouraging gold mineralisation at depth. This bodes well for the delineation and development of near surface ore resources, pending more drilling. A summary of significant intersections attained is provided in Table 2:

Table 2: Significant Mineralised Intersections - RC Drilling - Shanta Gold-GBG JV

Big Vein 2 Prospect

Dave's Mile Prospect

Mgomba Prospect

Exploration Strategy

Shanta Gold and Great Basin Gold have agreed to implement a phased approach to the exploration of the >2500km2 Lupa Goldfields. It is envisaged that the area falling into a 20km radius around the New Luika Gold Mine will initially be prioritised for exploration, while low-key reconnaissance activities will be commissioned in areas further afield.

With the above in mind, Shanta Gold-GBG have commissioned and completed a detailed LiDAR survey of a block comprising approximately 400km2. Data from this survey has been received and is being processed. In addition to the above, the Company is currently considering the commissioning of a Heli-borne magnetic and radiometric survey covering the same area - approximately 400km2.

Exploration trenching at known gold occurrences is ongoing with the view to commission a new drilling programme during the course of Q4 2012.

Walton Imrie, Executive Chairman of Shanta Gold, commented:

"We are encouraged by the early stage exploration results achieved from tenements in the Shanta Gold-Great Basin Gold JV. The JV has agreed to implement a phased approach to the exploration of the over 2,500km2 of tenement area within the historic Lupa Goldfields, which hosted numerous shallow, high-grade gold mines during the colonial era. The JV represents significant exploration upside potential for Shanta Gold as the tenements are in very close proximity to the Company's existing operations at New Luika."

Competent Persons Statement

Braam (J.A.C.) Jankowitz, M.Sc., Pr.Nat.Sci. (400127/93), Shanta's General Manager at New Luika Gold Mine 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 an East African focused gold mining company. 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 Company's flagship New Luika Gold Mine commenced production and achieved first gold pour in August 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.