Chunya Project Mine Construction & Appointm...

SHANTA GOLD LIMITED

  CHUNYA PROJECT MINE CONSTRUCTION AND APPOINTMENT OF CHIEF OPERATING OFFICER

                                 6 August 2010

Shanta Gold Limited ("Shanta" or the "Company") is pleased to announce that the
Directors have decided to commence with mine construction at the Company's
Chunya Project in southern Tanzania, subject to the Company receiving the
relevant mining licence for the project.

The results of the feasibility study, as announced on 5 July 2010, justify the
construction of an open pit mining operation with an expected average annual
production of 28,400 ounces of gold and envisages a 11-year mine life that will
produce a total of approximately 313,000 ounces of gold from a total resource of
642,716 ounces at an average grade of 2.39g/t (1g/t cut-off). The capital cost
is estimated at $23.19 million.

The consultants who completed the feasibility study, Environmental, Process and
Mining Consultants (Pty) Ltd ("EPMC"), have been commissioned to carry out a
detailed design of the Chunya mine in conjunction with the specialist
consultants who assisted them with the feasibility study. The detailed design of
the Chunya mine is expected to be available during November 2010. Mine
construction is expected to commence before the end of the year and
commissioning is targeted for the fourth quarter of 2011.

The following are the key activities to be completed during the design phase of
the project:
  * Detailed design and economic optimisation of the mining cycle for the five
    potential open pits and the mining physical parameters for the early stage
    mining of year one and two will be conducted.
  * The detailed engineering design will include process and infrastructure
    details including electrical and water reticulation, tailings impoundment
    and reticulation, and service, administration and accommodation
    infrastructure.
  * Key long lead time items have been identified and will be ordered
    expeditiously.
  * The sourcing and procurement of quality second hand capital items such as
    the mills is considered a priority and will be facilitated by EPMC.
  * Capital and operating cost optimisation will be conducted by Shanta in
    conjunction with consultants.


In the light of this progress, the Board has decided to appoint Gareth Taylor to
the position of Chief Operating Officer. His key responsibility at this point
will be to deliver the operation at the Chunya project and to ensure the
development of the Singida prospect into a mining operation.

Walton Imrie, Chairman, commented:

"I am delighted that Gareth has accepted this appointment. He brings a wealth of
experience to the establishment of an exciting new mine for Tanzania. The
appointment places the Company in a strong position in its development from
explorer to miner."

For further information:

Shanta Gold Limited 

http://www.shantagold.com

Walton Imrie
Mobile: [phone]

David Scott
Mobile: + 255 (0) 784 366146

Gareth Taylor
Mobile: [phone]

Walter Vorwerk
Mobile: +27 (0)83 308 0080


Fairfax I.S. PLC
Ewan Leggat/Laura Littley
[phone]



[HUG#1436237]








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Source: Shanta Gold Limited via Thomson Reuters ONE