Debt Financing, exploration and project update

21 December 2011

                              Shanta Gold Limited

                 Debt Financing, exploration and project update

Shanta Gold Limited, ("Shanta Gold" or "the Company") (AIM: SHG), the near-term
gold producer  with  operations  in  Tanzania,  is  pleased  to announce the
following operational update.

Highlights:

·         Securing of US$ 5 million in bridging loan;

·         Second bridging loan of US$ 15-20 million in advanced stage of
negotiations;

·         More than 10,000 ounces gold at 4.9 g/t stockpiled at New Luika at 17
December 2011;

·         Deeper drilling at Bauhinia Creek shows extension of ore body down to
200 metres;

·         Mining licence for the Singida mine project received on 19 December
2011.

Bridging loans

Shanta Gold has secured a US$ 5 million loan facility with Export Trading Group,
a company in which Ketan Patel, a Director of Shanta Gold, has a beneficial
interest. The loan facility was made available on 20 December 2011 and is
repayable within six months of a draw down. The loan bears an interest rate of
8 per cent. per annum and Export Trading Group is also entitled to an option
over new ordinary shares of Shanta Gold equal to 3 per cent. of the value of any
loan draw down amount, such options to be exercisable at the weighted average
mid-market closing price of ordinary shares of the Company for the ten days
preceding the loan draw down. The share options are exercisable from the date of
grant for a period of 36 months. In the event of a default on the loan, Export
Trading Group will be entitled to have any capital repayment or interest due
repaid from an issue of new ordinary shares of the Company to it, based on the
mid-market closing price of the Company's ordinary shares on the date repayment
of the loan is due.

The  provision of the loan facility from Export Trading Group is a related party
transaction  under the AIM Rules. Having  consulted with the Company's nominated
adviser,  Fairfax  I.S.  PLC,  the  Directors,  excluding Mr Ketan Patel and his
alternate  Director, Mr Maheshkumar  Patel, consider that  the terms of the loan
from  Export Trading Group  are fair and  reasonable insofar as Shareholders are
concerned. In giving advice to the Directors, Fairfax has taken into account the
Directors' commercial assessments of the loan terms available from third parties
and alternative sources of debt financing.

Shanta Gold is at an advanced stage of negotiation for an additional loan
facility of US$15-20 million with other parties. The Directors believe the
additional loan facility will provide sufficient funds for the Company to
achieve commissioning at New Luika by the end of Q1 2012. Significant progress
has been made at New Luika and the Company can confirm that as at 17 December
2011, more than 10,000 ounces of gold at 4.9g/t were stockpiled at New Luika.

Bauhinia Creek infill drilling

After highly favourable drill results were achieved and announced on 29 June
2011, Shanta Gold commissioned deeper RC drilling to test the down dip
extensions to the ore body.

Current 3D block modelling containers indicate resources to 120 metres depth
below surface. Due to the high grades drilled and the robust nature of the
mineralised intersections achieved, the entire indicated resource will be mined
using open pit methods. RC drill rigs were commissioned on 2 October 2011 to
optimise the depth extensions of the ore body.
Thus far four drill holes designed to target mineralisation at 150 metre depth
have intersected robust mineralisation. The first two boreholes designed to
intersect mineralisation at 200 metres depth have intersected zones of between
10 and 18 metres true width. Assay values for these intersections are expected
in early 2012.

Visual inspection of the drill chips from these intersections suggests the
Bauhinia Creek indicated resource may be increased, extending the life of the
Bauhinia Creek pit and the New Luika mine. The Bauhinia Creek mineralised
prospect remains open at depth and to the west.

Shanta plans to commission depth-extension drilling at its Luika mineralised
prospect in early 2012, the Luika pit is scheduled to follow Bauhinia Creek as
the ore source for the New Luika plant.

Singida project progress

Following the attainment of the Environmental and Social Impact Assessment
('ESIA') for the Singida project the mining licence has been issued and received
by Shanta from the Ministry of Energy and Minerals, dated 19 December 2011.

Gareth Taylor, Chief Executive Officer, commented;

"With the first bridging loan now in place and the second at an advanced stage,
Shanta is on track to commence  at New Luika by the end of Q1 2012.

Receiving approval of the mining licence for Singida represents another major
achievement for the Company and we can look forward with confidence to having
two producing mines by the end of 2013. With our excellent exploration team
focussed on the opportunities available in the joint venture areas I am very
excited about the further growth potential of this company"



Contacts:

Shanta Gold Limited
Walton Imrie   Tel: +27 (0) 82 444 2851
Gareth Taylor   Tel: [phone] 732 484

Nominated Adviser and Broker
Fairfax I.S. PLC
Tel: [phone]
Ewan Leggat / Laura Littley

Financial Relations
Tavistock Communications
Tel: [phone]
Emily Fenton/Ed Portman







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Source: Shanta Gold Limited via Thomson Reuters ONE

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