Interim Results

Shanta Gold Limited 13 July 2006 Interim Report Shanta Gold announces results for the 6 months to 30 June 2006 Shanta Gold Limited ("Shanta Gold" or the "Company") is pleased to present the interim report for the six months to 30 June 2006. Following the exploration success at Singida, the Board has considered it prudent to re-establish an executive presence and Richard Shead (CEO) and Walter Vorwerk (CFO) were appointed with effect from 1 June 2006. At the same time, George Bennett resigned from the Board. Exploration Report Shanta Gold maintained its focus on extending the evaluation of the Singida property, while limited activity took place at the Mgusu project. 1. Singida Project Londoni 1 Target Shanta Gold's exploration activities during this period have largely focused on the Singida project with the drill testing of a large gold geochemical anomaly discovered in a new unexplored greenstone belt in central Tanzania during 2005. Detailed announcements of drilling results were made in February, May and June and may be found on the Shanta Gold website (www.shantagold.com). A total of 3,630 metres of rotary air blast drilling ("RAB"), 21,700 metres of reverse circulation drilling (RC) and 670 metres of diamond drilling has been completed at four targets along a 5,300 metre strike. Some 10,600 samples have been assayed for gold, arsenic and base metals at SGS laboratories in Mwanza, Tanzania. Gold was intersected at all four targets and the feature of the period was the intersection of high grade mineralization at two targets in a 600 metre strike section referred to as the "Gold Tree" and "The Jem". Highlights at the "Gold Tree" are intersections averaging 16 metres at 5.24 g/t Au in SC12, 10 metres at 7.70 g/t Au in SC64, 10 metres at 8.49 g/t Au in SC70 and 2 metres at 145.36 g/t Au (including 1 metre at 280 g/t Au) in SC110. The drilling to date has confirmed the mineralised shear zone is robust along a 350 metre strike down to 200 metres depth. It remains open along strike and down dip where step-out exploration drilling is in progress. The highlights of the drilling at "The Jem" along a 425 metre strike is a 5 metre intersection averaging 23.90 g/t Au (including 1 metre at 79.38 g/t) in SC43, 7 metres at 21.19 g/t (including 3 metres at 46.36 g/t) in SC115, 3 metres averaging 65.35 g/t in SC206, and 4.05 metres at 10.18 g/t in diamond drill hole SD207. The mineralised quartz veins in both areas are hosted within a strongly sheared and highly altered basaltic volcanic sequence which contains medium grained gabbro intrusives. Metamorphic grade occurs in transition from the upper greenschist to the lower amphibolite facies. Visible gold and bonanza grades occur in the strongly sheared margins of quartz-sulphide veins with a broad zone of mineralization extending into the footwall rocks. Mineralogical examination of the RC chips by Australian mineral consultants, Mason Geoscience Pty Ltd, has shown that native gold is intergrown with quartz veins and with zoisite in altered wallrocks. No gold has been observed in arsenopyrite, suggesting that recoveries should not be problematic. Preliminary metallurgical testing is still to be undertaken on mineralised drill core samples. The preliminary open pit mineral resources are being independently modelled by Johannesburg based independent consultants Mineral Corporation. Insufficient data is available for the assessment of JORC or SAMREC compliant resource assessments at this stage. Infill and step out drilling continues to generate additional data points for assessment. Mineral Corporation will be providing the company with an independent JORC compliant resource statement shortly. Londoni 2 Target Detailed geological mapping and infill soil sampling has been completed at Londoni 2 situated approximately 6 km east of the Londoni 1 target. The geochemical sampling programme located a high grade mineralised vein at surface extending along a 500 metre strike length. The reconnaissance chip sampling of a poorly exposed mylonitic quartz-sulphide vein returned with bonanza grades of 280 g/t Au with adjacent sheared mafic wallrocks containing values of 10 g/t Au. A first phase RC drill programme is planned to commence in this area shortly. Further geochemical sampling is in progress to define the full extent of this new discovery. Londoni 3 Target Shanta Gold has secured the exploration rights on 27 primary mining leases over and along the strike projections from high grade gold mineralization at the Londoni 3 target. Surface and underground sampling of sub-vertically dipping quartz veins and sheared mafic volcanic rocks in artisanal workings returned with gold values between 8g/t and 15g/t over several metres width. A preliminary reverse circulation drill programme is planned in conjunction with detailed geological mapping and soil geochemical sampling along the projected strike extensions. Shanta is also planning to complete a detailed airborne magnetic survey over and along strike from all of the three main Londoni targets in August. Miscellaneous A dry weather airstrip (1,800 metres long) has recently been constructed to facilitate the transport of equipment, supplies and staff into this remote part of Tanzania. The exploration camp has been upgraded with the construction of a larger office and sample storage facilities. Community Involvement The Company has assisted financially with the upgrading of facilities at the Shanta Secondary School at Mang'onyi village. Shanta Gold has provided building materials for the construction of new classrooms and has equipped these with new desks for students. The company has also drilled water boreholes to supply local villagers with clean drinking water. 2. Other Projects Activity at the Mgusu Project has been restricted to the construction of access routes and drill platforms for the planned 3,600 metre RC and 2,400 metre diamond drill programme. The resource definition and expansion programme will be completed as soon as a rig is available from the Singida Project. First phase reconnaissance exploration programmes are expected to commence in these areas in the second half of 2006. Financial report During May and June 2006, 7.4 million warrants were exercised and shares issued raising US$4 million in additional funds. The total number of shares in issue is now 69,698,128 (62,224,735 at 31 December 2005). Due to the intensified exploration in the Singida Area, significant drilling costs amounting to US$907,000 are included in exploration expenditure of US$1,599,000. The Company has also spent US$776,000 on obtaining the rights to explore additional primary mining licence areas in the Singida area, reflected in the increase in the intangible assets item in the balance sheet, and has incurred capital expenditure of US$182,000 to support exploration activities. At 30 June 2006 the Company had US$5,464,000 free cash available for further exploration activities. Financial Results Consolidated results for the Company have been prepared based on International Financial Reporting Standards (IFRS). INCOME STATEMENT 6 months to 6 months to Period to 31 30 June 2006 30 June 2005 December 2005 Notes US$000 US$000 US$000 Investment and operating income (287) - 137 Exploration costs (1,599) (14) (1,533) Administrative expenses (571) (28) (710) Share option costs (227) - (422) Net loss for the period (2,684) (42) (2,528) Loss per share basic (US cents) 1 4.23 0.52 5.18 Loss per share diluted(US cents) 2 3.12 0.52 5.17 BALANCE SHEET At At At 31 December 2005 30 June 2006 30 June 2005 US$000 US$000 US$000 Assets Non current assets Intangible assets 1,312 1,281 671 Property, plant and equipment 270 134 152 Goodwill 3,318 3,425 3,318 4,900 4,840 4,141 Current assets Receivables 158 101 121 Cash and cash equivalents 6,864 - 5,301 7,022 101 5,422 Total assets 11,922 4,941 9,563 Equity and liabilities Equity Share capital and premium 14,384 4,758 10,020 Share option reserve 649 - 422 Warrant reserve 305 - 672 Translation reserve 396 - 119 Accumulated loss (5,212) (42) (2,528) 10,522 4,716 8,705 Non current liabilities Loans from related parties 508 147 508 Current liabilities Other creditors and accruals 892 78 350 Total equity and liabilities 11,922 4,941 9,563 CASH FLOW STATEMENT Period to 6 months to 6 months to 31 December 30 June 2006 30 June 2005 2005 US$000 US$000 US$000 Cash outflow from operations (1,476) (25) (745) Cash flows from investing activities (958) (5) (112) (net) Cash flows from financing activities 3,997 20 6,158 (net) Increase/decrease) in cash 1,563 - 5,301 Cash and equivalents at the beginning of 5,301 - - the period Cash and equivalents at the end of the 6,864 - 5,301 period STATEMENT OF CHANGES IN EQUITY For the periods to 30 June 2006 Share Share Share Warrant Translation Accumulated Capital Premium Options Reserve Reserve Loss TOTAL US$000 US$000 US$000 US$000 US$000 US$000 US$000 Balance on - - - - - - incorporation Shares issued 8 4,910 4,918 Shares issue expenses (160) (160) Loss for the period (42) (42) Total capital and 8 4,750 (42) 4,716 reserves at 30 June 2005 Shares issued 3 7,589 7,592 Shares issue expenses (2 ,330) (2,330) Share option costs 422 422 Warrant costs 672 672 Translation on 119 119 consolidation Loss for the period (2,486) (2,486) Total capital and 11 10,009 422 672 119 (2528) 8,705 reserves at 31 December 2005 Shares issued 1 4,001 4,002 Shares issue expenses (5) (5) Share option costs 227 227 Warrants exercised 367 (367) - Translation on 277 277 consolidation Loss for the period (2,684) (2,684) Total capital and 12 14,372 649 305 396 (5,212) 10,522 reserves at 31 December 2005 Notes Calculated on the loss for the period divided by the weighted average number of shares in issue (63,463,419) Calculated on the loss for the period divided by the weighted average fully diluted number of shares in issue (84,119,479) For further information: Shanta Gold Richard Shead: Mobile: +27 (0) 82 654 1821 Walter Vorwerk Mobile: +27 (0) 83 308 0080 This information is provided by RNS The company news service from the London Stock Exchange

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