Placing to raise £15.1 million to bring the Ne...

Shanta Gold Limited

                        ("Shanta Gold" or the "Company")

Placing to raise £15.1 million to bring the New Luika Gold Mine into production,
                                    Tanzania

-   Shanta Gold is to raise £15.1 million, before expenses, through the issue of
83,927,667 new  ordinary  shares  at  18 pence  per  share  to  new and existing
institutional shareholders in the United Kingdom

-     Proceeds  are  to  be  used  to  continue to transform the Company from an
explorer  to a producer by  bringing the New Luika  Gold Mine into production in
December  2011, and financing the  exploration and joint  venture agreement with
Great Basin Gold [TSX: GBG] announced on the 1(st) June 2011

-   New Luika Gold Mine is expected to produce 175,000 - 190,000 ounces over the
first three years at an average grade of 3.5/3.8Au grams per tonne at an average
cost of US$560 to US$610 per ounce from December 2011.


Shanta Gold Ltd, (AIM: SHG), the gold development company operating in Tanzania,
is  pleased to announce that  it has received commitments  from new and existing
institutional  investors  in  the  United  Kingdom  for  a  placement  to  raise
approximately £15 million, before expenses, through the issue of  83,927,667 new
ordinary shares  at an issue price of 18 pence per share ("Placing Shares"). .

The New Luika Gold Mine, aims to produce 175,000 - 190,000 ounces over the first
three  years at an average grade of 3.5/3.8Au grams per tonne at an average cost
of US$560 to US$610 per ounce from December 2011.

Walton Imrie, Executive Chairman of Shanta Gold, commented on the placement; "We
are  very pleased  to have  received such  a high  level of support from new and
existing  institutional shareholders for this capital raising. The proceeds will
enable  Shanta to continue to transform from  an exploration company into a gold
producer, as we remain on track to bring the New Luika Gold Mine into production
in  December of this  year. The New  Luika Gold Mine  is targeting production of
175,000 -  190,000 ounces  of  gold  for  the  first  three  years  and  has the
opportunity  to be very cash generative. Furthermore, we are able to finance the
initial  exploration activities in the Lupa Goldfield to meet the agreement with
Canadian listed Great Basin Gold."

The  Placing is conditional, inter alia, on  the admission of the Placing Shares
to  trading the AIM market  of the London Stock  Exchange plc ("Admission"). The
net proceeds of the Placing after allowing for expenses are expected to be £14.3
million.

The  Placing Shares will,  when issued, represent  46.47 per cent. of the issued
ordinary  share capital  of   the  Company as  enlarged by the  issue of Placing
Shares.  The  total  number  of  voting  shares  in  issue immediately following
Admission will be 264,545,124.

Application  will be made to the London  Stock Exchange plc for the Admission of
the  Placing Shares and it  is expected that admission  will take place at 8.00
a.m.  on 15 July 2011.  The Placing Shares will, when issued, rank pari passu in
all respects with the Company's existing ordinary shares.

Working capital loan facility

Shanta  Gold is pleased to announce that  it has arranged a working capital loan
facility  with  Yorkville  Advisors  SPV  LLP  ("YA") totaling US3,400,000. This
facility  is backed by the Company's  existing standby equity drawdown agreement
with YA, which was announced on 18 December 2009.

Under  the agreement, Shanta Gold will pay a  coupon of 8% per annum on any sums
drawn  down and the facility  is repayable monthly, with  the final repayment in
July 2012.

For further information:

Shanta Gold Limited


http://www.shantagold.com
Walton Imrie
Mobile: [phone]

Walter Vorwerk
Mobile: [phone]
[phone]

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

Tavistock Communications
Emily Fenton/Ed Portman
[phone]








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Source: Shanta Gold Limited via Thomson Reuters ONE

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