Revised Feasibility Study - New Luika Gold Mine

Shanta Gold Limited

                        ("Shanta Gold" or the "Company")

                Revised Feasibility Study - New Luika Gold Mine

The Board of Shanta Gold is pleased to announce the results of a revision to the
feasibility study for the New Luika Gold Mine ("NLGM"). This revision has its
origin in the resource estimate update that was announced on 5 May 2011. The
study has determined a significantly improved net present value of $66.15
million from $37.5 million for the project as advised in the preliminary study
on 6 July 2010. The improvement has resulted from both improved grades and
additional tonnage available over the 12 year life of mine determined at
present.

The results of the revised feasibility study are set out below:

+----------------------------------------+---------+
| Total tons mined (million)             | 45.8    |
+----------------------------------------+---------+
| Total tons treated (million            | 5.6     |
+----------------------------------------+---------+
| Annual treatment rate (tons)           | 547,000 |
+----------------------------------------+---------+
| Total construction cost                | $29.4   |
+----------------------------------------+---------+
| Total gold produced (million ounces)   | 0.445   |
+----------------------------------------+---------+
| Average annual production of gold (oz) | 40,484  |
+----------------------------------------+---------+
| Escalated average cost per ounce (US$) | 1,015   |
+----------------------------------------+---------+
| Return on investment                   | 71%     |
+----------------------------------------+---------+
| Net present value (11%)                | $66.15m |
+----------------------------------------+---------+


The purchase of the mills was announced on 23 November 2010. The rated capacity
of the mills is 100 tonnes per hour (tph). The revised feasibility plans to
treat ore at 50tph from mining operations and to treat 25tph sourced from free
dig lower grade gravels available at the Luika pit. In addition, the carbon in
leach (CIL) tank design has been increased to ensure 12 hours of contact time at
a 100tph throughput rate.

A further technical change has been to provide for onsite power generation for
the full load required at NLGM. The Tanzanian power supply infrastructure, while
providing cheaper power is unreliable at present and independence from the
national grid is required to ensure continuous production.

Increases in the size of the ore resource and improved grades have meant that
the mining and treatment schedule has been revised to bring the Bauhinia Creek
orebody into production as soon as possible. This has meant that waste stripping
has been brought forward from year 1 to commence immediately and, as a result,
the amount of working capital required has increased by approximately US$13m.

Based on the revised mine planning the feasibility study estimates that gold
production, mining grade and cost per ounce in the first three years are
expected to be as follows:
+------+---------------+-------+----------------+
|      | Gold produced | Grade | Cost per ounce |
|      |               | G/ton |                |
+------+---------------+-------+----------------+
| 2012 |     65-70,000 |  4.24 |        470-510 |
+------+---------------+-------+----------------+
| 2013 |     55-60,000 |  3.56 |        610-660 |
+------+---------------+-------+----------------+
| 2014 |     55-60,000 |  3.56 |        625-675 |
+------+---------------+-------+----------------+


Construction of NLGM has been underway since first quarter 2011. Pre- stripping
of the first operational pit (Bauhinia Creek) has been underway for the last 4
weeks.

 The following is the expected timetable for the completion of the mine:

+----------------------------+----------------------+
| Mill foundation completion | 31 July 2011         |
+----------------------------+----------------------+
| Mill delivery              | 31 July 2011         |
+----------------------------+----------------------+
| Leach tank construction    | July - September2011 |
+----------------------------+----------------------+
| Crusher installation       | July - August2011    |
+----------------------------+----------------------+
| Smelt house construction   | October 2011         |
+----------------------------+----------------------+
| Plant commissioning        | November 2011        |
+----------------------------+----------------------+
| Gold production            | December 2011        |
+----------------------------+----------------------+

Walton Imrie, Executive Chairman, said "the excellent outcome of drilling in
2010 has translated into a significant improvement in the returns expected from
the New Luika Gold Mine, and with particularly robust cash flows in the early
years of operation. My thanks go to the teams responsible for the improvement in
the resource and for the outstanding efforts in completing the revision to the
feasibility in short order."

For further information:

Shanta Gold Limited 

http://www.shantagold.com

Walton Imrie
Mobile: [phone]

Walter Vorwerk
Mobile: [phone]

Gareth Taylor
Mobile: [phone]

Fairfax I.S. PLC
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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