SINGIDA PRE-FEASIBILITY STUDY, MINING LICENCE A...

SHANTA GOLD LIMITED

 SINGIDA PRE-FEASIBILITY STUDY, MINING LICENCE APPLICATION AND PROJECT PROGRESS

                                17 December 2010

In line with its development into a producing mining company, Shanta is pleased
to announce the completion of a preliminary feasibility study ("PFS") and the
submission of three mining licence applications and an Environmental and Social
Impact Assessment Scoping Report for the Singida mining project in central
Tanzania. The PFS was conducted by Environmental, Process and Mining Consultants
(Pty) Ltd ("EPMC"), independent third party consultants, who also carried out
the recently completed Chunya detailed feasibility study.

The PFS has confirmed that the Singida project is extremely robust and the
company will now proceed with a full detailed feasibility study immediately.
This will be done by EPMC and is due for completion by the end of June 2011.

Shanta submitted three mining licence applications covering the orebodies
included in the preliminary feasibility study to the Ministry of Energy and
Minerals of Tanzania on 8 December 2010 and the Scoping Report of the
Environmental and Social Impact Assessment ("ESIA") to the National
Environmental Management Committee on 13 December 2010. The ESIA is being
conducted by MTL Consulting, a Tanzanian consulting firm with extensive
experience in environmental certification studies in the mining industry in the
country.

Diamond drilling of three geotechnical boreholes has been completed and
geotechnical logging conducted by a consultant from SRK, South Africa. The data
gathered will be used to define pit slope design parameters and the ore
intersections will be used to determine the rock grinding parameters including
bond work index.

PFS OVERVIEW

·        Singida has nine orebodies with a combined resource of 858,000 ounces
(at a 1 g/t cut-off). The study focussed on seven of these, Gold Tree 1, 2 and
3, Jem, Vivian, Corn Patch and Corn Patch West and excludes Gustav and Kaiser
Chief,
·        The orebodies are all located within a 5km radius.
·        The study envisages an annual mill feed of 540,000 tonnes from a series
of open pits and underground operations, representing an average production rate
of 45,000 tpm through a plant with a 75 tph capacity.
·        Average stripping ratio of the open pit operations is 9:1.
·        Orebody morphology and attitude have determined that initial mining
will be by conventional open pit methods and that development of conventional
narrow vein underground mining should commence early in the mine life.
·        Ore processing will consist of crushing, milling, combination
cyanidation and adsorption circuit, elution electrowinning and smelting,
achieving a 91% recovery.
·        Average production of 43,000 ounces per annum is planned.
·        The PFS mine plan has an annual production totalling approximately
387,000 ounces over a 9 year mine life.
·        Capital cost is estimated at US$83 million which includes US$43 million
for the underground mine to be spent over the 12 month construction period, and
US$10 million historical expenditure.
·        The total cash operating cost is estimated at US$699 per ounce, which
includes the underground operations.
·        The ongoing detailed feasibility study will improve the accuracy of the
cost estimates and further refine the production plan and design engineering to
increase confidence in cashflow and financial forecasts on which a decision to
mine will be made.
Walton Imrie, the Company's Executive Chairman commented:

"The Singida preliminary feasibility study shows the positive potential of the
Singida project. Coming close on the heels of the completion of the Chunya
feasibility study and commencement of construction at Chunya expected in January
2010, this project will place Shanta in a position to develop and commission two
profitable mining operations within 24 months, which will be a significant
achievement for a small explorer."

For further information:

Santa Gold Limited 

http://www.shantagold.com

Gareth Taylor
Mobile: [phone]

David Scott
Mobile: [phone]()

Walton Imrie
Moblie: [phone]


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


GLOSSARY

Adsorption: The step in the leaching process whereby gold dissolved by
cyanidation is adsorbed onto activated carbon in the leach circuit.

Bond work index: The measure of grindability of rock in evaluating grinding
circuits performance to help maximize the use of the power delivered to grinding
circuits in minerals processing plants.

Cyanidation: Chemical process whereby diluted alkaline cyanide solutions are
used to dissolve gold from ground rock particles.

Detailed feasibility study: Detailed Feasibility Studies are normally the
highest order and are the basis for capital appropriation and provide the budget
figures for the project, completed with a financial accuracy of ±10% with a
significant portion of the formal engineering completed.

Electrowinning: The step in the gold recovery process through which the gold
dissolved in elution is recovered from the solution by electrolysis prior to the
smelting.

 Elution: The process whereby electrodeposition circuit where hot caustic
sodiumcyanide solution or pressurized steam is utilized to desorb the gold or
silver from the charcoal

Feasibility study: An evaluation of a proposed project to determine whether and
how it can be mined economically.

Preliminary feasibility study: Preliminary Studies are accurate to ± 25-30% and
are typically obtained by factoring known unit costs and estimated gross
dimensions or quantities once conceptual or preliminary engineering has been
completed.










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Source: Shanta Gold Limited via Thomson Reuters ONE

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