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Shanta Gold announces results for the period to 31 December 2005

13 June 2006

Shanta Gold announces results for the period to 31 December 2005

Shanta Gold Limited (“Shanta Gold” or the “Company”) was admitted to AIM on 11 July 2005.

The period under review was characterized by three significant achievements:

• In May 2005, Shanta Gold's wholly-owned subsidiary Shanta Gold Holdings Limited (SGHL) acquired the entire issued share capital of Shanta Mining Company Limited, Mgusu Mining Limited and Nsimbanguru Mining Limited, which together hold the Company's exploration interests in Tanzania;
• On 11 July 2005, the Company was admitted to AIM, a market of the London Stock Exchange. At the same time the Company completed a placing of 17,224,735 ordinary shares of 0.01p each ("Ordinary Shares"), at a price of 25p per share ("Placing Shares"), raising £3,300,000. At Admission the Company's market capitalization was £15,600,000. Each Placing Share was issued with a warrant entitling the holder to subscribe, at any time over the 2 years following the date of Admission, for a further Ordinary Share in the Company at a price of 30p. The Company also issued to its AIM Admission advisors a total of 2,700,000 warrants to subscribe, at anytime over the three years following the date of Admission, for 2,700,000 ordinary shares in the Company at a price of 25p. Following the growth in the share price Shanta Gold's current market cap has increased to over £37,000,000;
• The Company has deployed exploration crews and equipment to our prospecting projects in Tanzania, with aggressive exploration programmes yielding encouraging results at the Katario and Singida projects.

In November a decision at board level to increase Shanta Gold's profile in Tanzania resulted in the reorganization of the board. As a consequence George Bennett stepped down from the position of Chief Executive Officer and Walter Vorwerk relinquished his position as Chief Financial Officer.

Chris Picken was appointed as chief operating officer based in Dar es Salaam. Mr Maheshkumar Patel was appointed alternate director to the board. Mahesh is a Tanzanian resident (15 years) and has an excellent knowledge of local conditions and the business environment in the country.

Our drilling programme in Tanzania has continued apace. At Katario an 18 hole, 2,061 metre reverse circulation drilling programme was completed in December 2005 and confirmed the wide zones of mineralization in underground workings at Katario.

The most promising exploration result however was the discovery at Singida of a new greenstone belt where some gold anomalies have been identified as drilling targets. Announcements as to the results of initial exploration activities were made on 7 February, 5 May and 6 June 2006. Shareholders are referred to these announcements for details.

Shanta Gold has set clear targets for 2006:

• The drilling programme on Singida has delivered promising exploration results. It confirmed the discovery of high grade gold mineralization associated with regional scale geochemical gold anomalies. The Company is currently focussing its resources on an extended drill programme with reverse circulation and diamond drill rigs on site. The directors believe total expenditure for the year may exceed $8 million; and
• As a result other exploration activities will be tailored to address exploration licence and joint venture requirements and will mainly encompass preliminary surveys at a cost of approximately $100,000.

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.

At year end the company had US$5,300,000 available for further exploration activities. Holders of approximately 3,900,000 warrants have begun the process to exercise them. This will raise approximately US$2,000,000.

Financial Results

Consolidated results for the Company have been prepared based on international financial reporting standards. As Shanta was incorporated in May 2005 these are the first results of the group and therefore there are no comparative figures.

Notes

1. Calculated on the loss for the period divided by the weighted average number of shares is issue (48,791,164)
2. Calculated on the loss for the period divided by the weighted average fully diluted number of shares in issue (48,791,164)
3. Copies of the annual report for the period will be despatched to shareholders on 14 June 2006. Additional copies will be available to the public, free of charge, from the Company’s registered office: Suite A, St Peter Port House, Sausmasez Street, St Peter Port, Guernsey, GY1 3PG.
4. A notice convening the annual general meeting together with a proxy form was posted to shareholders on Monday 12 June 2006. The AGM will be held at the company’s registered office, Suite A, St Peter Port House, Sausmasez Street, St Peter Port, Guernsey, GY1 3PG on Wednesday 5 July at 11:00.