Chunya Project Potential Resource

CHUNYA PROJECT POTENTIAL RESOURCE ANNOUNCEMENT
                          12 December 2008
Shanta Gold is pleased to announce that resource 3D block modelling
and calculation has defined a total resource of 716000 ounces (at a
0.5 g/t cutoff) on the Saza prospecting licence in Chunya in
Tanzania. A final JORC compliant resource sign-off is expected in the
1st quarter of 2009 on completion of an independent inspection of the
core and review of the sampling and QA/QC protocols by the company's
resource consultants, Geologix. The non-compliant resources reported
here have been defined by reverse circulation ("RC") and diamond
drilling beneath earlier positive exploration results, historical
workings and trenching channel results. Down dip and along strike
extensions to these resources and new targets remain untested and
additional trenching and drilling is expected to increase this
resource.
Chunya Project Potential Resource Estimate
      RC and diamond drilling on the Saza licence (7.83km2 in extent)
that commenced in the  4th quarter of 2007  was completed during  the
second quarter of 2008.
      The drilling comprised a total  of 32 RC drill holes  completed
during the  Phase 1  drilling  programme (2,979  metres), and  47  RC
(4,783 metres) and 14 diamond  (1,917 metres) drill holes during  the
Phase 2  drilling  programme.  Drilling  targeted  soil  geochemistry
anomalies, geological  mapping  targets  and rock  chip  sampling  of
artisanal and  historical mining  excavations. Details  of the  drill
results have  previously  been  released in  announcements  dated  18
December 2007 and 25 September 2008.
      The drill holes and trenches exposed and intersected wide zones
(up to  25  metres) of  mineralization,  shearing and  alteration.  A
selection of the best  drilling results is  presented below for  each
prospect.
      The geological features commonly associated with the geological
processes that result in gold mineralization have been identified  at
Saza. These  include multiple  phases  of quartz  veining,  prominent
brittle-ductile shear  zones,  cross  cutting  relationships  between
structures and  lithological  boundaries  and  retrograde  alteration
mineral assemblages  including the  minerals chlorite,  sericite  and
muscovite. The intersection grades reported are associated with these
coincident geological features  that are extensively  present on  the
PL. Drilling  and trenching  has been  conducted on  five  prospects,
Bauhinia Creek, Black  Tree Hill, Elizabeth  Hill, Jamhuri and  Luika
Mine.
      The  total potential  resource  comprises 13.8  million  tonnes
containing 716,000  ounces  of  gold  at 1.61  g/t  (using  a  0.5g/t
cut-off).
      The  exploration  activities  planned  for  2009  will  include
further testing of the extensions to known mineralization, testing of
newly  identified  mineralized  zones  and  preliminary   feasibility
investigations with a view  to determining the  economics of a  small
scale mining operation  at Luika Mine,  and in the  future, a  larger
operation exploiting  the  combined  economic resources  of  all  the
prospects, all of which are within 6 kilometres of one another.
      The  preliminary  feasibility  study  activities  will  include
completion of the  JORC compliant  resource modelling,  metallurgical
test work and conceptual mine design and financial modelling.
Luika Mine
      Drilling  targeted the  down  dip extension  of  mineralization
mined in historical surface open pit and underground operations.
      Luika Mine  returned best RC  drilling results of  9 metres  at
3.95 g/t, 5 metres at  3.71 g/t, 4 metres at  5.71 g/t, 15 metres  at
3.12 g/t, 7  metres at 3.51  g/t and  3 metres at  16.5 g/t.  Diamond
drilling results achieved at Luika Mine include 11.44m at 7.1g/t,  3m
at 9.11g/t and 2.86m at 6.43g/t.
      The Luika  Mine indicated resource  consists of 760,000  tonnes
containing 69,600 ounces of gold at 2.85 g/t and inferred resource of
722,000 tonnes containing 89,900 ounces at 3.87 g/t.
      Although  the Luika  Mine  target appears  to be  truncated  by
faulting in a north-easterly direction, drill hole evidence  suggests
that mineralisation is open at depth  and to the southwest and it  is
planned to test  the extensions  by trenching  and possibly  drilling
during 2009.
      The Board has agreed to conduct a preliminary feasibility  into
opening a small scale mine on this property to determine the economic
potential of  this  resource. The  purchase  of second  hand  gravity
concentration equipment located in the area is being considered.
Elizabeth Hill
      Elizabeth Hill returned  best drilling results  of 7 metres  at
2.75 g/t and 8 metres at 2.08 g/t.
      The drill  holes beneath  the good trench  sampling results  at
surface,  did  not   return  the  expected   good  results.   Despite
intersecting appreciable  thicknesses  of mineralised,  sheared,  and
altered material, strong geological indicators of mineralization, the
grades were lower than expected. It is suspected that the gold in the
Elizabeth Hill shear zone, hosted in brecciated and undeformed  white
quartz veins and foliated and mylonitised grey to blue quartz  veins,
is nuggety  and dominated  by  coarse gold.  Both these  factors  may
present a  problem  to  achieving representative  assay  results.  To
further test  this  and  improve  the  accuracy  of  the  gold  assay
determination,  larger  samples  of  the  vein  material  are  to  be
submitted to the laboratories for assay determination.
      The Elizabeth Hill indicated  resource consists of 1.5  million
tonnes containing  55,600 ounces  of gold  at 1.16  g/t and  inferred
resource of 3.5 million tonnes containing 107,300 ounces at 0.95 g/t.
      Subsequent investigations at Elizabeth Hill has resulted in the
discovery of  a second  zone  of shearing,  quartz veining  and  gold
mineralisation  (visible  gold  panned  from  crushed  grab  samples)
located approximately  100m-150m to  the  north of  the  drill-tested
area. This zone  is obscured by  slope scree and  currently is  being
exposed and tested by means of trenching and channel sampling.
      Both target areas at Elizabeth Hill remain open at depth and to
the west.
      The 2009 work programme  will investigate the nugget effect  in
completed drill holes,  test the  Elizabeth Hill  extensions and  the
resource will be incorporated in the preliminary feasibility study of
the Chunya project.
Bauhinia Creek

      Bauhinia Creek returned best RC drilling results of 9 metres at
5.62 g/t, 9 metres at 9.21 g/t, and 10 metres at 4.16 g/t.
      The  Bauhinia  Creek  indicated resource  consists  of  474,000
tonnes containing  56,100 ounces  of gold  at 3.68  g/t and  inferred
resource of 463,000 tonnes containing 29,900 ounces at 2.01 g/t.
      Mineralisation along strike is displaced by later faulting, but
remains open at depth.
      Fault-displaced strike extensions will be investigated by means
of exploration trenches during the 2009 work programme.
Black Tree Hill

      Black Tree Hill returned best  RC drilling results of 5  metres
at 8.52 g/t, 9 metres at 3.41 g/t,  5 metres at 4.1 g/t, 7 metres  at
2.09 g/t, 4 metres at 2.83 g/t and 4 metres at 2.64 g/t.
      The  Black Tree  Hill indicated  resource consists  of  902,000
tonnes containing  45,000 ounces  of gold  at 1.55  g/t and  inferred
resource of 1.3 million tonnes containing 51,400 ounces at 1.23 g/t.
      The target remains open at depth and to the west
      During  the first  half of  2009, additional  trenches will  be
excavated to the west of Black Tree Hill to delineate and expose  the
total strike extent of mineralisation.
Jamhuri Creek

      Jamhuri Creek  returned best  drilling results of  6 metres  at
5.04 g/t, 14 metres at 4.58 g/t and 3 metres at 3.22 g/t.
      The Jamhuri  Creek indicated resource  consists of 1.4  million
tonnes containing  69,200 ounces  of gold  at 1.48  g/t and  inferred
resource of 2.7 million tonnes containing 141,600 ounces at 1.61 g/t.
      Soil geochemistry data suggests that mineralisation at  Jamhuri
Creek  may  persist  for  an  additional  1km  in  a   south-easterly
direction. This is  currently being  tested by  means of  wide-spaced
trenching.  The  Company  has  already  successfully  identified   an
extension to the  mineralised shear  zone at Jamhuri  Creek with  the
first two trenches  completed. The trenching  will continue into  the
early part of the 2009 program and the results will determine whether
further work including drilling will be conducted.

* All intersection widths listed are down-hole intersection widths.
As completion of an independent inspection of the core and review  of
the  sampling  and   QA/QC  protocols  by   the  company's   resource
consultants is only expected to be completed during 1st quarter 2009,
resources in this  announcement are not  currently compliant with  an
internationally acceptable standard. The company intends to release a
JORC-compliant mineral resource statement  in  the first  quarter  of
2009 once an independent consultant has verified the above estimate.
The  company  will  be  testing  the  potential  extensions  to   the
mineralized zones through the  2009 work programme  and in line  with
the strategy to  develop alternative sources  of exploration  finance
through cash  flow from  production, will  be conducting  preliminary
feasibility  work  on  selected  ore  bodies  (initially  the   Luika
prospect) that have the potential to be brought into production  with
a low capital investment.
The total potential resources are tabulated below:

   PROSPECT  RESOURCE CATEGORY   TONNES   AU (g/t)*  Kg's  OUNCES

  LUIKA MINE     INDICATED      760,475     2.85    2,166  69,629
                 INFERRED       721,895     3.87    2,796  89,890

  ELIZABETH      INDICATED     1,495,812    1.16    1,729  55,596
     HILL        INFERRED      3,496,232    0.95    3,336  107,266

   BAUHINIA      INDICATED      473,762     3.68    1,745  56,114
    CREEK        INFERRED       463,081     2.01     931   29,940

    BLACK        INDICATED      902,148     1.55    1,400  45,027
  TREE HILL      INFERRED      1,298,490    1.23    1,600  51,427

   JAMHURI       INDICATED     1,455,192    1.48    2,152  69,203
    CREEK        INFERRED      2,728,873    1.61    4,406  141,660

    TOTAL        INDICATED     5,087,389    1.81    9,193  295,569
  RESOURCES      INFERRED      8,708,571    1.50    13,069 420,182
                   TOTAL       13,795,960   1.61    22,262 715,751

* Average grade after a cut off of 0.5 g/t applied

Qualified Person:
John Fleming (BSc (Hons)) has more than eight years experience in the
mining, exploration and geotechnical industries with a focus on gold,
platinum, diamonds and  andalusite. He  is registered  by the   South
African Council for Natural Scientific Professions as a  Professional
Natural  Scientist  in  the  field  of  practice  of  Earth  Science,
Registration Number  400160/05, and  as such  is considered  to be  a
Competent Person. John, who  was been employed by  Shanta Gold for  a
year, has reviewed  the data  for  the  RC and  diamond drilling  and
subsequent sampling  programmes carried  out at  Chunya and  Singida.
John Fleming consents to the inclusion in the report of  the matters
based  on his   information  in the   form  and context  in which  it
appears.
Deon van der Heever has more  than 18 years experience in the  mining
and exploration industry.  He is the  Executive Director of  GeoLogix
MRC (Pty) Ltd. He is the founding member of GeoLogix and has provided
consulting services to  the minerals  industry for  eight years.  His
field of expertise  is gold  and platinum  and he  has completed  and
signed off many  resource estimates  in South  Africa, Africa,  North
America and Tajikistan. He is registered by the South African Council
for  Natural  Scientific  Professions   as  a  Professional   Natural
Scientist  in   the  field   of  practice   of  Geological   Science,
Registration Number  400115/00, and  as such  is considered  to be  a
Competent Person. Deon van  der Heever consents  to the inclusion  in
the report of the  matters based on his  (or her) information in  the
form and context in which it appears.
For further information:

Shanta Gold Limited 

http://www.shantagold.com

Walton Imrie
Mobile: [phone]

Walter Vorwerk
Mobile: [phone]

GMP Securities Europe LLP
James Hannon
[phone]

Panmure Gordon (UK) Limited
Edward Farmer
[phone]


Glossary
3D Block Modelling. A  computer-based representation of a  geological
body, or mine  excavation, created  from a  series of  interconnected
outlines of the body being modelled.

0.5 g/t Cut-off implies all values above 0.5 g/t are taken into
account.


Brecciated. Condition applied to an intensely fractured body of rock.

Brittle-ductile Shear Zones. A combination of both brittle and
plastic deformation produced in response to changes in stress
orientation or changes in the rock competency due to progressive
alteration.

Channel Sampling. Sampling taken from the wall of a mine opening, or
along a surface exposure, trench or costean, in which a furrow is
made and all of the sample combined for analysis. Channel samples are
commonly, but not always, collected over continuous one meter
intervals.

Cut-off.   The value  of  an ore  variable  below which  material  is
classified as waste.

Down Dip.  Direction perpendicular to the strike and in the plane of
a body.

Ferricrete. A soil zone variably cemented by iron oxide.

Foliated. Banded rocks, usually due to crystal differentiation or
preferential mineral alignment as a result of metamorphic processes.

Down-hole  Intersection Widths. The absolute width of a rock
unit/mineralised zone intersected in a bore hole drilled. May be
drilled at an oblique angle to the rock unit/mineralised zone, and is
therefore greater that the true width of the rock unit/mineralised
zone intersected

JORC - The Joint Ore Reserves Committee.  The Australasian Code  for
Reporting of Mineral Resources and  Ore Reserves (the 'JORC Code'  or
'the Code'), which  sets out minimum  standards, recommendations  and
guidelines for  Public  Reporting  of  exploration  results,  Mineral
Resources and Ore Reserves in Australasia.

Lithological Boundary. Boundary zone separating rock types with
different physical and chemical characteristics.


Mylonitised. The physical character of a hard compact rock with a
streaky or banded structure produced by extreme granulation of the
original rock mass in a fault or thrust zone.

Overburden. Waste material (unconsolidated, semi-consolidated)
overlying in-situ bedrock

PL. Prospecting Licence. An area defined by specific geographic
coordinates, allocated to an exploration company by the government,
for the purpose of conducting mineral exploration within the boundary
area.

Reverse Circulation (RC) Drilling. A variation of the rotary drilling
method in which the cuttings are pumped up and out of the drill pipe,
an advantage in certain large diameter holes.

Resource Categories
Measured Resource.  An in-situ mineral resource calculated with a
high confidence level to which economic parameters have not been
applied.  Aslo that part of a mineral resource where the data used
for inspection, sampling and measurement is of sufficient quality and
density such that the geological character, continuity, grade and
nature are sufficiently well understood to define the location and
characteristics of mineralisation with a high degree of confidence.

Indicated Resource. An in-situ mineral resource calculated with a
moderate confidence level to which economic parameters have not been
applied.

Inferred Resource.  An in-situ mineral resource calculated with a low
confidence level to which economic parameters cannot be applied.

Shear Zone. A zone in which shearing has occurred on a large scale,
so that the rock is crushed or such that the rock is deformed.

Trenching. The excavating of a trench for the purpose of collecting
samples or geological information.

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