Half-yearly report

SHANTA GOLD LIMITED
                 INTERIM REPORT FOR THE 6 MONTHS TO 30 JUNE 2010


Interim financial report
Shanta  Gold Limited ("Shanta  Gold" or "the  Company" or "the Group") announces
its interim results for the half year ended 30 June 2010.

Operations Review for 6 months to 30 June 2010

During the interim period the Company was able to advance towards production
during this period through completion of an Environmental and Social Impact
Assessment (ESIA) which was submitted for approval to the National Environmental
Management Council of Tanzania and the Feasibility Study on the mine development
at the Chunya project. Approval of the ESIA is the final step towards achieving
approval of a mining licence at Chunya. In parallel with these activities,
surface exploration continued at both the Singida and Chunya projects, following
up on encouraging surface exploration results returned during the 2009
programmes.

Singida Project

During 2009 promising soil geochemistry results were achieved on the Muhintiri
licence. The results may be found in the announcement made on 11 February 2010.
These anomalies are of a similar tenor to those that led to the discovery of the
Gold Tree and Jem ore bodies at the Singida main project area. Limited trenching
of these anomalies which have a total strike length of 3km has commenced and has
exposed gold in weathered bedrock containing grades similar to that encountered
in the soils. Further work is proposed to test the anomalies at depth and on
strike.

Chunya Project

The field exploration programme at Chunya focused on identifying extensions to
known mineralisation and previously undiscovered mineralisation through detailed
mapping, surface sampling and trenching. The potential mineralized strike extent
has been extended from 3km to a total of 6km. The positive sampling results
indicated significant gold mineralisation associated with quartz vein filled
structures. At the end of June a reverse circulation drilling programme was
commissioned and results are awaited. It is anticipated that additional
resources will be defined that will provide further support to the proposed
mining operation planned at Chunya. Details of the exploration results may be
found in announcements made in February, March and June.

A definitive feasibility study was completed at Chunya and announced on 6 July
2010. Environmental certification application was completed during the six
months to 30 June, in fulfilment of the requirements for the granting of a
mining licence which now awaits final approval.

Songea Project

This project area is located in southern Tanzania close to areas known to
contain uranium mineralisation. No field work was undertaken during this period
but the radiometric data achieved during earlier phases of exploration and
subsequently followed up with surface scintillometer traverses, are to be
submitted to a uranium consultant for review. Future programmes will be
determined by the results of the review.

Mgusu Project

The Company continued to engage with the government to reach a resolution of the
access issue at Mgusu. A proposal submitted by Shanta Gold has been well
received by the mining ministry and finalization is expected to result in access
being achieved and exploration work advancing. It is hoped that this will be
achieved in the first quarter of 2011.

Development Programme

On 6 August 2010 the Company announced the decision to commence with mine
construction at the Company's Chunya Project in southern Tanzania, subject to
the Company receiving the relevant mining licence for the project.

The results of the feasibility study, as announced on 5 July 2010, indicate a
total resource of 642,716 ounces of gold at an average grade of 2.39g/t (1g/t
cut-off) which is able to support an open pit mining operation with an expected
average annual production of 28,400 ounces of gold; over an envisaged 11-year
mine life approximately 313,000 ounces will be mined. Mine construction is
expected to commence before the end of the year and commissioning is targeted
for the fourth quarter of 2011.

The Company, in relation to the Singida group of licenses, has decided that it
is necessary to prepare a pre-feasibility study and a feasibility study that
will enable the Company to apply for a mining license over these prospecting
licenses before the end of 2010 and ultimately undertake mine development. The
Company has appointed consultants to execute the feasibility study.

Corporate

The Board announced in August 2010 that it had appointed Gareth Taylor to the
position of Chief Operating Officer. His key responsibility at this point will
be to deliver the operation at the Chunya project and to ensure the development
of the Singida prospect into a mining operation

Financial Results

The  Group reported  a loss  of $2.66  million for  the six months ended 30 June
2010 an increase from $1.82 million for the six months to 30 June 2009 which was
mainly  due  to  completion  of  a  feasibility  study  and  related exploration
expenditure,  which increased  from $1.06  million in  the first half of 2009 to
$1.71  million for the six  months to 30 June 2010.  The  loss per share for the
period was 2.46 cents per share.

The balance sheet reflects an increase in cash in hand to $3.32 million at 30
June 2010 from $2.61 million at the end of December 2009. This was due to a
placing to investors in the London market of 10,000,000 shares at a price of 20
pence per share to raise $ 2.72 million net of expenses.

The directors have prepared the interim financial statements on a going concern
basis. In view of current market conditions and the need to continue the
exploration activities the Board continues to review its options, in particular
the need for future finance. The Board, while pursuing financing with a view to
commencing production, awaits the results from current exploration activities to
inform future direction.


Financial Results
These are not the group's consolidated financial statements, however, all
figures are based on the unaudited consolidated financial statements.

Consolidated Statement of Comprehensive Income

+----------------------------------------+------------+------------+-----------+
|                                        |            |            |           |
|                                        |            |            |           |
|                                        |            |            | Year ended|
|                                        | 6 months to| 6 months to|31 December|
|                                        |30 June 2010|30 June 2009|       2009|
|                                        |      US$000|      US$000|     US$000|
+----------------------------------------+------------+------------+-----------+
|Revenue                                 |           -|           -|          -|
+----------------------------------------+------------+------------+-----------+
|Cost of sales                           |           -|           -|          -|
+----------------------------------------+------------+------------+-----------+
|Gross profit                            |           -|           -|          -|
+----------------------------------------+------------+------------+-----------+
|Administration expenses                 |       (954)|       (774)|    (1 616)|
+----------------------------------------+------------+------------+-----------+
|Exploration and evaluation costs        |     (1 705)|     (1 055)|    (2 703)|
+----------------------------------------+------------+------------+-----------+
|Operating loss                          |     (2 659)|     (1 829)|    (4 319)|
+----------------------------------------+------------+------------+-----------+
|Finance income                          |           4|           5|          9|
+----------------------------------------+------------+------------+-----------+
|Loss before taxation                    |     (2 655)|     (1 824)|    (4 310)|
+----------------------------------------+------------+------------+-----------+
|Taxation                                |           -|           -|          -|
+----------------------------------------+------------+------------+-----------+
|Loss for the period/ year               |     (2 655)|     (1 824)|    (4 310)|
+----------------------------------------+------------+------------+-----------+
|Other comprehensive income for the      |            |            |           |
|period/ year                            |           -|           -|          -|
+----------------------------------------+------------+------------+-----------+
|Total comprehensive loss for the period/|            |            |           |
|year                                    |     (2 655)|     (1 824)|    (4 310)|
+----------------------------------------+------------+------------+-----------+
|Earnings per share                      |            |            |           |
+----------------------------------------+------------+------------+-----------+
|Basic loss per share (US cents)         |      (2.46)|      (1.80)|     (4.25)|
+----------------------------------------+------------+------------+-----------+

Consolidated Statement of Financial Position

+-------------------------------------+------------+------------+-----------+
|                                     |            |            |         At|
|                                     |          At|          At|31 December|
|                                     |30 June 2010|30 June 2009|       2009|
|                                     |      US$000|      US$000|     US$000|
+-------------------------------------+------------+------------+-----------+
|Assets                               |            |            |           |
+-------------------------------------+------------+------------+-----------+
|Non-current assets                   |            |            |           |
+-------------------------------------+------------+------------+-----------+
|Intangible assets                    |       4 442|       4 680|      4 442|
+-------------------------------------+------------+------------+-----------+
|Plant and equipment                  |         215|         235|        252|
+-------------------------------------+------------+------------+-----------+
|                                     |       4 657|       4 915|      4 694|
+-------------------------------------+------------+------------+-----------+
|Current assets                       |            |            |           |
+-------------------------------------+------------+------------+-----------+
|Trade and other receivables          |         518|         255|        428|
+-------------------------------------+------------+------------+-----------+
|Cash and cash equivalents            |       3 319|       4 619|      2 608|
+-------------------------------------+------------+------------+-----------+
|                                     |       3 837|       4 874|      3 036|
+-------------------------------------+------------+------------+-----------+
|Total assets                         |       8 494|       9 789|      7 730|
+-------------------------------------+------------+------------+-----------+
|                                     |            |            |           |
+-------------------------------------+------------+------------+-----------+
|Equity and liabilities               |            |            |           |
+-------------------------------------+------------+------------+-----------+
|Equity                               |            |            |           |
+-------------------------------------+------------+------------+-----------+
|Share capital                        |          20|          18|         19|
+-------------------------------------+------------+------------+-----------+
|Share premium                        |      34 963|      31 779|     31 976|
+-------------------------------------+------------+------------+-----------+
|Share option reserve                 |         747|         599|        678|
+-------------------------------------+------------+------------+-----------+
|Shares to be issued reserve          |          93|          53|         86|
+-------------------------------------+------------+------------+-----------+
|Translation reserve                  |         400|         400|        400|
+-------------------------------------+------------+------------+-----------+
|Retained losses                      |    (28 749)|    (23 611)|   (26 094)|
+-------------------------------------+------------+------------+-----------+
|Total equity                         |       7 474|       9 238|      7 065|
+-------------------------------------+------------+------------+-----------+
|Current liabilities                  |            |            |           |
+-------------------------------------+------------+------------+-----------+
|Trade and other payables and accruals|         684|         215|        329|
+-------------------------------------+------------+------------+-----------+
|Loans payable to related parties     |         336|         336|        336|
+-------------------------------------+------------+------------+-----------+
|Total liabilities                    |       1 020|         551|        665|
+-------------------------------------+------------+------------+-----------+
|Total equity and liabilities         |       8 494|       9 789|      7 730|
+-------------------------------------+------------+------------+-----------+

Consolidated Statement of cash flows

+----------------------------------------+------------+------------+-----------+
|                                        |            |            |           |
|                                        |            |            |           |
|                                        |            |            | Year ended|
|                                        | 6 months to| 6 months to|31 December|
|                                        |30 June 2010|30 June 2009|       2009|
|                                        |      US$000|      US$000|     US$000|
+----------------------------------------+------------+------------+-----------+
|Net cash flows from operating activities|     (1 971)|     (1 781)|    (3 662)|
+----------------------------------------+------------+------------+-----------+
|Investing activities                    |            |            |           |
+----------------------------------------+------------+------------+-----------+
|Cash flow attributable to the           |            |            |           |
|exploration for and evaluation of       |            |            |           |
|mineral  resources                      |            |            |           |
+----------------------------------------+------------+------------+-----------+
|   Purchase of intangible assets        |           -|           -|       (66)|
+----------------------------------------+------------+------------+-----------+
|   Purchase of plant and equipment      |        (43)|         (4)|       (92)|
+----------------------------------------+------------+------------+-----------+
|Net cash flows from investing activities|        (43)|         (4)|      (158)|
+----------------------------------------+------------+------------+-----------+
|Financing activities                    |            |            |           |
+----------------------------------------+------------+------------+-----------+
|Proceeds from issue of ordinary share   |            |            |           |
|capital                                 |       2 910|           -|          -|
+----------------------------------------+------------+------------+-----------+
|Share issue cost                        |       (185)|           -|          -|
+----------------------------------------+------------+------------+-----------+
|Net cash flows from financing activities|       2 725|           -|          -|
+----------------------------------------+------------+------------+-----------+
|Net increase/( decrease) in cash and    |            |            |           |
|cash equivalents                        |         711|     (1 785)|    (3 820)|
+----------------------------------------+------------+------------+-----------+
|Cash and cash equivalents at beginning  |            |            |           |
|of period/year                          |       2 608|       6 404|      6 404|
+----------------------------------------+------------+------------+-----------+
|Foreign exchange adjustment             |           -|           -|         24|
+----------------------------------------+------------+------------+-----------+
|Cash and cash equivalents at end of     |            |            |           |
|period/year                             |       3 319|       4 619|      2 608|
+----------------------------------------+------------+------------+-----------+



Consolidated Statement of Changes in Equity for the period ended 30 June 2010
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|              |       |       |  Share|           | Shares|        |          |
|              |       |       |       |           |       |        |          |
|              |  Share|  Share| option|Translation|  to be|Retained|     Total|
|              |       |       |       |           |       |        |          |
|              |capital|premium|reserve|    reserve| issued|earnings|    equity|
|              |       |       |       |           |       |        |          |
|              |US$'000|US$'000|US$'000|    US$'000|US$'000| US$'000|   US$'000|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Total equity  |       |       |       |           |       |        |          |
|as at         |       |       |       |           |       |        |          |
|              |       |       |       |           |       |        |          |
| 31 December  |       |       |       |           |       |        |          |
|2008          |     18| 31 779|  1 337|        400|      8|(22 539)|    11 003|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Total         |       |       |       |           |       |        |          |
|comprehensive |       |       |       |           |       |        |          |
|loss for the  |       |       |       |           |       |        |          |
|period        |       |       |       |           |       | (1 824)|   (1 824)|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Shares to be  |       |       |       |           |       |        |          |
|issued        |       |       |       |           |     45|        |        45|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Share option  |       |       |       |           |       |        |          |
|costs         |       |       |     14|           |       |        |        14|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Share options |       |       |       |           |       |        |          |
|expired       |       |       |  (752)|           |       |     752|         -|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Total equity  |       |       |       |           |       |        |          |
|as at         |       |       |       |           |       |        |          |
|              |       |       |       |           |       |        |          |
|30 June  2009 |     18| 31 779|    599|        400|     53|(23 611)|     9 238|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Total         |       |       |       |           |       |        |          |
|comprehensive |       |       |       |           |       |        |          |
|loss for the  |       |       |       |           |       |        |          |
|period        |       |       |       |           |       | (2 486)|   (2 486)|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Share based   |       |       |       |           |       |        |          |
|payments      |      1|    197|       |           |    (8)|        |       190|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Shares to be  |       |       |       |           |       |        |          |
|issued        |       |       |       |           |     41|        |        41|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Share option  |       |       |       |           |       |        |          |
|costs         |       |       |     82|           |       |        |        82|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Share options |       |       |       |           |       |        |          |
|expired       |       |       |    (3)|           |       |       3|         -|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Total equity  |       |       |       |           |       |        |          |
|as at         |       |       |       |           |       |        |          |
|  31 December |       |       |       |           |       |        |          |
|2009          |     19| 31 976|    678|        400|     86|(26 094)|     7 065|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Total         |       |       |       |           |       |        |          |
|comprehensive |       |       |       |           |       |        |          |
|loss for the  |       |       |       |           |       |        |          |
|period        |       |       |       |           |       | (2 655)|   (2 655)|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Shares issued |      1|  2 909|       |           |       |        |     2 910|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Share issue   |       |       |       |           |       |        |          |
|expenses      |       |  (185)|       |           |       |        |     (185)|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Share based   |       |       |       |           |       |        |          |
|payments      |       |    263|       |           |   (86)|        |       177|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Shares to be  |       |       |       |           |       |        |          |
|issued        |       |       |       |           |     93|        |        93|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Share option  |       |       |       |           |       |        |          |
|costs         |       |       |     69|           |       |        |        69|
+--------------+-------+-------+-------+-----------+-------+--------+----------+
|Total equity  |       |       |       |           |       |        |          |
|as at         |       |       |       |           |       |        |          |
|              |       |       |       |           |       |        |          |
|30 June  2010 |     20| 34 963|    747|        400|     93|(28 749)|     7 474|
+--------------+-------+-------+-------+-----------+-------+--------+----------+

1. Basis of preparation

The  consolidated unaudited results  for the Group  have been prepared using the
same  accounting policies and  principles as the  financial statements as at 31
December 2009.

 2. Earnings per share
The earnings and weighted average number of ordinary shares used in the
calculation of basic earnings per share is as follows:

                                                        GROUP

                                                30June     30 June 31 December

                                                  2010        2009        2009

                                               US$'000     US$'000     US$'000

Loss for the year attributable to equity
holders of the company                         (2 655)     (1 824)     (4 310)

Earnings used in the calculation of basic
loss per share                                 (2 655)     (1 824)     (4 310)

as presented below:

Basic loss per share (US cents)                 (2.46)      (1.80)      (4.25)

Weighted average number of shares in issue 107 888 272 101 390 429 101 791 926



    As at balance sheet date, the company had US$ 93 053 (30 June
2009:US$52 500) worth of share reserved in the Shares to be issued reserve.

    Of this amount US$26 867 relates to the June 2010 directors remuneration in
respect of W Imrie, W  Vorwerk , and D Scott. US$60 000 relates to the March to
June 2010 remuneration in respect of G Taylor. This was settled in the post
reporting period by the issue of 306 383 shares in the company.

    The balance of US$6 186 relates to April to June 2010 salary of an employee
of the company that was settled by the issue of 21 915 shares in the post
reporting period.

    During the post reporting period, the company also issued 11 540 033 shares
at 8p per share in relation to the Chunya project. Of the total issue of shares
9 906 046 shares were placed for cash and raised £792 484 (before expenses). The
balance of 1 633 987 shares were issued to DRA in settlement of fees due to be
paid.

    IAS 33 "Earnings per share" defines dilution as a reduction in earnings per
share or as an increase in loss per share. When calculating the dilutive
earnings per share the loss is decreased. Accordingly dilutive loss per share is
not disclosed
                                                                        Number

The group has the following instruments which could potentially
dilute basic earnings per share in the future

Share options                                                      4 449 064


   During 2009, the company entered into the SEDA agreement in terms of which
the company raises funds by the issue of shares in the company, the SEDA
agreement can potentially dilute earnings per share in the future.

3. Related party transactions

   Directors' contracts
   W N B Imrie is executive chairman and has a service agreement with a three
months notice period. As remuneration for his services on the basis of a 2.5
days per week, the company pays remuneration of US$180 000 per annum. US$90 000
is payable in cash and the remaining remuneration of US$90 000 is payable in
ordinary shares in the company.


   K V Patel as a non-executive director has an agreement with a three-month
notice period.


   W E Vorwerk as executive director has a service agreement for which he is
paid for time worked (with a minimum of two days per week) and which has a
six-month notice period. US$120 000 is payable in cash and the remaining
remunerations is payable in ordinary shares in the company.

   W D Scott was appointed executive director on 21 October 2008 and has a
service agreement for which he is paid for time worked (with a minimum of two
and a half days per week) and which has a six-month notice period. US$42 000 is
payable in cash and the remaining remuneration is payable in ordinary shares in
the company.


   G Taylor was appointed a consultant from I March 2010 until he was appointed
an executive director on 20 May 2010 and has a service agreement for which he is
paid for time worked (with a minimum of two days per week) and with a three
months notice period for which he is paid US$180 000 per annum payable in
ordinary shares in the company.

   Details of transactions between the group and other related parties are
discussed below as follows:-.
Directors' remuneration

                                       30 June 2010        31 December 2009

                                            US$'000                 US$'000

  Walton Norman Brian Imrie                      90 *                   180 *

  Ketankumar Vinubhai Patel                       2                       8

  Gareth Taylor                                  60 **                    -

  Walter Egmund Vorwerk                         104 ***                 201 ***

  Mike Grosvenor Wuth                             -                       5

  Walter David Scott                             78 ****                113 ****

  Maheshkumar Raojibhai Patel
(Alternate director)                              -                       -


   Details of related parties share based payments:-
  * Of this amount US$37 500 in respect of the 2010 fees and US$7 500 in respect
    of the 2009 fees  was settled by the issue of 225 925 (31 December
    2009: 1 707 771) shares in the company. A further US$7 500 in respect of the
    June 2010 fees was settled by the issue of 29 921 shares subsequent to the
    end of the period.

    ** This amount (31 December 2009: nil) was settled by the issue of 199 199
shares subsequent to the end of the period.

    ***Of this amount US$36 544 in respect of the 2010 fees and US$8 350 in
respect of 2009 fees was settled by the issue of 213 813 shares in the company.
A further US$7 117 was settled by the issue of 28 393 shares subsequent to the
end of the period.


    ****Of this amount US$44 400 in respect of the 2010 fees and US$5 950 in
respect of 2009 fees  was settled by the issue of 227 997 shares in the company.
A further US$12 250 was settled by the issue of 48 870 shares subsequent to the
end of the period.




Directors' interests
   The interest of the directors (all of which are beneficial) in the issued
ordinary share capital of the company are as follows:
                                       30 June 2010    31 December 2009

                                 Number each          Number each

                                 of ordinary          of ordinary

                                      shares      %        shares      %

    Walton Norman Brian Imrie      9 044 162   7.83     8 818 217   8.47

    Ketankumar Vinubhai Patel     10 343 750   8.96    10 343 750   9.94

    Gareth Taylor                          -      -             -      -

    Walter Egmund Vorwerk            572 037   0.50       358 224   0.34

    Mike Grosvenor Wuth                    -                    -

    Walter David Scott               475 133   0.41       247 136   0.24

    Maheshkumar Raojibhai

    Patel (Alternate director)    10 343 750   8.96    10 343 750   9.94



Share options
The following share options have been granted to the following directors  under
the Share Option Plan:
                                                        Number of

                                         Grant date share options Option price

Walton Norman Brian Imrie              29 July 2005       168 006           25 p

Walton Norman Brian Imrie          7 September 2009       350 000            6 p

Ketankumar Vinubhai Patel              29 July 2005       168 006           25 p

Ketankumar Vinubhai Patel          7 September 2009       150 000            6 p

Gareth Taylor                                     -             -            -

Walter David Scott                 7 September 2009       250 000            6 p

Walter Egmund Vorwerk                  29 July 2005       466 685           25 p

Walter Egmund Vorwerk                  14 July 2006       363 718           59 p

Walter Egmund Vorwerk              7 September 2009       350 000            6 p

Maheshkumar Raojibhai Patel
(alternate director)                   29 July 2005       168 000           25 p


The option plan was adopted by the board of directors on 1 July 2005. Details of
the option plan are available at the company's registered office.

None of the above directors' options lapsed as a result of vesting conditions
not being met and none were exercised during the year.

Other related parties transactions

The loans from related parties are from companies in which K Patel, M Patel and
W Imrie have an indirect interest.




For further information:

Shanta Gold Limited


http://www.shantagold.com

Walton Imrie
Mobile: [phone] or [phone]

Walter Vorwerk
Mobile: [phone]

Nominated adviser and broker
Ewan Leggat / Laura Littley
Fairfax I.S. PLC
[phone]

Russell & Associates
Johannesburg
Marion Brower/Charmane Russell
Tel: [phone]


A copy of this announcement will be available on Shanta Gold's website
www.shantagold.com


[HUG#1440696]








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Source: Shanta Gold Limited via Thomson Reuters ONE