Replacement - Feasibility Study supports develo...

THIS ANNOUNCEMENT REPLACES THE ANNOUNCEMENT RELEASED AT 7.00am on 23 August
2011 WITH HUGIN NUMBER HUG#1540306.

THE FEASIBILITY STUDY AVERAGE FEED GRADE, AS SHOWN IN THE TABLE WHICH SETS OUT
THE FEASIBILITY PARAMETERS, IS 5.97g/t AND NOT 4.97g/t AS PREVIOUSLY STATED.


                              Shanta Gold Limited

    Feasibility Study supports development of gold mine in Singida, Tanzania

                                 23 August 2011

Shanta  Gold Limited, ('Shanta' or the 'Company') [AIM: SHG], the near-term gold
producer  with  operations  in  Tanzania,  is  pleased  to announce the positive
results   of  its  Feasibility  Study  ('FS'  or  the  'Study')  supporting  the
development  of  the  Company's  100%-owned  mine  in the district of Singida in
Tanzania.

The  Study has determined that a mine  producing 45,000 ounces of gold per annum
at  a capital cost of  US$39m and an average  escalated operating cost of US$412
per  ounce, and (based on  a US$1200 per ounce  gold price an 11% discount rate)
should generate a net present value of US$130 million and would have an internal
rate of return of 126%.

Walton Imrie, the Company's Executive Chairman commented:

"The  significant  results  from  the  Singida Feasibility Study show attractive
investment  outcomes and will  allow Shanta to  proceed to project construction.
Singida  will enable Shanta to transform into a mid-tier gold producer by 2013,
as  the Company's annual  gold production should  increase to more than 100,000
ounces once the new project is in production alongside the New Luika Gold Mine.

The  Board  of  Shanta  will  now  consider  the most appropriate timing for the
development of the Singida mine.

It is currently anticipated that the New Luika Gold Mine, currently in the final
phase  of construction, should generate sufficient funds for the construction of
the  Singida mine during  2012. Bridging finance may  be required. The New Luika
Gold Mine is expected to ramp up to full production in 2012."


Key Project Fundamentals

-   Singida has nine ore bodies with a combined resource of 858,000 ounces (at a
1 g/t  cut-off). The study focused 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  ore  bodies  are  all  located  within  a  5km radius  of the proposed
metallurgical recovery plant;



-    The study envisages an annual mill  feed of 255,000 tonnes from a series of
open  pits, representing an  average production rate  of 21,250 tonnes per month
('tpm') through a plant with a 35 tonnes per hour ('tph') capacity;



-   Average stripping ratio of the open pit operations is 3.65:1;



-    Ore-body morphology  and attitude  have determined  that mining  will be by
conventional open pit methods;



-   Ore processing will consist of crushing, milling, a combined cyanidation and
adsorption  circuit,  elution,  electro-winning  and  smelting, achieving a 91%
recovery;



-   Average production of 45,000 ounces per annum is planned;



-    The FS mine  plan has an  annual production totaling approximately 452,000
ounces over a 10 year mine life;


-    Capital cost(1) is estimated at US$39 million for the construction and pre-
strip;



-   The total cash operating cost is estimated at US$412 per ounce.



The  FS was conducted by Environmental, Process and Mining Consultants (Pty) Ltd
("EPMC"),  independent  third  party  consultants,  who carried out the recently
completed New Luika detailed feasibility study.

Shanta  submitted  three  mining  licence  applications  covering the ore bodies
included  in the  preliminary feasibility  study to  the Ministry  of Energy and
Minerals  of Tanzania on 8 December 2010 and the Environmental and Social Impact
Assessment  ("ESIA")  was  submitted  to  the  National Environmental Management
Committee  on  18 July  2011. The  ESIA  was  conducted  by  MTL  Consulting,  a
consulting firm with extensive experience in environmental certification studies
in  the mining industry, in  Tanzania. It is hoped  that mining licences will be
awarded by the end of 2011.





The Table below sets out the salient feasibility parameters.

+------------------------------+--------------+-----------------+-------------+
|                              |              | Pre-feasibility | Feasibility |
+------------------------------+--------------+-----------------+-------------+
| Annual mill feed             | tonnes       |         540,000 |     255,000 |
+------------------------------+--------------+-----------------+-------------+
| Monthly mill feed            | tonnes       |          45,000 |      21,250 |
+------------------------------+--------------+-----------------+-------------+
| Mill throughput              | tph          |              75 |          35 |
+------------------------------+--------------+-----------------+-------------+
| Average strip ratio          |              |             9.0 |         3.7 |
+------------------------------+--------------+-----------------+-------------+
| Average feed grade           | g/t          |            4.97 |        5.97 |
+------------------------------+--------------+-----------------+-------------+
| Plant recovery               | %            |              91 |          91 |
+------------------------------+--------------+-----------------+-------------+
| Average annual gold produced | ounces       |          43,000 |      45,000 |
+------------------------------+--------------+-----------------+-------------+
| Life of mine                 | years        |               9 |          10 |
+------------------------------+--------------+-----------------+-------------+
| Total gold production        | ounces       |         387,000 |     452,000 |
+------------------------------+--------------+-----------------+-------------+
| Surface mine capex           | USD millions |              30 |          39 |
+------------------------------+--------------+-----------------+-------------+
| Underground mine capex       | USD millions |              43 |           0 |
+------------------------------+--------------+-----------------+-------------+
| Total capex                  | USD millions |              73 |          39 |
+------------------------------+--------------+-----------------+-------------+
| Construction period          | months       |              12 |          12 |
+------------------------------+--------------+-----------------+-------------+
| Operating cost (escalated)   | USD / ounce  |             699 |         412 |
+------------------------------+--------------+-----------------+-------------+
| Gold price()                 | USD / ounce  |           1,200 |       1,200 |
+------------------------------+--------------+-----------------+-------------+
| NPV(11)                      | USD millions |                 |         130 |
+------------------------------+--------------+-----------------+-------------+
| IRR                          | %            |                 |         126 |
+------------------------------+--------------+-----------------+-------------+



Note
(1)The underground operation mentioned in the preliminary feasibility study has
not been incorporated in this feasibility study.

For further information, please contact:

 Shanta Gold Limited   Tel:
 Walton Imrie          +27 (0) 82 444 2851
 Gareth Taylor         +255 (0) 757 732 484
 Walter Vorwerk        [phone]


 Nominated Adviser and Broker   Tel: [phone]
 Fairfax I.S. PLC
 Ewan Leggat / Laura Littley



 Financial Relations
 Tavistock Communications       Tel: [phone]
 Emily Fenton/Ed Portman









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     originality of the information contained therein. 
    
Source: Shanta Gold Limited via Thomson Reuters ONE

[HUG#1541222]