6 May 2016

Shanta Gold Limited

("Shanta", the "Group" or the "Company")

Preliminary Results for the year ended 31 December 2015

Shanta Gold Limited (AIM: SHG), the East Africa-focused gold producer, developer and explorer, announces its preliminary unaudited results for the year ended 31 December 2015 ("FY2015" or the "Period"). The Company's focus remained on its flagship asset, the New Luika Gold Mine ("NLGM"), located in Southwest Tanzania, throughout the Period.

Highlights Financial

• Revenue of US$95.7 million (2014: US$114.9 million);

• Average realised gold price of US$1,163 per oz ("/oz") (2014: US$1,289 /oz);

• EBITDA of US$31.9 million, (2014: US$33.8 million);

• Loss after taxation of US$17.3 million (2014: Profit after taxation of US$8.9 million), as a result of a one-off non-cash depreciation charge of US$21 million for waste stripping and future development expenditure;

• Cash generated from operations of US$35.0 million (2014: US$39.0 million);

• Capital expenditure of US$29.5 million (2014: US$23.0 million);

• US$40 million senior secured bank refinancing with Investec Bank;

• Cash and cash equivalents of US$19.1 million at year end (2014: US$14.9 million); and

• Net debt at year end of US$41.5 million (2014: US$40.7 million).

  Operational

• Gold production of 81,873 oz exceeded guidance of 72,000-77,000 oz (2014: 84,028 oz);

• Gold sales of 80,622 oz at an average price of US$1,163 /oz, compared to average spot price of US$1,160 /oz (2014: 87,758 oz);

• Milled 563,613 tonnes of ore (2014: 580,664 tonnes);

• Average ore grade of 4.73 grams per tonne ("g/t") (2014: 5.18 g/t);

• All in Sustaining Cost ("AISC") of US$834 /oz against guidance of US$850-900 /oz (2014: US$941 /oz);

• One lost time injury; and

• Publication of the Base Case Mine Plan (the "BCMP") in September 2015.

  Corporate

• Prudent hedging program continued:

  o 20,000 oz of gold sold forward at 31 December 2015 at an average price of US$1,148 /oz versus a spot gold price of US$1,062 /oz at year end;

• Strengthened team at NLGM under the leadership of Dr Toby Bradbury, appointed as Group Chief Executive Officer ("CEO") from 1 April 2015, replacing Mike Houston who retired as CEO on 31 March 2015, and Eric Zurrin assumed the Chief Financial Officer ("CFO") responsibilities on an interim basis from 14 October 2015; and

• Scott Yelland joined as NLGM General Manager and Peet Prinsloo returned to the Company as Head of Exploration.

  Base Case Mine Plan

• Guidance is for five year average production of 84,000 oz from 2016 to 2020 with a life of mine average AISC of US$695 /oz;

• Probable reserves for surface and underground of 2.65 million tonnes ("Mt") at 5.93 g/t for 506,000 oz; and

• Total resources that sit outside of the BCMP of 6.64 Mt at 2.41 g/t for 514,000 oz, all of which are within existing mining licences at the NLGM.

  Post period end highlights

• Q1 2016 gold production of 24,341 oz and gold sales of 21,486 oz at an average price of US$1,132 /oz, compared to average spot price of US$1,183 /oz;

• Q1 2016 cash balance of US$16.3 million with cash generated from operations before working capital in Q1 of US$12.3 million and capital expenditure of US$5.6 million;

• Gross debt of US$74.7 million and net debt of US$58.4 million due to underground equipment and power station financings;

• Following the end of Q1 2016, drawdown of remaining US$10 million Investec Facility B, resulting in US$40 million Investec senior secured debt fully utilised;

• €4.6 million equipment financing secured for Sandvik mobile underground equipment and US$9.1 million power station equipment financing secured with Bank M Tanzania plc;

• US$5.25 million silver streaming agreement of silver by-product with Silverback Limited; and

• Forward sales from April to September 2016 of 32,000 oz at an average price of US$1,172 /oz.

  Outlook

• Appointment of Mark Rosslee as CFO effective 1 May 2016. Eric Zurrin will remain available to assist during a transitional period;

• Reworked mine plans at the NLGM for the Bauhinia Creek and Luika Pits have resulted in a substantial reduction in costs as reflected in the H2 2015 AISC of US$601 /oz;

• Anticipate to be at the higher end of 2016 annual production guidance of 82,000- 87,000 oz and currently updating mine plan for the year;

• Given the strength of Q1 2016 cost performance the Company is also currently reviewing its AISC guidance for the year; and

• Conditional agreement reached with the holders of the US$25.0 million senior unsecured subordinated convertible loan notes to buyback US$10.0 million and to extend the term of the remaining notes by two years to April 2019 with a concurrent increase to the coupon from 8.5 per cent to 13.5 per cent.

Toby Bradbury, CEO, commented:

"Shanta has had a positive 2015 which saw major re-engineering of its operations during the first half, allowing the Company to exceed its annual production guidance and generate

US$35.0 million of cash. These achievements reflect the true quality of its high grade resources and management team.

"While 2015 saw a lower gold price than the previous year, Shanta's position in the lowest cost quartile of gold producers ensures the Company is able to withstand a continued volatile market while delivering significant margin into the business.

"Additionally, in September 2015 Shanta published an updated reserves statement, an underground feasibility study and base case mine plan which provides it with a clear production platform to 2022. Part of this vision, and a major focus for the 2016 financial year, will be the transition to underground mining, alongside the renewed emphasis on the Company's exploration programme set to define additional resources and reserves within the mining licence and an economic radius of the New Luika plant. These initiatives will provide a platform for the Company's long term growth and for Shanta to create significant shareholder value.

"Shanta has also enjoyed a very pleasing start to the 2016 financial year which provides another building block to the foundation of delivering a sustainable, strongly cash generative business with real scope to extend the New Luika mine life."

Presentation and webcast

The full year results presentation has been placed on the Company's website and a webcast of that presentation is also available at www.shantagold.com.

Enquiries:

Chairman's Statement

Dear Shareholder,

I am pleased to report that Shanta has had a positive and transitional year, despite FY2015 being a challenging year for all gold mining companies.

Gold prices started 2015 above US$1,200 /oz, falling to six-year lows of US$1,051 /oz in November 2015 before rebounding to current levels back above US$1,200 /oz. Valuation metrics for junior and mid-tier companies fell to historic lows before staging a slight recovery. Shanta continues to follow a prudent hedging policy to protect its cash flows and balance sheet in a changeable gold market whilst maintaining exposure to price increases.

Against this volatile backdrop Shanta achieved sustainable improvement at its flagship asset, the New Luika Gold Mine, located in Southwest Tanzania. During the first half of the year the Company redesigned the operations which enabled delivery of an improved operational and financial performance in the second half of the year. Furthermore, in September 2015 the Company published an underground feasibility study, the BCMP and an updated reserves statement for NLGM. This provides clarity on the NLGM production profile from January 2016 to late 2022 and clearly demonstrates the investment thesis for developing the underground resources.

Shanta today sits in the lowest quartile cost of gold producers and exceeded its production and cost guidance set in April 2015, producing more ounces at a greater margin. Shanta achieved gold production for FY2015 of 81,873 oz, beating guidance of 72,000-77,000 oz and AISC for 2015 of US$834 /oz against guidance of US$850-900 /oz generating cash of US$35.0 million for FY2015, revenue of US$95.7 million and an EBITDA of US$31.9 million. Although the profitability was impacted by a non-cash amortisation charge of US$21 million resulting in a loss before tax for the year of US$18.1 million, this does not detract from a very robust performance. In April 2015, Shanta also strengthened its financial position with a new US$40 million loan facility with Investec Bank and at the date of this report it has been fully drawn down.

These achievements have been secured with a strengthened team under the leadership of Dr Toby Bradbury who was appointed as CEO from 1 April 2015. Patrick Maseva- Shayawabaya, who joined the Company on 1 July 2013 as CFO was also appointed to the Board on 1 April 2015. Mike Houston retired as CEO on 31 March 2015 and from the Board at the annual general meeting ("AGM") in May 2015. I would like to extend the Board's appreciation for Mike's service and also that of Patrick who subsequently left the Company and the Board on 31 October 2015. Shanta was also fortunate to engage Eric Zurrin as CFO on an interim basis whilst a permanent replacement was found and I'm pleased to announce that Mark Rosslee, who joined the Company in January 2016, assumed the role of CFO on 1 May 2016. Mark is a qualified Chartered Accountant and a graduate of the University of Witwatersrand, South Africa. He has a graduate diploma in Mining Engineering and has served on the boards of multiple public junior mining companies that have operated throughout Africa.

NLGM continues to be strongly cash generative, despite the recent gold price volatility. The healthy operating margins demonstrate both the good geological endowment in the Lupa