Continental GoldInc. said May 3 that it plans to raise about C$25 million via offering10 million units at C$2.50 each on a bought-deal basis.

The company has entered into an agreement with a syndicate ofunderwriters co-led by TD Securities Inc. and Clarus Securities Inc. for the offering.The underwriters will have an overallotment option to sell another 15% of the offeringwithin 30 days after closing.

Each unit consists of 1 common share and 0.5 of a common sharepurchase warrant. Each whole warrant is exercisable to acquire 1 additional shareat a price of C$4.75 within 18 months from closing. In case the closing price ofthe Continental Gold's shares on the TSX is greater than C$6.00 per share for 20consecutive trading days, the warrants will expire in 30 days.

The offer will close May 25.

The net proceeds will be used to fund exploration and developmentexpenditures at the Buriticagold project in Colombia, and for working capital and general corporate purposes.

A feasibility study on Buritica published in February a minimum posttax net presentvalue of US$860 million for the project and a maximum NPV of US$1.16 billion, bothat a 5% discount rate.

Recently, the Colombian government notified Continental Goldthat a major operation to permanentlyclose all illegal mines and processing plants operating within the company'slicenses covering the Buritica gold project is underway.