THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

CONTINENTAL MINERALS CORPORATION

THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

1.1	DATE	1
1.2	OVERVIEW	1
1.3	MARKET TRENDS	7
1.4	SELECTED ANNUAL INFORMATION	7
1.5	RESULTS OF OPERATIONS	9
1.6	SUMMARY OF QUARTERLY RESULTS	10
1.7	LIQUIDITY	11
1.8	CAPITAL RESOURCES	11
1.9	OFF-BALANCE SHEET ARRANGEMENTS	12
1.10	TRANSACTIONS WITH RELATED PARTIES	12
1.11	FOURTH QUARTER	13
1.12	PROPOSED TRANSACTIONS	13
1.13	CRITICAL ACCOUNTING ESTIMATES	13
1.14	CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION	13
1.15	FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS	15
1.16	OTHER MD&A REQUIREMENTS	15

1.1        Date

This Management's Discussion and Analysis ("MD&A") should be read in conjunction with the audited consolidated financial statements of Continental Minerals Corporation ("Continental" or the "Company") for the year ended December 31, 2006 and the unaudited consolidated financial statements for the three and six months ended June 30, 2007.

This MD&A is prepared as of August 20, 2007. All dollar figures stated herein are expressed in Canadian dollars, unless otherwise specified.

This discussion includes certain statements that may be deemed "forward-looking statements". All statements in this discussion, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements.

1.2        Overview

Continental is focused on exploring and developing mineral projects in the People's Republic of China ("China").

Continental holds 100% of the parent company of the wholly foreign owned enterprise ("WFOE") in China that holds 100% of the Xietongmen property, located approximately 240 km west of Lhasa in the Tibet Autonomous Region ("TAR").

The Xietongmen property consists of exploration licenses covering approximately 122 square kilometers. The property hosts the Xietongmen copper-gold deposit, discovered in 2005, and the Newtongmen copper-gold zone, discovered in the fall of 2006.

A comprehensive program began in 2006, designed to collect the necessary information for a feasibility study, and environmental and socio-economic impact assessments for development of the Xietongmen deposit. This work is ongoing and targeted for completion in 2007.

Continental initiated its 2007 exploration program late in the first quarter. Drilling will be focused on exploration and delineation of the Newtongmen zone.

During the quarter ended June 30, 2007, the Company:

• commenced a drill program at the Newtongmen deposit

• received approval from the central government's Ministry of Land and Resources for the Mining Area Scoping ("MAS") for the Xietongmen Project

• announced initial drill results at Newtongmen

CONTINENTAL MINERALS CORPORATION

THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

Subsequent to the end of the quarter, the Company:

• announced the positive results of a feasibility study completed by the Company's independent engineering consultants.

The Company had approximately $26 million cash on hand at the end of June 2007.

1.2.1     Property Agreements

Property Acquisition

In February 2004, Continental announced that it had reached an interim agreement (the "Property Option Agreement") with Great China Mining Inc. ("Great China Mining"), pursuant to which the Company had acquired the right, subject to TSX Venture Exchange ("TSXV") approval, to earn up to a 60% interest in the Xietongmen copper-gold property. The Company received TSXV acceptance of the basic transaction terms for the property in May 2004.

In 2004, the Company signed a formal agreement (the "Preliminary Option Agreement"). Under the Preliminary Option Agreement, the Company obtained options to acquire from Great China Mining up to 60% of the shares of Highland Mining Inc. ("Highland"), the British Virgin Islands parent company of Tibet Tian Yuan Minerals Exploration Ltd. ("Tian Yuan"), the WFOE that holds the Xietongmen property. During 2005 and 2006, the Company earned this 60% interest by making option payments totaling US$2.0 million and completing US$11.3 million of exploration expenditures.

In December 2006, the Company completed a merger of Great China Mining with the Company. The merger was completed in the fourth quarter of 2006. Consequently, Continental now holds 100% of Highland, which in turn holds 100% of Tian Yuan, which itself holds the exploration licenses comprising the Xietongmen property.

Concurrent with the completion of the merger, the Company also acquired three other properties totaling 109 square kilometers surrounding the original property, through the payment of US$3.25 million and the issuance of 1.5 million units (each unit consisting of one share and one warrant of the Company).

Framework Agreement for Financing and Mine Services

In June 2007, Continental entered into a framework agreement (the "Agreement") with Jinchuan Group Ltd. ("Jinchuan") for equity financing, capital financing, concentrate off-take and other mine building support for the Xietongmen project. Jinchuan is a leading Chinese corporation engaged in engineering, manufacturing, construction, mining, processing and smelting of nickel, copper and other metals.

Pursuant to the Agreement, Jinchuan agreed, among other things, to purchase 10,000,000 units (the "Units") of the Company, at a price of $1.80 per Unit, for gross proceeds to Continental of $18,000,000. Each Unit consisted of one common share in the capital of Continental and one common share purchase warrant (a "Warrant"). Each Warrant is exercisable for 0.8 of a common share in the capital of Continental at a price of $2.25 per share until September 29, 2007, and at $2.75 per share thereafter until December 29, 2007.

Jinchuan has also agreed to provide other key support to the Xietongmen Project, including assistance in arranging for a substantial portion of the required capital financing for the development of a mine in the form of debt; contributing 30% of required capital financing (net of any equity subscriptions) for the Xietongmen Project in the form of debt and/or equity; and providing other support to the Project, including assistance with design engineering, training, maintenance and other technical aspects, as well as sales of mineral

CONTINENTAL MINERALS CORPORATION

THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

products. The parties have also settled the principal terms of a concentrate off-take arrangement in connection with the Project, which is expected to be incorporated into the formal agreements in due course.

1.2.2     Financings

$32 million financing

In February 2007, the Company completed a private placement financing, issuing 19,439,395 equity units (the "Units") at a price of $1.65 per Unit for gross proceeds of $32.1 million. Each Unit consisted of one common share and one share purchase warrant, exercisable into one common share at $1.80 until February 20, 2008. Taseko Mines Limited, a related company by virtue of certain directors in common with the Company, exercised its preemptive right to participate in the financing for $12.1 million, based on the terms of its previously purchased convertible note.

$18 million financing

In March 2007, Continental completed a private placement financing by Jinchuan, for gross proceeds of $18 million. Further details are provided above under "Framework Agreement".

1.2.3     Property Activities

The Xietongmen property hosts porphyry copper and gold mineralization within a four kilometer long alteration zone.

A comprehensive program centered on the deposit commenced in 2006, designed to collect the data necessary for a feasibility study, environmental and socioeconomic assessments and the Chinese mining license application. International consulting groups and Chinese design institutes engaged in these studies.

Xietongmen Deposit

The Xietongmen deposit was discovered by drilling in 2005. Delineation drilling in 2006 confirmed the continuity of the mineralization and expanded the Xietongmen deposit in all directions.

Drill holes were spaced at 50 m by 50 m and 100 m by 100 m intervals. Substantial mineral resources were established in the measured and indicated categories, as tabulated below. The deposit is still open to the north.

CONTINENTAL MINERALS CORPORATION

THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

XIETONGMEN DEPOSIT MINERAL RESOURCES – JANUARY 2007 AT 0.15% COPPER CUT-OFF
Category	Tonnes Millions	Cu %	Au g/t	Ag g/t	CuEQ %	Contained Cu Millions lb	Contained Au Millions oz
Measured	197.5	0.44	0.62	3.95	0.80	1,911	3.94
Indicated	22.3	0.37	0.42	2.54	0.65	182	0.37
Measured & Indicated	219.8	0.43	0.61	3.87	0.78	2,092	4.31

Note 1:	By prescribed definition, "Mineral Resources" do not have demonstrated economic viability.
Note 2:	Copper equivalent calculations use metal prices of US$1.25/lb for copper and US$450/oz for gold. Adjustment factors to account for differences in relative metallurgical recoveries for gold and copper will depend upon completion of definitive metallurgical testing. Metallurgical recoveries and net smelter returns are assumed to be 100%. CuEQ = Cu % + (Au g/t x 12.86/22.046).
Note 3:	A 0.15% Cu cut-off is considered to be comparable to that used for porphyry deposit operations in the Americas.
Note 4:	The January 2007 estimate was prepared by Continental staff and audited by Ian Chisholm, P.Eng., of Aker Kvaerner E&C, (Aker Kvaerner) an independent qualified person as defined by National Instrument 43-101.

Feasibility Study

The positive results of the Feasibility Study were announced subsequent to the quarter end, on August 15, 2007. The study is based on measured and indicated resources in the Xietongmen deposit shown above; January 2007 US dollars; a US dollar to Chinese currency exchange rate of 7.8; and the following long term metal prices: copper US$1.50/lb, gold US$500/oz and silver US$8.50/oz. Two scenarios – mining by owner and mining by contractor – were assessed and both gave positive results. Results presented here are for the contract mining scenario.

XIETONGMEN COPPER-GOLD PROJECT FEASIBILITY STUDY – AUGUST 2007 KEY PARAMETERS AND RESULTS
Proven & Probable Reserves at 0.15% Copper Cut-off	182.1 million tonnes grading 0.45% copper, 0.62 g/t gold, 4.03 g/t silver
Strip Ratio	1.64
Annual Throughput	13.2 million tonnes
Production Rate	40,000 tonnes/day
Recoveries	Supergene (11% of deposit) Copper – 88.4% Gold – 65.1% Silver – 75.8%	Hypogene (89% of deposit) Copper – 92.1% Gold – 59.7% Silver – 77.6%
Average Annual Production	Copper - 116 million pounds Gold - 190,000 ounces Silver - 1.73 million ounces
Capital Cost	US$476.2 million
Operating Cost	US$7.69 per tonne milled
Life of Mine	14 years
Payback	5.2 years
Internal Rate of Return (IRR)	16.5%
Net Present Value (7.5% discount)	US$231.7 million

CONTINENTAL MINERALS CORPORATION

THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

The study recommends a 40,000 tonnes per day copper concentrator to process ore mined by open pit methods. Processing facilities, concentrate storage and truck loadout facilities, repair shops, administration and maintenance facilities, assay laboratory, water treatment facilities, cafeteria and a medical clinic would be built at site. Copper recovery will be accomplished by flotation, producing a 25% copper concentrate.

A 250 km extension of the rail line from Lhasa to Rikaze, the second largest city in the TAR, has been approved by the TAR government. Depending on when the rail line extension is completed, the final concentrate product would be trucked by way of a two lane paved highway that passes near to the southern part of the property to the nearby city of Rikaze (Shigatse) or to the city of Lhasa. A truck loadout facility would be constructed to store the concentrate and load it into railcars and ship it via rail to the Jinchuan refinery at Jinchang in Gansu Province for treatment. Recovery of other metals will be possible through treatment at the Jinchuan refinery. Under the plan, power would be provided by the regional power authority of the TAR, which is currently preparing their long term plan to provide 100 megawatts to the Xietongmen Project.

The pre-production period is expected to last 8 months. A three-stage pit operation is proposed for the development of the mine, with each stage lasting 3-5 years. A total of 480.1 million tonnes of material would be moved over the mine life, including 182.1 million tonnes of ore, at a strip ratio of 1.64. The mill feed would be 12.4 million tonnes in the first year, ramping up to an annual feed of 13.6 million tonnes by year 4. The deposit mineralization is 89% primary copper (hypogene), with approximately 11% enriched copper (supergene) and less than 1% oxide material. The plan is to mine most of the 17.4 million tonnes of supergene material in the first stage.

Upon completion of the permitting process, the project would take approximately 24 months to construct, employing a construction workforce of approximately 2,500. During operations, the direct workforce would be approximately 460 people. After operations, the closure plan would take 18-24 months to implement, which would be followed by post-closure monitoring.

The Feasibility Study was completed by international engineering firms, led by Aker Kvaerner E&C of Toronto. The independent qualified person is Graham Holmes, P.Eng., of Aker Kvaerner. The study utilizes:

• Mineral Resources audited by Aker Kvaerner, announced in January 2007.
• Mineral Reserves and Mining by Patrice Live, Eng. of BBA Inc.
• Metallurgical testwork design and management by Lawrence Melis, P.Eng., of Melis Engineering Ltd., announced in August 2006. Testwork was carried out by SGS Mineral Services.
• Geotechnical, Tailing and Waste rock facilities, Environmental and Socioeconomic studies and plans by Golder Associates, under the overall management of Dr. Chris Swindells, FAusIMM.
• Logistical plans for movement of mineral concentrates from site to smelter, and construction materials and equipment from the manufacturers to the project site by Panalpina Projects of Toronto and Beijing.
• Capital and Operating Cost Estimates, Plant Design, Economic Evaluation and Metallurgical Review by Aker Kvaerner.

A technical report will be filed on www.sedar.com.

Environmental and Socio-economic Studies

Socio-economic baseline data collection is being carried out by Sinosphere, based in Beijing, in conjunction with Golder Associates. The Yellow River Conservatory Bureau, in conjunction with Golder Associates, is conducting hydrological studies at site. Golder is continuing with environmental data collection and impact assessments. Although flora and fauna baseline studies are complete, further seasonal follow up and other

CONTINENTAL MINERALS CORPORATION

THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

activities such as weather data collection and water well monitoring continues. Detailed assessments of cultural heritage sites have been completed.

Continental has been actively consulting with local communities and other key stakeholders over the past year. Associated management plans are also being developed to address findings from the assessment raised during the consultation process.

Permitting

In April 2007, Continental received approval from the Ministry of Land and Resources for the Mining Area Scoping ("MAS") for the Xietongmen Project. The MAS approval is an important step in the process to obtain a mining license.

The mining license application requirements include the Mineral Resources Report; the Mine Area Scoping; the Mineral Resources Development and Utilization Plan; and the Environmental Assessment with Social Component ("ESIA"). These reports integrate assessments of land use; the geological environment and mineral resources; the technical and financial aspects of mining and treating the mineralization; the health and safety aspects of the potential operation; water use and water and soil conservation; and the environmental and social aspects of the project. Several of the reports are utilized in more than one component of the application. The information in the items above will also comprise the bulk of the international feasibility study and ESIA.

The following studies required for the mining license application have been completed:

• Feasibility Study Report
• Geological Resource Report
• Seismic Assessment
• Water Use Permit
• Mine Area Scoping Study

Work is now focused on the environmental and social impact assessments. The ESIA is also part of the permitting process. This work, under the direction of Golder Associates, is targeted for completion by the end of 2007.

Exploration

Drilling in the fall of 2006 led to the discovery of the Newtongmen zone. Two holes were drilled at Newtongmen; both intersected long intervals of copper-gold mineralization.

The Newtongmen deposit is located approximately three kilometers northwest of the Xietongmen deposit, and is hosted by the same alteration zone as the Xietongmen deposit and lies within a high copper-gold anomaly, 1.5 square kilometers in area, outlined during a rock chip sampling program completed earlier this year (see press release dated January 24, 2007).

Diamond drilling is outlining a new porphyry copper-gold deposit at Newtongmen. Three drills were deployed on a 100 meter by 100 meter grid to test the deposit in late March, early April 2007. This number was increased to five in June, and to seven drill rigs, subsequent to the quarter end, in July 2007. Strong copper and gold concentrations within intensely altered volcanic and intrusive rocks have been intersected over long intervals (see press release dated May 30, 2007).

CONTINENTAL MINERALS CORPORATION

THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

The 2007 holes have expanded the area of mineralization from the original two discovery holes. Collectively, these and the 2006 holes demonstrate a strong vertical and horizontal continuity to the copper-gold mineralization. The deposit remains open to further expansion in all directions.

1.3        Market Trends

Overall, copper prices have been increasing since late 2003, averaging US$3.03/lb in 2006. Prices dropped slightly in early 2007, but have increased again since mid February. The average price to August 20, 2007 is approximately US$3.16/lb.

Overall, gold prices have been increasing for more than three years. Although there was some volatility late in 2006, the average for the year – US$604/oz – was higher than the average price – US$445/oz – in 2005. This volatility continued in early 2007, but prices have mainly been increasing since mid January. The gold price has averaged approximately US$660/oz to August 20, 2007.

1.4        Selected Annual Information

The consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles, and are expressed in Canadian dollars except loss per share amounts and common shares outstanding.

		As at December 31
Balance Sheet		2006			2005		2004
Current assets	$	2,830,533		$	4,418,820	$	7,504,356
Other assets		113,270,637			2,035,767		1
Total assets		116,101,170			6,454,587		7,504,357
Current liabilities		16,694,166			500,346		354,239
Non-controlling interest		–			944,880		–
Other long-term liabilities		28,683,950			–		–
Shareholders' equity		70,723,054			5,009,361		7,150,118
Total shareholders' equity & liabilities		116,101,170			6,454,587		7,504,357
Working capital (deficit)	$	(13,863,633	)	$	3,918,474	$	7,150,117

CONTINENTAL MINERALS CORPORATION

THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

		As at December 31
Operations		2006			2005			2004
Conference and travel	$	843,510		$	277,471		$	50,917
Exploration (excluding stock-based compensation)		19,226,242			6,113,320			2,139,062
Foreign exchange		263,329			153,176			148,910
Insurance		131,880			99,614			78,654
Interest expense		916,021			–			–
Interest income		(56,668	)		(142,887	)		(119,588	)
Legal, accounting and audit		860,049			294,393			433,670
Office and administration (excl stock-based compensation )		2,387,458			730,431			358,634
Shareholder communications		353,977			197,350			46,339
Trust and filing		124,617			42,598			26,724
		25,050,415			7,765,466			3,163,322
Stock-based compensation		2,610,538			815,321			2,435,995
Loss shared by non-controlling interest		(944,880	)		–			–
Loss for the year	$	26,716,073		$	8,580,787		$	5,599,317
Basic and diluted loss per share	$	(0.51	)	$	(0.22	)	$	(0.17	)
Weighted average number of common shares outstanding		52,849,728			39,516,486			32,592,964

CONTINENTAL MINERALS CORPORATION

THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

1.5        Results of Operations

Loss for the quarter decreased to $4,225,000 from $4,639,000 in the quarter ended March 31, 2007, and decreased from $6,831,000 in the quarter ended June 30, 2006. The net loss for the quarter included foreign exchange gains of $1,760,000 for the quarter (three months ended March 31, 2007 – foreign exchange loss of $78,000). Excluding the large foreign exchange gain, the increase in net loss was primarily due to greater exploration at, and engineering activities related to, the Xietongmen property and greater overall corporate activities. The loss was comprised of exploration expenditures of $3,827,000 and administrative expenses of $1,208,000 and stock based compensation expense of $939,000 offset by foreign exchange gains of $1,760,000.

Exploration increased to $3,827,000 from $2,423,000 in the quarter ended March 31, 2007, and decreased from $5,246,000 in the quarter ended June 30, 2006. The increase/decrease over last quarter is due primarily to the drilling program at Newtongmen and to work related to the feasibility study.

Interest expense decreased to $4,000 from $359,000 in the quarter ended March 31, 2007, and was similar to the $nil in the quarter ended June 30, 2006. The decrease over last quarter is due to the extinguishment of the convertible promissory note during last quarter, and the non-existence of loans from related parties. Interest income increased to $317,000 from $93,000 in the quarter ended March 31, 2007, and increased from $7,000 in the quarter ended June 30, 2006. The increase over last year is due to greater cash balances on hand due to the two financings undertaken earlier in the year. Office and administration increased to $765,000 from $638,000 in the quarter ended March 31, 2007, and increased from $450,000 in the quarter ended June 30, 2006. The increase over last quarter is due to greater corporate activity related to the continued success at Xietongmen and Newtongmen. Loss on extinguishment of promissory note decreased to $nil from $376,000 in the quarter ended March 31, 2007. This loss on extinguishment of promissory note was a one-time event; hence there are no corresponding amounts during this quarter or the comparative quarter in 2006.

CONTINENTAL MINERALS CORPORATION

THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

1.6        Summary of Quarterly Results

The following summary is presented in thousands of Canadian dollars except earnings (loss) per share amount. Small differences are due to rounding.

		6/30/07			3/31/07			12/31/06			9/30/06			6/30/06			3/31/06			12/31/05			3/30/05
Current assets	$	26,710		$	32,218		$	2,830		$	4,735		$	1,746		$	1,581		$	4,419		$	5,598
Other assets		116,374			115,120			113,271			2,451			2,401			2,232			2,036			110
Total assets		143,084			147,338			116,101			7,186			4,147			3,813			6,455			5,708
Current liabilities		1,803			1,778			16,694			12,819			2,557			697			500			959
Other long-term liabilities and
NCI		27,237			29,114			28,684			–			–			–			945			–
Shareholders' equity		114,044			116,446			70,723			(5,633	)		1,589			3,116			5,009			4,749
Total shareholders' equity
and liabilities		143,084			147,338			116,101			7,186			4,146			3,813			6,454			5,708
Expenses:
Conference and travel	$	424		$	156		$	194		$	303		$	197		$	149		$	210		$	32
Exploration		3,837			2,423			4,799			6,985			5,246			2,197			2,246			1,835
Foreign exchange		(1,760	)		78			286			(50	)		33			(6	)		179			(10	)
Income taxes		–			–			(500	)		500			–			–			–			–
Insurance		45			45			41			38			26			27			26			26
Interest expense		4			359			705			211			–			–			–			–
Interest income		(317	)		(93	)		(18	)		(14	)		(7	)		(17	)		(31	)		(33	)
Legal, accounting and audit		198			66			249			228			228			155			100			48
Loss on extinguishment of
promissory note		–			376			–			–			–			–			–			–
Non-controlling interest		–			–			–			–			–			(945	)		–			–
Office and administration		766			638			1,208			347			450			382			283			168
Shareholder communications		71			66			69			79			107			99			76			45
Stock-based compensation		939			483			1,064			751			534			262			288			148
Trust and filing		17			42			74			19			17			14			5			7
Other		–			–			–			–			–			–			(21	)		–
Loss for the period	$	4,225		$	4,639		$	8,171		$	9,397		$	6,831		$	2,317		$	3,361		$	2,266
Basic and diluted earnings
(loss) per share	$	(0.03	)	$	(0.05	)	$	(0.14	)	$	(0.18	)	$	(0.13	)	$	(0.05	)	$	(0.08	)	$	(0.06	)
Weighted average number of
common shares outstanding
(thousands)		120,790			101,129			59,808			53,028			51,081			47,360			42,733			39,760

CONTINENTAL MINERALS CORPORATION

THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

1.7        Liquidity

Historically the Company's sole source of funding has been the issuance of equity securities for cash, primarily through private placements to sophisticated investors and institutions. The Company has issued common share capital in each of the past few years, pursuant to private placement financings and the exercise of warrants and options. The Company's access to exploration financing when the financing is not transaction specific is always uncertain. There can be no assurance of continued access to significant equity funding.

The Company had working capital of approximately $24.9 million as at June 30, 2007, compared to $30.4 million at March 31, 2007 and a working capital deficit of $0.9 million as at June 30, 2006. In February and June 2007, the Company issued additional common shares through private placements, and the signing of the framework agreement with Jinchuan, to raise $36 million additional funds (net of repayment of the convertible promissory note and loans from a related party) to continue its exploration program at the Xietongmen project. However, future fund raising may not be successful or may not raise enough funds to complete the exploration program.

In December 2006, the Company acquired interests in three mineral properties with the issuance of shares and cash payments. Total cash payment for the acquisition of the interests is US$3.25 million, of which US$1.25 million was paid on closing of the acquisition and US$0.5 million is due on each of the next four anniversaries. As at June 30, 2007, a long term obligation of $27.4 million was recorded for the future income tax liability created on the acquisition of Great China Mining and the related properties.

1.8        Capital Resources

In February 2007, the Company entered into a framework agreement with Jinchuan for equity financing, capital financing, concentrate off-take and other mine building support for Xietongmen project. Specifically, Jinchuan has agreed to provide assistance in arranging for 60% of the required capital in the form of debt, and contributing 30% of required capital (net of any equity subscriptions) for the Xietongmen Property in the form of debt and/or equity. Pursuant to the agreement, Jinchuan purchased, in March 2007, 10,000,000 units of the Company, at a price $1.80 per unit, for gross proceeds of $18,000,000. Each unit consisted of one common share and one warrant. Each warrant is exercisable for 0.8 of a common share at $2.25 per share until September 29, 2007, and at $2.75 thereafter until December 29, 2007.

In February 2007, the Company completed a private placement of 19,439,395 units at a price of $1.65 per unit for gross proceeds of $32.1 million. Each unit was comprised of one common share and one share purchase warrant. Each warrant is exercisable into one common share at $1.80 until February 20, 2008. Taseko Mines Limited exercised its preemptive right to participate in the financing for $12.1 million, based on the terms of its previously purchased convertible note.

The Company had no material commitments for capital expenditures as of June 30, 2007.

The Company has no other lines of credit or sources of financing which have been arranged but are as yet unused.

CONTINENTAL MINERALS CORPORATION

THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

1.9        Off-Balance Sheet Arrangements

In October 2001, the Company completed an arrangement agreement with Taseko Mines Limited ("Taseko") and its subsidiary Gibraltar Mines Ltd. ("Gibraltar"), which are British Columbia companies with certain management and directors in common with the Company. Under the terms of the arrangement agreement, among other things, the Company (a) transferred its interest in the Harmony Gold Property to Gibraltar for $2.23 million cash and 12,483,916 series A non-voting redeemable preferred shares in the capital of Gibraltar into common shares of Taseko, and (b) reorganized its share capital so that each common shareholder of the Company received in exchange for each ten common shares, one new common share of the Company plus ten non-voting, redeemable preferred shares of the Company. This is more fully described in the notes to the accompanying financial statements.

Gibraltar is obligated to redeem the series A preferred shares under certain conditions, notably the sale of all or substantially all (80%) of the Harmony Gold Property (excluding options or joint ventures which do not result in the certain or immediate transfer of 80% of Gibraltar's interest in the Harmony Gold Property), or upon the commencement of commercial production at the Harmony Gold Property (an "HP Realization Event"). Upon the occurrence of an HP Realization event, Gibraltar must redeem Gibraltar preferred shares by distributing that number of Taseko common shares ("Taseko Shares") equal to the paid-up amount (as adjusted) divided by a deemed price per Taseko Share, which will vary dependent on the timing of such HP Realization Event. At June 30, 2007, the conversion rate was $4.89 per Taseko Share.

1.10      Transactions with Related Parties

Hunter Dickinson Inc. ("HDI") carries out investor relations, geological, corporate development, administrative and other management activities for, and incurs third party costs on behalf of the Company. Continental reimburses HDI on a full cost-recovery basis.

Due from (to) related party		June 30		December 31
		2007		2006
Loan from Hunter Dickinson Inc (‘HDI"). (a)	$	–	$	(1,500,000	)
Hunter Dickinson Inc.	$	307,778	$	643,055
Transactions		Six months ended June 30
		2007		2006
Hunter Dickinson Inc. –
Reimbursement for third party expenses and services rendered	$	1,292,750	$	1,811,139
Interest paid (a) and (b)	$	44,605	$	–
Taseko Mines Limited – Interest paid (d)	$	254,155	$	–
Payments to companies controlled by Zhi Wang, a director (c)	$	461,913	$	71,561
Payments to Xiaojun Ma, a director (e)	$	15,042	$	–

(a) In November 2006, the Company signed a loan agreement with HDI pursuant to which the Company borrowed $1,500,000 from HDI. On March 2, 2007, the Company repaid this loan

CONTINENTAL MINERALS CORPORATION

THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

	and paid $30,575 in interest, of which $20,054 has been recorded for the six months ended June 30, 2007.
(b)	On January 23, 2007, the Company signed a second loan agreement with HDI pursuant to which the Company borrowed US$2,500,000 from HDI, maturing on April 18, 2007, on an unsecured basis. The loan bore interest at 8% per annum. The Company repaid the loan on March 2, 2007 and paid $24,551 in interest.
(c)	During the three months ended June 30, 2007, the Company paid $52,259 (three months ended June 30, 2006 – $18,594) to Honglu Investment Holdings Inc. and $69,678 (three months ended June 30, 2006 – $nil) to Tibet Bojing Minerals Exploration Limited, each of which are companies controlled by Zhi Wang, a director of the Company, for administrative and consulting services.
(d)	In February 2007, the Company redeemed the $11,500,000 convertible promissory note held by Taseko at 105% of the principal amount (note 6). Taseko and the Company are related by virtue of having certain directors in common. During the three months ended June 30, 2007, the Company paid interest related to this convertible promissory note to Taseko of $nil (three months ended March 31, 2007 – $254,155, of which $156,274 was paid to Taseko by the issuance of 89,229 common shares of the Company).
(e)	Xiaojun Ma is a director of the Company who also provides managerial services to the Company's Tibetan subsidiary. During the three months ended June 30, 2007, he was paid $6,435 (three months ended March 31, 2007 – $8,607) for such services.

1.11       Fourth Quarter

Not applicable.

1.12       Proposed Transactions

There are no material transactions requiring disclosure under this section.

1.13       Critical Accounting Estimates

Not applicable; the Company is a venture issuer.

1.14       Changes in Accounting Policies including Initial Adoption

Effective January 1, 2007, the Company adopted the following new accounting standards issued by the Canadian Institute of Chartered Accountants ("CICA") relating to financial instruments. These new standards have been adopted on a prospective basis with no restatement to prior period financial statements.

CONTINENTAL MINERALS CORPORATION

THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

(a)	Section 3855 – Financial Instruments – Recognition and Measurement
	This standard sets out criteria for the recognition and measurement of financial instruments for fiscal years beginning on or after October 1, 2006. This standard requires all financial instruments within its scope, including derivatives, to be included on a Company's balance sheet and measured either at fair value or, in certain circumstances when fair value may not be considered most relevant, at cost or amortized cost. Changes in fair value are to be recognized in the statements of operations and comprehensive income (loss).
	All financial assets and liabilities are recognized when the entity becomes a party to the contract creating the asset or liability. As such, any of the Company's outstanding financial assets and liabilities at the effective date of adoption are recognized and measured in accordance with the new requirements as if these requirements had always been in effect. Any changes to the fair values of assets and liabilities prior to January 1, 2007 are recognized by adjusting opening deficit or opening accumulated other comprehensive income (loss).
	All financial instruments are classified into one of the following five categories: held for trading, held-to-maturity, loans and receivables, available-for-sale financial assets, or other financial liabilities. Initial and subsequent measurement and recognition of changes in the value of financial instruments depends on their initial classification:
	•	Held-to-maturity investments, loans and receivables, and other financial liabilities are initially measured at fair value and subsequently measured at amortized cost.
	•	Available-for-sale financial assets are measured at fair value. Revaluation gains and losses are included in other comprehensive income (loss) until the asset is removed from the balance sheet.
	•	Held for trading financial instruments are measured at fair value. All gains and losses are included in net earnings (loss) in the period in which they arise.
	•	All derivative financial instruments are measured at fair value, even when they are part of a hedging relationship. All gains and losses are included in net earnings (loss) in the period in which they arise.
(b)	Section 3865 – Hedges
	This new standard specifies the circumstances under which hedge accounting is permissible and how hedge accounting may be performed. The Company currently does not have any hedges.
(c)	Section 1530 – Comprehensive Income (Loss)
	Comprehensive income (loss) is the change in the Company's net assets that results from transactions, events, and circumstances from other than the Company's shareholders. This standard requires certain gains and losses that would otherwise be recorded as part of net earnings to be presented in other "comprehensive income (loss)" until it is considered appropriate to recognize into net earnings (loss). This standard requires the presentation of comprehensive income (loss), and its components in a separate financial statement that is displayed with the same prominence as the other financial statements.

CONTINENTAL MINERALS CORPORATION

THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

Accordingly, the Company now reports comprehensive income (loss) and includes, if applicable, the account "accumulated other comprehensive income (loss)" in the shareholders' equity section of the consolidated balance sheet.

1.15       Financial Instruments and Other Instruments

At January 1, 2007, upon adoption of the new accounting standards on financial instruments, the Company remeasured its financial assets and liabilities. The convertible promissory note was classified as held for trading and its carrying value was adjusted to $11,600,000 with a charge to opening deficit of $565,634.

1.16       Other MD&A Requirements

Additional information relating to the Company, including the Company's Annual Information Form, is available on SEDAR at www.sedar.com.

1.16.1    Additional Disclosure for Venture Issuers without Significant Revenue

(a) capitalized or expensed exploration and development costs;

The required disclosure is presented in the Consolidated Schedule of Exploration Expenses.

(b) expensed research and development costs;

Not applicable.

(c) deferred development costs;

Not applicable.

(d) general and administration expenses; and

The required disclosure is presented in the Consolidated Statements of Operations.

(e) any material costs, whether capitalized, deferred or expensed, not referred to in (a) through (d);

None.

CONTINENTAL MINERALS CORPORATION

THREE AND SIX MONTHS ENDED JUNE 30, 2007

MANAGEMENT'S DISCUSSION AND ANALYSIS

1.16.2     Disclosure of Outstanding Share Data

The following details the share capital structure as at August 20, 2007, the date of this MD&A. These figures may be subject to minor accounting adjustments prior to presentation in future consolidated financial statements.

	Expiry date	Exercise price	Number	Number
Common shares				120,798,041
Share purchase options	September 28, 2007	$ 1.70	883,334
	November 30, 2007	$ 1.20	240,000
	December 14, 2007	$ 1.50	15,000
	February 29, 2008	$ 1.61	20,000
	December 15, 2008	$ 2.10	40,000
	December 21, 2008	$ 1.21	136,607
	February 27, 2009	$ 1.61	50,000
	April 30, 2009	$ 2.01	1,268,334
	November 30, 2009	$ 1.61	250,000
	February 28, 2011	$ 1.61	2,700,000
	February 28, 2012	$ 2.01	1,400,000
				7,003,275
Warrants	December 29, 2007	$2.25 / $2.75 (1)	8,000,000
	February 20, 2008	$1.80	19,439,395
	December 15, 2008	$1.59	1,000,000
	February 14, 2009	$1.59	500,000
				28,939,395
Preferred shares redeemable into Taseko Mines Limited common shares				12,483,916

Note (1) –	Exercisable at $2.25 per share until September 29, 2007 and
	thereafter at $2.75 until December 29, 2007.