Filed by sedaredgar.com - Continental Minerals Corporation

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, 2008 and the unaudited interim consolidated financial statements for the three and six months ended June 30, 2009.

This MD&A is prepared as of August 23, 2009. 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". These forward-looking statements constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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, changes in and the effect of government policies and legislation, geopolitical and economic uncertainty, 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 stated herein. For additional risk factors please refer to the Company's latest Annual Information Form, filed on SEDAR (www.sedar.com).

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

Continental owns 100% of Highland Mining Inc. ("Highland"), the parent company of Tibet Tian Yuan Minerals Exploration Ltd. ("Tian Yuan"), a wholly foreign owned enterprise ("WFOE") that holds 100% of the Xietongmen property in the Tibet Autonomous Region ("TAR"), PRC. The Xietongmen property consists of two exploration licenses, totaling approximately 122 square kilometers. Exploration on the property by Continental since 2005 has resulted in the discovery of two copper-gold deposits.

The Xietongmen deposit was discovered in 2005. A comprehensive program began in 2006 to collect the necessary information for a feasibility study and environmental and socio-economic impact assessments ("ESIA") for mining the Xietongmen deposit.

The 2007 Feasibility Study completed by Aker Kvaerner E&C¹proposed a 40,000 tonnes per day conventional mill and open pit mining operation for Xietongmen, producing an average of 116 million pounds of copper, 190,000 ounces of gold and 1.73 million ounces of silver per year over a 14 year mine life. The study was based on a copper price of US$1.50/lb, a gold price of US$500/oz and a silver price of US$8.50/oz and 219.8 million tonnes of measured and indicated resources grading 0.43% copper, 0.61 g/t gold and 3.87 g/t silver, containing 2 billion pounds of

^{____________________________________________
1}October 2007 Technical Report is available on the Company’s profile on www.sedar.com. Qualified Persons are G. Holmes, P.Eng., P. Live, Eng., and L. Melis, P.Eng.

copper and 4.3 million ounces of gold at a 0.15% copper cut-off in the Xietongmen deposit, including 182 million tonnes of proven and probable mineral reserves.

In 2007 and 2008, Continental completed a number of submissions required to advance permitting for the project prior to the mining license application. These materials encompass at least eleven reports and permits, covering all aspects of the project development that have been submitted and approved by relevant PRC and TAR government authorities during the initial project review process. These include the geological resources report, the environmental impact report, the water use permit, the reclamation plan approval and the preliminary land use permit, among others. The mining license application is currently in the process of being submitted.

An initial resource estimate for the Newtongmen deposit by Wardrop Engineering ("Wardrop") was announced in May 2009. At a 0.20% copper cut-off, the results include:

Project work in 2009 is focused on the Xietongmen deposit. Activities have included basic engineering, project optimization and completion of the international-standard ESIA report to prepare for construction to start once permits are received.

The Company had approximately $6.5 million cash on hand at the end of June 30, 2009.

During 2005 and 2006, the Company earned a 60% interest in the shares of Highland by making option payments totaling US$2 million and completing US$11.3 million of exploration expenditures.

In December 2006, the Company completed a merger of Great China Mining Inc. with the Company. 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 (subsequently combined into one exploration license), 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).

In 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 acquired, in two tranches, 18 million common shares of the Company for a total cost of $36 million. Jinchuan has also agreed to provide other key support to the Xietongmen Project, including assistance in arranging up to 60% 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 products.

Jinchuan and Tian Yuan have entered into a life-of-mine concentrate off-take arrangement in connection with a future mine at Xietongmen. The concentrate off-take from Newtongmen is not subject to this arrangement; Jinchuan holds a right of first refusal to purchase any concentrate that may be produced in the future by the Company in the People's Republic of China, subject to Jinchuan maintaining a certain minimum interest in the Company.

In August 2008, the Company announced that it had engaged Standard Bank Plc, the principal international investment banking subsidiary of the Standard Bank Group Limited, jointly with the Industrial and Commercial Bank of China as Underwriters and Mandated Lead Arrangers for the project finance debt facility for the development of the Xietongmen property. The engagement is subject to due diligence and conditions precedent applicable to finance facilities of this type.

In 2009, the main work programs are directed toward completion of permitting and preparations for mine development at Xietongmen.

Continental has retained the Beijing General Research Institute of Mining and Metallurgy ("BGRIMM") as the primary Chinese design institute. Continental has also retained Tibet Hydrology Bureau, Yangtse Upstream Hydrology and Water Resources Survey Bureau of the Yangtse Water Resources Committee, Meteorological Bureau of the Rikaze Prefecture and a number of international firms to work with the Chinese design groups, including Ausenco Limited, Melis Engineering Ltd ("Melis"), Wardrop, Golder Associates Ltd ("Golder") and Leighton Asia Limited ("Leighton") along with its own in-house engineering team to complete project optimization, basic engineering and costing work for the Xietongmen Project in conjunction with its own in-house engineering team. This is similar to the approach taken for the Feasibility Study in 2007, and is required under legislation in China.

During the second quarter of 2009, the Company's in-house engineering team worked closely with BGRIMM and Wardrop on previewing process flow sheets and designs, as well as preparing equipment specifications, process plant layout, piping and instrumentation diagrams and mine infrastructure design. In addition to this work, Leighton and Golder were engaged to assist with optimizing the mining plan, open pit design and tailings storage and operational water management plan. During this time, additional metallurgical test work was also undertaken by Melis and completed by SGS Lakefield Laboratories.

Since June 2009, the Company's engineering team has continued work on the optimization of the process design and flow sheets. Other critical basic engineering items included requests for quotations, preparation of procurement documents, process plant general layout and piping and instrumentation diagrams.

Site activities during the first half of 2009 have focused on environmental baseline conditions studies and community outreach programs. Environmental studies that have been undertaken in the first half of fiscal 2009 and which will continue throughout the year include Black-necked Crane population and habitat usage surveys, air quality, precipitation, meteorology and hydrology and stream bed-load surveys. Community outreach programs included community health initiatives such as capacity building of Tibetan doctors and provision of equipment and supplies for a medical clinic; training of local people on basic veterinary care and implementation of an animal husbandry program; agricultural productivity support; the construction of a flood protection diversion channel for a local village; donations of furniture for the school and materials to construct storage buildings for a new community center; and driver training for local villagers. Other community investments such as the scholarship program will be implemented later in the year. Continental also supports the professional development of existing employees and improving their knowledge of modern mining practices. As an example of this initiative, the Company is currently sponsoring a Chinese geologist who is attending the Mining and Mineral Exploration Technology program at the British Columbia Institute of Technology.

New house construction has been completed for the villagers who signed house funding agreements. Related infrastructure such as threshing grounds, water and power are under development.

Release of the ESIA report by Golder is planned following completion of the third party review later this year.

The Newtongmen deposit is located 2.5 kilometers northwest of the Xietongmen deposit. Drilling so far has outlined a northwesterly-elongated zone about 850 m long by up to 450 m wide, with intersections of copper and gold mineralization from surface to the limit of drilling at 713 m depth. The deposit remains open to expansion in three lateral directions and at depth. Results from the resource estimate at a range of cut-offs are tabulated below.

Category	Cut-off	Tonnes Millions	Cu %	Au g/t	Ag g/t	Contained Cu Billion lbs	Contained Au Million oz	Contained Ag Million oz
Indicated	0.30	186.5	0.40	0.22	0.99	1.66	1.30	5.90
	0.20	388.9	0.32	0.18	0.87	2.77	2.30	10.85
	0.15	486.0	0.29	0.17	0.82	3.15	2.70	12.80

Category	Cut-off	Tonnes Millions	Cu %	Au g/t	Ag g/t	Contained Cu Billion lbs	Contained Au Million oz	Contained Ag Million oz
Inferred	0.30	84.4	0.37	0.06	0.13	0.68	0.17	0.36
	0.20	264.8	0.29	0.07	0.12	1.67	0.57	1.04
	0.15	379.3	0.25	0.07	0.12	2.11	0.80	1.44

The resource estimate is based on drill core assay results from 35 holes (approximately 16,000 meters) drilled in 2006 and 2007. The holes were drilled at about 100-meter spacing on eight lines, with holes on adjacent lines offset by approximately 50 meters. All but three of the holes were drilled vertically. Long intervals of copper and gold mineralization were encountered in most of the holes starting from surface, with higher grade intervals intersected near to the surface.

The estimate was prepared using geostatistical methods by Greg Mosher, P.Geo., of Wardrop Engineering, an independent Qualified Person as defined by Canadian National Instrument 43-101. A Technical Report has been filed on www.sedar.com.

Copper prices had been on an overall upward trend between late 2003 and October 2008, but have decreased significantly since then as a result of uncertainties in global financial markets. In mid-2008, the copper market deficit, caused by strong demand growth and struggling production and a lack of new development projects, reached its peak. The average price in 2008 was US$3.15/lb, compared to an average price of US$3.22/lb in 2007. There was an unprecedented 70% drop in prices over the six months from July to December 2008.

Copper prices stabilized in January 2009, then began to increase. Prices have been in the US$2.00/lb range since early April. The average copper price in 2009 to the date of this report is approximately US$1.99/lb.

Gold prices were volatile in late 2008, dropping below $800/oz for a two-week period in September, and again from mid-October through November. The average gold price for 2008 was US$871/oz. As global economic and other market conditions are uncertain, market experts have forecast strong gold prices through 2009. The average price to the date of this report is approximately US$922/oz.

Exploration and development activities decreased slightly from the previous quarter due to a decrease in engineering work offset partially by an increase in socio-economic work.

The increase in administrative expenditures was due primarily to an increase in legal, and accounting fees. Trust and filing fees increased to $28,892, compared to $26,491 in 2008. Included in the total administrative costs was stock-based compensation expense of $1,108,713, compared to $812,346 in 2008.

Stock based compensation expense increased due to the increase in the Company's stock price over the quarter.

The foreign exchange gain or loss is due substantially to the future income tax liability, which is a significant balance, and which is primarily denominated in Chinese currency ("renminbi").

During the quarter ended June 30, 2009, the Company's exploration and development activities had a greater focus on engineering, and related work in support of this work than during the quarter ended June 30, 2008. The Company also incurred more costs related to environmental and socio-economic work than in the same quarter of 2008.

The increase in administrative expenditures was due primarily to an increase in legal, and accounting fees. The increase in office and administration was mainly due to certain additional human resource-related costs and an increase in the office rent of Tian Yuan Beijing's office in the second quarter of 2009, which had no corresponding amounts in the same period of 2008.

Stock based compensation expense increased due to an increase in the volatility in the Company's stock price over the prior year. The increase in stock-based compensation expense in 2009 is primarily due to the fact that more options vested in the second quarter of 2009 compared to the same quarter of 2008.

There was a net difference in foreign exchange of $3,357,000 over the same quarter in 2008, related to the foreign exchange on the future income tax liability.

The exchange rate for the Canadian dollar against the Chinese yuan has increased from 1 Canadian dollar to 5.57 Chinese yuan on December 31, 2008 to 5.88 Chinese yuan on June 30, 2009.

Exploration and development activities increased significantly in the first six months of 2009 compared to the first six months of 2008. Engineering costs more than doubled, from approximately $1.0 million in the first six months of 2008 to over $2.1 million in the first six months of 2009. Significant increases were also seen in environment, geological (to support the engineering work), socio-economic and transportation. Slightly less graphics and assay work was done this year to date over last.

Office and administration costs have also increased to keep up with the increased exploration and development work, although not at the same level. The increase in legal, accounting and audit fees compared with the same of quarter of 2008 was mainly due to the legal activities related to the mining license application. Interest income decreased due to lower overall cash balances, and significantly lower interest rates earned by those cash balances. The Company has significantly decreased its travel and travel-related costs.

Stock based compensation expense increased due to an increase in the volatility in the Company's stock price over the prior year.

The change in foreign exchange is due substantially to the future income tax liability denominated in Chinese currency.

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

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 many 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 $1.5 million as at June 30, 2009, compared with $10.0 million at December 31, 2008. The change in working capital compared with December 31, 2008 is due to exploration and administrative expenditures incurred during the first and second quarters of 2009.

Management believes the Company has sufficient capital resources to maintain its properties and continue with its planned objectives for the 2009 fiscal year.

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 project capital (net of any equity subscriptions) for the Xietongmen property in the form of debt and/or equity.

The Company has engaged Standard Bank plc, jointly with the Industrial and Commercial Bank of China, as Underwriters and Mandated Lead Arrangers for the project finance debt facility for the development of the Xietongmen Project. The engagement is subject to due diligence and conditions precedent applicable to finance facilities of this type.

The Company had no material commitments for capital expenditures as of June 30, 2009. The Company has no other lines of credit or sources of financing which have been arranged but are as yet unused.

The ability of the Company to carry out its long range strategic objectives in future years depends on its ability to raise financing from lenders, shareholders and other investors. The Company is continuing to look at and consider financing alternatives to fund its ongoing activities.

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 audited annual financial statements for the year ended December 31, 2008.

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, 2009, the conversion rate was $5.39 per Taseko Share. These arrangements are more fully described in the notes to the audited consolidated financial statements for the year ended December 31, 2008.

There are no material changes since the fiscal year end of 2008 in terms of the financial instruments.

Additional information relating to the Company is available on SEDAR at www.sedar.com.

1.15.1 Additional Disclosure for Venture Issuers without Significant Revenue

The required disclosure is presented in the consolidated schedules of exploration expenses in the unaudited interim consolidated financial statements.

The required disclosure is presented in the unaudited interim consolidated financial statements.

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

The following details the share capital structure as at August 23, 2009, the date of this MD&A.

	Expiry date	Exercise	Number	Number
		price
Common shares				129,053,041

Share purchase options	November 30, 2009	$ 1.61	250,000
	September 30, 2010	$ 1.68	131,666
	February 28, 2011	$ 1.61	2,800,000
	February 28, 2011	$ 1.68	350,000
	May 2, 2011	$ 1.32	4,014,500
	October 1, 2011	$ 0.79	200,000
	February 29, 2012	$ 2.01	1,200,000
	July 28, 2012	$ 1.05	2,585,100
	July 28, 2014	$ 1.05	975,000
				12,506,266

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting. Any system of internal control over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

There have been no significant changes in internal controls over financial reporting occurred during the period ended June 30, 2009 that could have materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.

The Company has disclosure controls and procedures in place to provide reasonable assurance that any information required to be disclosed by the Company under securities legislation is recorded, processed, summarized and reported within the applicable time periods and to ensure that required information is gathered and communicated to the Company's management so that decisions can be made about timely disclosure of that information.

1.1	DATE	3

1.2	OVERVIEW	3

1.3	SELECTED ANNUAL INFORMATION	7

1.4	RESULTS OF OPERATIONS	8

1.5	SUMMARY OF QUARTERLY RESULTS	10

1.6	LIQUIDITY	11

1.7	CAPITAL RESOURCES	11

1.8	OFF-BALANCE SHEET ARRANGEMENTS	11

1.9	TRANSACTIONS WITH RELATED PARTIES	12

1.10	FOURTH QUARTER	12

1.11	PROPOSED TRANSACTIONS	12

1.12	CRITICAL ACCOUNTING ESTIMATES	12

1.13	CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION	12

1.14	FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS	12

1.15	OTHER MD&A REQUIREMENTS	12

Note 1	Contained metal calculations assume 100% recovery.

Note 2	Worldwide porphyry operations cut-offs generally range between 0.20 and 0.40% copper. Estimates for the Xietongmen deposit use 0.15% copper cut-off. Wardrop considers that a higher threshold grade of 0.20% copper is appropriate for this initial estimate of Newtongmen.

		Quarter ended			Quarter ended		Quarter ended
		June 30, 2009			March 31, 2009		June 30, 2008
Exploration	$	2,619,000		$	2,962,000	$	1,895,000
Administrative		1,623,000			1,496,000		1,389,000
Stock based compensation		1,298,000			330,000		1,064,000
Foreign exchange loss (gain)		(3,004,000	)		1,092,000		353,000
Loss	$	2,536,000		$	5,880,000	$	4,701,000

		Six months ended			Six months ended
		June 30, 2009			June 30, 2008
Exploration	$	5,581,000		$	3,427,000
Administrative		3,119,000			2,294,000
Stock based compensation		1,628,000			1,391,000
Foreign exchange loss (gain)		(1,912,000	)		2,556,000
Loss	$	8,416,000		$	9,668,000

		Jun 30			Mar 31			Dec 31			Sep 30			Jun 30			Mar 31			Dec 31			Sep 30
		2009			2009			2008			2008			2008			2008			2007			2007
Current assets	$	7,216		$	12,508		$	16,714		$	23,601		$	26,854		$	30,338		$	33,920		$	20,222
Other assets		116,258			114,413			113,585			118,699			118,456			118,954			117,836			118,473
Total assets		123,474			126,921			130,299			142,300			145,310			149,292			151,756			138,695

Current liabilities		5,675			7,101			6,762			3,105			1,800			2,015			3,249			2,057
Other long-term liabilities		32,202			34,410			33,247			30,480			29,256			29,022			26,501			26,959
Shareholders' equity		85,597			85,410			90,290			108,715			114,254			118,255			122,006			109,679
Total shareholders' equity and
liabilities		123,474			126,921			130,299			142,300			145,310			149,292			151,756			138,695

Working capital (deficit)		1,541			5,407			9,952			20,496			25,054			28,323			30,671			18,165

Expenses:
Exploration		2,619			2,962			8,215			3,335			1,895			1,534			5,628			4,283
Foreign exchange loss (gain)		(3,004	)		1,092			4,818			1,235			353			2,203			(97	)		(209	)
Insurance		50			37			38			31			37			40			37			38
Interest expense		–			–			–			–			–			–			45			–
Interest income		(26	)		(15	)		(47	)		(150	)		(119	)		(342	)		(191	)		(258	)
Legal, accounting and audit		400			213			386			159			213			167			115			156
Office and administration		998			1,121			1,030			774			879			765			(341	)		1,018
Project investigation		–			–			8			9			8			–			–			–
Shareholder communications		69			49			70			60			82			55			163			88
Stock-based compensation		1,298			330			211			331			1,064			327			409			710
Travel and conference		103			78			97			247			263			188			481			451
Trust and filing		29			13			5			24			26			30			10			35
Loss for the period	$	2,536		$	5,880		$	14,831		$	6,055		$	4,701		$	4,967		$	6,259		$	6,312

Basic and diluted loss per share	$	(0.01	)	$	(0.05	)	$	(0.11	)	$	(0.05	)	$	(0.04	)	$	(0.04	)	$	(0.05	)	$	(0.05	)

Weighted average number of
common shares outstanding (in
thousands)		129,053			129,053			129,053			129,053			129,053			129,053			123,689			120,802