CANGOLD IDENTIFIES NEW GOLD ZONES AND COMMENCES PHASE I DRILLING PROGRAM AT PLOMO;
SELLS INTEREST IN THORN TO RIMFIRE

CANGOLD LIMITED (TSX-V: CLD, the “Company”) is pleased to announce that Phase I mapping and sampling on the Plomo property in Sonora, Mexico have identified two new gold zones, thereby expanding the prospective area to five kilometres long by three kilometres wide. As part of the Company’s efforts to quickly advance the Plomo project, a 1,500 metre Phase I diamond drilling program has commenced on the property.

The first new area of gold mineralization, within the Pavorreal area, is located between the Pavorreal and San Perfecto structures, and has been mapped along a 600 metre trend with widths to 100 metres. The Pavorreal gold mineralization is associated with gossanous, sericitic, schistose andesite with local quartz-tourmaline-hematite breccias, related to a series of parallel NW trending low angle NE dipping shears (thrusts?). Initial rock sampling along the new structures included values to 10.8g/t gold (grab sample) and 5.82g/t gold over 2.0 metres, with 13 of the 25 samples taken assaying >0.3g/t gold (see geology map on web-site at www.cangold.ca).

The second new area, named the Culebra zone, is associated with the south bounding, NE trending, moderately NW dipping shear which presently defines the southeast side of the prospective area. The Culebra zone is an 800 metre long by 300 metre wide gossan along the sheared contact between andesite and a monzonite intrusion. Historic workings contain secondary copper mineralization and sampling has demonstrated the presence of gold. Initial rock sampling returned values to 4.28g/t gold and 0.21% copper over 0.85 metres, 0.25g/t gold and 3.43% copper (grab sample) and 0.93g/t gold and 1.65% copper over 3.0 metres. Of the initial 25 rock chip samples, gold was >0.3g/t in 9 samples, while copper was >1% in 13 of 25 samples.

The Phase 1 core drilling program, now underway, will comprise approximately 1,500 metres in 9 holes. Targets to be tested in this program include the Banco de Oro, Pavorreal, San Perfecto, and Bonancita zones. The idea of the first-pass drilling is to gain a better understanding of the structural control of the gold mineralization and to look for areas where the flat-lying gold-bearing structures coalesce into a larger zone with resource potential.

Property scale geological mapping and rock sampling is continuing with a particular effort in identifying major structures, and associated alteration and mineralized zones. To date, this work has outlined seven zones of alteration and gold mineralization on the Plomo project. Details of the Banco de Oro, San Perfecto, Pavorreal, San Crecencio, and Bonancita zones are described in the Cangold news release dated January 22, 2008. All zones are associated with shearing and thrust faulting within a 5 kilometre (NE-SW) by 3 kilometre area. Within this structural corridor, gold mineralization is related to brecciated quartz veining with sericite, tourmaline, and hematite alteration, associated with shallow NE dipping thrust faults. The identification of such widespread gold mineralization within a complex structural environment is an excellent indication of the potential of the Plomo Property. As mapping proceeds, specific attention will also be paid to areas where the NW and NE structures ntersect as these areas are particularly suitable structural traps for gold mineralization.

In a regional context, gold mineralization at the Plomo Project is believed to be related to the Mojave-Sonora Megashear (MSM). The MSM is a northwest-trending left-lateral, strike slip fault zone up to 5 kilometres wide and extending for hundreds of kilometres through northern Sonora, southern California and Arizona, and is interpreted to transect the southwest corner of the Plomo Project area. Many of the gold mines and prospects in Sonora occur within or are adjacent to the boundary of this regionally extensive structure, including Mexico’s largest gold mine, the Peñoles / Newmont La Herradura deposit, which lies 25 kilometres to the west of Plomo and contains a global resource of 104,063,824 tonnes averaging 0.84 g/t gold (Peñoles 2006 Annual Report). Other gold mines along the MSM include La Choya, and El Chanate in the Caborca region of north-western Sonora, and Mesquite and Picacho in the Yuma area of south-western Arizona and south-eastern California. The targets at Plomo are lw grade, high-tonnage fault-related gold deposit amenable to open pit mining and heap leaching, similar to the aforementioned mines. The relationship of gold mineralization to flat-lying structures is typical of deposits within the MSM.

The 4,279 hectare Plomo project lies within the Altar desert of north-western Sonora, approximately 320 kilometres northwest of Hermosillo, Sonora. It is easily accessible by paved highway and secondary gravel roads. Cangold is earning a 100% interest in the Plomo Property, subject to a 2% NSR.

In other news, Cangold has signed an agreement with Rimfire Minerals Corp. whereby the latter will purchase Cangold’s 51% interest in the Thorn Property in northern British Columbia. While Cangold still views the Thorn Property as prospective, the Company’s focus in Mexico precludes the near term funding of any exploration at Thorn. As Rimfire is focused on exploration in British Columbia, the project can now move forward with Cangold potentially benefiting from the advancement of the project.

Terms of the sale call for Rimfire to pay $100,000 and issue 100,000 shares of Rimfire to Cangold upon signing, and for Cangold to receive 25% of any cash payments and share issuances resulting from the future option and/or sale of the property to a third party. In addition, Cangold will receive $1,000,000 or 250,000 Rimfire shares (at Rimfire’s election) should the property be placed into Commercial Production while Rimfire owns at least 10% of the property.

Robert F. Brown, P. Eng and Vice-President of Exploration for Cangold and its wholly owned subsidiary, Coboro Minerales de Mexico, S.A. de C.V., is designated as the Qualified Person for the Plomo Project under the meaning of NI 43-101 and has reviewed this news release. Samples were assayed at SGS Labs in Durango. The Company’s QA/QC program includes the regular insertion of blanks, splits, and standards into the sample shipments.

FURTHER INFORMATION

For further information please visit the Company’s website at www.cangold.ca or contact Brad Aelicks or Don Mosher at telephone 604 685 6465, fax 604 899 4303 or e-mail info@cangold.ca

ON BEHALF OF THE BOARD

"Robert A. Archer"

Robert A. Archer, P. Geo.,
President & CEO