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June 11, 2012

Cangold Advances Metallurgical Program To Pre-Feasibility Level For Ixhuatan Gold-Silver Project

CANGOLD LIMITED (TSX-V: CLD, the "Company") is pleased to announce that metallurgical testing for the Ixhuatan Gold-Silver Project in Chiapas, Mexico has been advanced to a pre-feasibility level. Phase 1 metallurgical testing at SGS Lakefield, Canada consisted of a scoping level gold recovery test program to define the plant process flowsheet. Testwork results indicated recoveries averaging 87% (range of 82-93%). The average grade obtained by SGS Lakefield for the four drill core samples tested (see news release May 1, 2012) was 2.77g/t gold.

"This is a very positive development for the Ixhuatan Project", stated Robert Archer, Cangold's President & CEO. "The higher recoveries compared to previous testwork using conventional processes, and the possibility of obtaining recoveries in excess of 90% bode well for the future of the project."

Phase 2 of the metallurgical testwork has been initiated to compare gold recoveries for three alternative gold recovery flowsheets using a composite sample of material on hand. The activities will also include testwork for grindability and abrasion for each of the 4 samples. It is expected to take 8 to 10 weeks to complete the Phase 2 program, for which the Company is fully funded.

This work will guide plant and tailings design work at a pre-feasibility level. A formal pre-feasibility study with a resulting NI 43-101 report is slated to commence in September 2012 when the appropriate and respectively disciplined professional engineers are in place. At that point, the timeframe and cost of the pre-feasibility work will be determined.

The Campamento Deposit at the Ixhuatan Project contains a NI 43-101 compliant mineral resource comprising 17.6 million tonnes at average grades of 1.84g/t gold and 7.79g/t silver in the Measured and Indicated categories (1,041,000 ounces of gold and 4,400,000 ounces of silver) and 21.8 million tonnes at average grades of 1.01g/t gold and 3.23g/t silver in the Inferred category (703,000 ounces of gold and 2,260,000 ounces of silver), both using a 0.5g/t gold cutoff. Cangold is earning a 75% interest in the Ixhuatan project through its own wholly-owned Mexican subsidiary, Coboro Minerales de Mexico, S.A. de C.V.

Robert Brown, P. Eng., Director and VP Exploration for Cangold is the Qualified Person for the Company. He has reviewed the technical information referenced above and has approved this news release.

Cangold Limited is a junior exploration company engaged in the exploration and development of gold projects in Mexico and Canada. The option to acquire a majority stake in the Ixhuatan Project for the development of the Campamento Deposit is in furtherance of the Company's strategy to build a profitable gold producer.

FURTHER INFORMATION
For further information, please visit the Company's website at www.cangold.ca or contact BD Capital at telephone 604 685 6465 , fax 604 669 0384 or e-mail info@cangold.ca.

ON BEHALF OF THE BOARD

"Robert A. Archer"

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

This email was sent to .com

Cangold Limited

	PRODUCER
	CODE : CLD.V
	ISIN : CA1375881093
	CUSIP : 137588109

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Cangold is a gold exploration company based in Canada.

Cangold holds various exploration projects in Canada and in Mexico.

Its main asset in production is CASUMMIT-ARGOSY in Canada and its main exploration properties are ARGOSY and CASUMMIT LAKE in Canada and LOS VENADOS and PLOMO in Mexico.

Cangold is listed in Canada. Its market capitalisation is CA$ 1.4 millions as of today (US$ 1.1 millions, € 1.0 millions).

Its stock quote reached its lowest recent point on December 24, 2008 at CA$ 0.01, and its highest recent level on December 17, 2010 at CA$ 0.75.

Cangold has 46 740 000 shares outstanding.

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