VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 26, 2011) - CANGOLD LIMITED (News - Market indicators) (the "Company") is pleased to announce that, effective at the opening of trading on the TSX Venture Exchange tomorrow morning, it will have completed a consolidation of its share capital on a one for five basis, consolidating its 87,975,745 currently outstanding common shares to 17,595,149 following the consolidation. Shareholder authorization to effect the share consolidation was approved at the Company's Annual and Special General Meeting held on December 15, 2010, and the consolidation has been accepted by the TSX Venture Exchange.

The Company's name and trading symbol will remain the same. The Company's new CUSIP/ISIN numbers are CUSIP 137588109 / ISIN CA1375881093.

Letters of transmittal with respect to the consolidation will be mailed out to all registered shareholders on or about May 30, 2011. All registered shareholders of the Company will be required to send their certificates representing pre-consolidation common shares with a properly executed letter of transmittal to the Company's transfer agent, Computershare Investor Services Inc., in accordance with the instructions provided in the letter of transmittal. Additional copies of the letter of transmittal can be obtained through Computershare Investor Services Inc. All shareholders who duly complete letters of transmittal will receive post-consolidation common share certificates. No certificates representing fractional post-consolidation common shares will be issued pursuant to the consolidation.

Cangold Limited is a junior exploration company engaged in the exploration and development of gold projects in Mexico and Canada.

ON BEHALF OF THE BOARD

"Robert A. Archer"

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