Cangold Signs Letter of Intent for Option to Acquire Advanced-Stage Gold Project in Mexico

CANGOLD LIMITED (TSX VENTURE:CLD) (the "Company") announces that it has signed a
Letter of Intent whereby Cangold will be granted an option to acquire from Vista
Gold Corp. ("Vista"), up to a 100% interest (subject to certain underlying
royalties) in the mining rights to the Guadalupe de los Reyes Project in
Sinaloa, Mexico.


The Guadalupe de los Reyes Project comprises 6,302 hectares, covering a
past-producing district dating back to 1772. A Preliminary Economic Assessment
("PEA") carried out on the project by Tetra Tech for Vista on March 4, 2013
estimated an Indicated resource of 6.8 million tonnes at a grade of 1.73g/t gold
and 28.71g/t silver (380,100 oz gold and 6,315,300 oz silver) as well as an
Inferred resource of 3.2 million tonnes at a grade of 1.49g/t gold and 34.87g/t
silver (155,200 oz gold and 3,639,000 oz silver) at a cut-off grade of 0.50 g Au
per tonne. 


"We are very pleased to enter into this Letter of Intent with Vista for the
advanced-stage Guadalupe de los Reyes Project," stated Robert Archer, President
& CEO of Cangold. "With a significant compliant resource and a PEA already in
place, and excellent exploration upside, we look forward to advancing the
project further. It is our stated goal to turn Cangold into a junior gold
producer and our management team has the expertise to carry this out."


Cangold is considering the resource in the PEA to be a historical estimate as
Cangold's qualified person has not done sufficient work to classify the estimate
as a current mineral resource for Cangold, as per NI 43-101 requirements.
Assuming Cangold signs the option agreement for the Guadalupe de los Reyes
Project, the Company will update the resource within the time frame required.
Mineral resources that are not mineral reserves do not have demonstrated
economic viability. The PEA includes Inferred mineral resources that are
considered too speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as mineral reserves,
and there is no certainty that the preliminary economic assessment will be
realized. 


The 2013 PEA envisaged an open pit operation, while Cangold is considering a
combined open pit and underground approach with a higher grade. Following the
signing of a formal Option Agreement, the Company plans to undertake a complete
review of all previous work, update the resource, conduct additional baseline
studies and diamond drilling, and advance the project to the pre-feasibility
stage.


Terms of the option call for Cangold to pay to Vista a total of US$5,000,000 in
staged payments over three years (a total of $1,000,000 in the first year) in
order to acquire a 70% interest in the project. Cangold may then purchase the
additional 30% by making a positive production decision and paying to Vista
US$3,000,000 plus an escalator payment based upon the price of gold and the
number of NI 43-101 Measured and Indicated gold equivalent ounces over and above
those in the March 2013 PEA, at the time of the decision. Should Cangold elect
not to place the project into production, Vista will have the option to buy back
the original 70% for US$5,000,000 plus a similar escalator payment.


In keeping with the proposed option and anticipated level of activity, the
Company is pleased to announce the appointment of Erick Bertsch to the position
of Manager, Investor Relations. Mr. Bertsch has 20 years of experience in the
mining industry and has held Investor Relations and Corporate Communications
roles for Stratton Resources, Great Panther Silver and the Hunter Dickinson
Group of companies. 


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 Company owns a 100%
interest in the past-producing Argosy Gold Mine in northwestern Ontario and the
prospective Plomo Gold Project in Sonora State, Mexico. 


ON BEHALF OF THE BOARD

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

FOR FURTHER INFORMATION PLEASE CONTACT: 
Cangold Limited
Erick Bertsch
604 638 8967
604 608 1744 (FAX)
info@cangold.ca
www.cangold.ca
(TSXV:CLD)
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