Cangold starts phase I drilling at Plomo

Cangold Ltd (C:CLD)
Shares Issued 63,686,222
Last Close 4/11/2008 $0.165
Monday April 14 2008 - News Release

Mr. Robert Archer reports

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

Cangold Ltd.'s 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 northwest-trending low-angle northeast-dipping shears (thrusts). Initial rock sampling along the new structures included values to 10.8 grams per tonne (g/t) gold (grab sample) and 5.82 g/t gold over 2.0 metres, with 13 of the 25 samples taken assaying greater than 0.3 g/t gold (see geology map on the company's website).

The second new area, named the Culebra zone, is associated with the south-bounding, northeast-trending, moderately northwest-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 4.28 g/t gold and 0.21 per cent copper over 0.85 metre, 0.25 g/t gold and 3.43 per cent copper (grab sample) and 0.93 g/t gold and 1.65 per cent copper over 3.0 metres. Of the initial 25 rock chip samples, gold was greater than 0.3 g/t in nine samples, while copper was greater than 1 per cent in 13 of 25 samples.

The phase 1 core drilling program, now under way, will comprise approximately 1,500 metres in nine 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 are 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 Stockwatch on Jan. 24, 2008. All zones are associated with shearing and thrust faulting within a five-kilometre (northeast-southwest) by three-kilometre area. Within this structural corridor, gold mineralization is related to brecciated quartz veining with sericite, tourmaline and hematite alteration, associated with shallow northeast-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 northwest and northeast structures intersect 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 five 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 Penoles/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 (Penoles 2006 annual report). Other gold mines along the MSM include La Choya and El Chanate in the Caborca region of northwestern Sonora, and Mesquite and Picacho in the Yuma area of southwestern Arizona and southeastern California. The targets at Plomo are low-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 northwestern Sonora, approximately 320 kilometres northwest of Hermosillo, Sonora. It is easily accessible by paved highway and secondary gravel roads. Cangold is earning a 100-per-cent interest in the Plomo property, subject to a 2-per-cent net smelter returns royalty (NSR).

In other news, Cangold has signed an agreement with Rimfire Minerals Corp. whereby the latter will purchase Cangold's 51-per-cent 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 financing 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 per cent 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-million or 250,000 Rimfire shares (at Rimfire's election) should the property be placed into commercial production while Rimfire owns at least 10 per cent of the property.

Robert F. Brown, PEng, and vice-president of exploration for Cangold and its wholly owned subsidiary, Coboro Minerales de Mexico SA de CV, is designated as the qualified person for the Plomo project under the meaning of National Instrument 43-101 and has reviewed this news release. Samples were assayed at SGS Labs in Durango. The company's quality assurance/quality control (QA/QC) program includes the regular insertion of blanks, splits and standards into the sample shipments.

© 2008 Canjex Publishing Ltd.