CANADA GOLD CORPORATE UPDATE
Vancouver, British Columbia - August 27, 2010 - Canada Gold Corporation ("Canada Gold" or the "Company") (TSX.V: CI, FRKFRT: T9N, OTC-BB: CNGZF) announces that the Colombia pre-investment study initiated in May 2010 has concluded with mixed results. This study confirmed the Colombian Government's desire through legislation and incentives to assist foreign investment in the small scale mining sector, however, the 6 regions investigated did not produce sufficient ore supply commitments required to financially justify Canada Gold building a modern mineral processing facility.
Canada Gold is currently reviewing its business strategy with respect to purchasing ore from small scale miners and processing this ore using a modern facility. The failure to monetize the US$10 million holdings of the Grafton Resources Fund by our 100% controlled subsidiary has negatively impacted our ability to execute the original Canada Gold business plan. The company has reviewed numerous opportunities in Peru, Colombia and elsewhere, however, no firm projects have been identified to date. Reviews of potential new opportunities of brown fields and advanced staged projects are ongoing.
Canada Gold also announces the resignation of Mr. Rick Plotzki as COO effective August 31, 2010. Mr. Plotzki will remain as a Director of the company. Additionally, Mr. Marc Tran, CFO, has tendered his resignation effective August 31, 2010. Mr. Tran will continue to provide accounting services to the company on a contractual basis for the foreseeable future.
Financially, the company has approximately $1,250,000 in financial assets, primarily made up of cash and approximately 2.2 million shares in Animas Resources. The company has agreed to relinquish our holdings in the Grafton Resources Fund (press release of June 17, 2010), effectively unwinding the transaction of August 2009 due to the illiquidity of the Fund. This is expected to be completed by month-end and reported in detail in the next quarterly filing.
Canada Gold also announces it has granted 890,000 incentive stock options to Directors, Officers and Consultants of the company. The options will be exercisable for a 3 year period at $.11 per share.
For more information, please contact our office.
On behalf of the Board,
President & CEO
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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