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Evolving Gold Announces Sale of Prosperity Goldfields Shares

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 27, 2012) - Evolving Gold Corp. (TSX:EVG.TO - News), (OTCQX:EVOGF.PK - News), (FRANKFURT:EV7.F - News) ("Evolving Gold" or the "Company") is pleased to announce it has reached agreements to sell a portion of its interest in Prosperity Goldfields Corp. ("Prosperity") to certain purchasers for aggregate gross proceeds of $4,000,000. Certain of the purchasers are or will become insiders of Prosperity.

The sale involves approximately two-thirds of the Company's current holdings of 11,933,563 common shares of Prosperity and 5,000,000 warrants, each warrant exercisable to acquire one common share of Prosperity at a price of $0.25 until November 5, 2012.

"The sale of a portion of its Prosperity interest allows Evolving Gold to fund drill-intensive exploration of its Carlin-Humboldt project in the prolific Carlin trend of northern Nevada, whilst maintaining meaningful exposure to the upside potential at Prosperity, without creating unnecessary shareholder dilution in the context of the current capital markets", stated R. Bruce Duncan, the CEO of the Company.

The initial closing of the transaction is anticipated to occur on or about March 7, 2012 with a subsequent closing anticipated concurrent with the amalgamation (the "Amalgamation") of Smash Minerals Corp. and Prosperity originally announced by the parties on January 5, 2012, subject to receipt of any required regulatory approvals. The Company will file a notice of intention to distribute securities with the relevant securities regulators in due course.

Evolving Gold also announces it has entered into a lock-up agreement in support of the Amalgamation.

Evolving Gold also announces that Dr. Quinton Hennigh has been appointed to the technical Advisory Board of the Company. Dr. Hennigh, previously President and Chief Geologist of the Company, was heavily involved in the development of the Carlin-Humboldt exploration targets and has been a strong supporter of a focused, intensive deep drilling program on the Company's extensive land position in the south end of the prolific Carlin Trend gold system.

About Evolving Gold Corp.

Evolving Gold is focused on exploring its gold properties in and adjacent to the productive Carlin district of northern Nevada, and on advancing its gold discovery at Rattlesnake Hills, Wyoming. For more information about Evolving Gold please visit: http://www.evolvinggold.com.

On Behalf of the Board of Directors

EVOLVING GOLD CORP.
R. Bruce Duncan,
CEO and Director

Contact:

Rory Quinn
Evolving Gold Corp.
Investor Relations
604.630.0792
866.604.3864 (FAX)
[e-mail]

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