Evolving Gold Declares Dividend-in-Kind and Sets Record Date for Spin Out of Prosperity Goldfields Corp.

February 2, 2011, Vancouver, British Columbia: Evolving Gold Corp. (TSX: EVG) (FSE: EV7) (the "Company" or "Evolving Gold") announced today that its board of directors has set February 16, 2011 as the record date for the dividend-in-kind spin out transaction (the "Spin Out") involving the transfer of the Company's option to acquire the mineral claims forming the Kiyuk Lake gold property in southern Nunavut (the "Kiyuk Property") to a new company, Prosperity Goldfields Corp. ("Prosperity").

In connection with the Spin Out, the Company transferred to Prosperity its interest in the option to acquire the Kiyuk Property in exchange for common shares of Prosperity ("Prosperity Shares"). Prosperity also completed a $1.5 million private placement with Evolving Gold pursuant to which Prosperity issued 10,000,000 units to Evolving Gold at a deemed price of $0.15 per unit, each unit consisting of one Prosperity Share and one half of one share purchase warrant. Pursuant to the terms of a funding agreement, all transaction costs related to the Spin Out up to a maximum of $300,000 have been and will be paid by Evolving Gold. Prosperity has agreed to reimburse Evolving Gold for the payment of the transaction costs through the issuance of Prosperity Shares to Evolving Gold at a deemed price of $0.15 per Prosperity Share. Assuming the maximum of $300,000 of transaction costs are incurred in connection with the Spin Out, Prosperity expects to issue up to 2,000,000 Prosperity Shares to Evolving Gold pursuant to the terms of the funding agreement.

Under the dividend-in-kind, subject to applicable securities laws, each Evolving Gold shareholder will receive one Prosperity Share for every ten Evolving Gold shares held on the record date, and the number of Prosperity Shares to be issued will be rounded down to the nearest whole number of Prosperity Shares. The payment date for the dividend-in-kind is on or about March 3, 2011. Upon completion of the Spin Out and the receipt of Prosperity Shares for the reimbursement of transaction costs, Evolving Gold expects to hold approximately 48.5% of the outstanding Prosperity Shares.

The record date is February 16, 2011. The ex-dividend date, the date as of which a purchaser of Evolving Gold common shares will no longer be entitled to receive any Prosperity Shares pursuant to the Spin Out, is February 14, 2011.

Prosperity has filed a preliminary prospectus in all provinces and territories of Canada and this preliminary prospectus is available on SEDAR under Prosperity's profile. Prosperity expects to file a final prospectus relating to the dividend-in-kind on or about February 2, 2011. The TSX Venture Exchange ("TSXV") has conditionally approved the listing of the Prosperity Shares on the TSXV under the symbol "PPG", subject to customary listing conditions. The final prospectus will be available on SEDAR under Prosperity's profile. Copies of the final prospectus will also be mailed to Evolving Gold shareholders of record on the record date.

Evolving Gold believes that the fair market value, as at the date of completion of the Spin Out, of the Prosperity Shares to be distributed will be $0.15 per Prosperity Share.

As described in further detail in the prospectus, no Prosperity Shares will be issued to shareholders who are (or are deemed to be) non-residents of Canada. Rather, such Prosperity Shares will be delivered to a trustee for sale in the open market following the dividend-in-kind and the net proceeds will be delivered to non-resident shareholders, net of any withholding taxes. Shareholders who fail to provide a declaration of Canadian residency on or before March 2, 2011 in the form that will be provided may be deemed to be a non-resident for these purposes. Canadian shareholders who hold their shares in Evolving Gold through a brokerage or other account are therefore urged to contact their brokers to avoid being deemed a non-resident. The form of residency declaration will also be available on Evolving Gold's website at www.evolvinggold.com.

This news release does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction. The Prosperity Shares to be distributed have not been approved or disapproved by any Canadian or U.S. regulatory authority nor has any such authority passed upon the accuracy or adequacy of the preliminary prospectus. The Prosperity Shares will not be distributed in any state or jurisdiction, including the United States, if an offer, a solicitation of an offer to buy, or a sale of the Prosperity Shares would be unlawful absent registration or qualification under the securities laws of any such state or jurisdiction. Any public offering of securities to be made in the United States can only be made pursuant to an effective registration statement. The Prosperity Shares have not been registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and the Company has no intention of filing such a registration statement in connection with the dividend-in-kind of the Prosperity Shares. Accordingly, shareholders of the Company who are resident in the United States or who are U.S. persons (as defined in Rule 902 of Regulation S under the U.S. Securities Act) will not be entitled to participate in the dividend-in-kind of the Prosperity Shares, except as set out above and in the preliminary prospectus of Prosperity.



About Evolving Gold Corp.

Evolving Gold is focused on exploring its gold discovery at Rattlesnake Hills, Wyoming, an alkalic gold system, similar to the Cripple Creek gold district in Colorado, and on four gold properties in and adjacent to the productive Carlin district of northern Nevada, two of which are 100% controlled by Evolving Gold.

For more information about Evolving Gold please visit: www.evolvinggold.com. To receive regular updates or to receive a follow-up call from Investor Relations please sign up at: http://www.evolvinggold.com/.

On Behalf of the Board of Directors

"Robert Barker"

Robert Barker
CEO and Director


Investor Relations:
Graham Johnstone
Tel: 778-331-2023

FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements which address future events and conditions, which are subject to various risks and uncertainties. Such statements include those related to the timing and benefits of the proposed Spin Out, the expected filing and availability on SEDAR of Prosperity's final prospectus, and the expected payment date of the dividend-in-kind. The Company's actual results and financial position could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company's control. These factors include: results of exploration activities and development of mineral properties; fluctuations in the marketplace for the sale of minerals; the inability to implement corporate strategies; the ability to obtain financing; currency fluctuations; general market and industry conditions; securities regulatory review of the final prospectus, logistical factors involved in the payment of the Prosperity Shares, and other risks disclosed in the Company's filings with Canadian Securities Regulators.

Forward-looking statements are based on the expectations and opinions of the Company's management on the date the statements are made. The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Such assumptions include assumptions related to the receipt of securities regulatory approval of the Prosperity prospectus and the expected benefits of the Spin Out for Evolving Gold shareholders. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

FORWARD LOOKING STATEMENTS: This news release contains forward-looking statements, which relate to future events or future performance and reflect management's current expectations and assumptions. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to the Company. Investors are cautioned that these forward looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected. These forward-looking statements are made as of the date hereof and, except as required under applicable securities legislation, the Company does not assume any obligation to update or revise them to reflect new events or circumstances. All of the forward-looking statements made in this press release are qualified by these cautionary statements and by those made in our filings with SEDAR in Canada (available at www.sedar.com).
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