Canaco Resources Inc.

Canaco Resources Inc.

October 17, 2007 08:26 ET

Canaco Announces Phase I Exploration at Magembe Diamond Project, Tanzania

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 17, 2007) - Canaco Resources Inc. (TSX VENTURE:CAN) is pleased to announce the initiation of Phase I exploration at the Company's Magembe Diamond Project located in the Shinyanga district of northwestern Tanzania.

The objectives for the current exploration program at Magembe will be to confirm and evaluate indicated diamond potential from both alluvial and kimberlite sources. This program will follow-up on reconnaissance scale exploration competed earlier in 2007. This initial work consisted of compilation, remote sensing, geological mapping and prospecting and was successful in identifying geological environments favourable for hosting surficial and bedrock diamond deposits.

Local artisanal mining operations are active and recovering diamonds from surface alluvial deposits on the western boundary of the Magembe property. Security has been established in areas of the property where significant potential exists for the recovery of alluvial diamonds related to the Mwadui (Williamson) kimberlite and other possible sources in the region. The Phase I exploration program will evaluate the concentrations of recoverable diamonds from alluvial material through systematic bulk sampling and processing.

On the northern part of the property, regional geophysical data indicate the presence of four unexplored kimberlite targets with magnetic expressions similar to that of the Williamson (Mwadui) kimberlite. Phase I exploration will evaluate these targets through the completion of ground geophysics and bedrock sampling.

The Magembe property is part of a two kilometre buffer zone created to surround the Williamson (Mwadui) Mine as part of the original mine development in the 1940's and 50's. This buffer zone was formed with the intention of ensuring that the mining operations could proceed in a safe and orderly manner through the prohibition of the mining of surficial diamond deposits in the area immediately adjacent to the mining operation.

The Williamson Mine is currently owned 75% by De Beers and 25% by the Government of Tanzania, and has a production history that spans six decades. The Williamson pipe covers 360 acres and, at the time of its discovery in 1940, was considered the largest economically exploitable pipe in the world. The mine at Williamson is notable as the original source of pink diamonds and has produced notable stones including a 54 carat flawless pink diamond, and a 388 carat diamond found in 1990.

Canaco's exploration at Magembe is being conducted under the terms of an option agreement with Douglas Lake Minerals whereby Canaco can earn 75% of Douglas Lake's interest in the property through cash and share payments and spending US$2.5 million in exploration expenditures over four years (see press release, March 9, 2007).

The planning, execution and quality control programs at the Magembe Diamond Project are under the supervision of Andrew Lee Smith, P.Geo. Mr. Smith is a qualified person as defined by National Instrument 43-101.

Additional information on Canaco, including technical reports and other public documents are available on SEDAR at or from the company's website at

Canaco Resources is an emerging junior gold exploration company trading on the TSX Venture Exchange. The company is actively engaged in the acquisition of advanced exploration and development projects.

The Company relies on litigation protection for "forward-looking" statements. Forward-Looking Statements: This press release contains forward-looking statements that are based on the Company's current expectations and estimates. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other similar words or statements that certain events or conditions "may" or "will" occur, and include, without limitation, statements regarding the obligations of the Company under the Option Agreement and the Company's plans with respect to the exploration and development of its projects. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from estimated or anticipated events or results implied or expressed in such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due o the inherent uncertainty therein. No independent consultant has rendered an expert opinion on the property.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the release.

Contact Information

  • Canaco Resources Inc.
    Andrew Lee Smith
    Chairman and CEO
    (604) 488-0822 or Toll Free: 1-866-488-0822
    Canaco Resources Inc.
    Nick Watters
    Investor Relations
    (604) 488-0822 or Toll Free: 1-866-488-0822