Canaco Resources Inc.
TSX VENTURE : CAN

Canaco Resources Inc.

January 16, 2007 18:54 ET

Canaco Announces Update on Morogoro Exploration

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 16, 2007) - Canaco Resources Inc. (TSX VENTURE:CAN) is pleased to announce an update on the progress of Phase 1 exploration at the Company's 230 square kilometre Morogoro property located in the Kilosa District of Tanzania.

The Phase 1 exploration program was initiated with the objective of providing an initial evaluation of the geological potential of the 24 square kilometre area of interest defined by the presence of artisanal mining activity. The exploration program was conducted on seven different target areas (Kiegea, Matandani A and B, Quarry, Safuma A and B, Mkula, Msunguluti, and Mangai) and included mapping, sampling, and wide-spaced diamond drilling. The diamond drilling program was completed on December 7, 2006 and totaled 2508 meters in 25 drill holes. All of the drill core has been logged and samples from 15 holes have been delivered to SGS laboratories in Mwanza for analysis. Partial results (gold only) have been received for 8 of the 25 holes drilled. These analyses represent the results from 32% of the total samples submitted for laboratory analysis.

To date, results have been received from two of five holes in the Kiegea area, the other 6 holes from Matandani A and B, Msunguluti, Safuma A, Quarry and Mkula.

The drill holes at Kiegea are anomalous for gold in the upper 9 metres. MGRDDH0601 reported 0.99 grams per tonne gold (gAu/t) over 2.5 metres from 6.5m to 9m with coarse visible gold at 6.8m. In addition to the drill holes in the Kiegea area, analytical data has also been received from chip samples taken on exposed trench walls of artisanal workings. Chip samples in the vicinity of MGRDDH0601 returned gold values over 1.30 gAu/t, and 5.61 gAu/t over the 1.2 meters respectively. In addition to gold, the channel samples also returned elevated values in lead, zinc and copper. No base metal or silver analyses for drill core samples have been received to date.

The drill holes at Msunguluti are anomalous for gold in the upper 11 metres. MGRDDH0618 reported 0.75 gAu/t over 2 metres from 9m to 11m and 0.50 gAu/t from 6m to 7m.

The drill holes at Safuma A are locally anomalous for gold in the upper 18 meters. MGRDDH0615 reported 1.68 gAu/t Au over 3 meters from 15m to 18m.

The results from drilling and channel sampling received to date together with geological observations from drill core and outcrops indicate that the majority of the gold at Morogoro is supergene, secondary reprecipitate. In combination, these data confirm that the potential to define a broad near surface source of gold mineralization exists at Morogoro. The completion of the analyses of drill core and the geochemical survey will define the focus for subsequent exploration. To date, the controls on the distribution of near surface gold have not been defined and indications of primary source for the gold mineralization within the gneissic host rocks below the zone of surface oxidation has not been observed. The company is continuing with regional mapping and geochemical surveying focused within the 24 square kilometre area defined by artisanal workings.

"Canaco remains encouraged by the potential exhibited at the Morogoro prospect on the basis of results received thus far from this initial phase of exploration," said Andrew Lee Smith, Canaco's Chairman and CEO. "Geological data accumulated from exploration on the property over the past three months continues to define the gold targets, however, conclusions with respect to the potential of the gold mineralization and recommendations for further exploration will await the receipt and interpretation of analytical data from the diamond drilling program."

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

Detailed information on the drill hole sampling results summarized in this press release, images, technical reports on the Morogoro gold prospect and other public documents are available on SEDAR at www.sedar.com or from the company's website at www.canaco.ca.

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

The Company relies on litigation protection for "forward-looking" statements.

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 1-866-488-0822
    or
    Canaco Resources Inc.
    Nick Watters
    Investor Relations
    (604) 488-0822 or 1-866-488-0822
    Email: investors@canaco.ca
    Website: www.canaco.ca