Canaco Resources Inc.

Canaco Resources Inc.

June 29, 2009 06:00 ET

Canaco Closes on 2nd Tranche of $2,270,000 Financing

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 29, 2009) - Canaco Resources Inc. (TSX VENTURE:CAN) is pleased to announce that it has closed on its second tranche of non-brokered private placement previously announced on March 30, 2009. The Company raised $2,000,000 and issued a total of 40,000,000 units at $0.05 per unit. Each unit consists of one common share and one-half of one common share purchase warrant. One full warrant will entitle the holder to acquire one common share at $0.07 per share in the first year and $0.10 per share in the second year. These warrants will expire on June 25, 2011. The 40,000,000 shares issued and any shares issued upon exercise of the 20,000,000 warrants are subject to a four-month hold period expiring on October 27, 2009.

The Company also issued 1,000,000 units (comprising of 1,000,000 shares and 500,000 warrants having the same terms as the subscriber warrants) to an individual as finders fee. The 1,000,000 shares issued and any shares issued upon exercise of the 500,000 warrants are subject to a four-month hold period expiring on October 27, 2009.

Subsequent to the closing, SinoTech (Hong Kong) Corporation Limited owns 32,000,000 common shares, representing 35.2% of the outstanding common shares of the Company, and 16,000,000 warrants of the Company.

The proceeds of the private placement will be used toward general working capital project generation and exploration costs.

The closing follows SinoTech having received approval of its investment from the China State Administration for Foreign Exchange.

SinoTech is wholly owned by Sinotex Mineral Exploration Co., Ltd., which in turn is controlled by Beijing Institute of Geology of Mineral Resources ("BIGM"). BIGM owns 28% of Sinotex. BIGM is an enterprise that is wholly owned by the State-Owned Assets Supervision and Administration Commission of China (SASAC).

Two nominees of SinoTech, Dr. Jingbin Wang and Mr. Shuixing Fu, are appointed directors of Canaco. Dr. Wang has been President of Sinotex since 2004; President of BIGM since 2002; a Director of China Nonferrous Metals Resource Geological Survey since 2003; and a Vice President of China Nonferrous Metals Industry Association since 2008.

Mr. Fu has been Assistant General Manager of SinoTech and Sinotex since 2004; and Deputy Director of China Nonferrous Metals Resource Geological Survey since 2005. From 2001 to 2005, Mr. Fu was Associate Dean of BIGM.

Both Dr. Wang and Mr. Fu have over 25 years of experience as a geologist in the mining industry.

In addition, Canaco has appointed Mr. Chaoxian Zhou and Ms. Lingling (Vera) Yang to the officer positions of Deputy General Manager and Director of Corporate Communications respectively.

The Directors welcome Dr. Wang and Mr. Fu to the board and look forward to working closely with them.

The Company has 6,006,750 share purchase warrants with an exercise price of $0.35 per share and will expire in March 2010 and April 2010. The Company had desired to reduce the exercise price of the warrants to $0.10 per share, which amendment requires consent from 100% of the warrantholders. The Company has failed to obtain consent from 100% of the warrantholders and will no longer be pursuing the repricing of the warrants.

The Company relies on litigation protection for "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 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.

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.

Contact Information

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