Canaco Resources Inc.
TSX VENTURE : CAN

Canaco Resources Inc.

May 03, 2010 06:00 ET

Canaco Drills 21.7m Grading 6.79 Grams Gold Per Tonne and 21.2m Grading 4.80 Grams Gold Per Tonne at Magambazi Central, Extending the Magambazi Gold Zone Over 200m to the North

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 3, 2010) - Canaco Resources Inc. (TSX VENTURE:CAN) is extremely pleased to announce exciting new intercepts from Magambazi Central and Magambazi located at the Company's Handeni Gold Project in the Handeni region of the United Republic of Tanzania. Extensional drilling 240m north of previously reported drilling conducted at Magambazi (refer to our Press Release dated March 8, 2010) has intersected high gold grades over large widths; including:

  • 21.7m @ 6.79g/t Au, including 9.5m @ 12.75 g/t Au (MGZD0045); and
  • 21.2m @ 4.80g/t Au, including 11.0m @ 7.90 g/t Au (MGZD0043).

Other significant intercepts have been returned for extensional and infill drilling at Magambazi, including:

  • 8.0m @ 3.80 g/t Au, 7.7m @ 5.42 g/t Au and 4.2m @ 5.87 g/t Au (MGZD0042);
  • 11.5m @ 3.16g/t Au (MGZD0044); and
  • 3.8m @ 19.83 g/t Au and 3.5m @ 7.71 g/t Au (MGZD0040).

The Magambazi Lodes, containing high-grade gold intercepts on every section drilled to date, are now defined over a 440m strike (from 60320N to 60760N local grid) and the system remains open down dip, down plunge and along strike to the north. New lodes have also recently been identified to the west of the main Magambazi Upper and Lower Lodes with intercepts of 34.6m @ 1.36g/t Au (MGZD0040) from 102.0m (including 12.0m @ 2.83g/t Au).

TABLE 1 – Magambazi Drill Results

Drill Hole Local N Local E Program Type Local Azimuth/Dip
(degrees)
  From (metres) To (metres) Interval (metres) Au Grade (grams/tonne)
MGZD014 10244 60320 Additional assays 90/-62   160.0 161.0 1.0 7.55
MGZD038 10203 60400 Infill 90/-65   219.7 235.0 15.3 1.87
including 219.7 226.4 6.7 2.64
and including 229.9 232.0 2.1 4.07
MGZD039 10200 60400 Infill 90/-71   199.0 202.5 3.5 1.69
and 233.3 249.2 15.9 2.00
including 233.3 238.0 4.7 3.47
and including 245.0 249.2 4.2 3.11
MGZD040 10243 60400 Infill 90/-90   102.0 136.6 34.6 1.36
including 106.0 109.5 3.5 7.71
including 103.0 115.0 12.0 2.83
and 211.0 214.8 3.8 19.83
MGZD041 10200 60400 Infill 98/-79   228.4 233.7 5.3 1.74
and 278.0 280.1 2.1 2.85
MGZD042 10129 60560 40m extension 90/-58   178.7 186.7 8.0 3.80
and 198.0 205.7 7.7 5.42
and 226.0 242.4 16.4 2.03
including 226.0 230.2 4.2 5.87
MGZD043 10134 60760 200m extension 101/-75   149.7 159.9 10.2 2.87
and 224.0 227.8 3.8 3.36
and 247.0 268.2 21.2 4.80
including 247.0 258.0 11.0 7.90
MGZD044 10128 60560 40m extension 90/-68   261.4 281.0 19.6 2.32
including 261.4 272.9 11.5 3.16
MGZD045 10133 60760 200m extension 90/-82   246.0 267.7 21.7 6.79
including 246.0 255.5 9.5 12.75

The Magambazi, Magambazi Central and Magambazi North prospects are part of a 1.4 kilometre long trend of gold mineralization defined by bedrock gold occurrences, artisanal mine workings and soil geochemical anomalies. This 1.4 kilometre trend represents the southernmost segment of the 11 kilometre Handeni Gold Trend contained within the Company's Handeni Gold Project. The diamond drilling operation is progressing with the objective of extending the mineralization at Magambazi North to the north, south and down dip and at the Magambazi down dip and along strike.

Preliminary metallurgical test work is reaching completion and the results are expected to be announced in the near future. Canaco is gearing up toward increasing its diamond drill capacity with a second rig and is currently finalizing plans for RAB and RC drilling as well as a detailed aeromagnetic survey across the project area.

Harvest Acquisition Update:

Further to Canaco's proposed acquisition of a 70% equity interest in Harvest Plc, a private Ethiopian company with exploration assets in the Tigray region of northeast Ethiopia (refer to our Press Release dated January 21, 2010) legal and technical due diligence remains ongoing and the closing date of the proposed transaction has been extended to June 30, 2010.

The planning, execution and monitoring of quality control programs at the Handeni project are under the supervision of Andrew Lee Smith, P.Geo, Canaco's CEO and Dr. David Groves, Canaco's Director of Project Development, Tanzania. Mr. Smith and Dr. Groves are qualified persons as defined by National Instrument 43-101. Canaco utilizes an industry standard QA/QC protocol with respect to sampling procedures. Blanks, and certified reference standards are inserted into the sample stream to monitor laboratory performance and duplicates of pulps and bulk rejects are also used to monitor laboratory performance.

Additional information and public documents about Canaco Resources, including drill hole intercepts, drill collar maps, and images of 2009 exploration activities, can be viewed at the Company's website www.canaco.ca or at www.sedar.com. Canaco Resources Inc. is listed on the TSX Venture Exchange and is engaged in the exploration and development of Tanzanian gold prospects.

Andrew Lee Smith, P.Geo Dr. Jingbin Wang,
CEO, Canaco Resources Chairman, Canaco Resources

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the release. The Company relies on litigation protection for "forward-looking" statements.

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