Canaco Resources Inc.

Canaco Resources Inc.

February 18, 2010 06:00 ET

Canaco Drills 30 Metres Grading 3.46 Grams Gold Per Tonne at Magambazi North 800 Metres North of Magambazi Main Zone

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 18, 2010) - Canaco Resources Inc. (TSX VENTURE:CAN) today announces significant diamond drill results at the new Magambazi North discovery (refer to our press release dated January 27, 2010). The discovery is 800 metres northwest from Magambazi on the 100% owned Kilindi license at the Company's Handeni Gold Project, located in the Handeni region of the United Republic of Tanzania.

The latest drill hole results highlight continuity of grade and thickness of gold mineralization, in an extensive sheet-like gold system.

New results from Magambazi North include:

- 30.3m @ 3.46 g/t Au;

- 27.7m @ 2.18 g/t Au;

- 8.0m @ 3.25 g/t Au; and,

- 12.0m @ 2.65 g/t Au.

To date, fifteen diamond drill holes (MGZD018 to MGZD020 & MGZ023 to MGZ034) totaling 2401 metres have been drilled to evaluate Magambazi North. Results (see Table 1 below) indicated the presence of an extensive zone of structurally-controlled alteration and gold mineralization in a thrust fault dipping gently south. The recent drill results (holes MGZD023 to MGZD027) have continued to intersect broad intervals of mineralization and have confirmed the continuity of the mineralized zone. The mineralized thrust zone has now been traced 220m along strike to the southeast and 200m down-dip and remains open to the south, east and west. Assay results for MGZD028 to 034 are pending.

TABLE 1 – Magambazi North Drill Results To Date (New Results are MGZD023 to MGZD0027) (1)

Drill Hole (3)   From (metres) To (metres) Interval (1) (metres) Au Grade(2) (grams/tonne) Dip/Azimuth
MGZD018   21.0 24.7 3.7 2.25 -50º / 340º
MGZD019   70.0 88.0 18.0 3.30 -50º / 237º
Including 70.0 78.0 8.0 5.68
And 100.0 103.0 3.0 3.04
MGZD020   63.0 63.7 0.7 4.00 -90º / 0º
MGZD023   22.0 27.4 5.4 1.44 -55º / 237º
  54.7 85.0 30.3 3.46
Including 70.0 76.3 6.3 5.57
MGZD024   64.4 72.4 8.0 3.25 -55º / 237º
MGZD025   41.4 52.6 11.2 1.33 -55º / 237º
  75.0 87.0 12.0 2.65
MGZD026   87.7 95.7 8.0 1.73 -55º / 237º
MGZD027   99.0 126.7 27.7 2.18 -55º / 237º
Including 99.0 106.4 7.4 4.05
1. Drill intercept lengths are down-hole lengths reflecting apparent widths of mineralization with true widths ranging between 60% - 100% of the reported down-hole lengths.
2. The calculation of drill intercept employs a 0.3 gAu/t cut-off and no cutting grade for high gold values
3. A drill collar location map can be found on the company's website,

The Magambazi North prospect is 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 includes the Magambazi, Magambazi Central and Magambazi North targets (collectively known as the "Magambazi prospects") and represents the southernmost segment of the 11 kilometre Handeni Gold Trend contained within the Company's Handeni property.

The drilling operation has been re-established at Magambazi to drill several holes into the down plunge extension of the Magambazi mineralized system where previous drilling returned a best intercept of 56.2m @ 6.34 g/t Au. Other holes will be drilled to test several areas where mineralization remains open down plunge, down dip or along strike. Once these are completed and assay results are received for the remainder of holes drilled at Magambazi North, the drill rig will return to Magambazi North to continue drilling the system where it remains open to the south, east and west.

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 images of 2009 exploration activities, can be viewed at the Company's website or at 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

CEO, Canaco Resources

Dr. Jingbin Wang,

Chairman, Canaco Resources

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.

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