Canaco Resources Inc.

Canaco Resources Inc.

November 03, 2009 06:00 ET

Canaco Samples 5 Metres of 4.92 Grams Gold Per Tonne at Magambazi North-Expands the Exploration Progam at Handeni

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 3, 2009) - Canaco Resources Inc. (TSX VENTURE:CAN) is pleased to announce assay results from surface channel sampling at Magambazi North and an expanded exploration effort that includes additional diamond drilling of the Magambazi gold prospect at the Company's Handeni Gold Project, located in the Handeni region of the United Republic of Tanzania.

At Magambazi North, results from channel sampling of an occurrence of exposed bedrock mineralization have returned grades of 2.99 grams gold per tonne over 9 meters (including 4.92 grams gold per tonne over 5 meters). The sampled mineralization at Magambazi North is similar in style and grade to that observed from the "Big Pit" channel sampling at Magambazi, 700 meters to the southeast, where recent drill results have confirmed the presence of a significant gold system consisting of a broad, alteration zone with sulphide mineralization and frequent occurrences of trace visible gold and containing two distinct intervals of moderate to high-grade gold mineralization known as the "upper" and "lower" lodes (see press release dated October 22, 2009).

The Magambazi North prospect was originally defined by geochemical surveying designed to identify the source of large alluvial deposits found in river beds draining the immediate area. The results of the soil sampling program returned 33 samples >100ppb Au with a peak value of 1218ppb Au (1.22g/t Au). The Magambazi North anomaly 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 southernmost segment of the 11 kilometre Handeni Gold Trend contained within Canaco's Handeni property.

Since the press release dated October 22, 2009 the Company has continued the Phase 1 diamond drilling program, completing an additional 1113 metres in 5 holes (MGZD008, 9, 10, 11 and 12). This brings the total metres drilled to date in Phase 1 to 3,202 metres. Recent drilling continues to test the mineralized zone discovered in MGZD001 along strike and down dip, stepping out both south and north of the discovery section. Additional information on this latest drilling will be released once assay information becomes available.

Encouraged by recent drill results at Magambazi, Canaco's Board has approved an expanded exploration effort at the Handeni Project to continue to test the extents mineralization at the Magambazi prospects, identify additional drill targets along the Handeni Gold Trend and complete a detailed assessment of the controls on mineralization and the structural geology. The expanded work program will include:

  • 2,000 metres of additional diamond drilling at Magambazi, Magambazi North and Magambazi Central
  • Detailed airborne Mag/EM survey
  • Soil sampling, regional mapping and trenching
  • Rotary Air Blast ("RAB") drilling along the Handeni Gold Trend – Majili Bomba and Magambazi West
  • Geotechnical compilation, resource assessment and petrographic and metallurgical analysis

The Company anticipates being actively engaged in exploration at Handeni for the remainder of 2009 and throughout 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 images of 2009 exploration activities, can be viewed at the Company's website or at Canaco Resources 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 Inc.

Dr. Jingbin Wang, Chairman,

Canaco Resources Inc.

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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