Canaco Resources Inc.
TSX VENTURE : CAN

Canaco Resources Inc.

July 13, 2011 06:00 ET

Canaco Announces Additional Magambazi Drill Results, Including 20.3 Metres at 6.93 Grams Per Tonne Gold and 21.7 Metres at 4.7 Grams Per Tonne Gold

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 13, 2011) - Canaco Resources Inc. (TSX VENTURE:CAN) ("Canaco" or the "Company") is pleased to announce new assay results for diamond drill holesat Magambazi on the Company's Handeni project in Tanzania. Highlights include:

  • 20.3 metres at 6.93 grams per tonne gold from 235.1 metres in hole MGZD203, including 13.3 metres at 8.96 grams per tonne gold, located in the keel position at Magambazi Central (section 60720N);
  • 21.7 metres at 4.70 grams per tonne gold from 67.7 metres in hole MGZD149, including 5.6 metres at 10.59 grams per tonne gold, in the near-surface Magambazi Main Lode position approximately 40 metres up-dip of the discovery hole MGZD001 (section 60440N). This interval continues to highlight the continuity of thick intercepts of mineralization on strike and up dip of the discovery hole, and represents the nearest to surface intercept on this section to date;
  • 14.0 metres at 4.13 grams per tonne gold from 139.1 metres in hole MGZD191 in the Magambazi Main Lode at Magambazi Central (section 60720N);
  • 29.8 metres at 2.03 grams per tonne gold from 186 metres in hole MGZD196, including 7.7 metres at 6.11 grams per tonne gold, located 50 metres up-dip of hole MGZD203 in the Magambazi Main Lode at Magambazi Central (section 60720N). It is expected that results for the lower part of this hole will yield significant additional gold results and this interval may be restated in future releases;
  • 19.1 metres at 2.59 grams per tonne gold from 237 metres in hole MGZD188, including 3.1 metres at 9.86 grams per tonne gold (section 60640N).This interval is currently interpreted to be an extension of the Magambazi Main Lode.

These results include new drill holes from Magambazi Central and Magambazi South utilizing seven diamond drill rigs. The new results also include a number of new intervals and sub-intervals identified through ongoing reassessment and reinterpretation of previously reported holes. There are also a significant number of additional intervals from holes drilled on the periphery of the main lodes, which are all listed in the table associated with this release.

Hole(1) From (m ) To (m ) Interval (m ) Au (g/t )
MGZD107(2) 230.6 248.1 17.5 14.61
MGZD149 67.7 89.4 21.7 4.70
including 78.9 84.5 5.6 10.59
MGZD188 237.0 256.1 19.1 2.59
including 237.0 240.1 3.1 9.86
MGZD191 139.1 153.1 14 4.13
MGZD196 186 215.8 29.8 2.03
including 189.1 196.8 7.7 6.11
MGZD203 235.1 255.4 20.3 6.93
  1. Mineralized true thicknesses are 60-100% of stated thicknesses. The calculation of drill intercepts employs a 0.3 gram/tonne cut-off and no cutting grade has been applied to high gold values.
  2. Hole MGZD107 was initially reported on February 23, 2011.

Click http://media3.marketwire.com/docs/can713a.pdf for a plan view map and complete list of drill hole intercepts.

To accommodate increased sample loads and resolve the current backlog of drill core processing, Canaco has initiated an additional sample stream at a second accredited laboratory in Tanzania and has also identified excess sample stream capacity with an accredited laboratory out of country. A total of 56,000 metres of diamond drilling has now been completed at Magambazi from 240 diamond drill holes averaging 237 metres in depth.

Quality Control

The planning, execution and monitoring of Canaco's quality control programs at the Handeni project are under the supervision of Jeff Heidema, P.Geo., Canaco's Vice President Exploration, and Dr. David Groves, Canaco's Director of Project Development. Mr. Heidema and Dr. Groves are Qualified Persons as defined by National Instrument 43-101. Diamond drill samples are prepared and analyzed at the SGS Geochemical Laboratory in Mwanza, Tanzania. RC drill samples are prepared at the ALS Chemex Laboratories in Mwanza, Tanzania and analyzed at their facilities in Johannesburg, South Africa. Samples are processed by Fire Assay with A.A. finish under the SGS FAA505 and ALS Au-AA24 protocols. Samples in this release also included results from pulp assay rechecks conducted at ALS Chemex Laboratories in Vancouver, Canada. 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.Mineralized true thicknesses are 60-100% of stated thicknesses throughout this release.

Additional information including press releases and public documents about Canaco can be viewed at the Company's website www.canaco.ca or at www.sedar.com.

About Canaco

Canaco is a Vancouver-based mineral exploration company focused on advanced exploration projects in Africa. Built on a foundation of experienced management and focused on rapidly advancing exploration projects throughout Africa, Canaco is well positioned to build shareholder value through discovery and resource development.

Canaco's shares trade on the TSX Venture Exchange under the symbol CAN.

On behalf of the Board of Directors:

Andrew Lee Smith, P.Geo., President, CEO and Director

Cautionary Statement Regarding Forward-Looking Information

This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "anticipate", "believe", "plan", "expect", "intend", "estimate", "forecast", "project", "budget", "schedule", "may", "will", "could", "might", "should" or variations of such words or similar words or expressions. Forward-looking information is based on reasonable assumptions that have been made by the Company as at the date of such information and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: risks associated with mineral exploration and development; metal and mineral prices; availability of capital; accuracy of the Company's projections and estimates; interest and exchange rates; competition; stock price fluctuations; availability of drilling equipment and access; actual results of current exploration activities; government regulation; political or economic developments; environmental risks; insurance risks; capital expenditures; operating or technical difficulties in connection with development activities; personnel relations; the speculative nature of strategic metal exploration and development including the risks of diminishing quantities of grades of reserves; contests over title to properties; and changes in project parameters as plans continue to be refined. Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to the price of gold; the demand for gold; the ability to carry on exploration and development activities; the timely receipt of any required approvals; the ability to obtain qualified personnel, equipment and services in a timely and cost-efficient manner; the ability to operate in a safe, efficient and effective manner; and the regulatory framework regarding environmental matters, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking contained herein, except in accordance with applicable securities laws.

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.

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