Canaco Resources Inc.

Canaco Resources Inc.

July 20, 2012 17:00 ET

Canaco Announces All Remaining Drill Results at Handeni

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 20, 2012) - Canaco Resources Inc. (TSX VENTURE:CAN) ("Canaco" or the "Company") is pleased to provide all remaining drill results from the Handeni project, including diamond drilling at Magambazi and both diamond and reverse circulation (RC) drilling at regional targets within the Handeni project area.

The diamond drill results, which include 38 new holes and updates to one previously reported hole, were not included in the initial Magambazi mineral resource estimate announced on May 15, 2012, and are not expected to significantly affect the mineral resource estimate. Highlights include:

Hole ID(1) From (m) To (m) Interval (m) Au (g/t) Location
MGZD277(2) 249.0 279.0 30.0 4.78 Magambazi Main
including 249.0 267.0 18.0 7.97
MGZD403 173.70 191.20 17.50 5.21 Western Lodes (top)
including 187.70 191.20 3.50 12.47
195.70 198.50 2.80 6.58
MGZD406 238.70 242.00 3.30 3.29 Western Lodes (top)
MGZD420 152.00 156.50 4.50 2.14 Magambazi Main
179.20 200.00 20.80 2.84
including 192.50 195.30 2.80 10.17
203.00 206.10 3.10 15.98
MGZD432 18.70 22.20 3.50 22.05 Magambazi North
32.00 34.80 2.80 1.49
63.00 67.20 4.20 2.35
including 65.80 67.20 1.40 4.73
(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) Updates to a previously reported hole

The RC drill results, which include 137 holes in the areas peripheral to Magambazi, have indicated the potential for near surface gold mineralization at Kwadijava and returned anomalous mineralization from other regional targets. Highlights include:

Hole ID(1)(2) From (m) To (m) Interval (m) Au (g/t) Location
MGZC158 12.00 41.00 29.00 1.25 Kwadijava
including 26.00 39.00 13.00 1.53
MGZC161 12.00 15.00 3.00 8.11 Kwadijava
MGZC245 89.00 90.00 1.00 1.70 MK South
103.00 109.00 6.00 0.69
MGZC183 10.00 12.00 2.00 3.71 Majiri
MGZC214 16.00 17.00 1.00 2.60 Bahati
MGZC224 145.00 146.00 1.00 3.13 Junction
MGZC257 21.00 22.00 1.00 1.59 Kiajani
(1) Holes were drilled as water source wells.
(2) True interval thicknesses of drilled gold intercepts cannot be determined at this time and interval lengths are presented as drill interval lengths.

The data generated by the RC program is being compiled and the results considered as part of the planning process for further exploration work.

Please visit the Company's website at for a plan view map and complete updated lists of drill hole intercepts.

Quality Control

The planning, execution and monitoring of Canaco's drilling and quality control programs at the Handeni project are under the supervision of Jeff Heidema, P.Geo., Canaco's Vice President Exploration. Mr. Heidema is a Qualified Person as defined by National Instrument 43-101. Diamond drill samples in this release were prepared and analyzed at the SGS Geochemical Laboratory in Mwanza, Tanzania. Samples are processed by Fire Assay with A.A. finish under the SGS FAA505. Additionally, core samples analyses are conducted at Acme Labs in Vancouver, Canada, and undergo Fire Assay Fusion Gold by ICP-ES and lead collection fire assay-gravimetric finish. 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 core, rejects, and pulps are also used to monitor laboratory performance and characterize mineralization. Mineralized true thicknesses are 60-100% of stated thicknesses throughout this release.

About Canaco

Canaco is a Vancouver-based mineral exploration company focused on advanced exploration projects in Africa. The Company has $95 million cash and no debt. 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 information 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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