Canaco Resources Inc.

Canaco Resources Inc.

October 06, 2009 06:00 ET

Canaco Announces Complete and Restated Results From Magambazi DDH 001

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 6, 2009) - Canaco Resources Inc. (TSX VENTURE:CAN) is pleased to announce the complete and restated assay results from the first drill hole of the Company's current diamond drilling program at the Magambazi gold prospect located in the Handeni region of the United Republic of Tanzania.

As presented previously (refer to press release September 28, 2009), MGZD001 is the first drill hole in a 2000 metre program at Magambazi which began in early September and marks the first diamond drilling campaign ever to be conducted on the property. The 293 metre drill hole (MGZD 001) intersected a broad, intense alteration zone and sulphide mineralization (pyrrhotite, arsenopyrite, pyrite and chalcopyrite) with trace amounts of visible gold in eight separate one-metre intervals. This zone of alteration and mineralization intersected the target at approximately 70m below surface and has returned an overall gold grade of 4.28 grams gold per tonne over 59 metres based on additional assay results received from the lowermost interval of the mineralized zone. High grade gold mineralization occurs in two major intervals within the broader alteration envelope.

Assays for the complete mineralized interval have now been received for all of the 73 meters of sampled drill core. The previous announcement did not included three mineralized one metre core samples whose delivery to the assay lab had been delayed. The average grade for the 3 metre interval for which assays have been recently received is 7.39 grams gold per tonne.

The restated results from MGZD001 are as follows:

From To Interval(1) Au Grade(2)
Drill Hole Number Azimuth Dip (metres) (metres) (metres) (grams/tonne)
MGZD001 060 -50 148 206 59 4.28(3)
including 154 166 12 4.18
including 189 206 17 10.38
MGZD002 060 -75 Assays Pending
MGZD003 060 -61 Assays Pending
MGZD004 060 -50 Assays Pending
(1) Drill intercept lengths are down-hole lengths reflecting apparent widths
of mineralization with true widths ranging between 80% - 100% of the
reported down-hole lengths.
(2) Drill intercepts are based on a 0.3 gram/tonne gold cut-off with no
upper cut.
(3) grade calculation includes up to 6 meters of internal dilution

MGZD002 and MGZD003 have been drilled on the same section as MGDZ001. MGZD004 is the first of 3 holes to be drilled on a section 80 metres to the southeast to test the strike extension of the mineralization first encountered in MGZD001.

The Magambazi prospect lies at the southern end of the 10 km Handeni Gold Trend, an area of anomalous gold geochemistry defined by soil sampling surveys and the presence of artisanal mining operations including Canaco's Magambazi, Magambazi North, Semwaliko, Semwaliko North and Majiri Bomba prospects

Canaco has the option to earn a 100%, interest in the Magambazi property by making a US$1.8 million cash payment and providing a 2% Net Smelter Royalty ("NSR") to Magambazi Mines Ltd., a Tanzanian company that represents the interests of artisanal miners and local families. Canaco also owns a 100% interest in the contiguous 200 square kilometre Kilindi Prospecting License ("PL") which contains the entire strike extent of the Handeni Gold Trend as it has been defined to date.

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. Core is sawn in half with one half shipped for analysis to SGS Laboratories in Mwanza Tanzania. The remainder of the core is stored and secured for future assay verification. 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

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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