Canaco Announces Preliminary Economic Assessment Program for Magambazi and Appoints Sean Waller to Advisory Board

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 19, 2011) - Canaco Resources Inc. (TSX VENTURE:CAN) ("Canaco" or the "Company") is pleased to announce details of a $5 million Preliminary Economic Assessment ("PEA") program at Magambazi planned for completion by the end of June 2012. The Company also announces the appointment of Sean Waller to its Advisory Board.

Resource Calculation

The drill program presented in Canaco's 2011/12 exploration program (see press release dated August 15, 2011) has been designed to support the completion of an initial resource calculation at Magambazi by the end of the first quarter of 2012. Based on rig availability and anticipated productivity, delineation drilling for the purposes of calculating the initial resource estimate will be completed by December 31, 2011. Diamond drilling will continue over the next 12 months to provide continued detailed assessment of Magambazi mineralization.

PEA Program

The Company's 2011/12 exploration and development budget includes plans for engineering work that will lead to the completion of a PEA by the end of June 2012. The PEA will include design and field work, metallurgical testing, geotechnical assessment, mill flow-sheet design, economic analysis, preliminary mine plan and operations layout, and preliminary production schedule.

Canaco is currently in the process of selecting an engineering consulting firm to initiate the Magambazi PEA. A schedule to establish parameters for a pre-feasibility/feasibility program will follow.

Permitting

Canaco has been engaged in the permitting process for the past 18 months in order to apply for a mining license on the primary mining licenses purchased from Magambazi Mines Limited in 2010. The Tanzanian process requires the acquisition of an environmental certificate, which includes impact assessments and public hearings from village level to regional stakeholders, prior to submission of an application for a mining license. The environmental certification process at Magambazi has been through its final review by the National Environment Management Council, and Canaco expects to receive environmental certification by the end of 2011. Once received, the environmental certificate will allow Canaco to submit an application for the mining license. The application has been prepared in anticipation of submission and review.

Management Additions

In anticipation to the initiation of a development program based on the PEA, Canaco is sourcing candidates for the position of Vice President Project Development. This Vancouver-based position will be filled by a qualified professional who will lead a team of Canaco technical personnel and consultants as Magambazi advances through development toward production.

Canaco is also pleased to announce the addition of Sean Waller, P.Eng., to the Company's Advisory Board. Mr. Waller is President of Candente Copper Corp. and a registered Professional Engineer with more than 25 years of international experience in mining project management, evaluation, design and operation, with a specific focus on large-scale copper projects and gold projects. Prior to joining Candente he was with AMEC Americas Limited Mining Division ("AMEC") in Vancouver where he held the positions of Vice President of Global Business Development and Senior Project Manager. He has also worked with SNC-Lavalin's Mining Division and Freeport-McMoRan at its Grasberg copper operation in Indonesia. He is a member of the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") where he has served on the CIM National Executive Council, and he is the immediate past Vice President for District 6 (British Columbia and Yukon). Mr. Waller has a B.Sc. in Geology from the University of British Columbia in Vancouver and a Master's Degree in Mineral Process Engineering from The Montana School of Mines in Montana.

Canaco President and CEO Andrew Lee Smith said: "These important milestones are achievable in the next 12 months and will allow the acceleration of the development program at Magambazi. Combined with the appointment of Sean Waller to the Advisory Board, these plans signal Canaco's commitment to the rapid advancement of the Magambazi project, which we believe is a world-class asset."

About Canaco

Canaco is a Vancouver-based mineral exploration company focused on advanced exploration projects in Africa. Built on a foundation of experienced management, the Company is rapidly advancing the Handeni project in Tanzania and 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.