Canaco Completes $120 Million Treasury Bought Deal Financing and $43 Million Secondary Bought Deal Financing

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 22, 2011) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES.

Canaco Resources Inc. (TSX VENTURE:CAN) ("Canaco" or the "Company") is pleased to announce it has completed its previously announced bought deal financing for aggregate gross proceeds to Canaco of $119,880,000 and aggregate gross proceeds to SinoTech (Hong Kong) Corporation Limited ("SinoTech") of $43,200,000. A syndicate of underwriters including Canaccord Genuity Corp. and TD Securities Inc. (the "Underwriters") purchased an aggregate of 30,200,000 common shares (the "Common Shares") of the Company, of which 8,000,000 Common Shares were purchased on a secondary basis from SinoTech, at a price of $5.40 per share. The Company has also granted the Underwriters an over-allotment option, exercisable for a period of up to 30 days following the closing, to purchase from the Company up to an additional 3,330,000 Common Shares at a price of $5.40 per share for additional gross proceeds to Canaco of up to $17,982,000.

Following the completion of the financing, SinoTech currently holds 40,000,000 Common Shares, representing approximately 20% of the Company on an undiluted basis.

The securities offered have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Canaco also announces a correction to the price of 7,225,000 options granted on December 3, 2010 to certain directors, officers and consultants. The exercise price will be $4.88 per share, rather than $4.56 per share, and the expiry date of December 3, 2015 will remain the same.

About Canaco

Canaco is a Vancouver-based mineral exploration company focused on advanced exploration in Africa. Built on a foundation of experienced management and focused on rapidly advancing exploration projects in Tanzania and Ethiopia, Canaco believes it 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 news 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, as well as those risk factors set out in the Company's annual information form for the financial year ended June 30, 2010 and the Company's short form prospectus dated March 15, 2011.

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. The forward-looking information contained in this news release is included for the purpose of providing investors with information to assist them in understanding the Treasury Offering and the Secondary Offering and may not be appropriate for other purposes. The Company does not undertake to update any forward-looking information that is included herein, except in accordance with applicable securities laws.