Canaco Resources Inc.

Canaco Resources Inc.

September 17, 2010 06:00 ET

Canaco Drills 27 Metres at 4.29 and 15.6 Metres at 6.6 Grams Gold Per Tonne-Continues to Expand Magambazi Gold Discovery With New Results at Magambazi Central

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 17, 2010) - Canaco Resources Inc. (TSX VENTURE:CAN) is pleased to announce new drill results from the Company's Magambazi gold discovery located in the Handeni region of the United Republic of Tanzania.

Results from the project continue to provide steady growth to the mineralization at Magambazi with new intercepts from the high-grade shoot component of the Magambazi Main Lode including:

  • 15.6 metres @ 6.60 grams gold per tonne ("gAu/t") (MGZD0082) including 10.6m @ 8.39 gAu/t (section 60,560N)

Results from the Magambazi Central area include:

  • 27 metres @ 4.29 gAu/t (MGZD0079) including 14 metres @ 6.21 gAu/t
  • 18 metres @ 3.4 gAu/t (MGZD0076) including 7.3 metres @ 5.70 gAu/t
  • 18.4 metres @ 3.01 gAu/t (MGZD0077) including 4.9 metres @ 6.45 gAu/t

The new results from Magambazi Central are from 80m spaced infill drilling of sections previously spaced at 120 to 200 metres and prove the continuity of the Magambazi Main Lode to be over 860 metres of strike and still remaining open to the north.

A program of sampling the wall rocks above and around the Magambazi Main Lode has defined an important new zone of mineralization in hanging wall gneiss, approximately 100m above the Magambazi Main Lode, with the intercept of 9m @ 1.13 gAu/t (MGZD0010 from 81.0 metres). These results confirm the presence of mineralization in a new geological setting at Magambazi and sampling of the hanging wall gneiss along the 860 metre strike length is in progress to define additional mineralization within the Magambazi system.

Exploration is gaining momentum with the diamond drilling capacity now at approximately 4,000 metres a month increasing to approximately 5,500 metres with the arrival of a third rig in the near future. Extensional drilling to the north and exploration drilling testing the targets on the western side of the Magambazi Hill will be combined with infill drilling along the trend in the coming months.

Canaco has recently completed a detailed regional helicopter-borne aero-magnetic survey across the project with 50m spaced line spacing at Magambazi. The survey data is being processed, along with radiometric data and a digital elevation model and will significantly aid the understanding of the structural controls on the Magambazi gold system and assist in establishing priority targeting for regional exploration.

An Induced Polarization ("IP") survey has also commenced in the last few days to help define new targets on the western side of the Magambazi Hill and elsewhere in the region.

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. 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, including drill hole intercepts, drill collar maps, and images of 2009 exploration activities, can be viewed at the Company's website or at Canaco Resources Inc. 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 Inc.

Dr. Jingbin Wang, Chairman

Canaco Resources Inc.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the release. The Company relies on litigation protection for "forward-looking" statements.

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