Canaco Resources Inc.
TSX VENTURE : CAN

Canaco Resources Inc.

August 02, 2011 06:00 ET

Canaco Drills 31.3 Metres Grading 3.11 Grams per Tonne Gold at Magambazi Main Lode and Extends Western Lodes with 17.5 Metres at 2.95 Grams per Tonne Gold

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 2, 2011) - Canaco Resources Inc. (TSX VENTURE:CAN) ("Canaco" or the "Company") is pleased to announce new assay results from diamond drilling at the Magambazi gold discovery on the Company's Handeni project in the United Republic of Tanzania.

Seven diamond drill rigs are currently drilling at Magambazi, where the focus is on delineation and extension of known mineralization at the Main, Western, Southern Gneiss and Cave Lode positions. Results have been received for 17 drill holes, 14 of which encountered mineralization. Highlights include:

  • 31.3 metres at 3.11 grams per tonne gold in hole MGZD207, including 3.5 metres at 7.9 grams per tonne gold. This hole was drilled between hole MGZD004, which intercepted 27 metres at 2.82 grams per tonne gold, and hole MGZD005, which intercepted 41 metres at 3.32 grams per tonne gold (see Canaco's news releases dated November 17, 2009 and December 16, 2009), and highlights the exceptional reproducibility of grade of the Main Lode;

  • 17.5 metres at 2.95 grams per tonne gold in hole MGZD161 in the Upper Western Lode, including 4.2 metres at 7.89 grams per tonne gold. This intersection suggests continuity of Western Lode mineralization between previously reported intersections 160 metres to the north and 320 metres to the south (see Canaco's news releases dated November 17, 2009 and December 16, 2009). Drilling has been planned to further test the continuity of the Western Lode mineralization over the entire approximate 1.0 km length of Magambazi;

  • 9.1 metres at 4.3 grams per tonne gold in hole MGZD157, including 5.6 metres at 6.01 grams per tonne gold. This hole was drilled to test the Main Lode at Magambazi Central;

  • 3.0 metres at 30.2 grams per tonne gold in hole MGZD163 in the Western Lodes;

  • 16.0 metres at 1.03 grams per tonne gold in hole MGZD138 in the near-surface Cave Lode. This is the largest intercept to date drilled on the Cave Lode;

  • 7.0 metres at 1.86 grams per tonne gold in hole MGZD164, including 3.0 metres at 3.67grams per tonne gold. These encouraging intersections are also in the Cave Lode and indicate potential for mineralization over a significant strike length. Additional drill testing is planned up dip and near surface, as indications are that the mineralization is strengthening east and up dip; and

  • 7.0 metres at 2.4 grams per tonne gold in hole MGZD155 and 3.1 metres at 3.16 grams per tonne gold in hole MGZD159. These holes have located the tail to the Magambazi Main Lode approximately 50 metres below surface in southern extensions to the Magambazi Main Lode.

Recent Magambazi Drill Results
Hole(1) From
(m)
To
(m)
Interval
(m)
Au
(g/t)
Lode
MGZD138 including 56.4 72.5 16.1 1.03 Cave
69.7 71.8 2.1 3.54 Cave
MGZD155 63.0 70.0 7.0 2.40 Main
MGZD157 including 230.4 239.5 9.1 4.30 Main
232.5 238.0 5.6 6.01 Main
MGZD159 66.0 69.1 3.1 3.16 Main
MGZD161 including 169.7 187.2 17.5 2.95 Western (Upper)
183.0 187.2 4.2 7.89 Western
MGZD163 257.0 260.0 3.0 30.20 Western
MGZD164 including 194.0 201.0 7.0 1.86 Cave
198.0 201.0 3.0 3.67 Cave
MGZD207 including 118.7 150.0 31.3 3.11 Main
132.1 135.6 3.5 7.90 Main
(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.

Click http://media3.marketwire.com/docs/can_fgs_802.pdf for a plan view map and complete list of drill hole intercepts.

Quality Control

The planning, execution and monitoring of Canaco's quality control programs at the Handeni project are under the supervision of Jeff Heidema, P.Geo., Canaco's Vice President Exploration, and Dr. David Groves, Canaco's Director of Project Development. Mr. Heidema and Dr. Groves are Qualified Persons as defined by National Instrument 43-101. Diamond drill samples are prepared and analyzed at the SGS Geochemical Laboratory in Mwanza, Tanzania. RC drill samples are prepared at the ALS Chemex Laboratories in Mwanza, Tanzania and analyzed at their facilities in Johannesburg, South Africa. Samples are processed by Fire Assay with A.A. finish under the SGS FAA505 and ALS Au-AA24 protocols. 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. Mineralized true thicknesses are 60-100% of stated thicknesses throughout this release.

Additional information including press releases and public documents about Canaco can be viewed at the Company's website www.canaco.ca or at www.sedar.com.

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.

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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