Canaco Resources Inc.

Canaco Resources Inc.

November 17, 2009 06:00 ET

Canaco Drills 40 Metres of 3.56 Grams Gold Per Tonne at Magambazi

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 17, 2009) - Canaco Resources Inc. (TSX VENTURE:CAN) is pleased to announce further high-grade diamond drill intersections from the Magambazi gold prospect at the Company's Handeni Gold Project, located in the Handeni region of the United Republic of Tanzania.

New results for MGZD007 include:

- 39.6 m @ 3.56 g/t Au in MGZD007 within a broad mineralized interval,

- Including 13.53 m @ 4.01 g/t Au (Upper Lode); and

- Including 12.21 m @ 6.99 g/t Au (Lower Lode).

These results enhance the previously announced results for MGZD004 and MGZD005 on section 60360N (see previous release October 22, 2009) and has extended the high-grade gold intercepts to over 140m depth below surface.

High grade mineralization in the Magambazi Mineralized Zone, including the upper and lower lodes, have been intersected in drill Hole MGZD001 as well as MGZD004, 5 and 7 (all three holes drilled on the section 80 metres south of the discovery hole - see Table 1).

TABLE 1: Magambazi Drill Results to Date - Significant and Recent Intercepts
Inter- Au
val Grade
East From To (1) (2)
Drill (met- North Azi- (met- (met- (met- (grams/
Hole res) (metres) muth Dip res) res) res) tonne) Notes
MGZD001(3) 10176 60440 60 -50 148 207 59 4.28(3) Mineralized
Including 154 166 12 4.18 Upper Lode
Including 189 206 17 10.38 Lower Lode
MGZD004 10249 60360 60 -50 110 137 27 2.82 Mineralized
Including 113 120.5 7.5 2.85 Upper Lode
Including 127 137 10 5.15 Lower Lode
MGZD005 10247 60360 60 -65 128 169 41 3.32(5) Mineralized
Including 128 144 16 3.34 Upper Lode
Including 161 169 8 9.95 Lower Lode
MGZD007 60360 60 -79 156 195.6 39.6 3.56(5) Mineralized
Including 156.6 170.1 13.5 4.01 Upper Lode
Including 184 196.2 12.2 6.99 Lower Lode
MGZD006 60520 60 -50 200.7 202 1.3 3.02 Mineralized
(1) Drill intercept lengths are down-hole lengths reflecting apparent widths
of mineralization with true widths ranging between 60% - 100% of the
reported down-hole lengths.
(2) The calculation of drill intercept employs a 0.3 gAu/t cut-off and no
cutting grade for high gold values.
(3) Grade calculation includes 8m internal waste.
(4) Grade calculation includes 18m internal waste.
(5) Grade calculation includes 14m internal waste.

The current diamond drilling program is designed to extend the known ore zones to the north and south and down dip/plunge and to understand the structural controls on mineralization.

Interpretation of the drill hole data to date confirms that the "Magambazi Mineralized Zone" is a broad, intense siliceous alteration zone with sulphide mineralization (pyrrhotite, arsenopyrite, pyrite and chalcopyrite) and frequent occurrences of trace visible gold. Contained within this broad envelope are two geologically and geochemically distinct intervals of moderate to high-grade gold mineralization (the "upper" and "lower" lodes).

Since our press release dated November 3, 2009, the Company has continued the Phase 1 diamond drilling program, completing an additional 552 metres in 2 holes (MGZD013 and 14). This brings the total metres drilled to date in Phase 1 to 4,088 metres. A change in drill equipment from truck to track mounted has been completed in preparation for moving the drill rig to new positions on the Magambazi North prospect, 800 metres northwest along trend.

The Magambazi prospect lies at the southern end of the 11 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.

Contact Information