Canaco Resources Inc.
TSX VENTURE : CAN

Canaco Resources Inc.

February 23, 2011 14:43 ET

Canaco Drills 48.3 Metres at 7.24 Grams Per Tonne Gold at Magambazi and 8.7 Metres at 38.76 Grams Per Tonne Gold at Magambazi North

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 23, 2011) - Canaco Resources Inc. (TSX VENTURE:CAN) ("Canaco" or the "Company") is pleased to report results from 30 new holes on the Magambazi zone at the Company's Handeni Project in Tanzania. Canaco is also pleased to announce that five drill rigs are now operational on site, accelerating both resource definition and systematic drilling of regional targets.

Drilling has focused on the Magambazi North area over the last month and has extended the known gold lode system a further 40 metres north, with the mineralized lodes still remaining open to the north. Highlights from the new drill results include:

  From To Interval Au  
Hole (m) (m) (m) (g/t) Location
MGZD107 204.0 252.3 48.3 7.24 Magambazi
MGZD110 31.1 42.2 11.2 3.35 Magambazi North
MGZD117 112.3 121.0 8.7 38.76 Magambazi North
MGZD118 42.0 59.7 17.7 2.72 Magambazi North
MGZD123 98.0 107.4 9.4 3.98 Magambazi
MGZD125 90.1 119.5 29.4 1.71 Magambazi North
* mineralized true thicknesses are 60-100% of stated thicknesses. The calculation of drill intercepts employs a 0.3g Au/t cut-off and no cutting grade has been applied to high gold values.

A full table of new drill results and drill hole locations is available on the Canaco website at www.canaco.ca.

Deviation during drilling caused the intersection in hole 107 (48.3 metres at 7.24 grams per tonne gold) to be in close proximity to the intercept previously reported from hole 98 (53.2 metres at 9.91 grams per tonne gold). This result thereby has confirmed the mineralization in the Keel Zone as reported in hole 98. (Refer to the Company's December 22, 2010 press release.)

In conjunction with the favourable ground tenure resolution for Canaco at Magambazi Central (refer to the Company's February 14, 2011 press release), the drill program will now shift focus toward definition drilling of the high-grade Keel Zone of the Magambazi Main Lode system between Magambazi and Magambazi North.

Quality Control

The planning, execution and monitoring of Canaco's quality control programs at the Handeni project are under the supervision Jeff Heidema, P.Geo, Canaco's VP 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 core samples are prepared and analysed at the SGS Geochemical Laboratory in Mwanza, Tanzania. Samples are processed by Fire Assay with A.A. finish under the SGS FAA505 protocol. 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 a complete list of drill hole intercepts and drill collar maps, 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 in Africa. Built on a foundation of experienced management and focused on rapidly advancing exploration projects in Tanzania and throughout Africa, 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 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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