Canaco Reports Additional Drill Results at Magambazi, Including 11.0 Metres at 14.75 Grams per Tonne Gold, and Provides Exploration Update for the Handeni Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 3, 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 and to provide an update on exploration at the Company's Handeni project in Tanzania.

Canaco continues extensive delineation drilling at Magambazi, with significant additional infill and extension intercepts as highlighted below. Two additional diamond drill rigs have been added to the program to aggressively test key targets immediately peripheral to the main area of Magambazi mineralization.

Results have been received for 27 new diamond drill holes. Highlights include:

Hole(1)(2)		From (m)	To (m)	Interval (m)	Au (g/t)	Lode(s)
MGZD209		107.0	111.0	4.0	16.29	Southern Gneiss
MGZD271		21.3	24.8	3.5	10.33	Magambazi Main
		85.0	114.0	29.0	1.23
	including	98.9	103.1	4.2	3.12
MGZD275(3)		229.7	254.2	24.5	2.99	Magambazi Main
	including	241.6	245.8	4.2	6.48
MGZD276		195.0	219.5	24.5	2.23	Central Contact
	including	201.0	203.4	2.4	8.11
MGZD284		275.0	286.0	11.0	14.75	Western
	including	282.2	285.0	2.8	56.16
MGZD288		245.0	265.0	20.0	1.75	Western
	including	258.4	265.0	6.6	4.65

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.
2. Not all drillholes identified in this release have had a full sample submission completed. A prioritized system of sample submission has been introduced due to the previously identified sample backlog. Additional significant results will be released and posted as received.
3. Denotes intercepts where one of the intercept contacts is the limit of analyses received.

President and CEO Andrew Lee Smith said: "These most recent drill results represent steady progress on the infill drill program and give us confidence that the Western Lodes have the potential to contribute significant additional value to the Magambazi mineralized system."

Click http://media3.marketwire.com/docs/1103can1.pdf for a plan view map and complete list of drill hole intercepts.

Exploration Update

Magambazi
Canaco is currently drilling approximately 11,000 metres per month with nine diamond drill rigs at Magambazi, where the main focus is infill drilling for the purposes of calculating an initial mineral resource estimate by the end of the first quarter of 2012. Of the nine rigs, one is drilling Kuta, to the west of the Main Lode, and a second is testing the northern extensions of Magambazi. The remainder are working to complete delineation drilling by the end of the year.

In anticipation of the completion of the initial mineral resource estimate, Canaco has initiated planning and mobilization activities for a preliminary economic assessment (PEA), with completion targeted by mid-2012.The PEA will include determination of a preliminary mine plan, metallurgical response, mill flow-sheet design, engineering design, cost estimation and project economic analysis. Detailed metallurgical test-work will begin this quarter to build on the preliminary work completed in May 2010 which indicated possible recoveries of 94% (refer to the Company's press release dated May 19, 2011). Preparations are underway to consolidate representative sample materials for this metallurgical test-work and to assemble the engineering team who will execute the study.

MK Trend
In addition to nine diamond drill rigs at Magambazi, the Company has one reverse circulation (RC) drill rig testing regional targets on the MK Trend, where gold mineralization in soils and artisanal workings has been identified over a 2.4 kilometre strike length. The initial phase of RC drilling has targeted a broad assessment of the main regional anomalous gold in soil, and artisanal workings trends. The drilling has identified a near-surface gold mineralized zone at Kwadijava (refer to the Company's press release dated March 28, 2011), and additional drilling has been systematically testing soil anomalies along the MK Trend.

This exploration phase included selective geophysical IP surveying and an airborne magnetic and radiometric survey, ground infill soil sampling, reanalyses of RAB drill samples, and a subsequent re-synthesis of targeting property-wide. This has led to better definition of existing targets, and the establishment of additional reconnaissance test targets. From this work, the source of the Majiri area gold soil anomaly is now interpreted to be related to NNW-trending, near-vertical interpreted structures parallel in orientation to the main fault trend interpreted at Magambazi. RC drill testing will continue on select target areas, based on the re-synthesis of data listed above.

A complete list of RC drill results can be viewed http://media3.marketwire.com/docs/1103can.pdf. The Company plans to mobilize one diamond drill rig from Magambazi to Kwadijava, the highest priority target on the MK Trend, on completion of the infill drill program at Magambazi.

Environmental certification
At Magambazi, Canaco is nearing completion of environmental certification, the first and most significant step in the mine permitting process and an important catalyst for the project. On receipt of the environmental certificate, which is expected in the next four to six months, the Company will be in a position to apply for mining licenses.

Exploration budget
Canaco is well financed with $120 million in cash and no debt. Exploration expenditures have increased to approximately $3.5 million per month as the drill program has been expanded. This number is expected to increase further as additional rigs are mobilized in the fourth quarter. The Company's budget for fiscal 2011, which ends June 30, 2012, comprises $35 million for drilling and exploration activities at Magambazi and along the MK Trend, plus an additional $6 million for projected development expenditures.

Title
Following a dispute over title to a small (0.07 square kilometre) mineral license at Magambazi in 2010, Canaco confirms that it has exclusive mineral rights over, and drilling continues on, the previously disputed area. The dispute was resolved to the Company's satisfaction in December 2010 when the Commissioner for Minerals of The United Republic of Tanzania ordered the immediate surrender for cancellation of the competing license. In February 2011 the competing license was cancelled for failure to comply with the Commissioner's order. Subsequent to the resolution of the dispute, Canaco received an independent title opinion in connection with its March 2011 financing that confirmed the mineral license is validly held by Canaco Tanzania Limited and that Canaco companies have 100% beneficial interest in the license.

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, P.Geo., Canaco's Director 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. Additionally, core samples analyses are conducted at Acme Labs in Vancouver, Canada, and undergo Fire Assay Fusion Gold by ICP-ES and lead collection fire assay-gravimetric finish. 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 core, rejects, and pulps are also used to monitor laboratory performance and characterize mineralization.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.