Canaco Resolves Mineral Rights Dispute

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 14, 2011) - Canaco Resources Inc. (TSX VENTURE:CAN) ("Canaco" or the "Company") is pleased to announce that actions by the Tanzanian Ministry of Energy and Minerals have validated Canaco's exclusive mineral rights to the area of the Magambazi discovery located within the Company's Handeni Project in Tanzania.

Canaco believes that it holds undisputed title to the region and plans to continue drilling to define and delineate the high-grade gold discovery at Magambazi. (For previous disclosure on the property dispute, see Canaco's press releases dated October 18, 2010, October 21, 2010, October 29, 2010, and December 2, 2010, all of which are available on the Company's website at www.canaco.ca and on SEDAR under the Company's profile.)

Subsequent to the Order of the Commissioner for Minerals of The United Republic of Tanzania (see press release dated December 2, 2010), Abdallah Omary Kigoda ("Kigoda") was served with a Default Notice for, among other things, failure to comply with such order. The failure to comply resulted in the cancellation of ML 413/2010 effective February 1, 2011. Further to such cancellation, and in acknowledgement that substantial development work on the conflicted mineral right had already been undertaken by Kigoda, on February 6, 2011, the Minister for Energy and Minerals directed Canaco to provide compensation to Kigoda. The parties have entered into an agreement for such compensation, comprised of a US$2.0 million cash payment and a 2.0% net smelter royalty for minerals recovered from the 0.07 square kilometre area of the former PML 0010145.

Canaco's management once again expresses appreciation to the government of Tanzania for its support throughout this process.

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 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.