Canaco Resources Inc.
TSX VENTURE : CAN

Canaco Resources Inc.

April 07, 2006 17:45 ET

Canaco Signs Engagement Letter with Haywood Securities Inc.

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 7, 2006) - Canaco Resources Inc. (the "Company") (TSX VENTURE:CAN) is pleased to announce the execution of a Letter of Engagement with Haywood Securities Inc. whereby Haywood, together with Bolder Investment Partners, Ltd. (the "Agents"), have agreed to act as the agents for a private placement of $2,007,500 on a commercially reasonable efforts basis.

The Company is offering for sale 3,650,000 units at a price of $0.55 per unit, with an overallotment option of another 900,000 units. Each unit comprises of one common share and one-half of one common share purchase warrant. One full warrant entitles the holder to acquire one common share for $0.70 for a period of 12 months from the date of closing. The expiry date will be accelerated if the Company's closing price is greater than $1.25 for a period of 20 consecutive trading days (after 4 months from closing), and the warrants will expire 30 days after the Company gives notice to the warrantholders.

A cash commission equivalent to 7% of the proceeds raised under the private placement will be payable to the Agents upon closing, which may be payable in cash or in units at the Agents' election. In addition, the Company will grant the Agents a non-transferable warrant to acquire common shares equivalent to 8% of the total number of units sold under the private placement at an exercise price of $0.70 per share for 12 months from closing.

The funds received will be applied toward the Company's operations, exploration, acquisition and development of mineral prospects as well as general and administrative purposes.

The private placement is subject to certain conditions, including, but not limited to, satisfactory due diligence and the receipt of all necessary approvals, including the approval of the TSX Venture Exchange.

This private placement is in conjunction with the Company's non-brokered private placement. The terms of the non-brokered placement are the same as the brokered placement in that it is a unit offering with each unit being offered for $0.55 and each unit comprises of one common share and one-half of one common share purchase warrant, exerciseable for 12 months from closing at a price of $0.70 per share. The expiry date will be accelerated if the Company's closing price is greater than $1.25 for a period of 20 consecutive trading days (after 4 months from closing), and the warrants will expire 30 days after the Company gives notice to the warrantholders. The Company may pay a finder's fee if permitted by the policies of the Exchange and securities law.

Canaco Resources is an emerging junior mineral exploration company listed on the TSX Venture Exchange. The Company is engaged in the acquisition and exploration of advanced mineral prospects. Further information on the Company and its projects can be viewed at www.canaco.ca.

The Company relies on litigation protection for "forward-looking" statements.


The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the release.

Contact Information

  • Canaco Resources Inc.
    Andrew Lee Smith
    President & CEO
    (604) 488-0822 or Toll Free: 1-866-488-0822
    or
    Canaco Resources Inc.
    Nick Watters
    Investor Relations
    (604) 488-0822 or Toll Free: 1-866-488-0822
    investors@canaco.ca
    www.canaco.ca