Canico Resource Corp.

Canico Resource Corp.

March 04, 2005 18:44 ET

Canico Releases 2nd Quarter Financial Statements


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: CANICO RESOURCE CORP.

TSX SYMBOL: CNI

MARCH 4, 2005 - 18:44 ET

Canico Releases 2nd Quarter Financial Statements

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 4, 2005) - Canico
Resource Corp. (TSX:CNI)

(All amounts are in Canadian Dollars unless otherwise noted)

Canico Resource Corp. released its interim consolidated financial
statements for the six months ended January 31, 2005.

Canico reported a loss for the six months ended January 31, 2005 of
$24,113,000 (loss per share of $0.58), compared to $24,039,000 (loss per
share of $0.70) for the comparative six months ended January 31, 2004.
Expenditures on the Onca-Puma property for the six months ended January
31, 2005 and 2004 were $17,259,000 and $16,519,000, respectively.
Exploration and development expenditures include drilling, assaying,
engineering studies including metallurgical studies and feasibility
study, environmental studies, costs associated with securing surface
access, certain administration costs and, consulting and professional
fees. Canico is expensing exploration and development costs associated
with Onca-Puma until completion of the feasibility study. Corporate
general and administrative costs for the six months ended January 31,
2005 were $1,510,000, compared to $1,731,000 for the comparative six
months ended January 31, 2004. The balance of the loss in the current
period includes $6,194,000 in "stock-based compensation expense"; the
majority of this is the result of Canadian G.A.A.P. accounting policy
which requires that stock options granted be valued on the Black-Scholes
option pricing model and recognized as current compensation expense;
this does not represent a cash distribution. During the six months ended
January 31, 2005, we spent $5,648,000 on road improvements, these costs
have been capitalized to "Construction in Progress" on the balance
sheet, as they relate to the construction of the potential mine at
Onca-Puma. As at January 31, 2005, Canico had working capital of
$107,183,000, including cash and cash equivalents of $110,554,000.

This news release should be read in conjunction with Canico's interim
consolidated financial statements and its management discussion and
analysis for the six months ended January 31, 2005, which are available
on Canico's website at www.canico.com. Additional information about
Canico and the Onca-Puma project can be found on that website.

The recently announced new mineral resource estimates continue to
support the presence of a substantial tonnage of laterite above a
cut-off grade of 2.5% nickel. This material will be targeted for initial
mine production to maximize project cash flows during early years of
operation. There are also substantial tonnages at a 1.0% nickel cut-off
grade with a silica to magnesia ratio below 2.0. This may create
opportunities for a much longer mine life and/or higher annual
throughputs than were estimated in the November, 2003, Scoping Study,
(posted on www.sedar.com and on the Canico website).

Diamond drilling continues at Onca to better define the higher grade
areas and to upgrade the inferred mineral resources to the measured and
indicated categories. A feasibility study is underway to assess the
construction of a large scale ferronickel production facility at
Onca-Puma. The study is scheduled to be completed early in the second
quarter of calendar 2005.

CANICO RESOURCE CORP.

J. Michael Kenyon, President & CEO

Cautionary Notices

This News Release, the Company's interim consolidated financial
statements for the six months ended January 31, 2005 and the
accompanying Management Discussion and Analysis ("MD&A") include certain
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 of the United States. Other
than statements of historical fact, all statements in these documents,
including, without limitation, statements regarding potential
mineralization and resources, estimated or potential future production,
potential ranking amongst nickel producers, and future plans and
objectives of the Company, are forward-looking statements that involve
various known and unknown risks, uncertainties and other factors. There
can be no assurance that such statements will prove to be accurate.
Actual results and future events could differ materially from those
anticipated in such statements. Readers are cautioned not to place undue
reliance on these forward-looking statements that speak only as of their
respective dates. Important factors that could cause actual results to
differ materially from the Company's expectations include, among others,
the ongoing results of current exploration activities, conclusions of,
scoping studies, pre-feasibility studies or feasibility studies, ongoing
engineering work, changes in project parameters, and future metal
prices, as well as those factors discussed under the heading "Risk
Factors" and elsewhere in the Company's documents filed from time to
time with the Toronto Stock Exchange, the TSX Venture Exchange, Canadian
securities regulators and other regulatory authorities. All subsequent
written and oral forward-looking statements attributable to the Company
or persons acting on its behalf are expressly qualified in their
entirety by this notice.

The financial information in this news release is taken from the
Company's interim consolidated financial statements for the six months
ended January 31, 2005, and the accompanying MD&A, which may be found on
the Company's website at www.canico.com. Readers are cautioned to refer
to such financial statements and MD&A for complete information, as the
information in this release has been selectively drawn from the full
documents and is not complete.

The new mineral resource estimates were completed with an effective date
of February 21, 2005, according to the requirements of National
Instrument 43-101, for the Onca deposit under the supervision of Hatch
Associates Ltd., Consulting Geologists and Engineers, of Vancouver, B.C.
and for the Puma West deposit under the supervision of GRD Minproc
Limited of Perth, Australia, both of whom are independent of Canico.
Details of the estimates, a description of Canico's assaying and
analytical techniques and methodology and particulars of historical
mineral resource estimates, may all be found on Canico's website. The
quality of the information, conclusions and estimates contained herein
are consistent with the intended level of accuracy as well as the
circumstances and constraints under which the mandates were performed.
Some of the information on which the estimates were based was generated
or provided by other outside sources. Neither Hatch nor Minproc warrant
the accuracy or completeness of data supplied by outside sources. The
standards employed by Hatch and Minproc, respectively, in estimating
these mineral resources differ significantly from the requirements of
the United States Securities and Exchange Commission and the mineral
resource information reported may not be comparable to similar
information reported by United States companies. The term "resources"
does not equate to "reserves" and normally may not be included in
documents filed with the United States Securities and Exchange
Commission. "Resources" are sometimes referred to as "mineralization" or
"mineral deposits".


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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Canico Resource Corp.
    J. Michael Kenyon
    President & CEO
    (604) 669-9446
    (604) 669-9447 (FAX)
    www.canico.com