Canaco Resources Inc. (TSX VENTURE: CAN) ("Canaco" or the
"Company") is pleased to announce exciting diamond drill results
from the Terakimti concession, part of the Company's Harvest
project in Ethiopia, acquired in August 2010 (and which remains
subject to certain conditions and final acceptance from the TSX
Venture Exchange). Significant drill results from a 1,600-metre
program of 12 holes, 11 of which were drilled over an 800-metre
strike length, included massive sulphide intersections of:
-- 52.1 metres at 1.55 grams gold per tonne, 4.10% copper and 25.97 grams
silver per tonne in hole 10HTD003 starting at a depth of 45.6 metres,
including 23.7 metres at 1.88 grams gold per tonne, 7.30% copper, and
21.88 grams silver per tonne;
-- 13.2 metres at 2.84 grams gold per tonne and 300.11 grams silver per
tonne in hole 10HTD002 from a depth of 28.8 metres. This hole is located
350 metres northeast of hole 10HTD003 and is open at depth;
-- 13.9 metres at 1.17 grams gold per tonne, 2.67% copper, 3.42% zinc and
21.57 grams silver per tonne in hole 09HTD005 starting at a depth of
77.0 metres. This hole is located 270 metres northeast of hole 10HTD003;
and
-- 12.0 metres at 0.88 grams gold per tonne, 1.06% copper, 4.11% zinc and
24.33 grams silver per tonne in hole 09HTD002 from a depth of 42.0
metres. This hole is located 570 metres northeast of hole 10HTD003.
Drilling was conducted as part of Canaco's due diligence process
in acquiring the project in an attempt to confirm the potential for
a gold enriched, polymetallic Volcanogenic Massive Sulphide ("VMS")
deposit beneath gold rich gossans previously identified by surface
trenching. Ten of the 11 holes contained significant
mineralization, as follows:
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Local From To Inter- Au Ag
Hole No North East Azi/Dip (m) (m) val g/t g/t Cu % Zn %
----------------------------------------------------------------------------
10HTD001 54,189 24,383 275/-70 71.7 79.3 7.6 4.01 35.63 2.07 2.59
--------------------------------------------
85.3 93.8 8.5 0.32 4.62 0.41 0.59
----------------------------------------------------------------------------
10HTD002 54,096 24,327 275/-65 28.8 42.0 13.2 2.84 300.11 0.16 0.02
----------------------------------------------------------------------------
10HTD003 53,758 24,246 261/-76 45.6 97.7 52.1 1.55 25.97 4.10 0.13
--------------------------------------------
61.7 85.4 23.7 1.88 21.88 7.30 0.15
----------------------------------------------------------------------------
10HTD005 53,870 24,359 275/-65 164.6 167.8 3.2 1.57 8.12 0.83 5.02
----------------------------------------------------------------------------
10HTD006 53,741 24,323 260/-65 149.2 154.0 4.8 0.35 12.54 0.32 2.43
----------------------------------------------------------------------------
09HTD001 53,643 24,201 260/-75 39.0 42.0 3.0 0.39 11.22 3.75 0.01
----------------------------------------------------------------------------
09HTD002 54,311 24,368 275/-65 42.0 54.0 12.0 0.88 24.33 1.06 4.11
--------------------------------------------
75.0 92.0 17.0 0.38 10.21 0.33 1.10
----------------------------------------------------------------------------
09HTD003 54,207 24,304 275/-75 17.0 22.0 5.0 0.70 41.26 0.61 1.51
--------------------------------------------
41.0 52.2 11.2 0.37 2.87 0.34 0.15
----------------------------------------------------------------------------
09HTD004 53,884 24,280 275/-70 69.0 76.0 7.0 0.37 11.20 0.30 4.21
----------------------------------------------------------------------------
09HTD005 54,018 24,325 260/-75 66.3 69.9 3.6 1.58 30.12 3.05 1.68
--------------------------------------------
77.0 90.9 13.9 1.17 21.57 2.67 3.42
----------------------------------------------------------------------------
Drill intercept lengths are down-hole lengths reflecting apparent widths of
mineralization, with true widths ranging between 60-90% of the reported
down-hole lengths.
Location
Canaco's Ethiopian exploration asset consists of six exploration
concessions covering 468 square kilometres in a 70%-owned joint
venture with Ezana Mining Development, an Ethiopian company. The
Nefasit, Hamlo, Terakimti, Adi Nebrid, Igub and Medri Felasi
concessions are located in the Tigray region of Ethiopia within the
Neo-Proterozoic Asmara VMS Cu-Zn-Au-Ag metallogenic belt. Several
deposits have been discovered along the north-eastern extension of
this belt in central Eritrea. The drilling conducted on the
Terakimti concession is located 140 kilometres southwest along
strike of Sunridge Gold Corp.'s Emba Derho VMS deposit, which is
estimated to contain 62.5 million tonnes grading 0.72% copper,
1.38% zinc, 0.2 grams gold per tonne and 10 grams silver per tonne,
and 150 kilometres southeast of Nevsun Resources Ltd.'s Bisha VMS
deposit, estimated to contain 27.3 million tonnes grading 2.1 grams
gold per tonne, 42.1 grams silver per tonne, 1.8% copper and 3.8%
zinc. Bisha is in the commissioning stage and once in full
production is expected to produce 1.06 million ounces of gold, 9.4
million ounces of silver, 734 million pounds of copper, and over
one billion pounds of zinc.
Terakimti Concession
Exploration on the Ethiopian concessions has been conducted over
the past three years by Beijing Donia Resources Co. Ltd. This has
included remote sensing, geological mapping, geochemical soil
sampling, geophysical ground magnetic surveys, IP surveys and
extensive trenching, but only localized drilling on select targets.
Trenching at Terakimti highlighted the potential of the area, where
gold-rich gossans define a VMS target with greater than 800 metre
strike potential. Trench channel sampling gold intercepts from the
gossans include (at 0.3 grams gold per tonne cut-off):
-- 40 metres at 3.24 grams gold per tonne (TRK-TR3) including 19 metres at
5.3 grams gold per tonne;
-- 25 metres at 2.68 grams gold per tonne (TRK-TR5) including 14 metres at
4.17 grams gold per tonne; and
-- 38 metres at 2.37 grams gold per tonne (TRK-TR7) including 9 metres at
5.91 grams gold per tonne.
Of the 11 holes drilled at Terakimti, 10 contained significant
gold and base metal intercepts and all holes contained significant
zones of disseminated and stringer style sulphide mineralization
and intense alteration including chlorite pyrite and sericite.
Like Bisha and Emba Derho to the north, the near-surface
Terakimti VMS body is vertically zoned due to weathering and
supergene processes. This weathering provides important enrichment
of gold at surface in gossans, enrichment of gold and silver in a
leached zone beneath the gossans and strong copper enrichment in
the supergene transition to fresh rock. At Terakimti, there is
strong evidence of:
1. Surface gold enrichment in gossans at surface indicated from systematic
rock channel sampling (i.e. 19 metres at 5.3 grams gold per tonne).
Start-up pits on VMS deposits such as Bisha lead the Company to believe
this gold-rich surface mineralization should provide strong cash flow at
the commencement of the project;
2. Gold and silver enrichment at depth in the weathered zone (i.e. 13.2
metres at 2.84 grams gold per tonne and 300.11 grams silver per tonne in
hole 10HTD002 from about 22 metres true depth to below 35 metres depth).
This is highly encouraging as it demonstrates a thick zone (greater
than 35 metres deep) of gold and spectacular silver enrichment (i.e. 10
grams silver per tonne);
3. Copper enrichment in the supergene transition. Hole 10HTD003 intersected
52.1 metres at 1.55 grams gold per tonne, 4.10% copper and 25.97 grams
silver per tonne from 45.6 metres depth (true depth of about 40 metres).
This intercept has been recalculated for the important zones of
weathering:
-- Strongly weathered zone - 16.1 metres at 1.41 grams gold per tonne,
0.90% copper and 44.76 grams silver per tonne from 45.6 metres
depth; and
-- Supergene zone - 25.0 metres at 1.79 grams gold per tonne, 6.96%
copper, 20.83 grams silver per tonne from 61.7 metres depth. This
highlights a thick zone of very high-value copper enriched
mineralization with significant gold credits.
4. High-grade massive sulphide in fresh rock. The last part of hole
10HTD003 intersected fresh chalcopyrite-rich massive sulphide, yielding
7.0 metres at 1.37 grams gold per tonne, 3.46% copper and 13.29 grams
silver per tonne. This is extremely important as it indicates the
presence of high-grade primary massive sulphide mineralization. Other
primary sulphide mineralization intersected includes 13.9 metres at 1.17
grams gold per tonne, 2.67% copper, 3.42% zinc and 21.57 grams silver
per tonne (hole 09HTD005 - from 77.0 metres depth).
Nefasit Concession
Five diamond drill holes totalling 513 metres were also drilled
to test VMS potential on the Nefasit prospect approximately 20
kilometres to the east-southeast of Terakimti. Two holes
intersected significant zones of massive sulphide, indicating the
presence of a second target with potential to yield significant VMS
mineralization. Peak results from two holes drilled 470 metres
apart include:
-- 3 metres at 1.41 grams gold per tonne, 2.34% copper and 22.68 grams
silver per tonne in hole 09HND004 - from 52.15 metres depth; and
-- 3 metres at 1.13 grams gold per tonne, 0.68% copper and 5.42 grams
silver per tonne in hole 09HND001 - from 71.93 metres depth.
Drilling at Nefasit is in its infancy and detailed work is
expected to be conducted to locate targets associated with the
proven massive sulphide system.
2011 Program
Canaco has commenced a dynamic exploration program aimed at
defining drill targets at both Terakimti and Nefasit, whilst
regional exploration is also accelerated (see the Company's August
31, 2010 press release for information on other concessions).
Exploration under way or planned for the near future includes
gravity and micro-gravity (2,800 stations planned as a first pass),
50 line kilometres of time domain electromagnetic ("EM") survey,
detailed Niton handheld XRF-based soil-geochemical sampling over
principal targets and all known gossan occurrences across all
concessions, one metre topographic contour generation and
acquisition of high-resolution Quickbrid stereo photos, and
reprocessing airborne EM over the southern half of the concession
areas. This exploration work is directed toward targeting drill
holes to maximize the chance of success and allow rapid advancement
of the project.
The closing of the Harvest acquisition is pending the execution
of transfer documents by Ezana Mining Development, the owner of the
other 30% of the project, and final acceptance from the TSX Venture
Exchange.
Once the Harvest acquisition is complete, Canaco will consider
options for maximizing the value of the acquisition for Canaco
shareholders, including the possible spin-out of its Ethiopian
assets into a new public company. The spin-out strategy is expected
to allow Canaco to continue focusing on its promising gold
exploration properties in Tanzania and the spin-off company to
focus on its Ethiopian mixed mineral resource properties. If the
spin-out strategy is selected, all existing shareholders of Canaco
will own shares of a company which is expected to be listed on the
TSX Venture Exchange. The Company is currently pursuing legal and
tax advice as to the exact procedures it will undergo to achieve
the spin-out in the most expeditious manner with the least onerous
tax consequences possible. Any spin-out transaction will be subject
to Board, shareholder and regulatory approvals.
Quality Control
The planning, execution and monitoring of Canaco's quality
control programs at the Harvest 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. 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 is well
positioned to build shareholder value through discovery and
resource development.
Canaco's shares are listed and posted for trading 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.
Contacts: Canaco Resources Inc. Meghan Brown Director Investor
Relations 604-488-0822 or 1-866-488-0822 investors@canaco.ca
www.canaco.ca
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