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:
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From To Interval Au
Hole(1)(2) (m) (m) (m) (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. Aprioritized 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 drillinghas been systematically testing
soil anomaliesalong 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.
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 604-488-2557 or 1-866-488-0822 604 899 1240
(FAX)investors@canaco.cawww.canaco.ca
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