VMS Vortex Metals Inc

Canaco Resources Inc. (TSX VENTURE:CAN) is pleased to announce that the Company
has closed in escrow its acquisition of 70% of the outstanding shares of Harvest
Mining PLC ("Harvest"), a private Ethiopian exploration company from Beijing
Donia Resources Co. Ltd. ("Donia"). The remaining 30% interest of Harvest is
owned by Ezana Mining Development, an Ethiopian company.


Harvest owns a 100% interest in 468 km2 of exploration concessions in the Tigray
state of Ethiopia. These concessions host several identified gold enriched,
polymetallic volcanogenic massive sulphide ("VMS") prospects.


The Company has issued 3,508,771 common shares to Donia and paid cash of
CAD$4,000,000. The consideration is being held in escrow by the Company's
solicitors pending delivery of the remaining closing documents and receipt of
final acceptance of the acquisition from the TSX Venture Exchange. The common
shares issued to Donia will be subject to a four month hold period expiring on
January 1, 2011. Release of the consideration is scheduled to occur on or before
September 30, 2010.


Dr. Jingbin Wang is a Director of both Canaco and Donia. Donia is also a sister
company of SinoTech (Hong Kong) Corporation Limited, a control person of Canaco.
Mr. Shuixing Fu, a Director of Canaco, is also an officer of SinoTech. Dr. Wang
and Mr. Fu do not directly own any shares of Canaco. Post transaction, SinoTech
and Donia together own 51,508,771 shares, representing 31.6% of the outstanding
shares of the Company. Dr. Wang and Mr. Fu abstained from any Canaco board
discussions or decisions through this process, and the Boards Corporate
Development Committee has reviewed and strongly recommended moving forward with
this transaction.


Once the Harvest consideration is released from escrow, Canaco will consider
options for maximizing the value of the acquisition for Canaco shareholders,
including the possible spin out its Ethiopian assets into a new public company.
The spin-out strategy will 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
will be listed for trading on the TSX Venture Exchange. The Company is currently
pursuing legal and tax advice as to the exact corporate procedures it will
undergo to achieve the spin-out in the most expeditious manner with the lowest
tax consequence possible. The spin-out will be subject to applicable shareholder
and regulatory approvals.


Harvest's exploration assets consist of six exploration concessions covering 468
square kilometres, named the Nefasit, Hamlo, Terakimti, Adi Nebrid, Igub and
Medri Felasi. The concessions are all located within the Neo-Proterozoic Asmara
VMS type Cu-Zn-Au-Ag metallogenic belt where several deposits have been
previously discovered in the NE extension of this belt in central Eritrea,
including the Bisha deposit (27M tonnes grading 2.08 grams gold and 1.8% copper
per tonne) and the Emba Derho, deposit (38M tonnes grading 1.08% copper, 0.18
grams gold and 9.31 grams silver per tonne - "Copper-rich primary ore").


Initial exploration results indicate there is significant potential for the
discovery of similar deposits on Harvest's concessions. Since 2007, extensive
exploration activities have been completed including, remote sensing, geological
mapping, geochemical soil sampling, geophysical ground magnetic surveys, IP
surveys, extensive trenching, and localized drilling on selected targets. Canaco
is very excited about the exploration potential of these prospects. 


In completing this transaction Canaco will take ownership of the Harvest
Project, the main exploration achievements on the property are as follows:


The Nefasit Concession Block



--  The Adi Angoda Prospect 
    --  Four intermittent sulphide zones with outcrops of surface oxides
        have been mapped with strong base metal mineralization and a strong
        co-incident IP anomaly. 
    --  Diamond drilling results for four recently completed holes indicate
        the presence of a primary sulphide copper-zinc ore body below the
        surface oxide cap. Two of these holes drilled to test the IP
        response encountered several ten meter wide zones of base metal
        mineralization, including sections of massive sulphides. Assay
        results for these holes are pending. 
    --  These results have confirmed the potential for the discovery of a
        medium-large size VMS type copper-zinc deposit in this area. 
--  The Medadib Prospect 
    --  Geological mapping has outlined a surface oxide zone which has 360
        meters of aggregate strike length and mineralization over widths of
        3 to 20 meters. Analytical results have confirmed anomalous values
        for copper and zinc. An IP survey completed in November 2009
        indicates a strong IP response co-incident with the surface oxide
        zone and is interpreted as indicating the presence of primary
        sulphides at depth. 
    --  Previous RC drilling of the surface oxide cap intersected a gold
        mineralization with an average thickness of 20m and average gold
        grade of 4.6 g/t. 



Terakimti Concession Block



--  Several zones of sulphide mineralization have been identified within the
    felsic tuffs and at the contact of the intermediate meta-volcaniclastic
    rocks and felsic tuff at Terakimti. The sulphide mineralized zone
    measures 3.5 km along strike and 30 m to 110 m wide - locally reaching
    widths of up to 400 m. 
--  Disseminated sulphides, surface oxide zones have been identified in
    outcrop. Strong copper, zinc and lead anomalies have been confirmed
    associated with the surface oxide zones.  
--  The Mai Sensela Prospect 
    --  A surface sulphide zone anomalous in Cu and Pb has been mapped with
        over a strike length of 1,200 m and width ranging from 20 m to 100
        m. 
    --  Contained within the surface sulfide zone a surface gold oxide zone
        with a strike length of 800 m and an average width of 20 m has been
        defined through surface trenching. The average gold grade is 3 grams
        gold per tonne with peak values of 43 grams gold per tonne. IP
        surveying has detected chargeability anomalies coincident with the
        surface gold oxide mineralization and is interpreted as indicating
        the presence of primary sulphide concentrations at depth. 



The Hamlo Concession Block



--  Geological mapping has outlined seven sulphidic alteration zones locally
    with massive sulphide oxide caps. In the north of the Hamlo block, a
    sulphide zone with strike length of 2.2 km and thickness of 200 m to 300
    m has been mapped. Within this sulphide zone a massive sulphide oxide
    zone with an aggregate length of 1,200 m and thickness of 10-30 m has
    been identified. 
--  The Wuhidet Prospect 
    --  Three sulphidic zones have been identified, including one zone
        measuring 4 km long and 60 m wide. 
    --  Mapping has indicated a surface sulphide zone that measures 800 m
        along strike and 20 m wide. 
    --  Initial field work has indicated these sulphide zones are strongly
        anomalous in Cu and Zn. 
--  The Hamlo area contains a geological setting favourable for the
    discovery of Au-enriched VMS deposits. Initial exploration programs will
    include extensive trenching, ground magnetic and profile IP surveys and
    test drilling of selected targets. 



"The acquisition of Harvest by Canaco is a significant event in the corporate
development of the Company and is consistent with the Company's strategy of
acquiring advanced exploration projects poised for discovery programs," said
Andrew Smith, Canaco's CEO. "Due diligence has confirmed the geological
potential for the discovery of gold-enriched, polymetallic VMS deposits on
Harvest's properties is exceptional in the view of Canaco's technical team." 


Additional information and public documents about Canaco Resources can be viewed
at the Company's website www.canaco.ca or at www.sedar.com. Canaco Resources
Inc. is listed on the TSX Venture Exchange and is engaged in the exploration and
development of Tanzanian gold prospects. 


Andrew Lee Smith, P.Geo, CEO 

Canaco Resources Inc. 

Dr. Jingbin Wang, Chairman

Canaco Resources Inc.

The Acquisition is subject to a number of conditions as set out above. There can
be no assurance that the Acquisition will be completed as proposed or at all.
The Company relies on litigation protection for "forward-looking" statements.
This press release contains forward-looking statements that are based on the
Company's current expectations and estimates. Forward-looking statements are
frequently characterized by words such as "plan", "expect", "project", "intend",
"believe", "anticipate", "estimate", "suggest", "indicate" and other similar
words or statements that certain events or conditions "may" or "will" occur, and
include, without limitation, statements regarding the Company's plans with
respect to the exploration and development of its projects. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
could cause actual events or results to differ materially from estimated or
anticipated events or results implied or expressed in such forward-looking
statements. Any forward-looking statement speaks only as of the date on which it
is made and, except as may be required by applicable securities laws, the
Company disclaims any intent or obligation to update any forward-looking
statement, whether as a result of new information, future events or results or
otherwise. Forward-looking statements are not guarantees of future performance
and accordingly undue reliance should not be put on such statements due to the
inherent uncertainty therein. No independent consultant has rendered an expert
opinion on the property.

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