Discovery Hole at Canaco's Harvest Project in Ethiopia Intersects 52.1 Metres at 1.55 Grams Gold Per Tonne and 4.10% Copper
January 06 2011 - 8:00AM
Marketwired Canada
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.
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