| January 21, 2010 Canaco acquires Copper-Gold exploration assets in Ethiopia | ||||
| Vancouver, January 21, 2010 -- Canaco Resources Inc. (CAN: TSX-V) is pleased to announce that the Company has entered into a letter of intent with Beijing Donia Resources Co. Ltd. ("Donia") to acquire 70% of the outstanding shares of Harvest Mining PLC ("Harvest"), a private Ethiopian exploration company. Harvest owns 100% interest in 605 km2 of exploration concessions in the Tigray state of Ethiopia. These concessions host several identified gold enriched, polymetallic volcanogenic massive sulphide ("VMS") prospects. Harvest's exploration assets (the Nefasit, Hamlo, Terakimti, Adi Nebrid, Igub and Medri Felasi concession respectively) are located in the SW extension of the Neo-Proterozoic Asmara VMS type Cu-Zn-Au-Ag metallogenic belt where several deposits have been previously discovered in central Eritrea. These discoveries include 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 and extensive trenching and drilling on selected targets. According to reports published by Harvest, the main exploration achievements are as follows: The Nefasit Concession Block
The purchase price is C$6.0 million, payable on closing as follows: $4,000,000 in cash and issuance of an additional 3,508,771 shares to Donia at a deemed price of $0.57 per share (based on the closing price of the past 30 trading days from the date of the letter of intent plus a 5% premium). Since 2007, Harvest has spent about USD$4.4M for the above-mentioned exploration activities on the six exploration licenses, and has established an operating capability based in Shire, Ethiopia with a strong technical team and exploration equipment and infrastructure. Canaco expects to spend a minimum of C$2 million in exploration costs on the properties in the first year. The acquisition of Harvest by Canaco is subject to a 90 day due diligence period, and obtaining approvals from third parties, the TSX Venture Exchange and shareholders (if required). Independent members of the Board of Canaco have considered a number of factors in determining that the consideration for the acquisition is fair and reasonable, including the amount already spent on exploration expenditures and its potential to host commercially viable copper and gold deposits. 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. SinoTech presently owns 32 million shares of Canaco, representing 27.8% of the outstanding shares of Canaco. The 3,508,771 shares to be issued by Canaco to Donia on closing of the acquisition represents 3% of Canaco's outstanding shares. The remaining 30% interest of Harvest is owned by an Ethiopian company.
For further information, contact: Nick Watters, Investor Relations Telephone: 604-488-0822 or 1-866-488-0822 Visit our website: www.canaco.ca Email: 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. 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. 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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