Canaco Jumps On Tanzanian Gold Hit

VANCOUVER– The results of just one drill hole from Canaco Resources’ (CAN-V, CANWF-O) Magambazi gold prospect, in Tanzania, lifted the junior’s share price from just 10¢ to the 40¢-range recently.

Magambazi is one of six prospects within Canaco’s district-scale Hadeni project, a 3,500-sq.- km land package that is home to active artisanal mining but has never been drilled. Canaco says recent gold discoveries in the region have defined a gold-prospective zone that strikes for 100 km.

At Canaco’s property, artisanal mining activities at the Magambazi prospect — including significant open-pit workings and shafts extending to 90 metres depth — have revealed steeply dipping sulphide-bearing quartz veins. Veins are being mined over widths up to 10 metres and define a northwest-trend striking 350 metres to date. The workings are concentrated on the western flank of a 4-km-long regional magnetic anomaly.

In its first drill test of the Magambazi mineralization, Canaco certainly hit gold. Hole 1 returned 53 metres grading 4.32 grams gold per tonne, starting 148 metres down-hole and including 12 metres of 4.18 grams gold and 11 metres of 13.93 grams gold.

The drill cut through a broad zone of intense alteration and sulphide mineralization with trace amounts of visible gold. The zone started roughly 70 metres below surface. Assays for the last few metres of the alteration zone are still pending; Canaco says it expects the overall mineralized intercept to grow to 58 metres with the additional assays.

The company plans to drill eight to 12 holes totalling 2,000 metres in this first drill program.

Last year, Canaco conducted a geochemical survey that defined a 1.3-km-long gold-in-soil anomaly. In addition, channel sampling returned such results as 7 metres of 5.6 grams gold.

Canaco is working to earn a 100% interest in the property by making staged payments totalling US$1.8 million to Magambazi Mines, a Tanzanian company that represents local artisanal miners and families. Magambazi Mines will also retain a 2% net smelter royalty.

On news of the first Magambazi hole, Canaco’s share price jumped 25¢ in a day to close at 41¢, a new 52- week high. The company has 50 million shares outstanding.