Barclays and CIBC to arrange Onca-Puma Financing

Vancouver — Canico Resource (CNI-T) has appointed Barclays Capital and CIBC to arrange project financing for its Onca-Puma nickel laterite project located in Para State, Brazil.

The mandate encompasses advising and arranging services in respect of both conventional project loans from the commercial bank community and other forms of project debt from capital markets, export credit agencies and suppliers.

"Canico is very pleased to have Barclays Capital and CIBC join our team," commented Michael Kenyon, President &CEO of Canico. "We are all dedicated to seeing the full potential of Onca-Puma realized in the earliest possible timeframe."

Barclays and CIBC will also advise on the structure and size of the project financing. According to the agreement, the financiers will appoint an independent engineer to provide early technical input to Canico’s feasibility study and other project studies in order to insure that these studies will be bankable upon completion.

As part of the compensation for this arrangement Barclays and CIBC will receive 1.25 million non-transferable share purchase warrants exercisable into 1.25 million common shares. The warrants have an exercise price of $15.55 per share and will expire November 17, 2007.

The quantity of warrants available for exercise by the Banks will be subject to a number of conditions which include; the successful arrangement of project financing for the project; a satisfactory level of participation in such financing by the Banks and certain other events.

The Ona-Puma laterites are flat-lying near surface deposits that appear to be suitable for conventional, pyrometallurgical processing.

Using a 1.5% nickel cut-off grade resources at Onca-Puma stand at 104.4 million tonnes averaging 2.15% nickel and 0.105% cobalt. Once contains 69.8 million tonnes averaging 2.12% nickel and 0.123% cobalt. Puma West hosts 34.6 million tonnes averaging 2.21% nickel and 0.07% cobalt.

Based on a 1.0% nickel cut-off grade, Onca-Puma hosts an inferred resource of 197.5 million tonnes averaging 1.72% nickel and 0.113% cobalt. Onca hosts 140.8 million tonnes averaging 1.67% nickel and 0.125% cobalt. Puma West, hosts 56.8 million tonnes averaging 1.83% nickel and 0.082% cobalt.

The Ona estimate is based on 485 diamond drill holes completed in Canico’s 2003 evaluation program. The revision to the Puma estimate is based upon the results of an additional 24 diamond drill holes west of the main Puma ridge.

Canico is in the midst of a scoping study to establish order of magnitude parameters for building and operating a nickel mine at Ona-Puma. A full feasibility study on the Ona-Puma Project is scheduled to be completed in late 2004. The company has yet to decide upon a cut-off grade for use in mine planning and financial modeling.