Canico tables more drill results form Onca

Vancouver – Drill results from the Onca Ridge portion of the Onca -Puma nickel laterite project in Para State Brazil continue to exceed Canico Resources (CNI-V) expectations.

Canico’s initial drilling campaign at Onca will consist of about 500 widely spaced drill holes along the Onca Ridge, which has a total prospective strike length of 20 km. So far assays have been received for 178 holes. Canico states that the near surface, flat lying mineralization at Onca is thicker and more continuous than it expected.

“Results of our Onca drilling continue to be excellent,” said Michael Kenyon, President & CEO of Canico. “Nickel assays average over 2% and the laterite thickness is better than predicted. We believe that we will see a significant increase over the historical Onca resources.”

The recent drill results include numerous intercepts that have nickel grades in excess of 2% nickel over intervals greater than 5 metres. Highlights include;

• Hole 3102 which cut 5 metres averaging 2.24% nickel and 0.24% cobalt, starting 2 metres down-hole.
• Hole 3115 which cut 6.50 metres averaging 2.41% nickel and 0.11% cobalt, starting from surface.
• Hole 3096 intersected 11.85 metres averaging 1.77% nickel and 0.05% cobalt starting from surface.
• Hole 3103 cut 18.4 metres averaging 2.78% nickel and 0.93% cobalt, staring from surface.
• Hole 3114 intersected 6.4 metres averaging 2.36% nickel and 0.25% cobalt, starting from surface.
• Hole 3118 cut 6.35 metres averaging 2.45% nickel and 0.21% cobalt, starting from surface.
• Hole 3120 intersected 9.95 metres averaging 2.15% nickel and 0.27% cobalt, starting from surface.
• Hole 3131 cut 6.0 metres averaging 2.18% nickel and 0.18% cobalt, starting from surface.
• Hole 3142 cut 6.15 metres averaging 2.33% nickel and 0.025% cobalt, starting from surface.
• Hole 3160 intersected 6 metres averaging 2.58% nickel and 0.079% cobalt, starting from surface.
• Hole 3168 cut 8.1 metres averaging 2.28% nickel and 0.105% cobalt, starting from surface.
• Hole 3176 cut 10.70 metres averaging 2.06% nickel and 0.306% cobalt, starting 9.6 metres down-hole.

The inferred resource estimates at Onca-Puma were performed by Watts, Griffis and McOuat Consulting Geologists and Engineers. This resource is currently pegged at 53 million tonnes averaging 2.2% nickel and 0.08% cobalt.

The Ona target comprises an area measuring 18 by 1 km, with the mineralized laterite having an average thickness of 4.1 metres. Moving 10 km northeast, the Puma West target extends for 10 km along strike and is also about 1 km wide. The mineralization is slightly lower-grade but has an average thickness of 5.1 metres. Between the two deposits lies an iron formation. Another 3 km to the northeast is the smallest zone, Puma East, which measures 7 km long by 500 metres wide.

Half of Puma West and all of Puma East lie within an indigenous reserve and are not available for development. Even when the 10-11 million tonnes of ore-grade material that occur on the native lands are excluded, the project economics still appear robust.

The Onca-Puma deposits were discovered by Inco (N-T) in the 1970’s and represent one of the world’s highest grade undeveloped nickel laterite deposits. Canico started work on the property last September and hopes to complete a bankable feasibility study before the end of 2004.

Canico completed its requirement to raise US$22.5 million, in late February, as was stipulated in its deal with Inco. At the end of the day, Inco will receive no cash payments but hold an 18% stake in the junior, as well as several warrants. The warrants are designed so that Inco can buy shares to maintain its 18% stake in Canico.