VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 24, 2012) - Canaco Resources Inc. (TSX VENTURE:CAN) ("Canaco" or the "Company") is pleased to provide an update on the mineral resource estimate and to announce the commencement of a comprehensive metallurgical test work program at the Handeni project in Tanzania. This work will provide key input information to the upcoming Magambazi preliminary economic assessment scheduled for completion by the end of the third quarter of 2012.

The initial mineral resource estimate is on track for completion at the end of the first quarter 2012 under the supervision of James Gray, P. Geo, of Advantage Geoservices Limited, Maple Ridge, BC, Canada. In addition to various field and operations roles, the majority of Jim's 26 year career includes responsibility for resource modeling and project evaluations at Teck Resources Limited and then at Fronteer Gold. Specifically, his experience in a wide variety of geologic settings using a range of geological, statistical and geostatistical modeling techniques is well suited for application to the Handeni project.

Canaco's metallurgical test work program will determine the effect of mineralization, lithology and grade variation on metallurgical recovery, grind size, leach residence time, work index and abrasion characteristics. To this end, approximately 2,900 samples have been received at the G&T Metallurgical Services laboratory in Kamloops, BC, and the program is expected to be completed near the end of the first quarter of 2012.

The program is being completed by G&T Metallurgical Services under the direction of Dr. Jim King, Canaco's qualified person for metallurgy and process design. Jim's experience includes more than 40 years associated with the design, commissioning and operation of major mineral processing facilities. During his long career at Placer Dome Jim played a key role in the metallurgy, evaluation, establishment and expansion of many successful mineral processing operations including those at Porgera, Zaldivar, North Mara and others.

G&T Metallurgical Services has provided an extensive range of metallurgical and mineralogical services to the mining and mineral exploration industry since 1990. G&T's laboratory houses a modern, well-equipped mineral processing research and development complex which includes unit laboratories for sample preparation, mineral processing testing, mineralogical/modal analysis, chemical analysis and process pilot plant operation.

Canaco discovered gold mineralization at Handeni in eastern Tanzania in 2009. Since that time the Company has drilled more than 400 holes along the Magambazi ridge, a 1.4-kilomatre outcrop where mineralization was first encountered.

Additional information including press releases and public documents about Canaco can be viewed at the Company's website or at

About Canaco

Canaco is a Vancouver-based mineral exploration company focused on advanced exploration projects in Africa. Built on a foundation of experienced management, the Company is rapidly advancing the Handeni project in Tanzania and is well positioned to build shareholder value through discovery and resource development.

Canaco's shares trade 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.

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.

Contact Information:

Canaco Resources Inc.
Meghan Brown
Director Investor Relations
604-488-2557 or 1-866-488-0822