Canaco Completes Reconnaissance Drill Program at Semwaliko and
Prepares to Drill Magambazi Prospect in Tanzania

Vancouver, British Columbia -- August 28, 2008 -- Canaco Resources Inc. (TSXV: CAN) announced today the results of reconnaissance, reverse circulation drilling at the Company's Semwaliko prospect, part of the 100% owned Handeni Gold Project located in the United Republic of Tanzania.

Results have been received for the recent reverse circulation ("RC") drilling program at the Semwaliko North Prospect. Ten drill holes for 1,027 m of shallow RC drilling was conducted at the Semwaliko North Prospect to test an area of artisanal workings over 400m strike. Five drill holes for a total of 780m were also drilled to the south, to test a weak soil geochemical anomaly (40ppb Au). Peak gold results included 12m @ 1.04g/t including 1m @ 6.5 g/t and several greater than 1g/t intercepts over narrow widths. Drill hole MGZC007 was abandoned in 2.85g/t Au in a vertical fault zone and remains open at depth. The peak intercepts are shown in Table 1.

The interpretation of data returned from the RC program indicates the geology of the Semwaliko prospect is structurally complex. Anomalous gold mineralization was intersected over broad widths from metamorphosed amphibolite. Additional targeting of exploration drilling at Semwaliko will require further detailed mapping of the surface geology and compilation of the results of the RC program and recent soil geochemistry.

The reconnaissance drilling at Semwaliko is phase 1 of a 3 phase exploration drilling program planned to test the down dip extensions of surface mineralization identified by artisanal mining operations on the Handeni Gold Property. The next phase of drilling will consist of systematic diamond drilling of the Magambazi prospect where artisanal, bedrock mining operations have exposed surface gold mineralization over a strike length of 350m within a 1.3 km long trend of strongly anomalous gold geochemistry in soils.

The planning, execution and quality control programs at the Handeni Project are under the supervision of Andrew Lee Smith, P.Geo. and Dr. David Groves, Canaco's Director of Project Development, Tanzania. Mr. Smith and Dr. Groves are qualified persons as defined by National Instrument 43-101.

Additional information on Canaco, including technical reports and other public documents are available on SEDAR at www.sedar.com or from the Company's website at www.canaco.ca.

Canaco Resources is an emerging junior exploration company trading on the TSX Venture Exchange. The Company is actively engaged in developing an exploration portfolio that includes gold and diamond assets in Tanzania and the El Oro gold project in Mexico.


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