Canaco Resources Inc Announces a $101 Million Treasury Bought Deal Financing and a $32.4 Million Secondary Bought Deal by 24hgold

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Re: News Releases - Thursday, February 24, 2011
Title: Canaco Resources Inc. Announces a $101 Million Treasury Bought Deal Financing and a $32.4 Million Secondary Bought Deal Financing

February 24, 2011 Vancouver, British Columbia - Canaco Resources Inc. (TSXV:CAN) ("Canaco" or the "Company") is pleased to announce it has entered into an agreement with a syndicate of underwriters co-led by Canaccord Genuity Corp. and TD Securities Inc. (the "Underwriters"), pursuant to which the Underwriters have agreed to purchase, on a bought deal basis, 18,700,000 common shares (the "Common Shares") of the Company at a price of $5.40 per share for aggregate gross proceeds to the Company of $100,980,000 (the "Treasury Offering"). The Company has also agreed to grant the Underwriters an over-allotment option, exercisable for a period of up to 30 days following the closing of the Treasury Offering, to purchase from the Company up to an additional 2,805,000 Common Shares at a price of $5.40 per share for additional gross proceeds of up to $15,147,000 (the "Over-Allotment Option"). If the Over-Allotment Option is exercised in its entirety, the aggregate gross proceeds of the Treasury Offering to the Company will be $116,127,000.

In addition to the Treasury Offering, the Underwriters have agreed to purchase, on a bought deal basis, from SinoTech (Hong Kong) Corporation Limited ("SinoTech"), 6,000,000 Common Shares at the same price as the Treasury Offering for gross proceeds to SinoTech of $32,400,000 (the "Secondary Offering"). The Company will not receive any proceeds from the Secondary Offering.

SinoTech currently holds 48,000,000 Common Shares, representing approximately 28% of the Company on an undiluted basis. After giving effect to the Treasury Offering and the Secondary Offering, but before giving effect to the Over-Allotment Option, SinoTech will hold 42,000,000 Common Shares, representing approximately 22% of the Company on an undiluted basis.

In connection with the Treasury Offering and the Secondary Offering, the Underwriters will receive a cash commission equal to 5.5% of the gross proceeds raised pursuant to the Treasury Offering (including upon exercise of the Over-Allotment Option) and the Secondary Offering. In connection with the Treasury Offering, the Underwriters will also receive broker warrants (the "Broker Warrants") equal to 3.0% of the aggregate number of Common Shares sold pursuant to the Treasury Offering (including upon exercise of the Over-Allotment Option). Each Broker Warrant shall be exercisable to purchase one Common Share at a price of $6.00 at any time up to 24 months after closing of the Treasury Offering.

Net proceeds from the Treasury Offering are expected to be used by Canaco to fund ongoing development and exploration activities on the Company's African mineral properties and for general corporate and working capital purposes.

The Common Shares to be issued pursuant to the Treasury Offering, and the Common Shares to be sold pursuant to the Secondary Offering, will be offered by way of a short form prospectus in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario.

Closing of the Treasury Offering and the Secondary Offering is scheduled to occur on or about March 22, 2011 and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and other approvals including the approval of the TSX Venture Exchange and the securities regulatory authorities.

The securities offered have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Canaco

Canaco is a Vancouver-based mineral exploration company focused on advanced exploration in Africa. Built on a foundation of experienced management and focused on rapidly advancing exploration projects in Tanzania and throughout Africa, Canaco believes it 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.

For further information contact:
Meghan Brown, Director Investor Relations
Telephone: 604-488-0822 or 1-866-488-0822
Visit our website: www.canaco.ca
Email: investors@canaco.ca

On behalf of the Board of Directors,
Andrew Lee Smith, P.Geo
President, CEO and Director

Cautionary Statement Regarding Forward-Looking Information
This news 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 information. The forward-looking information contained in this news release is included for the purpose of providing investors with information to assist them in understanding the Treasury Offering and the Secondary Offering and may not be appropriate for other purposes. The Company does not undertake to update any forward-looking information that is included herein, except in accordance with applicable securities laws.

NEITHER THE 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 NEWS RELEASE

Copyright � 2011 CANACO RESOURCES INC. (CAN) All rights reserved. For more information visit our website at http://www.canaco.ca/ or send email to investors@canaco.ca ..
Message sent on Thu Feb 24, 2011 at 7:25:35 AM Pacific Time

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