Canaco Resources Inc. (TSX VENTURE: CAN) ("Canaco") has been asked by the TSX Venture Exchange to comment on a news release issued by Sonora Gold & Silver Corp. ("Sonora") on October 15, 2010. Sonora's news release indicates that it has an option on a Primary Mining License (PML) that has been converted into a Mining License (ML). Canaco has reviewed the Sonora news release.
Canaco has met with the Commissioner of Mines in Tanzania who has confirmed the validity and status of Canaco's existing Prospecting License (PL) which provides Canaco with exclusive rights to the area of the Magambazi discovery. The Commissioner has also informed Canaco of the existence of competing rights in the form of a 0.075 sq. km. PML within Canaco's 196 sq. km. Kilindi PL which was previously not indicated as being present within Canaco's PL. The PML is located within the area that Canaco has been drilling while outlining the Magambazi gold trend.
The Commissioner has expressed to Canaco concerns about the ability of a small ML to be sufficient to accommodate any mining operations and about the potential detrimental impact on Canaco's shareholders, the Government of Tanzania and the impairment of the advanced exploration program at Magambazi. Therefore, the Commissioner has advised Canaco that it has suspended the transfer of the ML to Sonora and will intervene to arbitrate a fair and equitable resolution to the competing interests in order that the project can move forward.
All affected parties have been called by the Commissioner to meet in Dar es Salaam in the next 48 hours for an arbitrated resolution that will be in the best interest of all parties. Canaco will continue to work diligently towards what it expects to be a speedy and favourable resolution to maintain the integrity of the Magambazi discovery, and is continuing to progress exploration and definition drilling activities on the PL.
Canaco thanks the Tanzanian Government for their continued support of the company's efforts.