Canaccord Morning CoffeeCanaco Resources* (CAN : TSX-V : $1.98), Net Change: 0.08, %Change: 4.21%, Volume: 2,579,279
Put your hands in the air. Canaco Resources released additional drill results from theMagambazi Main and Western Lodes of the Handeni project in Tanzania. Highlights include 35 m grading 6.45 g/t gold in the Western Lodes (MGZD222) and 55 m grading 3.19 g/t gold in Magambazi Main (MGZD265).MGZD222 was one of the best results returned to date from the Western Lodeszone. Highlights from the latest set of results also included five intercepts of 2.74-3.27 g/t gold over 15-28 m.
A Bay Street analyst commented, “These are solid results.” However, he noted that Canaco has been under significant pressure, despite a consistent delivery of strong drill results from its Handeni project. He went on to say that he does not think that the potential of the Handeni project has changed. The drill results have demonstrated the potential to prove up a significant near surface, relatively high-grade resource. An initial resource estimate is expected in Q1/12.Canaccord Genuity Mining Analyst Nicholas Campbell is expecting a 2.5 M oz gold resource at a grade of roughly 3.5 g/t gold. A PEA is expected by the end of Q2/12. Campbell believes Handeni should have robust economics, likely profitable in a gold price environment 50% lower than spot. With $125 million in cash, Canaco should not have to come back to the market until major construction activities begin at Handeni