RE: Update?
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 7, 2012) - Canaco Resources Inc. (TSX VENTURE:CAN) ("Canaco" or the "Company") is pleased to announce its Board of Directors has approved a revised budget of $3.5 million for the six months ending December 31, 2012, reduced from $11 million as previously announced (refer to the Company's news release dated May 31, 2012).
In regards to this news, Canaco President and CEO, Andrew Lee Smith, commented: "Steps have been taken to reduce company operating costs with the preservation of capital and advancement of project development as our top priorities. Canaco has strategic assets in the form of a $95 million treasury and the Handeni property, which provide capacity to create shareholder value in challenging resource markets. In parallel with ongoing engineering, the Board and management are currently evaluating a number of potential opportunities for strategic alternatives for growth."
As announced on August 2, 2012, Canaco has entered into a memorandum of understanding (MOU) with an arm's length third party, a Chinese gold producer, to create a joint venture to develop Canaco's Magambazi project in Tanzania. The MOU is non-binding and subject to certain conditions including, but not limited to, the completion of due diligence and a positive economic evaluation by the Chinese third party. "This agreement creates the possibility for the development of Magambazi to proceed without the requirement for financial contributions by Canaco during the earn-in period," Smith said. "In response to the potential development of a joint venture, management has taken the decision to defer the completion of a Magambazi PEA pending third-party economic evaluations, further reflecting our commitment to preserving cash in this market environment."
Ongoing engineering work at Magambazi will include the completion of environmental baseline reports along with flow sheet design and site plan development to continue advancing the permitting process and provide a basis for the completion of the PEA, if required.
The Board has granted an aggregate of 6,000,000 stock options to directors, officers and consultants pursuant to Canaco's Stock Option Plan. The options have an exercise price of $0.40 per share and an expiry date of August 3, 2017.
Additional information including press releases and public documents about Canaco can be viewed at the Company's website www.canaco.ca or at www.sedar.com.