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Three of the drill programs will be conducted on the company’s large Handeni Project in eastern Tanzania, where gold discoveries have occurred on a district scale and defined an extent of mineralization with a strike length of over 100 km.
On the Magambazi prospect, a total of 12 diamond drill holes totaling over 2,000 metres will be completed during the phase 1 drilling at Magambazi and three holes totaling 700 metres at Magambazi North. These drill holes will test the down-dip extensions of known bedrock mineralization that is currently the site of intense surface artisanal mining operations and strong surface geochemical anomalism.
The target gold mineralization at Magambazi is defined by artisanal workings and surface rock chip sampling over 350 m strike and is open to the northwest under significant transported cover. At Magambazi North, the target gold mineralization is defined by a 650 m long soil geochemical anomaly (greater than 40 parts per billion Au) with peak soil values of 0.68 gram per tonne Au.
In the northern part of the Handeni gold trend, at Semwaliko North, a reverse circulation drill program is planned to test bedrock artisanal workings that extend over a strike length of 500 m and over widths up to 40 m. The best rock chip channel samples previously reported from the project were 10 m at 2.54 g/t Au and two m at 14.3 g/t Au.
The Magembe diamond project, adjacent to De Beers’ world class Williamson diamond mine will also be drill tested during the second quarter of 2008.
The Williamson mine has been producing diamonds from the Mwadui kimberlite, discovered by Canadian geologist Dr John Williamson, since1925, and has produced over 19 million carats of diamonds.
Tanzania has been a significant diamond producer for several decades, with the bulk of production coming from the Williamson Mine at Mwadui where commercial production began in 1925. Over 300 kimberlites are known in Tanzania of which, 20% are diamondiferous. Some 600 dipolar magnetic anomalies with similar geophysical characteristics to known kimberlite pipes have been recorded during recent geophysical surveys. Also of relevance are the psuedo-kimberlites or para-kimberlites along the young craters where diamonds have been discovered.
Canaco’s Tanzanian exploration efforts are being guided in large part by the work of world renowned geologist, Dr. David Groves.
He is Canaco’
According to Dr. Groves,
“Here we’ve got the chance to control a very large ground holding in which we’ve got some quite exciting prospects….all of the things were seeing are exposed on the surface, and we’ve got a lot of ground that’s under cover, and our experience elsewhere like Geita has shown the biggest deposit there was under cover. What was showing on the Geita Hill there was just the tip of the iceberg of something much bigger, and what we see something like Magambaze, the potential is there that this the tip of the iceberg of some system which is much bigger than it., and because we are effectively first movers into this new terrain, we’ve got a ground position that could take advantage of that...If the deposit isn’t exactly like Magambaze, we’ve got at least 6 km of strike and mineralization, we think from the geophysical work it could be 20 km…we can control that we’ve got the chance that a discovery is going to be made.
The Geita gold mine, owned by Ashanti Goldfields and Anglogold, was officially commissioned on August 10 2000, and is expected to yield a minimum of 14 million ounces of gold.
Tanzania is home to some of the largest mines in production today, including Barrick’s Bulyanhulu gold mine, currently with 11.2 million ounces of proven and probable gold reserves. In 2006, the mine produced 330,000 ounces of gold at total cash costs of $339 per ounce.
Mining contributes 2.3 percent of Tanzania’s GDP presently, a figure projected to grow to 10 percent by 2025.
Besides the company’s principle focus in Tanzania, Canaco is participating in a 50/50 joint venture with Candente Resources (TSX.V:DNT) on the 67 sq. km El Oro property , which hosts one of the most significant historic gold-silver producers in Mexico, with past production of over 20 million ounces of gold equivalent over a 400-year period.
Canaco is led by Andrew Lee Smith who has over 20 years of experience in successfully exploring, developing and operating North American base and precious metal mining and gem projects.
