News Releases

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 28, 2008) - Canaco Resources Inc. (TSX VENTURE:CAN) announced today the results of reconnaissance, reverse circulation drilling at the Company's Semwaliko prospect, part of the 100% owned Handeni Gold Project located in the United Republic of Tanzania.

Results have been received for the recent reverse circulation ("RC") drilling program at the Semwaliko North Prospect. Ten drill holes for 1,027 m of shallow RC drilling was conducted at the Semwaliko North Prospect to test an area of artisanal workings over 400m strike. Five drill holes for a total of 780m were also drilled to the south, to test a weak soil geochemical anomaly (40ppb Au). Peak gold results included 12m @ 1.04g/t including 1m @ 6.5 g/t and several greater than 1g/t intercepts over narrow widths. Drill hole MGZC007 was abandoned in 2.85g/t Au in a vertical fault zone and remains open at depth. The peak intercepts are shown in Table 1.

/T/

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Hole         From (m)    To (m)  Interval (m)     Au g/t
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MGZC001           25        37            12        1.04
 including        25        26             1        6.47
MGZC007           86        90             4        0.86
 including        89        90             1        2.81
MGZC009            0        13            13        0.49
 including        12        13             1        4.08
MGZC012           66        69             3        0.90
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/T/

The interpretation of data returned from the RC program indicates the geology of the Semwaliko prospect is structurally complex. Anomalous gold mineralization was intersected over broad widths from metamorphosed amphibolite. Additional targeting of exploration drilling at Semwaliko will require further detailed mapping of the surface geology and compilation of the results of the RC program and recent soil geochemistry.

The reconnaissance drilling at Semwaliko is phase 1 of a 3 phase exploration drilling program planned to test the down dip extensions of surface mineralization identified by artisanal mining operations on the Handeni Gold Property. The next phase of drilling will consist of systematic diamond drilling of the Magambazi prospect where artisanal, bedrock mining operations have exposed surface gold mineralization over a strike length of 350m within a 1.3 km long trend of strongly anomalous gold geochemistry in soils.

The planning, execution and quality control programs at the Handeni Project are under the supervision of Andrew Lee Smith, P.Geo. and Dr. David Groves, Canaco's Director of Project Development, Tanzania. Mr. Smith and Dr. Groves are qualified persons as defined by National Instrument 43-101.

Additional information on Canaco, including technical reports and other public documents are available on SEDAR at www.sedar.com or from the Company's website at www.canaco.ca.

Canaco Resources is an emerging junior exploration company trading on the TSX Venture Exchange. The Company is actively engaged in developing an exploration portfolio that includes gold and diamond assets in Tanzania and the El Oro gold project in Mexico.

The Company relies on litigation protection for "forward-looking" statements. Forward-Looking Statements: This press release contains forward-looking statements that are based on the Company's current expectations and estimates. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other similar words or statements that certain events or conditions "may" or "will" occur, and include, without limitation, statements regarding the obligations of the Company under the Option Agreement and the Company's plans with respect to the exploration and development of its projects. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from estimated or anticipated events or results implied or expressed in such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein. No independent consultant has rendered an expert opinion on the property.