Canico cuts new zone in Brazil

Vancouver An ongoing 11,000-metre drill program has discovered a new zone of nickel laterite mineralization on the Ona-Puma project in northern Brazil.

Canico Resource (CNI-V) hit the latest mineralization in an area largely covered by a silica cap. Several of the holes yielded grades of greater than 1.5% nickel over more than 2 metres. The best results came in hole1080, which returned 1.66% nickel over 17.8 metres. The zone was hit from 1-to-49 metres below surface and contains more iro0n and silica than the previously defined prospects.

“We continue to receive results from the program which bode quite well for a significant increase in resources at Puma,” says Canico’s President, Michael Kenyon. “In addition, we now have some encouragement that the silica cap area will yield added resources."

Highlights of the latest results include:

• Hole 1077 15.5 metres grading 1.67% nickel.
• Hole 1084 3.6 metres grading 2.1% nickel.
• Hole 1086 13.9 metres grading 2.23% nickel.
• Hole 1087 12.7 metres grading 1.78% nickel.
• Hole 1088 29.4 metres grading 2.7% nickel.
• Hole 1092 — 6 metres grading 1.96% nickel.
• Hole 1098 12.5 metres grading 1.61% nickel.
• Hole 1104 12.2 metres grading 2.12% nickel.

Situated in Para state, the Puma deposit lies on the 400-sq.-km Ona-Puma property, which hosts a near-surface inferred resource of 50 million tonnes grading 2.3% nickel and 0.09% cobalt using a 1.5% nickel cutoff grade.

The resource consists of three separate targets. The Ona zone covers an 18-by-1-km area, the average thickness of the mineralized laterite being 4.1 metres. Moving 10 km northeast, the Puma West zone extends for 10 km along strike and is also about 1 km wide. The mineralization here is slightly lower-grade but has an average thickness of 5.1 metres. Between the two deposits lies an iron formation. Another 3 km to the northeast is the smallest zone, known as Puma East, which measures 7 km long by 500 metres wide.Half of Puma West and all of Puma East lie within an indigenous reserve and are not available for development.

"We are about to start drilling on the Onca ridge, where there are also silica cap areas within which previous exploration was restricted," adds Kenyon. "These areas are far more extensive at Onca than at Puma."

The early results indicate a wider mineralized zone than expected at Puma West and with the identification of a new zone, Canico believes there is good potential for increasing the tonnage at the project.

"Increases in resources will give us options in scaling the size of production plants in our upcoming feasibility studies.” Says Kenyon.

The junior aims to drill 265 holes into Puma before moving on to Ona. More than 400 drill holes are planned for the latter, and, overall, the company intends to complete 11,000 metres by year-end.