Category: Uncategorized
October 17, 2002

News Release: Puma Drilling Yields Good Nickel Intercepts

Canico Resource Corp. (CNI TSX-V) is pleased to report the assay information received to date in its ongoing drilling program at the Ona-Puma nickel laterite project in Brazil.

Nickel assays from the holes which have cut the zone are in line with or exceed expectations based upon previous work. Several holes yielded intervals of more than 30 meters grading over 2% nickel, with the best hole to date yielding 31.17 meters grading 4.02% nickel. The deepest previous penetration of the Puma deposit was about 19 meters. Virtually all of the mineralized intercepts start at, or very near, surface. The 39 reported holes are at the western end of the Puma deposit and cover approximately one quarter of the 6 kilometer strike length of the Puma ridge. The map accompanying this news release sets out the sites of the holes reported and the accompanying table sets out composited nickel assays from those holes together with a description of Canico's analytic techniques and methodology.

Diamond drilling is with large-diameter core equipment on grid lines that are 200 meters apart, with drill hole spacing at about 100 meter intervals along these lines. Assays from a number of additional holes are pending and the drill program is continuing with two drills on site and a third expected this month. Approximately 265 drill holes in total are planned for Canico's present campaign over Puma. These will be followed up by additional holes where initial results warrant.

A separate geological crew is preparing the Onca deposit for drilling, to start when the Puma drilling has finished. More than 400 drill holes are planned for the Onca campaign. In all, Canico hopes to complete approximately 11,000 meters of drilling at Onca-Puma by year-end, subject to weather. Following these drill programs, Canico will complete a new resource estimate as part of its drive toward a definitive feasibility study.

The Onca-Puma deposits represent one of the world's highest grade undeveloped nickel laterites. Based on wide-spaced drilling and test pitting undertaken before the current program, Watts, Griffis and McOuat, Consulting Geologists and Engineers, estimated that there are inferred resources of approximately 32.5 million tonnes of laterite grading about 2.2% nickel at a 1.5% nickel cutoff located on the parts of Onca-Puma which are presently available to Canico. Of there inferred resources, about 10 million tonnes at a slightly higher grade are on the Puma deposit. Additional resources were estimated for certain other parts of the Onca-Puma concession area, but these additional resources are overlain by the Xikrin Indigenous Reserve area and are not presently available to Canico.

The resource estimated for Puma was inferred to be about 5 meters thick on average, although about 54% of the previously drilled holes and pits containing mineralization did not penetrate the entire profile and the boundaries of the deposit were not fully outlined. The current drilling results suggest that the Puma deposit may be substantially thicker than previously estimated, and if this holds true, tonnage at Puma may be substantially greater than previously estimated.

In their review of the project prior to the current work, Watts, Griffis and McOuat stated that; "Based on a single-line pyrometallurgical process similar to that used by Inco's subsidiary, PT Inco, at its operations in Indonesia and assuming a throughput of about 1.1 million tonnes of laterite annually, the inferred resource outside the Xikrin area could potentially support production of about 50 million pounds of nickel in matte annually for 20 years. The total inferred resources outside the Xikrin area suggest that production could continue at this processing rate for up to 30 years."

"This project is starting to live up to its considerable promise," said Michael Kenyon, President and CEO of Canico. "If the potential production scenario recognized by Watts, Griffis and McOuat is realized, Canico will rank within the top ten nickel producing companies in the western world."


J. Michael Kenyon, President & CEO

Cautionary Notices

The estimate of inferred resources referenced in this release and the statement quoted in this release which is attributed to Watts, Griffis and McOuat Limited, Consulting Geologists and Engineers, ("WGM"), are taken from a Technical Report dated November 15, 2001, Revised January 31, 2002, and Amended May 29, 2002, completed by WGM and filed by Canico on SEDAR under National Instrument 43-101. The estimate and the statement quoted are based on the assumptions and methods, and are subject to the limitations and qualifications, described in such Technical Report. The Technical Report can be found in Canico's filings at The standards employed by WGM in estimating the inferred resources differ significantly from the requirements of the United States Securities and Exchange Commission and the resource information reported may not be comparable to similar information reported by United States companies. The term "resources" does not equate to "reserves" and normally may not be included in documents filed with the United States Securities and Exchange Commission. "Resources" are sometimes referred to as "mineralization" or "mineral deposits".

This News Release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 of the United States. Other than statements of historical fact, all statements in this release, including, without limitation, statements regarding potential mineralization and resources, estimated or potential future production, potential ranking amongst nickel producers, and future plans and objectives of the Company, are forward-looking statements that involve various known and unknown risks, uncertainties and other factors. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this announcement. Important factors that could cause actual results to differ materially from the Company's expectations include, among others, the ongoing results of current exploration activities, conclusions of any pre-feasibility or feasibility studies, changes in project parameters, and future metal prices, as well as those factors discussed under the heading "Risk Factors" and elsewhere in the Company's documents filed from time to time with the TSX Venture Exchange, Canadian securities regulators and other regulatory authorities. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this notice.
Puma Deposit Drill Data
Hole Intercept (m) Interval (m) % Nickel % Cobalt
1002 0 - 5.33 5.33 1.87 0.024
1005 0 - 7.90 7.90 2.89 0.019
1006 1.40 - 6.40 5.00 1.66 0.006
1008 0 - 7.75 7.75 2.65 0.017
1009 0 - 7.61 7.61 2.92 0.016
1010 0 - 4.40 4.40 2.02 0.042
1011 0 - 11.76 11.76 1.72 0.008
1012 2.05 - 6.85 4.80 1.87 0.047
1013 5.72 - 8.72 3.00 1.57 0.020
1014 0 - 13.90 13.90 3.22 0.024
1015 0.70 - 8.85 8.15 2.84 0.027
1016 0 - 3.73 3.73 1.82 0.057
1018 1 - 32.75 31.75 2.34 0.096
1019 0 - 7.10 7.10 2.36 0.037
1020 0 - 31.10 31.10 2.46 0.012
1021 0 - 4.30 4.30 2.22 0.025
1023 2.10 - 5.25 3.15 1.95 0.057
1024 0 - 6.85 6.85 1.64 0.052
1026 1.15 - 3.35 2.20 2.00 0.033
1029 6.30 - 9.00 2.70 1.71 0.054
1032 4.00 - 21.70 17.70 1.94 0.134
1033 0.6 - 6.70 6.10 2.05 0.035
1034 1 - 32.17 31.17 4.02 0.108
1035 0 - 2.35 2.35 2.04 0.086
1037 0.27 - 3.20 2.93 1.78 0.018
1038 3.35 - 40.0 36.65