CVRD Increases its All Cash Offer to Acquire Canico Shares and Enters into Support and Lock-Up Agreements.

VANCOUVER, British Columbia -- Canico Resource Corp.. ("Canico") (TSX:CNI) announced today that it has entered into a definitive support agreement with Companhia Vale do Rio Doce ("CVRD") (NYSE:RIO)(NYSE:RIOPR) pursuant to which CVRD has agreed to amend the terms of its previously announced take-over bid (as so amended, the "Offer") to, among other things, increase the offer price to $20.80 in cash per Canico common share. The increased price represents a premium of approximately 53% over the volume weighted-average trading price of Canico's common shares on the Toronto Stock Exchange (TSX) for the 30 trading days immediately preceding the September 15, 2005 date of announcement of CVRD's intention to proceed with the Offer. Any Canico shareholders who previously tendered to the offer will be entitled to the increased price.

The board of directors of Canico has determined that the Offer is fair to all shareholders of Canico and in the best interests of Canico and its shareholders and, accordingly, has unanimously recommended that shareholders of Canico accept the Offer. BMO Nesbitt Burns Inc. and Genuity Capital Markets, Canico's financial advisors, have also provided an opinion to the Canico board of directors and special committee that the consideration to be received under the Offer is fair, from a financial point of view, to all shareholders of Canico.

CVRD has also entered into a lock-up agreement with certain shareholders of Canico, who collectively hold an aggregate of 4,138,217 Canico common shares and 1,063,500 options, representing approximately 11.5% of the outstanding Canico common shares (on a fully-diluted basis), under which agreement each locked-up shareholder has agreed to tender their Canico common shares to the Offer.

CVRD has agreed to mail a notice of change and variation amending the Offer and an amended director's circular to Canico shareholders on or before November 17, 2005, with the Offer being open for acceptance until 8:00 p.m. (Toronto time) on November 28, 2005, unless withdrawn or extended. Completion of the Offer is subject to certain conditions including a sufficient number of shares being tendered to the Offer such that CVRD would own at least 50% plus one of Canico's common shares on a fully-diluted basis, the receipt of any necessary regulatory approvals, the absence of litigation, no material changes at Canico and certain other conditions. Under the terms of the support agreement Canico has agreed to defer the separation time of the rights issued under Canico's shareholder rights plan in respect of the Offer and to waive, suspend the operation of or otherwise render the shareholder rights plan inoperative against the Offer.

Under the terms of the support and lock-up agreements, CVRD has the right to match any Offer made by another bidder. The support agreement also provides for the payment of a fee to CVRD by Canico of up to $32,844,699 in the event that the Offer is not completed upon the occurrence of certain events.

About Canico

Canico is a Canadian-based junior resource company focused on the development of the Onca Puma nickel laterite project located in Para State, Brazil. A feasibility study for the development and operation of the Onca Puma nickel laterite project was concluded and its highlights were made public by Canico in a press release dated August 4, 2005.

BMO Nesbitt Burns Inc. and Genuity Capital Markets are acting as financial advisors to Canico and Gowlings Lafleur Henderson LLP and Davies Ward Phillips & Vineberg LLP are acting as legal counsel to Canico for purposes of this transaction.

About CVRD

CVRD, a Brazilian company, headquartered in the city of Rio de Janeiro, Brazil, is the largest metals and mining company in the Americas and one of the largest in the global metals and mining industry, with a market capitalization of approximately US$50 billion.

It is the largest global producer and exporter of iron ore and pellets, the world's second largest producer of manganese and ferroalloys, one of the world's lowest cost producers of aluminum products (bauxite, alumina and primary aluminum) and a producer of copper, potash and kaolin. CVRD is the largest logistics player in Brazil, owning and operating several railroads and ports.

CVRD shares are traded on the New York Stock Exchange, NYSE (RIO and RIOPR), on the BOVESPA (Vale3 and Vale5) and on Latibex (XVALP and XVALO).

The Offer is aligned with CVRD's strategic decision to become a large global player in the nonferrous metals business to create shareholder value. It is already a copper producer and is starting the development of its first nickel project, Vermelho, located in the southern range of Carajas. Given the location of Onca Puma, near to CVRD mining operations and its efficient infrastructure, where its EF Carajas railroad is a very important asset, there are significant synergies to be explored with this potential acquisition.

UBS Securities Canada Inc. is acting as financial advisor to CVRD and Stikeman Elliott LLP is acting as legal counsel to CVRD for the purposes of this transaction.

CANICO RESOURCE CORP.

"J. Michael Kenyon"

J. Michael Kenyon, President & CEO 

Canico Resource Corp. (TSX:CNI)