Canaco Resources Ltd. - Colchester Drilling Commences; Powderhorn Property Expands.

WEST VANCOUVER, British Columbia--(BUSINESS WIRE)--Nov. 19, 1998--Mr. J. Malcolm Bell, President, reports:

Colchester/McNeily Mines Project ---------------------------------

Canaco Resources Ltd. has obtained a drilling permit and initiated a phase I drill program with up to 1000m of diamond drilling south of the Colchester Main Zone on the McNeily/Colchester Mine project. An exploration program designed to investigate the strike extension of known gold and copper mineralization is already in progress. This program consists of property scale mapping, prospecting, trenching, and magnetometer, VLF-EM and Pulse-EM geophysical surveys. A downhole EM probe will explore the diamond drillholes. Results are expected shortly.

Located near Kings Point, on the Springdale Peninsula of Newfoundland, the Colchester/McNeily Mine project hosts the Colchester, McNeily, Swatridge and Old English Mines. Each of these mines produced high-grade copper ores direct-shipped to Swansea, Wales. In the 1980's, the Colchester and McNeily Mines were owned by Noranda Mines Ltd, who discovered gold in a number of locations and believed the property had the potential to host significant gold mineralization.

Powderhorn Lake ---------------

Canaco Resources Ltd. has recently acquired, by staking, a further 232 claims in the Powderhorn Lake area near Buchans, Newfoundland. The Company has expanded its land holdings in an easterly direction, along the favorable contact between the Twin Lakes Intrusive and the Ordivician Sediments to the south. A preliminary drill program (540 meters) has been successfully completed which was required to assist in determining geological relationships and structural complexities where densely disseminated sulphides carrying nickel, copper and cobalt were found at surface. The drilling established that a dynamic magma chamber is present and is responsible for the mixing of geologic units and subsequent related mineralization. Detailed analysis and study of results from the recent work program is underway and will be reported upon completion.