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Canasil Completes 2012 Exploration Program and Outlines Seven Silver-Gold Targets at the Sandra-Escobar Project in Durango State, Mexico

Vancouver, August 08, 2012 - Canasil Resources Inc. (Canasil, TSX-V: CLZ, DB Frankfurt: 3CC) announces completion of the 2012 exploration program at the Sandra-Escobar silver-gold project in northern Durango State, Mexico, outlining seven significant silver-gold targets over an area of 25 square kilometres. The 2012  program included an ASTER satellite alteration survey, surface mapping and sampling including collection of 370 surface samples, and an 11.8 line-kilometre ground IP geophysical survey, complementing previous mapping and sampling, airborne ZTEM geophysical survey and 1,849 metres of diamond drilling in 11 drill holes completed up to December 2011. These programs have confirmed evidence of a large hydrothermal system centred on an intrusive source and surrounded by mineralized zones observed at surface with veins and outcrops returning high silver, gold, copper, lead and zinc mineralization, with the potential for hosting both high grade vein style and disseminated mineralization. The results are consistent with earlier interpretations based on the project’s geologic setting and similarities with some major silver and gold deposits in northern Durango State such as La Pitarrilla, San Agustin and El Cairo, as outlined prior to these programs in Canasil’s news release dated July 14, 2009.

Bahman Yamini, President and CEO of Canasil, commented: “We are very pleased with the results of the exploration program at Sandra-Escobar with continuing evidence of a large silver-gold-base metal mineralized system. The project is now ready to move forward to comprehensive drill testing of the principal mineralized zones identified. The Sandra-Escobar project is an excellent silver-gold prospect with the potential for hosting both high grade and disseminated mineralization benefiting from base metal credits in an area with excellent location and infrastructure.”

The principal targets are shown on the attached map and described briefly below, with details included in previous news releases as indicated:

  1. The Rosario veins zone is located in the centre of the project area, directly over the ZTEM anomaly outlining the presumed intrusive source, and extends over an area of 2.5 km by 1.0 km. It is defined both by the ZTEM airborne survey and later ground IP geophysics, and carries a number of veins and structures at surface with intermittent outcrops over a strike distance of 2.7 kilometres. Samples from these outcrops have returned high gold, silver, copper, lead and zinc values from fractures filled with quartz as well as surface floats (announced on November 1, 2011). Soil and silt samples from the Rosario zone also carry anomalous background values in precious and base metals as well as indicator elements such as bismuth, indicating the possibility of both high grade veins and disseminated mineralization in this zone. Significant further drilling is warranted to explore this zone.
  2.  The Candelaria-San Francisco veins zone is located northeast of the ZTEM anomaly and consists of two parallel veins approximately 250 metres apart where there is both evidence of past mining activity as well as current small-scale artisanal mining recovering very high grade silver ore. Previous surface and underground sampling by Pan American Silver at the Candelaria vein returned very high grade silver values (announced on May 3, 2010), and drill hole SE-11-06 returned a 2.10 metre intercept with 126 g/t silver, 0.14% lead and 0.19% zinc at 47.80 metres (announced on June 6, 2011). At the San Francisco vein, drill hole SE-11-11 returned a 52.50 metre intercept, starting from 7.50 metres below surface, with 19 g/t silver, 0.12% lead and 0.22% zinc, including a 1.00 metre intercept with 155 g/t silver, 0.56% lead and 0.10% zinc at 34.00 metres (announced on October 17, 2011). The low lead and zinc values indicate that these intercepts may be at a high level in the system and the grades may increase at depth. This area is an important target for further drilling to test for both disseminated and high grade silver mineralization.
  3. The Maria Fernanda veins zone includes four mineralized veins located southwest of the ZTEM anomaly returning high gold and silver values from vein outcrops (announced on May 3, 2010). The main Maria Fernanda vein is traced along a surface strike for over 1 km, where drill hole SE-11-02 returned a narrow high grade intercept of 0.40 metres with 2.58 g/t gold, 429 g/t silver and 0.53% copper at 72.54 metres (announced on June 6, 2011), typical of the narrow high grade veins successfully mined in the Guanacevi district, with potential for wider zones along strike and at depth. Further drilling is now required to explore this vein system along strike and at depth.
  4. The El Encino vein zone, located in the southwest of the project area, where drill hole SE-11-05 intersected 0.50 metres with 0.22 g/t gold, 121 g/t silver, 1.79% lead and 6.52% zinc at 88.00 metres, as well as an intercept of 11.67 metres with 18 g/t silver, 0.29% lead and 0.78% zinc at 88.93 metres to the bottom of the drill hole at 103.10 metres (announced on June 6, 2011). There is an extensive area of pronounced hydroxyl alteration extending over 2.5 km by 2.5 km surrounding the El Encino vein, which indicates potential for a larger mineralized system in this area which requires further drill testing.
  5.  The Martha-La Posta veins zone is located immediately southeast of the Candelaria and San Francisco veins and hosts a series of small very high grade silver vein outcrops which are traced over a strike distance of 3 km. Sampling of veins and structures in the La Posta area, located in the southeast of this zone, consistently returned exceptionally high silver values (announced on June 1, 2012). Two samples also returned lower grade disseminated silver mineralization with 35 g/t and 53 g/t silver in surrounding porous rocks. This area requires detailed investigation and drilling to test for high grade silver veins as well as for the possibility of hosting bulk tonnage silver mineralization. ASTER imagery indicates that this northwest-southeast trending zone is located on a main structural feature running through the project area.
  6. The Katie and Magdalena veins zone, located to the northwest on the main structural feature passing through the project area, hosts two veins traced along a combined strike distance of 2.2 km with intermittent outcrops returning elevated silver, copper, lead and zinc grades. This area has only seen reconnaissance sampling and requires further investigation.    
  7. The ZTEM peripheral target zone is an area with anomalous ZTEM magnetic signature over 1.0 km by 0.5 km, located immediately west of the main ZTEM target, and coincides with surface samples showing anomalous gold and copper values. This area requires further investigation for the possibility of hosting a potentially large deeper mineralized system.

The majority of these exploration zones are located close to the main paved road running through the project area, which provides exceptional ease of access for drilling and future exploration programs. The initially postulated geologic setting at Sandra-Escobar from the review of historical data indicating the possibility of a major intrusive hosted mineralized system (previously announced on July 14, 2009) is being confirmed by the airborne and ground geophysics, satellite imaging, extensive surface sampling and diamond drilling carried out in Canasil’s exploration programs. The project now warrants aggressive drilling to discover the source of the widespread silver, gold, copper, lead and zinc mineralization observed throughout the project area. 

The exploration programs at the Sandra-Escobar project were carried out by the Company's wholly owned Mexican subsidiary, Minera Canasil S.A. de C.V., under the direction of Erme Enriquez CPG, Director of Exploration and Development. All surface and drill core samples were sent to ALS Chemex Laboratories in Zacatecas, Mexico, for preparation and on to ALS Chemex in North Vancouver, B.C. Canada, for assay analysis for gold and silver by fire assay with an atomic absorption finish (“FA-AA”) on a 30 gram split, and for copper, lead and zinc by digestion of 1.00 gram sample in aqua regia and analysis by AA. Gary Nordin, P. Geo. British Columbia and Director of Canasil, is the designated Qualified Person in accordance with National Instrument 43-101.

The Sandra-Escobar project is located in northern Durango State, Mexico, 200 kilometres northwest of the city of Durango with excellent access and infrastructure, on an important mineral trend with many past and presently producing silver-gold mines and deposits. The project area hosts a mineralized system centered on a large altered rhyolite dome complex, with surrounding geological formations, alteration patterns, and extensive evidence of gold, silver and base metal mineralization indicating the potential for hosting a large disseminated gold-silver-base metal mineralized system. A number of high-grade silver-gold veins surround the dome area.

Canasil holds 100% interest in the 7,451 hectares Sandra project claims, and has entered into an option agreement with Pan American Silver to earn 51% interest in Pan American’s adjoining 634 hectares Escobar project claims. Canasil has recorded over $1,107,008 in expenditures under the agreement and completed the earn-in of 51% interest in Pan American’s Escobar claims. Pan American has advised Canasil of its decision not to exercise its back-in right to acquire a 51% interest in the combined project claims and to sell its remaining 49% interest in the Escobar claims to Canasil as provided for in the agreement.

About Canasil:

Canasil is a Canadian mineral exploration company with interests in precious and base metal projects in Durango, Sinaloa and Zacatecas States, Mexico, and in British Columbia, Canada. The Company’s directors and management include industry professionals with a track record of identifying and advancing successful mineral exploration projects. The Company is actively engaged in the exploration of its mineral properties.

For further information please contact:

Bahman Yamini
President and C.E.O.
Canasil Resources Inc.
Tel: (604) 709-0109
www.canasil.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.