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Canasil Provides Update on Corporate Objectives and Projects

November 14, 2012

Vancouver, November 14, 2012 - Canasil Resources Inc. (Canasil, TSX-V: CLZ, DB Frankfurt: 3CC) provides an update on the Company’s corporate strategy and project status. Canasil’s objective is to acquire and advance exploration projects, with the potential for hosting world class silver, gold, copper, zinc and lead mineralized systems, through to discovery to create significant shareholder value. The Company’s projects are strategically located in highly prospective and politically stable jurisdictions, and have been selected for ease of access and excellent infrastructure close to major operating mines and recent mineral discoveries. The Company places particular emphasis on maintaining a tight share structure with low dilution. This provides a platform for creating significant shareholder value.

Canasil currently has 14 projects in its portfolio, 10 in Durango, Zacatecas and Sinaloa States, Mexico, and 4 in British Columbia, Canada. Among these, 8 projects are drill-ready with immediate targets for drill testing. Four of these projects, La Esperanza, Salamandra and Sandra-Escobar in Mexico, and Brenda in British Columbia, have had extensive exploration work completed to date including airborne and ground geophysics, geological mapping and surface sampling and initial drill programs confirming the potential for very large mineralized systems. The La Esperanza project is currently under option to MAG Silver Corp. (TSX: MAG, NYSE-MKT: MVG, “MAG”) where a 3,500-metre Phase 2 drill program is currently in progress. Canasil intends to advance the other drill ready projects under non-dilutive option and joint venture agreements or directly depending on financing conditions. A summary of the Company’s larger and more advanced exploration projects is included below:

(Note: data and assay results below have appeared in prior Canasil news releases – for technical details, sampling and assay procedures please refer to the relevant news releases posted on the Company’s website and filed on SEDAR)

1. La Esperanza silver-lead-zinc project, Durango and Zacatecas states, Mexico:

The La Esperanza project covers 68,954 hectares, located in the Mexican Silver Belt in northern Zacatecas and southern Durango States. This recognized world-class silver belt hosts some of the world’s largest and highest grade silver deposits and operating mines. La Esperanza is close to a number of active mines such as Pan American Silver’s La Colorada and First Majestic Silver’s La Parrilla mines, and 80 km on trend northwest of MAG’s Juanicipio project and the Penoles/Fresnillo Fresnillo mine, among the highest grade and largest silver mines in the world. The La Esperanza project covers multiple vein occurrences and alteration zones over a 20-kilometre strike length along a prospective SE-NW trend where the results of an airborne geophysical survey and drilling to date indicate potential for hosting a very large mineralized system.

Drilling conducted by Canasil and MAG on the La Esperanza vein has confirmed a high-grade silver-zinc-lead mineralized panel along a strike distance of over 250 metres and to a depth of 250 metres, which is open in all directions. Initial drilling by Canasil returned vein intercepts of up to 10.30 metres carrying high grade silver mineralization from seven drill holes with an average width of 4.21 metres carrying 330 g/t (9.62 opt) silver, 0.93% (18.60 lbs/ton) zinc and 1.57% (31.40 lbs/ton) lead, including several intercepts with very high silver grades of up to 2,144 g/t (62.53 opt) silver over 0.75 metres. Recent drilling by MAG intersected a 10.15 metre intercept carrying 98 g/t (2.86 opt) silver, 2.42% zinc and 1.16% lead, including 2.42 metres with 278 g/t (8.10 opt) silver, 5.82% zinc and 2.84% lead. The La Esperanza vein is open along strike and at depth. MAG is currently conducting a Phase-2 drill program to test previously undrilled silver veins in the north-west sector of the project area.

The La Esperanza project is under an option agreement whereby MAG can earn a 60% interest by completing CAD$ 5,000,000 in cumulative exploration expenditures by September 1, 2014, (CAD$ 1,624,393 completed to June 30, 2012) and making a further CAD$ 200,000 cash payment to Canasil by September 1, 2013. MAG will be required to complete a further CAD$ 3,250,000 in exploration expenditures between September 2012 and September 2014 in order to maintain and complete the earn-in option under the agreement.  

2. Salamandra silver-zinc-copper project, Durango, Mexico:

The Salamandra project is located 35 km to the northeast of the City of Durango and covers 14,719 hectares (over 140 square kilometres), and benefits from excellent access and infrastructure for mineral exploration and development. This large claim area is strategically located within the major silver-gold trend running through Durango and Zacatecas States, and is directly on trend with a number of important operating mines and recent discoveries. The project is located on the mineral-rich Fresnillo geologic trend, approximately 80 km northwest of and within a similar geologic environment to the San Martin mine of Grupo Mexico, which is the largest underground silver-copper-zinc mining operation in Mexico, producing at approximately 6,000 tonnes per day.

The exploration program to date at the Salamandra project indicates the potential for a large buried intrusive and carbonate hosted massive sulphide skarn/manto replacement system. Significant silver-zinc intercepts from prior drilling, plus results of both airborne and surface geophysical surveys, and the discovery of a high grade silver-copper-zinc vein outcrop as well as widespread silver-copper-lead-zinc-arsenic-antimony geochemical anomalies indicate the potential for a large silver-zinc-lead-copper mineralized system. Prior geophysics and diamond drilling identified significant zinc-silver mineralization at Salamandra, including 7.45 metres of 50 g/t silver and 12% zinc and 10 metres of 71 g/t silver, 3.48% zinc and 1.26% lead. This mineralization is associated with skarn, hydrothermal breccias, sulphide rich veins and quartz porphyry dykes. Preliminary metallurgical tests indicate high zinc and silver recoveries to clean concentrates.

A ZTEM airborne geophysical survey completed in 2011 outlined a much larger complex response area covering 2.5 km by 3.5 km, where detailed surface sampling led to the discovery of a high grade vein outcrop, carrying 2,150 g/t silver, 5.39% copper, and 1.89% zinc over 0.90 metres. In addition, sampling has outlined extensive areas of anomalous silver-copper-arsenic-antimony with peripheral lead and zinc anomalies. This is similar to the surface signature of the San Martin mine, and further confirms the potential for a very large silver-zinc-copper mineralized system.

3. Sandra-Escobar silver-gold project, Durango, Mexico:

The Sandra-Escobar project is located in northern Durango State, Mexico, 200 km 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. Canasil holds a 100% interest in the 7,451-hectares Sandra project claims, and a 40% interest in Pan American Silver’s adjacent 634-hectare Escobar claims. 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. These features indicate 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.

Exploration programs to date at the Sandra-Escobar project include ASTER satellite alteration and GeoEye satellite mapping surveys, ZTEM airborne and IP ground geophysical surveys, plus surface mapping and sampling and 1,849 metres of diamond drilling in 11 drill holes. These programs have confirmed evidence of a large hydrothermal system centred on an intrusive source with the potential for hosting both high-grade vein style and disseminated mineralization. The mineralized zones observed at surface with veins and outcrops consistently return high silver, gold, copper, lead and zinc mineralization (silver grades up to 1,465 g/t, gold grades up to 19.95 g/t, copper grades up to 3.75% in surface samples). An initial shallow drill hole to test the Maria Fernanda vein, with a strike length of over 1.5 km and which is open along strike and at depth, returned 0.40 metres with 2.58 g/t Au, 429 g/t Ag, 0.53% Cu. Seven significant silver-gold targets have been outlined over an area of 25 square km for future drilling. The results to date indicate a similar geologic setting to some major silver and gold deposits in northern Durango State such as Silver Standard Resources’ La Pitarrilla deposit, with Measured and Indicated Resources of 643 million ounces, and positive pre-feasibility for a 12-year underground mining operation based on Probable Reserves of 92 million ounces.

4. Brenda gold-copper project, British Columbia, Canada:

The Brenda gold-copper property covers 4,450 hectares, and is located in north-central British Columbia, Canada, 25 km northwest of the past producing Kemess South Mine. Cumulative exploration expenditures of over $3,500,000 to date include satellite surveys, airborne and ground geophysics, extensive geological mapping and sampling and over 10,000 metres of diamond drilling in 63 drill holes. These programs have confirmed the potential for a deep-seated porphyry gold-copper system at the Brenda project, similar to the nearby Kemess Underground (North Kemess) deposit advancing through feasibility by AuRico Gold Corp. with indicated resources of 3 million ounces gold and 1 billion pounds copper (185 million tonnes with an average grade of 0.48 g/t Au and 0.25% Cu).

At Brenda, the two deepest drill holes have intersected broad gold-copper mineralized zones with increasing grades to a depth of 560 metres. Mineralization is open to depth and to date drilling has not yet intersected any intrusive rocks which are presumed to be the core of the mineralized system. In these drill holes, the average grade of 5 intercepts above a depth of 450 metres was 0.48 g/t gold and 0.079% copper over a combined intercept length of 393.72 metres. The average grade of 3 intercepts below 450 metres was 0.68 g/t gold and 0.116% copper over a combined intercept length of 92.84 metres. These results are equivalent to and higher than the average grades of the Kemess Underground deposit, even though the projected mineralized intrusive zone at depth has not been reached. A significant number of drill core samples returned assays of over 1.0 g/t gold and 0.15% copper. The mineralized system averages 300 to 400 metres in width, and has been traced along a strike length of 400 metres by drilling, with a potential strike length in excess of 1,000 metres indicated by the chargeability anomalies observed in the 3-Dimensional Induced Polarisation geophysical survey.

The increasing gold and copper grades at depth and the strength of the highly altered mineralization observed in the drill core, in conjunction with the strong anomalies observed in the geophysical survey, are highly encouraging and indicate the potential for a large deep-seated gold-copper porphyry system. The mineralized environment observed at Brenda appears similar to that of the deep-seated Cadia East underground gold-copper porphyry deposit of Newcrest Mines in Eastern Australia, and the adjacent North Kemess deposit, which occur below a depth of 600 metres to 750 metres.

5. Other drill ready projects:

Canasil has four earlier stage drill ready projects, three of which have never been drill tested. These include the Carina silver-gold project (covering a large claim area adjacent to Orko Silver Corp.’s La Preciosa silver deposit), the Nora silver-gold-copper project, the Vizcaino gold project, all in Durango State, Mexico, and the Lil high-grade silver project in British Columbia, Canada. These projects all have the potential for hosting large mineralized systems and provide further opportunities for option and joint venture cooperation and direct exploration by Canasil with potential for discoveries.

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, and maintains an operating subsidiary in Durango, Mexico, with full time geological and support staff for its operations in Mexico.

For further information please contact:

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

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.


Canasil Mexico and British Columbia Projects Location Maps:


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