Cancana JV Provides Exploration Update for Brazil Manganese Project

VANCOUVER, BRITISH COLUMBIA–(Marketwired – Dec 22, 2015) – Cancana Resources Corp. (TSX VENTURE:CNY) (the “Company” or “Cancana”) and its joint venture partner Ferrometals, together Brazil Manganese Corporation (“BMC”), provided an update on exploration activities. Highlights include:

• 6,710 meters of drilling completed between two drill rigs, with hydrothermal style manganese oxide mineralization encountered at or near surface at each of the 15 regional targets.
• Eduardo Mendes – Vitalino Corridor: vein-breccia zones encountered of up to ~3.0 meters in width, mineralization traced intermittently for up to 12 kilometers along a 20 kilometer structure identified in geophysics. Notable intersections include:
  • 4.5m @ 31.0% Mn from 21.8m
  • 4.5m @ 23.9% Mn from 17.5m
• Antonio Gomes Prospect: vein-breccia zones encountered of up to ~3.5 meters within a broader lower grade stringer/stockwork zone ~15.0 meters wide. Notable results include:
  • 5m @ 32.9% Mn from 33m within 23.6m @ 14.3% Mn from 14.5m
• Drill intercept grades vary based on host rock dilution. Some breccia zones are proving amenable to processing through the current wash plant where the silicate matrix is clay altered (e.g. Dnei). Metallurgical studies on a range of breccia mineralisation types will be conducted in 2016.
• Reconnaissance exploration will continue to extend across the 108,000ha land package in 2016 with infill drilling to be conducted on prioritized prospects.

Anthony Julien, President & CEO of Cancana stated, “Significant progress was made this year with our exploration program. We advanced from a theoretical model of BMC’s manganese mineralization, confirming that model, and then identifying multiple, regional-size manganese-bearing structures. It is encouraging that drilling, trenching, sampling and extraction activities have confirmed the presence of manganese in all of the structures targeted to date. Our focus now is to expand the drilling to test for areas that will ultimately support an expansion of operations through bedrock mining.”

Drill Program Overview

Assays have been returned for drill holes from the Phase I drill program, which confirmed the exploration model for high-tenor, hydrothermal mineralization extending to depth. The second phase of drilling remains in progress, which is testing the strike extensions to Phase I prospects, and screening new target areas. Some initial assays results have been received from this program, which will be ongoing into 2016. Trenching and drilling has confirmed the presence of mineralization on the previously disclosed, recently acquired licence area (see news release dated Oct.6, 2015), with assay results pending.

Phase I drilling involved the completion of 38 HQ diamond holes drilled for a total of 2,084 meters over eight targets (described previously in the Company’s news release dated May 28th and September 22nd, 2015). The program confirmed that the extensive colluvial manganese mineralization in the district is sourced from structurally controlled hydrothermal veins in the poorly exposed basement. The vein positions are typically concealed

The drilling was extended into a Phase II program following the validation of the exploration model. Drilling is initially being conducted at broader spacings of 300-500 meters along strike, with occasional infill. An additional 87 holes have been completed to date, with the prospects under evaluation to date illustrated below.

To view Figure 1, please visit the following link: http://www.marketwire.com/library/20151222-Cancana-Figure1.jpg.

The drilling is expected to extend to a Phase III program next year, with more detailed infill drilling to test the resource potential, focusing on areas where thicker and more continuous vein packages are defined.

Findings: Eduardo Mendes Prospect

The new assays have further emphasised the style of mineralization, which is variably expressed as discrete veins and/or broader stinger zones or stockwork zones hosted within a granitic basement.

The Phase II program initially commenced at the Eduardo Mendes Prospect, where a number of parallel vein trends had been exposed in an area where past mining activity had recovered ~20,000t of colluvial material. Available results are illustrated below:

To view Figure 2, please visit the following link: http://www.marketwire.com/library/20151222-Cancana-Figure2.jpg.

The drilling at Eduardo Mendes confirmed depth extensions to the vein positions outlined at the surface. A total of 15 holes have been drilled at the prospect concentrating on the eastern end but stepping out more broadly to the west. Observations from drilling and surface trenching suggest that the veins and their marginal breccia zones typically have true widths of ~0.5 – 3m (with pinching and swelling geometries), and average grades of ~18 – 33% Mn. Manganese grade varies in proportion to the abundance of granitic breccia inclusions in the intersection. Individual samples of more massive material return grades of >50%Mn, in line with the high tenor of the mineralization. Some of the mineralized zones can be composited into broad but lower grade domains where a higher abundance of stockwork style mineralization is present (e.g. DDH_EM_001).

To view Figure 3, please visit the following link: http://www.marketwire.com/library/20151222-Cancana-Figure3.jpg.

A number of additional reconnaissance holes are planned for the eastern extensions early in 2016 in steeper terrain using the man-portable rig. Commentary on this prospect will be updated as further results are received.

The reconnaissance drill program has progressed WSW from the Eduardo Mendes Prospect, along an extension of the structural corridor that was identified from the Company’s geophysical survey. Manganese mineralization has been traced intermittently for up to 12km along the projection of this structure in broad spaced drill traverses of approximately 300-500m apart.

The geophysical survey data has provided a key targeting tool in this area, as the vein positions generally have poor surface expression. Trenching is conducted in advance of the drilling to confirm the position and orientation of the targeted structure. The wider individual vein-breccia zones have true widths of ~2-3 m (DDH-ADE- series).

Additional fences of drilling are required to fully test the potential for sub-parallel vein trends across strike. The corridor will be incorporated into the Phase III program for 2016.

To view Figure 4, please visit the following link: http://www.marketwire.com/library/20151222-Cancana-Figure4.jpg.

Findings: Ademir – Vitalino Corridor

Current drill coverage in prospects to the SW of Eduardo-Mendes (Phase II collar positions in yellow). Assay results returned from the DDH_ADE series are summarised in the intersection table, with results from other prospects pending.

The drilling along the Calça Frouxa trend has encountered narrower stringer style mineralization to date, whereas the Ademir – Vitalino corridor is of similar style to Eduardo-Mendes. The Vitalino and Ademir-Vitoria prospects are located within the newly acquired licence 886262/2012 (refer to release of October 6th, 2015).

The principle focus for the track-mounted rig is now to evaluate the mineralization within the Lavra and along structural trends on the eastern side of the tenement package. Results remain pending for these holes drilled to date at Adesvaldo, Jair Mundi, and Dnei-Zenilda within the Lavra, along the Marfon trend to the far east of the project area.

To view Figure 5, please visit the following link: http://www.marketwire.com/library/20151222-Cancana-Figure5.jpg.

Findings: Antonio Gomes Prospect

The man-portable drill rig has been focused on testing the Antonio Gomes region, where known mineralization is associated with steeper structurally controlled ridgelines. Drilling coupled with assay results from the first three holes of the program confirm the presence of a package of massive to brecciated veins and stringer zones, illustrated below (DDH_AG001-003). On section 745770E, individual breccia zones typically have composited intersection grades of ~25-35% Mn and range in true width from <1m to ~3.5m. The main set of veins falls within a lower stringer/stockwork grade zone approximately 15 meters wide, with additional more isolated veins located beyond this.

The footprint of the surficial colluvium extends beyond the limits of the drilling, with further work required to test whether this represents dispersion from the main structure or the possible presence of additional parallel veins. Reconnaissance drilling has located the interpreted extension of the structure approximately 450m to the east and a weaker breccia zone 750m to the west, with assays pending.

Provisional drilling has been conducted on a number of satellite structures in the immediate area. To date these have returned thinner stringer zones, but the presence of larger surficial blocks along these trends suggests that some of the veins may pinch and swell. Ongoing work will continue to probe for vein sets beneath the surficial colluvium and test for concealed mineralization in areas of thicker overburden.

There are indications that multiple structural trends are present from analysis of the geophysical and remote sensing data, coupled with the pattern of colluvial dispersion. An objective of ongoing work will include the development of a geological model to better understand whether structural intersections and/or certain vein orientations represent preferred sites for thickened vein packages.

To view Figure 6, please visit the following link: http://www.marketwire.com/library/20151222-Cancana-Figure6.jpg.

To view Figure 7, please visit the following link: http://www.marketwire.com/library/20151222-Cancana-Figure7.jpg.

To view Figure 8, please visit the following link: http://www.marketwire.com/library/20151222-Cancana-Figure8.jpg.

Next Steps

The 2016 exploration program will see the reconnaissance exploration drilling campaign continued and the commencement of infill drilling to test the resource potential where scope exists for bedrock vein mining. The company has hosted an initial site visit by a resource consultant as in orientation in preparation for this work. The full scope of the exploration program will be detailed after budget proposals are assessed in January 2016.

Intersection Tables

On behalf of the Board of Directors of

CANCANA RESOURCES CORP.

Anthony Julien, President, CEO and Director

QUALIFIED PERSON

The technical information about the Company’s mining activities has been prepared under the supervision of and verified by Dr. Adrian McArthur (B.Sc. Hons, PhD. FAusIMM), a consultant to Brazil Manganese Corporation, who is a “qualified person” within the meaning of National Instrument 43-101.

ABOUT CANCANA

Cancana Resources Corp is focused on exploring and developing the BMC manganese project in Brazil with its joint venture partner Ferrometals BV. The JV is employing a two-pronged strategy at BMC, where the primary objective is to advance the project to an initial resource and onward to feasibility, while also expanding current small-scale production to support those exploration activities. Further information can be found at cancanacorp.com, and bmcorporation.com.br.

ABOUT FERROMETALS

Ferrometals is a privately held mining and metallurgical group. It is a global supplier of essential minerals and micronutrients to the agriculture, steel and manufacturing industries. Building on sustainable and ecologically sound production methods, it is developing specific product lines designed to enhance the yield and growth potential of these industries. Further information can be found at ferrometals.net.

FORWARD-LOOKING STATEMENTS

Some statements in this news release contain forward-looking information or forward-looking statements for the purposes of applicable securities laws. These statements include, among others, statements with respect to the Company’s plans for exploration and development of the Brazil properties and potential mineralization. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such risk factors include, among others, failure to obtain regulatory approvals, failure to complete anticipated transactions, the timing and success of future exploration and development activities, exploration and development risks, title matters, inability to obtain any required third party consents, operating hazards, metal prices, political and economic factors, competitive factors, general economic conditions, relationships with strategic partners, governmental regulation and supervision, seasonality, technological change, industry practices and one-time events. In making the forward-looking statements, the Company has applied several material assumptions including, but not limited to, the assumptions that: (1) the proposed exploration and development of mineral projects will proceed as planned; (2) market fundamentals will result in sustained metals and minerals prices and (3) any additional financing needed will be available on reasonable terms. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation. The Company cautions that it has not completed any feasibility studies on any of BMC’s mineral properties, and no mineral reserve estimate has been established. Because the Company production decision is not based upon a feasibility study of mineral reserves, the economic and technical viability of the property has not been established.

Notes

HQ-diameter drill core has been obtained from surface to end-of hole using a track-mounted Boartlongyear LF90D drill rig operated by drilling contractor Geotechreserves do Brasil and a man-portable EGD SII rig operated by Energold.

Collar positions are recorded by hand-held GPS (accuracy typically +/- 5m). The reported grid system is South America 1969, Zone 20S. Collar positions are marked with a cement plug for later survey pick up for any areas that progress to resource drilling. Down hole-deviation is measured by a Refelx Gyro survey tool.

Recovery is recorded against individual core runs whilst drilling, and any areas of core loss that can be specifically identified are recorded. Recovery is generally good to excellent. Some core loss may be incurred where the mineralized intervals are softer and friable. Overall recovery averages >90% for the reported intersections. Holes undergo geological and basic geotechnical logging, and are photographed prior to sampling. Samples are collected as half-HQ core where the core is competent. When occasionally broken, half the sample is hand-picked in the most representative way possible. Sampling is conducted to geological boundaries.

Samples are submitted to an accredited SGS Laboratory in Belo Horizonte, Brazil. Samples are dried, crushed to 3 mm, homogenised, then a split is pulverised to produce a pulp of 250 – 300 g with 95% passing 150 mesh. Submissions include certified references to monitor laboratory performance, which have returned results within the expected laboratory analytical error margins. Laboratory protocols include blanks, duplicates and repeats. Major oxides in mineralised zones are analysed by lithium-borate fusion – XRF techniques, with minor elements monitored via a multi-acid digest and ICP-OES analysis. Zones of wall rock alteration with trace mineralisation are monitored analysed by multi-acid digest and ICP-OES analysis.

Until dispatch, samples are stored in the company’s supervised stockpile yard or exploration office. Individual bags are fitted with a tamper-proof bar-coded seal. The samples are couriered to the assay laboratory using a commercial contractor (Eucatur). Samples are weighed prior to dispatch and material received by the laboratory is reconciled with dispatch records. Pulps and rejects are returned to the Company. A subset is selected for periodic round-robin testwork.