Canico Resource Corp (CNI)

[Frank Pembleton]

Canico Resource Corp.: Onca-Puma Update
CCNMatthews
VANCOUVER, BRITISH COLUMBIA--The second phase of infill drilling along with some step-out exploration drilling, has commenced on the Puma West portion of the Onca-Puma nickel laterite project in Para, State Brazil.
This portion of the work will add to the information base for Puma West and move the resources to a higher level of confidence.

Work at Onca continues towards finishing the initial pass of exploring the ultimate size of the deposit and infill drilling will proceed immediately. Some 35,000 meters of drilling will follow in the definition phase for both deposits. As well, some holes will be drilled for geotechnical purposes around the proposed plantsite.

Engineering is proceeding towards a full feasibility study to be delivered in the second half of 2004. Environmental base line studies and social studies are also underway and some preliminary metallurgical tests have also been completed satisfactorily. Arrangements for a campaign of pilot plant tests for later this year are also being discussed.

As part of the process of finalizing a feasibility study, a scoping study or initial benchmark analysis of the prospective capital and operating costs for a conventional smelter nickel project will be completed. This review will look at the potential capital, operating and production profile for a single line (1.25 million tonnes per year) and a double line (2.5 million tonnes per year) ferronickel and nickel matte option. Costs of each will be assessed to determine the optimum project for Canico to pursue in the full feasibility.

At present, preliminary engineering work has advanced faster than the current exploration and resource drilling for the Onca deposit. Drilling has shown that the Onca nickel laterite is more extensive and thicker than historical work had indicated and engineering modeling of the old Onca resources in a new scoping study is not useful. Approximately 100 additional holes are planned in the initial phase for Onca. A new resource for Onca will be completed once all assays are received from the current drill campaign.

Canico is pleased to report the appointment of Quayle Lusty as Vice President, Projects and Development. Mr. Lusty has held senior engineering management positions on mining construction and operations assignments throughout North and South America.

Mr. Lusty assumes the position held by Tony Luteijn who has recently retired. Mr. Luteijn retains an active role as an engineering consultant to the Company.

CANICO RESOURCE CORP.

J. Michael Kenyon, President & CEO

Cautionary Notices

This News Release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 of the United States. Other than statements of historical fact, all statements in this release, including, without limitation, statements regarding potential mineralization and resources, estimated or potential future production, potential ranking amongst nickel producers and future plans and objectives of the Company, are forward-looking statements that involve various known and unknown risks, uncertainties and other factors. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this announcement. Important factors that could cause actual results to differ materially from the Company's expectations include, among others, the ongoing results of current exploration activities, conclusions of any pre-feasibility or feasibility studies, changes in project parameters and future metal prices, as well as those factors discussed under the heading "Risk Factors" and elsewhere in the Company's documents filed from time to time with the Toronto Stock Exchange, Canadian securities regulators and other regulatory authorities. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this notice.

Estimates of inferred resources at Onca-Puma have been completed by Watts, Griffis and McOuat Limited, Consulting Geologists and Engineers, ("WGM"), as set out in a WGM Technical Report dated November 15, 2001, Revised January 31, 2002, and Amended May 29, 2002, and estimates of inferred resources for Puma have also been completed under the supervision of Hatch Associates Ltd., Consulting Geologists and Engineers of Vancouver, B. C. ("Hatch") as set out in a Hatch Technical Report dated January 29, 2003. These reports have been filed by Canico on SEDAR under National Instrument 43-101. The standards employed by WGM and Hatch, respectively, in estimating the inferred resources differ significantly from the requirements of the United States Securities and Exchange Commission and the resource information reported may not be comparable to similar information reported by United States companies. The term "resources" does not equate to "reserves" and normally may not be included in documents filed with the United States Securities and Exchange Commission. "Resources" are sometimes referred to as "mineralization" or "mineral deposits".

FOR FURTHER INFORMATION PLEASE CONTACT: Canico Resource Corp., J. Michael Kenyon, President & CEO, [phone], [phone] (FAX), Website: www.canico.com, The Toronto Stock Exchange does not accept responsibility for, the adequacy or accuracy of this release.