Canasil Discovers More Silver Mineralization at Sandra-Escobar Project in Durango State, Mexico

VANCOUVER, BRITISH COLUMBIA–(Marketwire – Oct. 17, 2011) – Canasil Resources Inc. (Canasil) (TSX VENTURE:CLZ)(FRANKFURT:3CC) announces that assay results from drill hole SE-11-11, drilled to a depth of 175.6 metres to test the San Francisco vein area at the Sandra-Escobar silver-gold project in Durango State, Mexico, confirm disseminated silver mineralization with 19.09 g/t silver, 0.12% lead and 0.22% zinc over 52.5 metres, starting at 7.50 metres below surface to a depth of 60 metres. In addition drill hole SE-11-10, drilled on the fringe of a porphyry breccia zone outlined by surface sampling and geophysical signature from a ZTEM airborne survey, returned two narrow intercepts of gold-silver-copper mineralization at a depth of 92 metres with 0.368 g/t gold, 41.7 g/t silver and 0.431% copper over 2.0 metres, and at a depth of 190 metres with 0.575 g/t gold, 33.2 g/t silver and 0.765% copper over 1.7 metres, as shown in the table below.

These results provide further confirmation of disseminated silver-lead-zinc mineralization and indications of gold-silver-copper mineralization at Sandra-Escobar. The limited initial drill program of 1,850 metres in 11 drill holes has returned silver and silver-gold intercepts from three separate veins, as previously reported from drill holes SE-11-01 to SE-11-06, as well as a broad zone of disseminated silver mineralization from a fourth vein area in drill hole SE-11-11. There are also indicators of possible gold-silver-copper mineralization in drill hole SE-11-10. This provides the basis for further drilling to investigate the mineralized veins along strike and at depth, as well as further drilling to explore for possible zones of disseminated silver-lead-zinc and gold-silver-copper mineralization in the project area as shown on the attached map.

Details of the assay results from drill holes SE-11-10 and SE-11-11 are included in the table below.

The San Francisco vein is located parallel to and approximately 400 metres southeast of the Candelaria vein. The occurrence of these two closely spaced parallel veins further indicates the potential for a larger mineralized system in this area, which needs to be investigated with further drilling. The relatively low lead and zinc assays indicate that these intercepts may be in the upper levels of the mineralized system with potential for higher lead, zinc and silver grades at depth. There is currently small scale artisanal mining for silver ore in the San Francisco vein area by third parties with shipments of selected high grade silver ore to local smelters.

The drill program was supervised and 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. 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. 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.

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 634 hectares adjoining Escobar project claims. Canasil’s exploration expenditures will go towards completing the initial $1,000,000 work commitment to earn 51% interest in the Escobar claims. Pan American will then have a back-in right to acquire a 51% interest in the combined claims by paying three times exploration expenditures incurred. Canasil has recorded over $750,000 expenditures to date under 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.

To view the map, Sandra-Escobar Silver-Gold Project Reconnaissance Drill Program DDH SE-11-01 to SE-11-11, accompanying this release please click on the following link: http://canasil.com/_resources/nr_pix/nr_2011_10_17b.jpg