Shares in Canaco Resources Ltd. are up more than 20% so far Tuesday after the Vancouver-based gold explorer said its flagship Handeni project in eastern Tanzania may have more to it than originally thought.

On Monday, Canaco released solid drilling results from the Magambazi and Magambazi North zones of the 100%-owned project, and a reinterpretation of the deposit’s geometry that Daniel Earle, an analyst at TD Newcrest said “dramatically increases its potential tonnage.”

Mr. Earle increased his estimate for the Magambazi deposit to 3.1 million ounces grading 3.4 g/t gold and now models average production of 288,000 ounces per year at total cash costs of US$261 per ounce over a 10- year mine life.

As a result, he increased his net asset value estimate to $3.93 per share from $1.61 and his target price to $4 from $1.25. His speculative Buy rating remains unchanged.