SHAREHOLDER UPDATE May 19, 2011

Dear Shareholders:

In our last correspondence of February 18, 2011, management of Can-Cal Resources Ltd (“Can-Cal” or the “Company”) disclosed several initiatives that were being considered with the goal of increasing shareholder value. We are pleased to report that we are making progress on all fronts which are summarized below.

Potential Extraction Processes

A complete work-up of two potential extraction processes have been presented to determine which process would be used to potentially recover precious metals including platinum group elements and/or other base metals from the Pisgah, California and Wikieup, Arizona properties. After many months of negotiations Can-Cal is proceeding to test samples taken from both properties.

The first series of tests of the ore from the Pisgah site using Polymet Industries' Radio Frequency Plasma Torch Process commenced on May 16, 2011. Complex ore has limited potential for extraction because of the naturally occurring tight chemical bonds between the target element and its ligand. The finely ground, crystalline complex ore was treated by high temperature plasma melting the individual grains that are then reconstituted into spherical powders once they touch the Plasma torch's relatively cold walls. The previously tight chemical bonds have been severed leaving a simple rather than complex ore. This ore can now be assayed using standard analytical techniques in any Certified Laboratory and should yield the maximum potential of the ore body.

The second test sampling of ore was picked up last week by a new group, which specialize in a chemical extraction process to separate the encapsulated precious metal and platinum group elements. In the past, Can-Cal has never been successful in using chemicals to commercially separate out the ore’s precious metals and platinum group elements. However, this group feels they can potentially produce repeatable results with their process. We will keep you informed of their progress.

Wikieup, Arizona Property

Prior to proceeding with a drilling program, the Company has decided to commence a thermal imaging and geophysical program to potentially find the best areas on the Wikieup Property. We felt that along with the potential areas already identified (former Brown Derby gold mine and the U.S. Government Zinc mine), that other potential sites on the Property could be potentially identified as well. After completion and careful study of the findings, the Company will be in a better position to high-grade the Property for a potential drilling program.

Owl Canyon, California Property

A preliminary study of the Company’s Property was conducted by a registered geologist, who reported that while there was potential in some areas, it was recommended to continue a review of other claims in the area. Once this program is completed, the geologist based on his previous findings, will then determine if the Property warrants any potential impact to increasing shareholder value. It was determined that the current claims do not indicate any potential for rare earth elements.

Current Private Placement

The final tranche of the Company’s previously announced non-brokered $500,000 USD private placement of $0.06 Units is expected to be completed in the near future. Eeach Unit consists of one common share (“Common Share”) and one Common Share Purchase Warrant (“Warrant”). Each Warrant is exercisable into one additional Common Share at an exercise price of US$0.08 per Common Share at anytime by the holder for 2 years from the closing date. Management believes this financing is an ideal opportunity for current shareholders to increase their holdings in the Company. Our objective with this Private Placement is to fund the Treasury in order to take advantage of potential initiatives identified above. Please note that this Private Placement is only eligible for qualified “Accredited Investors”. If you have any questions in this regard, please contact us at (702) 243-1849.

Summary

Management remains optimistic that Can-Cal’s properties have excellent potential to become commercial. It is the Company’s desire and intention to demonstrate to you that although your investment for the most part has represented a considerable length of time, it will turn out that your patience will pay-off. Thank-you for your patience, support and confidence to date. As always, Can-Cal’s focus and objective is to deliver an above average ‘Return on Investment’ to its Shareholders.

Yours truly,

Can-Cal Resources Ltd.

Per:

G. Michael Hogan President & CEO