2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000
Gold Hawk Provides Update on Oracle Ridge Copper Mine Acquisition
SEP 24, 2010 - 16:05 ET
Oracle Ridge Copper Mine Transaction Expected to Close Next Week
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 24, 2010) - Gold Hawk Resources Inc. (TSX VENTURE:GHK) ("Gold Hawk" or the "Company") is pleased to announce today an update on its acquisition of the Oracle Ridge Copper Mine (the "Transaction").
Gold Hawk is purchasing 100% of the shares of 0830438 B.C. Ltd. ("Oracle Ridge"). Oracle Ridge's wholly owned US subsidiary, Oracle Ridge Mining LLC, owns the subsurface mining rights through an option to purchase and is leasing the surface mining rights necessary to explore, rebuild and operate the past producing Oracle Ridge Copper Mine located near Tucson, Arizona. Gold Hawk announced the signing of a definitive binding Share Purchase Agreement with the shareholders of Oracle Ridge on September 1, 2010. Gold Hawk has received final approval for the Transaction from the TSX Venture Exchange (the "Exchange") and intends to close the Transaction on or before September 28, 2010.
"Gold Hawk is pleased to have received strong shareholder and market support for the Oracle Ridge Copper Mine acquisition," said Kevin Drover, Gold Hawk's President and CEO. "The lower risk profile of the Oracle Ridge Copper Mine project, small capital outlay in comparison to other pre-production projects and the continued strength of the copper market all put Gold Hawk on a firm footing."
Gold Hawk will purchase all of the issued and outstanding shares of Oracle Ridge by issuing an aggregate of 11,200,000 common shares in the capital of the Company to the shareholders of Oracle Ridge. In addition, Gold Hawk has agreed to repay at closing approximately $700,000 of indebtedness of Oracle Ridge.
Gold Hawk plans to begin work on a program designed to validate the existing technical database and produce a NI 43-101 compliant resource study as well as embark on a significant exploration and development program for the Oracle Ridge Mine immediately following the completion of the Transaction. A significant portion of the property has not been drill tested. The proposed exploration program will include an underground core drilling program to locate additional potential areas of mineralization. While this work is underway the Company will commence collecting the data required to obtain the permits necessary to re-start the operation and complete a bankable feasibility study.
The Company has prepared a preliminary budget of approximately US$8.5 million over the next 12 months including drilling, land acquisitions and property payments, permitting, mine development work, equipment purchases, and bonding. Included in this budget are property payment obligations related to the earn-in on the mining rights that comprise the Oracle Ridge Copper Mine. Oracle Ridge Mining LLC is obligated to make the following payments to the underlying vendors of the Oracle Ridge Copper Mine:
The foregoing property payments have been structured as promissory notes with interest accruing at 8% per annum. However, no interest is payable until the final payment in 2013 and the sole recourse of the note holder is to the property interests of Oracle Ridge Mining LLC in the Oracle Ridge Copper Mine, so the Company considers these payments to be more analogous to option payments than conventional debt. The Company can pre-pay these amounts at any time. With approximately $18 million in cash and investments after closing, the Company remains well-funded to pursue its planned development at the Oracle Ridge Mine while retaining cash reserves to pursue other opportunities.
All project payments and repayment of outstanding loans made to Oracle Ridge were included as part of the Fairness Opinion analysis provided by Dundee Securities Corporation. The Fairness Opinion concluded that, subject to the matters stated therein, as at September 1, 2010 the consideration to be paid for the shares of 0830438 B.C. Ltd under the Transaction is fair, from a financial point of view, to the shareholders of the Company.
The Oracle Ridge copper mine operated as a 1,000-ton-per-day underground operation from 1991 to 1996. The mine closed in 1996 due to operating difficulties and low copper prices and there has been no mining or exploration activity on the property since 1996. Immediately prior to the mine closing, a feasibility study was completed to increase production to 2,000 tons per day. The old production facility has been removed and there is currently no production facility on site.
The project hosts multiple zones of primary copper skarn mineralization with gold and silver by-product credits. Copper grades in excess of 15% have been reported. Gold and silver have historically been recovered in the copper concentrate and would be more significant today given current high metal prices.
Historically there have been a number of resource and reserve estimates available that were made by reliable, knowledgeable professionals. In 1994, Mintec Inc. were contracted to complete a reserve estimate as part of a feasibility study for increasing the mine and processing plants capacity to 2,000 tons per day. At a 1.5% copper cut-off grade, the Mintec Inc. model estimated 8.14 million tons of proven and probable ore at a grade of 2.33% copper containing 379,000,000 lbs of copper and an additional possible or inferred resource of 16.57 million tons at 2.33% copper containing an additional 772,000,000 lbs of copper. No allowance is made for dilution, mine loss or pillars and gold and silver grades were not estimated. The data base for these estimates included 534 drill holes totalling 163,622 feet. The foregoing estimate is not in compliance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101") and is cited for historical purposes only and should not be relied upon until further work is carried out.
For additional information on the Oracle Ridge Copper Mine acquisition, please see the Company's August 17, 2010 media release "Gold Hawk signs Letter of Intent to acquire the Oracle Ridge Copper Mine" and September 1, 2010 media release "Gold Hawk signs a Definitive Share Purchase Agreement with Oracle Ridge shareholders". The Company has received a technical report on the Oracle Ridge Mine entitled "Review of the Oracle Ridge Mine Project" by Glenn R. Clark, P.Eng. of Glenn R. Clark & Associates Limited, which will be available on SEDAR shortly.
The reader is cautioned that Gold Hawk has not verified the above-mentioned historical resources under National Instrument 43-101 reporting standards. Gold Hawk Resources Inc. has not independently analyzed the results of the previous exploration therefore the historical results should not be relied upon. Resource estimates prepared under reporting codes other than National Instrument 43-101 should not be relied upon to conform to current standards and definitions. Gold Hawk believes, however, that the historical resource estimates reported above are material and should be disclosed. Gold Hawk believes these historical results provide an indication of the potential of the property and are relevant to future exploration.
Glenn R. Clark, P.Eng. of Glenn R. Clark & Associates Limited, a consultant for Gold Hawk, and a Qualified Person under NI 43-101, has reviewed this media release and is responsible for the technical information reported herein.
About Gold Hawk Resources Inc.
Gold Hawk (TSX VENTURE:GHK) is a Vancouver, Canada-based company actively exploring business opportunities in the mining sector. The Company has no debt, approximately $19 million in working capital and holds mining concessions at the Barry-Souart property northeast of Val-d'Or, Quebec – a gold mining area with existing mining operations nearby. Gold Hawk is operated by an experienced management team with significant operating experience.
This document may contain "forward-looking statements" within the meaning of Canadian securities legislation. These forward-looking statements are made as of the date of this document and Gold Hawk Resources Inc. (hereinafter referred to as the "Company") do not intend, and do not assume any obligation, to update these forward-looking statements. Forward-looking statements relate to future events or future performance and reflect management of the Company's expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, commodity prices, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of resources; possible variations in ore reserves, grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; as well as those factors detailed from time to time in the Company's interim and annual financial statements and management's discussion and analysis of those statements, all of which are filed and available for review on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Gold Hawk Resources Inc.
Mr. Jason Mercier
Director Investor Relations