January 21, 2010 (Vancouver, British Columbia), Hana Mining Ltd. ("the Company" or "Hana Mining"), (TSX-V: HMG) (Frankfurt: 4LH) is pleased to announce that it has approved a proposal to undertake a spin-out transaction pursuant to which the assets of Hana Mining will be separated into two companies. Hana Mining will retain the Ghanzi Copper--Silver project in Botswana, of which it currently owns 70%, with the remaining 30% interest under an exclusive right of acquisition from Stellent Proprietary Limited. All mineral resources discovered to date by Hana Mining (as outlined in the 43-101 compliant inferred resource estimate announced on June 1, 2009) are located on the Ghanzi Copper--Silver project.
By an agreement dated January 21, 2010, the Company will undertake a plan of arrangement (the "Arrangement") with New Hana Copper Mining Ltd. ("New Hana"), a newly incorporated subsidiary of the Company, and Hana Mining Botswana (Proprietary) Limited ("Hana Botswana"), an existing subsidiary of the Company, wherein the Company will spin-out and transfer Hana Botswana to New Hana, with the intention of building a new base metals company. Hana Botswana holds eleven (11) prospecting licenses in Botswana, known as the Kuke Property, comprising an area of 10,654 sq. kms. These prospecting licenses are outside of the Ghanzi Copper-Silver project's prospecting licenses, and there has been no exploration work yet conducted on the Kuke Property.
The initial share ownership of New Hana will mirror the shareholder base of the Company. There will be no change in the holdings of shareholders in the Company. The Company will determine a date of record for the Arrangement, after receipt of all required regulatory, court, and shareholder approvals (the "Effective Date"). As of the Effective Date, under the terms of the Arrangement, every ten (10) common shares of the Company will essentially entitle the shareholders of record to receive one new common share of New Hana. It is anticipated that New Hana will then seek a stock exchange listing for its common shares on the TSX Venture Exchange (the "Exchange"), and complete an equity offering to raise at least $500,000 to further explore and develop the Kuke Property.
Management believes separating its current assets into two companies, with the Company's shareholders initially holding proportionate interests in both companies, will allow the accelerated exploration of the Kuke Property independently by New Hana, without dilution to the shareholders of the Company in the more advanced Ghanzi Copper--Silver project. The Company will continue to hold the Ghanzi Copper-Silver project, and New Hana will hold the Kuke Property through Hana Botswana. The location of the Kuke Property is shown in relation to the Company's Ghanzi Copper--Silver project on the attached map. The proposed reorganization will provide greater market awareness of the Company, New Hana, and their respective assets, and offer both the Company and New Hana increased flexibility to utilize and exploit their respective assets, without unnecessary dilution to the other.
The Board of Directors of New Hana will be Joseph Arengi, a resident of Ontario, Marek Kreczmer, and Julie D. May-Frederick, both residents of British Columbia. Mr. Arengi is currently VP, Exploration of the Company, and Mr. Kreczmer is CEO, Chairman and a director of the Company. Ms. May-Frederick is a corporate administrator.
As part of the Arrangement, it is proposed that New Hana will conduct a private placement of its securities to raise a minimum of $500,000 up to a maximum of $1,000,000 (the "New Hana Financing"). These funds will be used for maintaining the Kuke Property, conducting further exploration work thereon, and meeting general working capital requirements. As the Kuke Property has not yet had any exploration work carried out on it, the Company plans to conduct shortly a work program, including an initial aeromagnetic survey and preliminary soil sampling. The aeromagnetic survey is expected to be completed in February 2010, the results of which will form the basis for a NI 43-101 technical report.
The Company will investigate the need for the appointment of a sponsoring broker to New Hana in connection with the Arrangement or the New Hana Financing, details of which will be announced in a future news release.
The completion of the Arrangement is subject to the fulfilment of a number of prior conditions, including Exchange acceptance of the Arrangement and the conditional listing of the New Hana common shares, the approval of the Arrangement by the shareholders of the Company by a special resolution of at least 2/3rds of the shares voted in person or by proxy at a general meeting held to consider the Arrangement, the approval of the Supreme Court of British Columbia, and the completion of the New Hana Financing. The Arrangement cannot close until all of these conditions precedent and others are met. There can be no assurance that the Arrangement will be completed as proposed or at all. Investors are cautioned that except as disclosed in the Information Circular to be prepared in connection with the Arrangement, and information released or received with respect to the Arrangement may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.
It is anticipated that the special general meeting of the shareholders of the Company to approve the Arrangement will be held sometime in April, 2010. Shareholders will receive an information circular setting out further details of the proposed transaction.
Click to View MapAbout Hana Mining's Ghanzi Copper-Silver Project in BotswanaThe Ghanzi Project is located in the center of the Kalahari copper belt in northwestern Botswana. The Ghanzi property covers 2,200 sq. km., and contains sediment-hosted copper-silver deposits with a demonstrated cumulative mineralized strike length of 26.9 kilometres. This favourable geology extends over the entire strike length of 600 kilometres Hana Mining released results of it's first NI 43-101 resource estimate for the Ghanzi Project in June 2009, announcing an inferred resource of 2.0 billion lb of copper and 34.9 million oz of silver from 60.4 million tonnes. This resource estimate is based on a 0.75% Cu cutoff grade, and averages 1.51% Cu and 17.98 g/t Ag. The Banana Zone represents 40.7 million tonnes of this total resource (67%), has been the focus of the Company's drilling and development efforts for 2009, and will remain the primary focus for 2010.
The Banana Zone exhibits certain areas of high grade Cu and Ag mineralization, particularly in the New Discovery area and the fold nose at the northern end of the zone, which represent an opportunity to locate starter pits and mine initial tonnages at higher than average grades. These +2% Cu pockets tend to be well within open pit depth parameters and represent opportunities to improve early cash flow and overall returns in development.
The project will benefit from contemplated rail/power infrastructure expansions, along with proximity to local population centers and workforce. A feasibility study is currently underway (funded by the World Bank and the governments of Botswana and Namibia) to support completion of a rail line link that would connect Botswana with the Namibian port of Walvis Bay, on the Atlantic coast. The closest existing railhead (to port) is at Gobabis, in Namibia, approximately 550 km from our property. A planned 600MW expansion of the government-owned Moropule Power Plant continues to advance, with US$825 million project funding secured in May 2009, and key supply contracts awarded. Currently, our project is served by the paved Trans-Kalahari highway, which passes within 15 km of the property.
Hana Mining is focused on demonstrating that the Ghanzi property represents one of Africa's premier future copper-silver resources.
FOR FURTHER INFORMATION
Contact:Marek Kreczmer
Chairman & CEO
Hana Mining Ltd.
Tel: (604) 676-0824
Email:
info@hanamining.comWebsite:
www.hanamining.com Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release. Statements in this press release, other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, may include forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.
You can also view this News Release on our website at:
http://www.hanamining.com/s/NewsReleases.asp?ReportID=381841