Gold Hawk Resources Inc.
TSX VENTURE : CGK

Gold Hawk Resources Inc.

October 01, 2009 05:30 ET

Gold Hawk Signs a Share Purchase Agreement With Nyrstar for the Sale of an 85 Per Cent Interest in the Coricancha Mine

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 1, 2009) - Gold Hawk Resources Inc. ("Gold Hawk" or the "Company") (TSX VENTURE:CGK) announced today that the Company has entered into a Share Purchase Agreement (the "Agreement") with Nyrstar ("Nyrstar") (NYSE Euronext Brussels:NYR), whereby Nyrstar will acquire an 85 per cent interest in Compania Minera San Juan (Peru) S.A. (CMSJ), Gold Hawk's Peruvian operating subsidiary, for US$15 million. Nyrstar is a leading, well-financed, global multi-minerals business, producing significant quantities of zinc and lead as well as other products (including silver, gold and copper).

As part of the transaction, Nyrstar will also assume Gold Hawk's guarantee in respect of CMSJ's existing US$13 million senior debt facility, which is payable in February 2010. Nyrstar has also agreed to loan up to US$20 million to CMSJ to fund re-start and expansion costs for the Coricancha Mine.

"Gold Hawk has had discussions with numerous parties over the past year to seek a financial solution that will re-start the Coricancha Mine. This all-cash offer and financing package for CMSJ is a compelling opportunity," said Kevin Drover, Gold Hawk President & CEO.

Following completion of the transaction, Gold Hawk will be debt-free, will have US$15 million in cash and will own a 15% interest in the Coricancha Mine, which could be in production during the first half of 2010. In addition, it is expected that the US$20 million loan that Nyrstar will provide to CMSJ will be sufficient to finance the re-start and expansion of the mine.

Nyrstar has indicated that following a ramp-up to expanded production levels by 2011, the expanded Coricancha Mine is expected to produce annually (approximately) 20,000 dry metric tonnes (dmt) of zinc concentrate, 15,000 dmt of lead concentrate, 45,000 troy ounces of gold and 2.4 million troy ounces of silver.

"Gold Hawk is currently evaluating other opportunities in the mineral resource sector to enhance shareholder value following completion of this Transaction," said Drover. "One of the potential opportunities the Company is considering would be to utilize Gold Hawk as a platform to create the next quality mid-tier gold producer."

The Companies previously signed a non-binding, confidential heads of agreement document (see Gold Hawk media release from August 11, 2009) prior to completion of due diligence by Nyrstar.

The transaction is expected to be completed in November 2009 and is subject to certain customary conditions, including receipt of shareholder approval and the approval of the TSX Venture Exchange. A special meeting of shareholders of Gold Hawk (the "Meeting") will be held on or about November 9, 2009 to approve the proposed transaction. The Company has set the Record Date for shareholders entitled to receive notice of the Meeting as October 2, 2009.

The Transaction and the assignment to Nyrstar as guarantor of Gold Hawk's current debt are also subject to the consent of Gold Hawk's lenders under the provisions of its debt facilities.

Gold Hawk has retained Auramet Trading LLC as advisors and Fraser Milner Casgrain LLP as legal advisors in connection with the Transaction.

About Gold Hawk Resources Inc.

Gold Hawk (TSX VENTURE:CGK) is a Canada-based precious metals company with reserves and resources containing gold, silver, lead, zinc and copper and a near-term production project at the Coricancha Mine and 600 tonnes of ore per day processing facility, located 90kms east of Lima, Peru. The Company has all permits required for the re-start of the mine.

Gold Hawk is based in Vancouver, Canada and is operated by an experienced management team. Gold Hawk and its wholly owned subsidiary, Compania Minera San Juan (Peru) S.A. also have exploration properties in Peru and Canada (Quebec).

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.

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