Hana Mining Ltd.

Hana Mining Ltd.

August 26, 2009 11:21 ET

Letter From the CEO-Hana Mining Ltd.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 26, 2009) - Hana Mining Ltd. (TSX VENTURE:HMG)(FRANKFURT:4LH)

Dear Shareholder:

This year represents a very important milestone for Hana Mining Ltd. (the "Company"), in that we have issued our very first NI 43-101 compliant resource estimate on our Ghanzi copper-silver property in Botswana, initially announced on June 23, 2009 (see initial press release dated June 1, 2009) and finalized on August 4,2009. While the full technical report is available on SEDAR, I wanted to write all shareholders directly to draw your attention to a few key findings.

Current Resource Size

An independent engineering firm, GeoLogix Mineral Resource Consultants (Pty.) Ltd. ("Geologix") of Potchefstroom, South Africa had available a total of 407 drill holes from Company drilling programs and from prior work. This drill hole inventory represents detailed exploration on only 16 kilometers or 3% of the overall mineralized horizon on the property. Numerous other mineralized targets are evident, although they are less explored at this time. GeoLogix considered 303 of these drill holes in their modeling, and applied 225 hole assay results and Datamine software to arrive at an inferred resource on the property. That resource, at varying Cu cut-off grades, was estimated by GeoLogix as follows:

Ghanzi Property
NI 43-101 Compliant Inferred Resource Details
Copper Cut-Off Resource Copper Contained Silver Contained
Grade Tonnes Grade Cu In-Situ Grade Ag In-Situ
% (MT) (%) (Bn lbs) (g/t) (M oz)

0.30 163.5 0.82 2.97 9.80 51.56
0.40 107.3 1.08 2.55 12.65 43.66
0.50 83.0 1.26 2.31 14.86 39.63
0.60 68.7 1.41 2.14 16.60 36.70
0.75 60.4 1.51 2.01 17.98 34.91
1.00 50.3 1.65 1.82 19.78 31.97
Note: Resource drilled to an average vertical depth of 150 metres

From the table, you can see how the various copper cut-off grade assumptions influence both overall resource tonnage and average resource copper grades. We do not yet know what cut-off will prove optimum from an economic perspective. This parameter is influenced by many factors, including:

- Total resource tonnage,

- Detailed open pit mine planning work (including strip ratios, recoveries, etc.), and

- Initial and long term copper price levels.

Our neighbor in Botswana, Discovery Metals, has adopted a 0.6% cut-off for their tonnage and resource discussions while we have been using a more conservative 0.75% cut-off. We continue gathering information to support the most appropriate cut-off figure to apply long term.

Characteristics of the Deposit

Through our drilling work we have found the deposit to be fairly predictable in its behavior. Mineralization thickness ranges from 4 to 15 metres and dip is 5 degrees to 60 degrees from horizontal. Mineralization thickness varies by zone, and as the table below illustrates, is impacted by cut-off grade as well.

Mineralization Thickness Mineralization Thickness (metres)
By Zone, at Varying ----------------------------------------------------
Cut-Off Grades Cu Grade Cut-Off @ 0.3% Cu Grade Cut-Off @ 0.5%
Range Average Range Average
Banana Zone 2.0 - 43.0 7.4 0.9 - 16.2 5.1
Zone 5 3.0 - 32.0 14 2.0 - 24.0 11.2
Zone 6 3.0 - 49.0 9 1.8 - 7.2 4.5


Within these resource zones we have found significant areas of mineralization where the grade (at a 0.75% cut-off) is considerably above 1.51% Cu. The best grades (+2% Cu) typically are in areas where the original rock porosity was best developed or where the mineralized 'blanket' is folded, and copper has been remobilized into thicker lenses. These high grade, +2% Cu "pockets" offer the opportunity to locate starter pits and achieve better overall economics than the average numbers would otherwise suggest. Early economics are further aided by the fact that the top 30 metres of overburden is a soft Kalahari sand, easily stripped prior to mining. The size and nature of these high grade Cu pockets is illustrated by the following table:

1.5% Cu Cut-Off 1.0% Cu Cut-Off
High Grade Copper Approximate
Sections on the Tonnage Cu Grade Tonnage Cu Grade Strike Length
Ghanzi Property (MT) (%) (MT) (%) (Metres)
Banana Zone
North Fold Closure
(5,000)(i) 11.11 2.08 20.11 1.73 1,000
North Limb (15,000)(i) 0.55 1.66 2.09 1.34 350
New Discovery
(25,000)(i) 1.99 1.71 5.73 1.45 500
South Limb (55,000)(i) 1.67 1.75 5.55 1.39 300
Total 15.32 1.98 33.48 1.60 2,150

Zone 5 6.86 2.16 11.68 1.78 600
Zone 6 2.89 1.97 5.10 1.65 600
Grand Total 25.07 2.03 50.26 1.65 3,350

(i)Note: Meterage distances reference within Banana Zone. From east to west
on the North Limb, the segments are numbered from 5,000 to 35,000,
then from west to east on the South Limb the segments are numbered
40,000 to 70,000. See Figure 1 (below) for more detail on the
segments within Banana Zone and Zone 3.

By analyzing the resource with the application of higher cut-off grades, the location of the high grade pockets is more evident. The north fold closure, along the northern end of the Banana Zone, currently exhibits the largest high grade tonnage at 11 MT of +2% Cu, and 20 MT of +1.7% Cu. This high grade area occurs over 1,000 metres of surface strike length and extends to 200 metres depth, making it an attractive early target for surface recovery.

Note also, our resource data shows we have high grade areas in each of the segments of the Banana Zone and in the other two Zones where we have a 43-101 compliant resource figure as well. We have only a few data points throughout the property on mineralization below 200 metres, but what we do have indicates higher grades and thicknesses at depth.

Detail on the Banana Zone and Zone 3, with the existing (and future) drilling sites identified, is shown in Figure 1 below.

To view Figure 1. of the Banana Zone and Zone 3 Diagram, please visit the following link: http://media3.marketwire.com/docs/HMG0826.pdf

Next Steps and Work Plan

The Banana Zone, combined with Zone 3, is our most prospective area based on our NI 43-101 resource and historic drill results, and will constitute the focus of the Company's drilling work during 2009, and much of 2010. The Company has outlined 20 km of prospective strike length in these two zones that form our next set of drill targets (see areas identified in Figure 1 above), supported by soil anomalies and percussion drilling work.

Our Q3/Q4 work plan focuses on this area as follows:

- Percussion drilling work (6,000 metres), to specify additional RC/diamond drilling targets,

- RC/diamond resource drilling (12,000 metres),

- Completion of a water study, and

- Initiation of a metallurgy study focused on recoveries, milling, smelting and refining behaviors for our resource.

We intend to have enough new assay results from the 2009 drilling campaign to update our NI 43-101 resource estimate in Q1 2010, still at an inferred designation. For more information on our strategy and plans for the future, you can go to our website (www.hanamining.com) and download our latest PDF, "Investor Briefing-August 2009".

We remain very excited about the prospects for the Ghanzi Project as the property is part of a known mineralized system that potentially represents the largest sediment-hosted, open-pittable copper-silver deposit in Africa.

Marek Kreczmer, M.Sc., P.Eng.

CEO, Hana Mining Ltd.

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.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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