Gold Hawk Resources Inc.
TSX VENTURE : CGK

Gold Hawk Resources Inc.

March 03, 2008 06:00 ET

Gold Hawk Resources Inc.: Production Update

- Gold recovery in Q1 2008 expected to significantly improve following completion of equipment repairs and production modifications in fourth quarter - Lead, zinc and silver recoveries approach design specifications; gold recovery shows improvement in January

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 3, 2008) - Gold Hawk Resources Inc. ("Gold Hawk" or the "Company") (TSX VENTURE:CGK) is pleased to provide an initial overview of the Company's fourth quarter production at its Coricancha mine in Peru and an update on its activities relating to the ramp-up of production since the start of commercial production October 1, 2007.

Significant progress was made in mine operations during the fourth quarter of 2007 and encouraging results have been achieved in the plant and in virtually all mill circuits subsequent to the end of the fourth quarter. In January 2008 metal recoveries and concentrate grades for lead and zinc exceeded expectations and lead, zinc and silver recoveries are now approaching design specifications while gold recovery is showing considerable improvement.

"With the production of all metals now on stream and showing positive growth rates, Gold Hawk management is focused on increasing head grades, production rate, and recovery rates in order to ultimately maximize shareholder value by increasing the efficiency of our operations," said Kevin Drover, President and CEO of the Company. "Gold Hawk's enviable position as a precious metals producer that is also generating revenue from base metal sales provides us with greater resilience to commodity fluctuations and differentiates us in the marketplace."

Management is particularly pleased with recent gold recovery improvements. In the fourth quarter of 2007, an air blower in the Biox® circuit was out of service due to a mechanical failure of one of the units, and the arsenopyrite floatation circuit used to separate arsenopyrite and pyrite required new heat conditioning tanks. The Biox® circuit and arsenopyrite floatation circuit are now functioning as designed and are showing encouraging results in recovery rates.

Coricancha mine production update

These preliminary results are for the three-month period ended December 31, 2007, which is the first full quarter of operation of the Coricancha mine. The Coricancha mine achieved an average of 382 tonnes per day (tpd) throughput in the quarter despite a number of setbacks that constrained production. By the end of January 2008, mill throughput had reached 500 tpd but remains temporarily below capacity because of tailings handling limitations.

For the fourth quarter ended December 31, 2007, 35,207 tonnes of ore were processed, yielding 765 tonnes and 511 tonnes of zinc and lead concentrate, respectively. Concentrate grade for lead and zinc have been improving since commercial production began, with an average zinc concentrate grade of 50.8% and lead concentrate of 50.6% in the fourth quarter. Average metallurgical recoveries for all metals have steadily improved since commercial production began and January recoveries subsequent to the fourth quarter show significant improvements in zinc, lead, gold and silver.



Coricancha mine fourth quarter 2007 (and January 2008)

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Fourth January
Coricancha mine production quarter 2007 2008
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Total tonnes of ore milled per period 35,207 12,000
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Average tonnes milled per day 382 387
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Fourth January
Zinc quarter 2007 2008
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Tonnes of zinc concentrate produced 765 302
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Zinc in concentrate (%) 50.8 52.2
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Average metallurgical recovery rate (%)(i) 70.8 77.4
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Fourth January
Lead quarter 2007 2008
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Tonnes of lead concentrate produced 511 194
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Lead in concentrate (%) 50.6 56.3
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Average metallurgical recovery rate (%)(i) 73.8 81.6
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Fourth January
Gold quarter 2007 2008
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Ounces produced 647 341
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Average mill head grade (grams/tonne) 2.66 3.03
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Average metallurgical recovery rate (%)(i) 21 29
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Fourth January
Silver quarter 2007 2008
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Ounces produced 70,676 28,517
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Average mill head grade (grams/tonne) 81.0 88.84
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Average metallurgical recovery rate (%)(i) 77 83
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(i) Note: The mine achieved commercial production status on October 1,
2007 based on attaining 66 per cent, or (400 tonnes per day ("tpd"))
of designed mill capacity (600 tpd) in any 18 days within a 30-day
period. These conditions were met on September 25, 2007. Metallurgical
recovery rates used for zinc, lead, gold and silver above are included
as an early-stage indicator of mine processing plant efficiency and do
not indicate final production recoveries. The recovery rates do not
directly convert to payable metal sales. Production figures are based
on dore and concentrate production and associated inventory for the
fourth quarter, and do not necessarily reflect sales for the given
periods.


Operations update

Equipment delivery delays throughout 2007 extended the production start-up timeline, and operational challenges subsequent to the end of the third quarter (as reported in the Company's management discussion and analysis ("MD&A") filed November 30, 2007) have resulted in a temporary delay in reaching planned production of 600 tpd. While most of these have now been overcome, this impacted a number of areas of mine production and processing:

- The tailings handling limitations, identified in the Company's MD&A filed November 30, 2007, continue to temporarily constrain production. As the plant throughput increased, it was determined that the existing vacuum filtering equipment used to remove water from the tailings before disposal, was unable to handle the moisture content associated with higher tonnage. The Company immediately constructed a dyke in the tailings pond for short-term use and ordered two refurbished press filters for a permanent solution. The press filters were inspected and ordered, and are scheduled for delivery and installation in the second quarter of 2008.

As a result of the present dyke and vacuum filter capacity, as well as the Company's commitment to long-term stewardship of the environment, mill throughput has been temporarily limited to approximately 450 tpd until the press filters are placed into service in the second quarter of 2008.

With the new extraction and processing equipment now in operation, it is expected that rated production of 600 tpd will be reached in the second quarter of 2008 when the press filters are delivered and installed.

- The impact on the mine plan of the 2007 equipment delivery delays prior to attaining commercial production, has resulted in less than planned mine ore grades due to limited access to the higher grade areas of the mine. Rehabilitation work to allow access to higher grade production stopes is planned for completion during the second quarter of 2008. Coupled with the Dense Media Separation ("DMS") plant that removes waste rock (dilution) from the mine ore before it is processed, being ready at the same time, an increase in the mill feed grade is expected, which will result in greater production of metals contained.

The Company will provide additional production updates in April with its 2007 fourth quarter and year-end financial results.

Mr. Rodney Lamond, P. Eng. is the Qualified Person as defined by National Instrument 43-101 for technical information contained in this press release. Mr. Lamond has reviewed and approved the technical information contained in this press release.

Gold Hawk is attending the 2008 Prospectors and Developers Association of Canada ("PDAC") conference and welcomes shareholders and visitors to our booth # 2801.

About Gold Hawk Resources Inc.

Gold Hawk is a Canadian based precious and base metals producer with reserves and resources containing gold, silver, lead, zinc and copper. Since the acquisition of the wholly owned Coricancha Mine in Peru in March of 2006, the mine and concentrator have been refurbished and commercial production status was achieved on October 1, 2007. The rated capacity of the processing facility is approximately 600 tonnes of ore per day, with potential for expansion to 900 tonnes per day during 2008. The Company, through its subsidiary, Compania Minera San Juan (Peru) S.A., has approximately 600 employees.

Gold Hawk is based in Vancouver, British Columbia, Canada and trades on the TSX-V under the symbol CGK, and is operated by an experienced management team. The Company also has exploration properties in Peru and Canada (Quebec), and is actively pursuing other growth opportunities.

This press release includes "forward-looking statements", within the meaning of applicable securities legislation, which are based on the opinions and estimates of management and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "expect", "forecast", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Such risks and uncertainties include, but are not limited to, risks associated with the mining industry (including operational risks in exploration development and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainties involved in the discovery and delineation of mineral deposits, resources; the uncertainty of resource estimates and the ability to economically exploit resources; the uncertainty of estimates and projections in relation to production, costs and expenses; the uncertainty surrounding the ability of Gold Hawk to obtain all permits, consents or authorizations required for its operations and activities; and health and safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the ability of Gold Hawk to fund the capital and operating expenses necessary to achieve the business objectives of Gold Hawk, the uncertainty associated with commercial negotiations and negotiating with foreign governments and risks associated with international business activities, as well as those risks described in public disclosure documents filed by Gold Hawk. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in securities of Gold Hawk should not place undue reliance on these forward-looking statements.

Readers are cautioned that the foregoing lists of risks, uncertainties and other factors are not exhaustive. The forward-looking statements contained in this press release are made as of the date hereof and Gold Hawk undertakes no obligation to update publicly or revise any forward-looking statements contained in this press release or in any other documents filed with Canadian securities regulatory authorities, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

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

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