Gold Hawk Resources Inc.
TSX VENTURE : CGK

Gold Hawk Resources Inc.

November 30, 2006 09:00 ET

Gold Hawk Resources Inc. Releases 3Q-2006 Results and Update on Coricancha Mine 'Formerly Tamboraque Mine'

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 30, 2006) - Gold Hawk Resources Inc. ("Gold Hawk" or the "Company") (TSX VENTURE:CGK) is pleased to announce the financial results for the three and nine months ended September 30, 2006.

During and subsequent to the third quarter of 2006, Gold Hawk's management team made substantial progress in permitting, financing and preparing the Coricancha Mine for commercial production. With the most significant permits and authorizations in hand and the financing in place, the Coricancha mine and mill are scheduled to commence production in February 2007 and be in full production, at the rated capacity of 600 tpd, in April 2007. Once the mine is operational, management will examine the possibility of expanding the operation by up to 50% from the existing capacity of 600 tonnes per day.

The last significant approval required to restart the Coricancha mine was granted by the Peruvian Ministry of Energy and Mines subsequent to the end of the third quarter. This authorization removed the "stop work order" on the Coricancha concentrator that was issued in November 2002. This resolution was a very important step in the process of restarting the mine as it allows the Company to operate the concentrator and use the existing tailings facility provided that the Company fulfils certain requirements. All of the specified requirements have either already been completed or will be completed over the next few months as the plant is readied for production.

During the third quarter of 2006, the Company closed a US$10 million loan facility with Natexis Banques Populaires as primary lender and Auramet Trading, LLC as co-lender. The loan facility was structured in two tranches. Tranche A was for US$5million and is to fund a portion of the capital requirements for the Coricancha Mine. Tranche B was for US$5 million and was to be utilized to support the potential acquisition activities of Gold Hawk. Subsequent to the end of the third quarter, the terms of the US$5 million Tranche B facility were amended, subject to documentation, such that this facility will also be available for the purpose of funding the capital requirements for the Coricancha Mine. These loan facilities ensure that there will be sufficient funds available for the re-start of the mine and to make the final property payment of US$1.5 million due on March 29, 2007 without the need for additional equity financing.

Rehabilitation activities at the mine were ongoing during the third quarter ended September 30, 2006 with a focus on the preparation of six mining levels in both the Constancia and Wellington veins. Ventilation systems have been established for the primary ventilation flows and work is underway in establishing proper ventilation throughout the mine. In addition, the Company is in the process of implementing a number of basic safety and training systems in preparation for full scale mine operation early in the New Year. New mine equipment, including jackleg drills, trucks and scoop trams, has been ordered and are scheduled for delivery in the first quarter of 2007. Also, rental mining equipment was sourced for use until the new mine equipment arrives.

Inspection and repair of the concentrator, crushing and grinding plant equipment is almost complete, and it is anticipated that test operations of the crushing and grinding sections of the plant will commence in December.

Recent results from metallurgical testing have shown that both recovery and concentrate grades of all payable metals can be improved significantly in comparison to the results of the previous operation. This will be accomplished with relatively minor changes to the flow sheet and some equipment additions. New equipment, such as a flash flotation cell, for the early recovery of lead, is on order while other equipment such as a dense media separator, new concentrate thickeners, and additional zinc conditioning tanks, are presently being quoted for purchase.

In March 2006, Gold Hawk completed a private placement of 65 million subscription receipts at a price of $0.25 per subscription receipt. The subscription receipts were exchanged for 65 million common shares and 32.5 million common share purchase warrants. Each warrant entitles the holder to purchase one common share at a price of $0.35 until March 6, 2008. However, if at any time after July 8, 2006 the closing price of the common shares of Gold Hawk on the TSX Venture Exchange is greater than $0.40 for 20 or more consecutive days, Gold Hawk may give notice to the holders of Warrants that the expiry date for the exercise of the Warrants has been accelerated and the Warrant will expire on the 20th calendar day following the date such notice is mailed.

As of the close of trading on November 28, 2006, the price of Gold Hawk's common shares has closed at a price greater than $0.40 for 20 consecutive days and the Company has sent notice to the warrant holders that the exercise date has been accelerated and the warrants will expire on December 19, 2006. Should all of the warrants be exercised, it will increase Gold Hawk's cash holdings by $11,315,500.

Looking beyond the start-up of the Coricancha Mine, it is management's corporate strategy to acquire additional producing or advance stage projects in order to grow the Company into a significant precious metal producer.

Gold Hawk's financial statements and MD&A for the third quarter of 2006 and the nine month period ended September 30, 2006 have been approved by Directors and can be viewed on Sedar (www.sedar.com) or the Company's website (www.goldhawkresources.com).

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.

Contact Information

  • Gold Hawk Resources Inc.
    Mr. Gordon F. Bub
    Chairman and C.E.O.
    (604) 689-9261
    or
    Gold Hawk Resources Inc.
    Mr. Kevin Drover
    President and Chief Operating Officer
    (604) 689-9296
    Website: www.goldhawkresources.com