Hana Mining Ltd.

Hana Mining Ltd.

June 05, 2007 11:19 ET

Hana Mining Signs Letter of Intent for African Copper Project

TORONTO, ONTARIO--(Marketwire - June 5, 2007) - Hana Mining Ltd. (TSX VENTURE:HMG) (the "Company") has entered into a letter of intent to acquire controlling interest in a highly prospective copper project in northwestern Botswana, Africa. The "Ghanzi Copper Project" consists of five license blocks covering approximately 4,370 square kilometres or 437,000 hectares. The licenses are located over widespread strata-bound sediment-hosted copper mineralization and at least six exploration targets have already been identified.

"This acquisition is consistent with our strategy to build a robust land portfolio that leverages the current strength in copper prices and rising demand for the commodity, particularly in growing economies such as China," said Peter Wilson, President of Hana Mining. "We look forward to conducting an aggressive exploration program in an effort to uncover Ghanzi's significant potential."

The project area contains at least six exploration targets that have excellent potential for copper mineralization, which occurs in the region over four main parallel trends that extend for approximately 80 kilometers each. The most southerly of these mineralized belts lies entirely within the project area as do portions of two additional belts. Collectively, the mineralized trends on the Ghanzi Copper Project area comprise a prospective strike length of 140 kilometers.

The Ghanzi Copper Project area lies within the Late Proterozoic Damaran rift sequence of the Pan African Mobile Belt. These same rocks host the world-class deposits of the Zambian Copper Belt, which contains roughly 30% of the world's copper reserves. Ghanzi has attractive potential for copper, minor yet significant silver and molybdenum deposits suitable for open pit mining. The property is easily accessible, located within 25 km of the paved Trans-Kalahari Highway, and a proposed railway linking Botswana and Namibia will pass within 10 km of the property.

The property has been explored intermittently since 1962 by large companies including Gencor (now BHP Billiton), Anglo-American, Anglovaal, Newmont, DeBeers, US Steel Corporation and Delta Gold. Work was conducted at a time when copper prices were low and infrastructure was not as advanced as it is today. With more advanced infrastructure now available and copper trading at much higher prices, the preliminary results obtained by this group of companies suggest that Ghanzi is potentially a large, target-rich area with existing economically significant mineralization.

A former British Protectorate, the Republic of Botswana became independent in 1966. It is the longest continuous multi-party democracy on the African continent having maintained four decades of uninterrupted civilian leadership. The Republic's government, coupled with progressive social policies and significant capital investment, has made Botswana one of the world's fastest growing economies. Mining has played a significant role in the Republic's economic growth and, according to the World Bank, this trend is expected to continue given the favourable outlook for Botswana's mining sector.

Under the terms of the Letter of Intent, signed with arm's length parties, Hana Mining will pay US$494,741 in cash installments over a three-year period and will issue 2,500,000 common shares and 2,000,000 share purchase warrants. Each warrant entitles the holder to purchase one additional common share of the Company at a price of C$1.00, exercisable during a period of 12 months from the date of issue of the warrants. Shares will be subject to all required regulatory hold periods. Hana Mining must also spend 750 million Botswana Pulas (approximately US$1.2 million) in exploration and development expenditures to acquire 70% of the shares of Stellent (Proprietary) Limited, a private Republic of Botswana corporation that holds the five prospecting licences. Hana Mining will act as operator of the project.

With respect to the transaction, a finder's fee of 200,000 common shares of the Company is payable to an arm's length party.

The Letter of Intent and the finder's fee is subject to the acceptance of the TSX Venture Exchange.


Hana Mining Ltd. is a junior mineral exploration company seeking to acquire, explore and develop precious, base metal and other mineral exploration projects worldwide.

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

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