Hana Mining Ltd.

Hana Mining Ltd.

March 14, 2011 09:00 ET

Hana Provides Update on Banana Zone Preliminary Economic Assessment (PEA)

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 14, 2011) - Hana Mining Ltd. (TSX VENTURE:HMG)(FRANKFURT:4LH) (the "Company") is pleased to provide a progress update on the Banana Zone Preliminary Economic Assessment study being prepared by AGP Mining Consultants Inc. ("AGP").The PEA is assessing the viability of a mining operation at the Banana Zone, Ghanzi Project with copper-silver ore being processed in a 20,000 tonne-per-day plant using conventional flotation to produce copper-silver concentrate.

Work to date on the PEA is positive and the work effort continues in earnest and the multiple studies required to evaluate the project are meeting expectations. However, the delivery of the reports has been slow mainly due to the level of activity in the mining industry. Therefore, the completion and the release of the PEA is expected to be delayed and is now expected to be made public during May 2011.

Other activities at the Ghanzi Project include:

  • Definition drilling at the Banana Zone commenced in January and the present expectation is to complete 50,000 metres of core drilling during 2011 which is expected to convert a substantial amount of the Inferred resources into the Indicated category. A new 43-101-Compliant resource estimate, incorporating this drilling, will be released after completion of the drilling program.
  • The final report from the ground water exploration program has been completed and submitted to the Company by Wellfield Consulting Services of Gaborone, Botswana. The report concluded that the proposed groundwater program has been successfully completed and substantial groundwater resources, more than adequate to supply the proposed processing plant, have been identified. The next stage is to substantiate the results through numeric modeling.
  • Multiple metallurgical studies have been completed. Leaching versus flotation PEA level studies appear to confirm conventional milling to be the preferred alternative method at this time considering current cost estimates and metal prices.
  • The Terms of Reference ("ToR"), a very important step towards determining the scope of the Environmental Impact Assessment ("EIA"), was recently submitted and is under review by the various Botswana regulatory entities. Meetings are scheduled for April 2011. The outcome of the meetings will provide guidance on content, issues and timing required for the full EIA.
  • Exploration drilling has resumed at Zone 5. This drilling is expected to increase the mineral resources at Zone 5 which at a cut-off grade of 0.30% copper host approximately 20.7 million tonnes grading 1.23% Cu and 8.70g/t Ag containing 562 million pounds of copper and almost six million ounces of silver. All of the resources at Zone 5 are in the Indicated category.

About Hana Mining's Ghanzi Copper-Silver Project in Botswana:

The Ghanzi Project is located in the center of the Kalahari Copper Belt in northwestern Botswana. The Ghanzi property covers 2,169 square kilometres, and contains sediment-hosted copper-silver deposits with a demonstrated cumulative tested strike length of 70 kilometres. This favorable geology extends over an estimated strike length of 600 kilometres. Hana Mining released results of its most recent NI 43-101 compliant resource estimate for the Ghanzi Project on December 20, 2010, announcing an Indicated mineral resource of 762 million pounds of copper and 16 million ounces of silver from 37.4 million tonnes at a grade of 0.93% copper and 13.4 g/t silver. All of the Indicated resources are from the Banana Zone. There are also Inferred resources of 5.6 billion pounds of copper and 85.4 million ounces of silver from 423.9 million tonnes. This Inferred mineral resource estimate consists of 225.4 million tonnes grading 0.64% Cu and 8.1 g/t Ag in the Banana Zone, 20.7 million tonnes grading 1.23% Cu and 8.7 g/t Ag in Zone 5, 16.7 million tonnes grading 0.86% Cu and 4.0 g/t Ag in Zone 6, and 161.1 million tonnes grading 0.45% Cu and 3.6 g/t Ag in the Chalcocite Zone; all at a cut-off grade of 0.30% Cu.

The Banana Zone exhibits certain areas of higher grade Cu and Ag mineralization, particularly between sections 49700 to 52000 on the North limb and sections 63000 to 71000 on both the North and South limbs, which represent an opportunity to locate starter pits and mine initial tonnages at higher than average grades. These higher grade pockets tend to be well within open pit depth parameters and represent opportunities to improve early cash flow and overall returns in development.

The project will benefit from proposed rail and power infrastructure expansions, along with proximity to local population centers and workforce. A feasibility study is currently underway (funded by the World Bank and the governments of Botswana and Namibia) to support completion of a rail line link that would connect Botswana with the Namibian port of Walvis Bay, on the Atlantic coast. The closest existing railhead to port is at Gobabis, in Namibia, approximately 550 km from our property. Construction has begun on the 600MW expansion of the government-owned Moropule Power Plant, having secured US$825 million project funding in May 2009. The Ghanzi Copper-Silver Project is currently accessed by the paved Trans-Kalahari highway, which passes within 15 km of the property.

The Ghanzi property is one of Africa's premier future copper-silver resources.

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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