Hawthorne Gold Corp.
TSX VENTURE : HGC

Hawthorne Gold Corp.

December 23, 2008 18:00 ET

Hawthorne Gold Acquires Balance of Taurus Gold Deposit at Cassiar Gold Camp

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 23, 2008) - Hawthorne Gold Corp. ("Hawthorne" or the "Company") (TSX VENTURE:HGC) announces it has entered into an agreement (the "Acquisition Agreement") with Bonanza Gold Corp. ("Bonanza") to acquire a further 70% interest in the Taurus gold deposit (the "Property"). Hawthorne currently owns approximately 30% of the Property and upon closing the Acquisition Agreement will own a 100% interest in the Property.

"Hawthorne is pleased to have completed the 100% purchase of the Taurus deposit. The deposit not only contains an inferred resource of approximately one million ounces of gold with significant upside potential, but also contains strategic higher grade zones outcropping at surface. The acquisition has also removed any further cash payments under the previous option agreement, thus saving the Company up to $6 million. The realized acquisition cost to the Company per in-situ inferred resource ounce, based on acquiring the remaining 70% of the Taurus deposit or 728,000 ounces, is estimated at less than $2.75 per ounce gold. This has significantly increased Hawthorne's gold resource portfolio and is the final step in Hawthorne's strategy to fully consolidate and control the Cassiar Gold Camp and to effectively move towards production in 2009," commented Richard Barclay, President and CEO of Hawthorne Gold.

Pursuant to the terms of the Acquisition Agreement, the Company will issue 6,750,000 common shares to Bonanza (the "Hawthorne Shares") in exchange for 46 mineral claims comprising approximately 70% of the Property (Hawthorne currently holds approximately 30% of the Property). The Property is located within the Cassiar Gold Camp controlled by the Company in northern British Columbia, Canada and 10 of the 46 claims acquired are subject to a 2.5% net smelter return royalty in favour of a third party.

On closing of the proposed transaction, Bonanza will own approximately 13% of the issued shares of the Company. Bonanza has agreed to vote the Hawthorne Shares in accordance with the recommendation of the management of Hawthorne and has further agreed to provide Hawthorne with a 15 day right of first refusal on the sale or placement of the Hawthorne Shares for a period of two years. The Acquisition Agreement and the issuance of the Hawthorne Shares are subject to the approval of the TSX Venture Exchange.

The Acquisition Agreement replaces an amended option agreement between the Company and Bonanza which required the Company to issue 250,000 common shares to Bonanza in December 2008 and pay to Bonanza cash payments of $3 million in 2009 and a further cash bonus payment of $3 million on the earlier of (i) the issuance of a feasibility study recommending that the Property be placed in commercial production and (ii) the Property being placed into commercial production.

About Taurus Gold Deposit

The Taurus deposit hosts an inferred resource estimate of 1.04 million ounces of gold comprising of 32.4 million tonnes at a gold grade of 1.0 g/t. A National Instrument 43-101 technical report on the Taurus Deposit - Liard Mining District, BC, dated June 11, 2007, by Wardrop Engineering is available at www.sedar.com.

Michael Petrina, P.Eng., the Company's Vice President of Mining and a Qualified Person as defined by National Instrument 43-101, has reviewed and approved the technical disclosure contained in this news release.

About Hawthorne Gold Corp.

Hawthorne Gold Corp. is a Canadian-based gold exploration and development company with key properties located in British Columbia, Canada. Hawthorne is led by well-respected mining leaders Richard Barclay and Michael Beley. Hawthorne's goal is to become a junior gold producer by working towards production at Table Mountain in 2009 and continued resource development at the nearby Taurus deposit, as well as the Frasergold deposit in the Cariboo region of south central British Columbia.

ON BEHALF OF HAWTHORNE GOLD CORP.

Richard J. Barclay, President & CEO

Certain information regarding the Company including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities laws and necessarily involve risks associated with mining exploration and development, volatility of prices, currency fluctuations, imprecision of resource estimates, environmental and permitting risks, access to labour and services, competition from other companies and ability to access sufficient capital. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements.

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

Contact Information

  • Hawthorne Gold Corp.
    Todd Hanas
    Toll Free: 1-866-869-8072
    or
    Hawthorne Gold Corp.
    (604) 629-1505 or Toll Free: 1-888-629-1505
    (604) 629-0923 (FAX)
    Website: www.hawthornegold.com