Huakan International Mining Inc.

Huakan International Mining Inc.

June 25, 2012 08:30 ET

Huakan Intersects 2.69m Grading 7.66 g/t Au, 82.58 g/t Ag, 3.44% Pb and 6.30% Zn in Main Zone Drilling at J&L

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 25, 2012) - Huakan International Mining Inc. (TSX VENTURE:HK) (the "Company") announces Main Zone drill results from holes DDH12-11 through DDH12-23 from the 2012 underground diamond drill program at its J&L precious and polymetallic (gold-silver-lead-zinc) project, located near Revelstoke, British Columbia. The drilling program is now completed with 45 holes in 9,725 metres. The aim of the drill program was to increase the indicated resource category for the Main Zone deposit. The program was successful in intersecting similar grade and thickness of mineralization as previous nearby holes. An updated resource will be completed once all assays have been received and the deposit has been re-modeled.

Holes reported in this news release were directed into 3 target areas: Target Areas A, B and C. Hole density or spacing in this campaign averaged 60 metre centres.

Area A

There were a total of 11 holes completed in Area A during the program, covering a target area of 150 metres in the down dip direction and 300 metres in strike length. Intercepts encountered were typical of the Main Zone, ranging between 1.23 metres and 8.48 metres wide, with an average width of about 3.0 metres. Assays have been received for 4 of the 11 holes completed in Area A and are shown in the following table. Three of these holes were previously reported (NR 12-07). The length weighted average gold grade of the intercepts in the following table (excluding the low grade intercept in hole 9) is -6.61 g/t Au.

Table 1: Drilling Highlights from Area A

Hole ID From (m) To (m) Length (m) Au (g/t) Ag (g/t) Pb (%) Zn (%)
DDH12-08* 171.75 174.74 2.99 2.88 73.29 3.63 9.35
DDH12-09* 192.38 193.61 1.23 4.13 71.88 3.03 2.68
and 206.55 208.11 1.56 1.94 20.94 0.21 0.06
DDH12-10* 207.70 216.18 8.48 9.41 101.39 2.17 4.31
DDH12-11 207.58 211.85 4.27 3.66 86.87 1.96 1.59

*Previously reported

Area B

Eleven holes were completed in Area B during the program, covering a target area of 120 metres in the down dip direction and 300 metres in strike length. Target Areas A and B are laterally adjacent to each other or a lateral continuum of the Main Zone. Results have been received from 7 holes, DDH12-17 through DDH12-23 in Area B and are tabled below. Visible gold was observed in 2 holes (DDH12-18 and -21). Main Zone intercepts ranged between 0.61 metres and 2.69 metres. From the table, the length weighted average gold grade in this area to-date is 6.32g/t Au.

Table 2: Drilling Highlights from Area B

Hole ID From (m) To (m) Length (m) Au (g/t) Ag (g/t) Pb (%) Zn (%)
DDH12-17 199.04 200.53 1.49 2.12 65.19 3.78 7.19
DDH12-17 203.91 204.72 0.81 4.24 15.30 0.10 0.82
DDH12-18 184.83 187.39 2.56 4.74 44.08 1.53 2.14
DDH12-18 196.15 197.82 1.67 21.39 27.15 0.43 0.36
DDH12-19 224.50 224.81 0.31 2.69 99.70 4.41 5.94
DDH12-20 180.22 181.93 1.71 3.28 26.39 0.99 1.85
DDH12-21 194.48 195.65 1.17 3.26 18.16 0.61 1.29
DDH12-21 199.01 199.62 0.61 3.63 6.8 0.03 0.03
DDH12-22 235.74 237.44 1.70 1.21 25.57 1.00 3.14
DDH12-22 244.95 245.64 0.69 11.30 71.3 1.38 1.13
DDH12-23 204.20 206.89 2.69 7.66 82.58 3.44 6.30

Area C

Ten holes were completed in Area C during the program, covering a target area of 250 metres in the down dip direction and 300 metres in strike length. The target area lies in the far southeast end of the deposit. Results from five holes, DDH12-12 through DDH12-16 are tabled below. The Main Zone was encountered in each hole, which displayed much variation in its width and grade. Thicknesses range from 0.70 metres to 6.47 metres and gold grades range from 1.24 g/t Au to 7.32 g/t Au. The length weighted average gold grade to-date in this area is 4.30 g/t Au. Visible gold was noted in DDH12-16.

Table 3: Drilling Highlights from Area C

Hole ID From (m) To (m) Length (m) Au (g/t) Ag (g/t) Pb (%) Zn (%)
DDH12-12 107.27 108.72 1.45 7.32 21.88 0.51 0.48
DDH12-13 102.07 102.77 0.70 3.58 11.00 0.24 0.05
DDH12-15 102.65 109.12 6.47 3.78 12.73 0.28 0.46
DDH12-16 136.10 137.40 1.30 3.86 10.52 0.41 0.67
DDH12-16 141.93 142.95 1.02 4.34 13.44 0.11 0.05

The 2012 diamond drill program was under the supervision of Paul Cowley, P.Geo., the Company's Qualified Person and VP Exploration. BQTW-sized core samples have been cut in half and sent to ALS Laboratory Group in Kamloops, BC. Samples are assayed for gold by fire assay (50 gram charge) as well as assayed for silver, lead and zinc. The Company inserted standards, blanks and duplicate samples throughout the sample sequence as quality control checks.

Paul Cowley, P.Geo., and VP Exploration, states, "We continue to be pleased with the Main Zone continuity and deposit expansion demonstrated by the current drill campaign. The Main Zone deposit remains open down dip and along strike, with excellent potential to expand the current resource."

Results from the remaining holes DDH12-24 through 45 will be released upon receipt.

About Huakan International Mining Inc.

Huakan's flagship property is the J&L, which it owns 100% with no underlying royalties. The property has a current resource at a $110/tonne in-situ NSR cut-off value of:

Main Zone

Classification Tonnes Au (g/t) Au (ozs) Ag (g/t) Ag (ozs) Pb (%) Zn (%)
Measured 1,202,000 6.71 259,200 69.0 2,664,600 2.40 4.46
Indicated 1,165,700 6.92 259,200 64.9 2,432,100 2.01 3.86
Measured & Indicated 2,367,700 6.81 518,400 66.95 5,096,700 2.21 4.16
Inferred 4,538,100 5.19 757,500 67.8 9,887,800 2.16 2.99

Footwall Zone

Classification Tonnes Au (g/t) Au (ozs) Ag (g/t) Ag (ozs) Pb (%) Zn (%)
Inferred 292,800 4.54 42,700 49 461,900 0.91 0.73
  1. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
  2. Confidence in the estimate of Inferred Mineral Resources is insufficient to allow the meaningful application of technical and economic parameters. There is no guarantee that all or any part of a mineral resource can or will be converted into a mineral reserve.
  3. The mineral resources in this estimate were calculated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.
  4. The following parameters were used to derive the NSR block model values:
    -April 30/11 US$ two year trailing av'g. metal prices of Au $1,183/oz, Ag $21/oz, Pb $0.99/lb, Zn $0.95/lb; Exchange rate of US$0.95US = $1.00CDN -Process recoveries of Au 92%, Ag 88%, Pb 80%, Zn 72%; Smelter payables of Au 96%, Ag 91%, Pb 95%, Zn 85% -Refining charges of Au US$15/oz, Ag US$0.50/oz; Concentrate freight charges of C$65/t and Smelter treatment charge of US185/t -Mass pull of 5% and 8% concentrate moisture content.
  5. The NSR cut-off of CDN$110 per tonne was derived from $75/t mining, $25/t processing and $10/t G&A.

Paul Cowley, P.Geo., Vice President Exploration for the Company, is the Qualified Person as defined in National Instrument 43-101, who has reviewed and approved the technical content of this news release.


Certain of the statements made and information contained herein may contain forward-looking statements or forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or forward-looking information include, but are not limited to statements concerning the J&L underground drill program. Forward-looking statements or information include statements regarding the expectations and beliefs of management. Often, but not always, forward-looking statements and forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements or information include, but are not limited to, statements or information with respect to known or unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information.

Forward-looking statements or information are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks and uncertainties relating to: completion of announced transactions, history of losses; requirements for additional capital; dilution; loss of its material properties; interest rates increase; global economy; limited history of production; speculative nature of exploration activities; periodic interruptions to exploration, development and mining activities; environmental hazards and liability; industrial accidents; failure of processing and mining equipment; labour disputes; supply problems; commodity price fluctuations; uncertainty of production and cost estimates; the interpretation of drill results and the estimation of mineral resources and reserves; legal and regulatory proceedings and community actions; title matters; regulatory restrictions; permitting and licensing; volatility of the market price of common shares; insurance; competition; hedging activities; currency fluctuations; and loss of key employees. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information. The Company disclaims any intent or obligation to update forward-looking statements or information except as required by law, and you are referred to the full discussion of the Company's business contained in the Company's reports filed with the securities regulatory authorities in Canada.

Neither the TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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