Huakan International Mining Inc.
TSX VENTURE : HK

Huakan International Mining Inc.

July 20, 2012 17:46 ET

Huakan Intersects 7.88 g/t Au, 65.2 g/t Ag, 2.17% Pb and 2.84% Zn over 3.32 m in Main Zone Drilling at J&L

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 20, 2012) - Huakan International Mining Inc. (TSX VENTURE:HK) (the "Company") announces Main Zone drill results from the remaining holes DDH12-23 through DDH12-45 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 consisted of 45 holes in 9,725 metres aimed at increasing 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 the deposit has been re-modeled.

Holes DDH12-01 through DDH12-22 were reported in news releases dated June 4th, June 6th and June 25, 2012 and are repeated here for summary purposes and context of the full program. The entire program tested 6 target areas, A through F, which are identified on a longitudinal section on the Company's website. Hole density or spacing in this campaign averaged 60 metre centres.

Area A

Eleven holes in Area A covered a 200 metre long by 130 metre down dip area of the Main Zone. Intercepts ranged between 0.56 metres and 8.48 metres of typical Main Zone mineralization. The length weighted average gold grade for all intercepts in this area is 5.55 g/t Au (Table 1). Multiple zones were encountered in some drill holes.

Table 1: 2012 Intercepts in 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
DDH12-09* 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 3.61 89.77 2.00 1.66
DDH12-26 212.35 214.27 1.92 7.36 191.31 6.58 3.97
DDH12-27 225.54 226.34 0.80 4.44 72.16 2.77 5.32
DDH12-27 227.75 228.31 0.56 2.18 24.30 1.19 8.06
DDH12-27 238.90 239.57 0.67 3.01 22.10 1.25 0.42
DDH12-29 221.52 222.49 0.97 4.64 93.32 2.91 8.81
DDH12-29 225.80 227.37 1.57 8.32 90.61 2.82 5.89
DDH12-32 232.08 233.96 1.88 1.47 26.28 1.06 3.47
DDH12-32 246.31 248.11 1.80 2.93 35.74 0.38 1.12
DDH12-32 250.39 251.52 1.13 1.48 92.88 1.73 3.89
DDH12-35 222.29 224.70 2.41 8.51 54.02 2.12 2.69
DDH12-39 240.67 242.60 1.93 7.03 70.92 3.32 6.32
DDH12-43 262.10 265.42 3.32 7.88 65.20 2.17 2.84
DDH12-43 273.40 274.00 0.60 4.98 113.00 2.56 2.88
* previously reported

Area B

Eleven holes in Area B covered a 250 metre long by 120 metre down dip area of the Main Zone. In this area, we are often seeing one or two Main Zone intercepts per hole with intercept widths between 0.50 metres and 2.69 metres of typical Main Zone mineralization (Table 2). The length weighted average gold grade for all intercepts in this area is 5.66 g/t Au.

Table 2: 2012 Intercepts in 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
DDH12-18* 184.83 187.39 2.56 4.74 42.98 1.53 2.18
DDH12-18* 196.15 197.82 1.67 28.20** 27.15 0.43 0.36
DDH12-19* 226.27 226.77 0.50 0.96 122.00 5.04 3.69
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 6.80 0.03 0.03
DDH12-22* 235.74 237.96 2.22 1.13 22.20 0.81 2.41
DDH12-22* 244.95 245.64 0.69 11.30 71.30 1.38 1.13
DDH12-23 204.20 206.89 2.69 7.66 82.58 3.44 6.30
DDH12-24 211.44 213.55 2.11 9.79 22.96 0.78 1.81
DDH12-24 217.83 218.70 0.87 6.25 41.68 0.87 0.39
DDH12-25 218.69 220.68 1.99 6.84 36.46 1.51 2.20
DDH12-28 245.06 247.65 2.59 2.45 16.79 0.63 1.20
DDH12-28 256.45 258.44 1.99 4.32 9.08 0.32 0.10
DDH12-30 253.33 255.20 1.87 3.47 51.00 0.64 3.66
* previously reported; ** re-stated from subsequent screen metallic assays

Area C

Ten holes were completed in Area C covering an area 150 metres long by 250 metres down dip on the Main Zone, in the far southeast end of the deposit. The Main Zone continues throughout this area. Main Zone intercepts ranged from 0.42 metres to 5.82 metres of typical Main Zone mineralization. The length weighted average gold grade for all intercepts (excluding DDH12-14) is 4.67 g/t Au (Table 3).

Table 3: 2012 Intercepts in 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
DDH12-14* 161.67 162.31 0.64 1.24 1.60 0.02 0.01
DDH12-15* 103.3 109.12 5.82 4.20 14.15 0.31 0.51
DDH12-16* 136.1 137.4 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
DDH12-36 176.12 176.91 0.79 15.60 51.60 1.65 2.44
DDH12-37 104.96 105.38 0.42 6.13 156.00 3.97 4.05
DDH12-40 98.57 100.19 1.62 6.50 30.48 0.71 1.48
DDH12-41 129.24 133.30 4.06 2.88 36.79 1.56 1.40
* previously reported

Area D

Three holes were completed in Area D covering an area 80 metres long by 100 metres down dip on the Main Zone. Intercept widths ranged from 1.39m to 1.41m of typical Main Zone mineralization. The length weighted average gold grade for all intercepts is 4.69 g/t Au (Table 4).

Table 4: 2012 Intercepts in Area D
Hole ID From
(m)
To
(m)
Length
(m)
Au
(g/t)
Ag
(g/t)
Pb
(%)
Zn
(%)
DDH12-31 121.57 122.96 1.39 8.52 78.02 2.89 3.01
DDH12-33 125.88 127.29 1.41 3.65 41.91 2.59 2.53
DDH12-34 180.15 181.55 1.40 1.92 16.63 0.61 1.00

Area E

Three holes were completed in Area E covering an area 100 metres long by 80 metres down dip on the Main Zone. This area fills in the gap between Area F and the area of the previous resource estimate. The length weighted average gold grade for all intercepts in this area is 5.78 g/t Au (Table 5).

Table 5: 2012 Intercepts in Area E
Hole ID From
(m)
To
(m)
Length
(m)
Au
(g/t)
Ag
(g/t)
Pb
(%)
Zn
(%)
DDH12-42 237.13 240.33 3.20 6.00 26.24 1.12 8.00
DDH12-44 260.87 262.48 1.61 6.17 14.68 1.04 4.86
DDH12-45 222.63 223.03 0.40 2.00 51.80 0.25 0.68
DDH12-45 233.99 234.35 0.36 7.26 35.70 0.30 0.07
DDH12-45 238.66 239.15 0.49 0.34 23.80 1.68 10.65
DDH12-45 242.98 245.08 2.10 3.68 31.40 1.74 2.31
DDH12-45 254.25 255.17 0.92 8.29 31.49 1.56 0.46
DDH12-45 262.36 262.63 0.27 28.90 80.10 2.34 2.50
DDH12-45 271.17 271.94 0.77 3.34 26.90 0.56 0.22

Area F

Seven holes were completed in Area F covering an area 180 metres long by 180 metres downdip on the Main Zone. Main Zone intercept widths ranged from 0.93 metres to 6.65 metres of typical Main Zone mineralization. The length weighted average gold grade for all intercepts in this area is 5.59 g/t Au (Table 6).

Table 6: 2012 Intercepts in Area F (Main Zone)
Hole ID From
(m)
To
(m)
Length
(m)
Au
(g/t)
Ag
(g/t)
Pb
(%)
Zn
(%)
DDH12-01* 149.58 151.22 1.64 2.94 28.3 1.46 1.94
DDH12-02* 182.57 183.95 1.38 2.69 41.7 1.84 1.82
DDH12-03* 75.56 76.89 1.30 6.17 23.6 1.20 3.08
DDH12-04* 139.90 146.55 6.65 5.23 34.6 0.90 2.18
DDH12-05* 187.49 189.62 2.13 11.73 85.6 2.87 2.92
DDH12-06* 198.68 199.61 0.93 5.28 62.1 3.08 2.77
DDH12-07* 246.25 247.95 1.70 3.90 23.4 1.23 3.27
* previously reported

These same seven holes intercepted multiple Yellowjacket (silver-lead-zinc) zones further up in the holes with intercept widths ranging from 1.04 metres to 3.25 metres (Table 7).

Table 7: 2012 Intercepts in Area F (Yellowjacket Zone)
Hole ID From
(m)
To
(m)
Length
(m)
Ag
(g/t)
Pb
(%)
Zn
(%)
DDH12-01* 103.81 105.50 1.69 92.0 3.40 13.50
DDH12-01* 115.86 117.46 1.60 98.0 4.90 8.80
DDH12-02* 116.41 117.5 1.09 52.2 3.07 16.91
DDH12-02* 129.16 132.28 3.12 99.4 4.75 14.51
DDH12-03* 93.68 95.19 1.51 51.7 1.88 13.79
DDH12-03* 103.89 105.92 2.03 75.9 3.91 14.53
DDH12-04* 120.83 121.92 1.09 59.9 3.28 4.66
DDH12-05* 97.83 100.43 2.60 58.0 2.20 3.50
DDH12-05* 131.94 134.28 2.34 31.3 1.20 10.44
DDH12-06* 103.91 105.93 2.02 106.7 2.90 10.57
DDH12-06* 130.16 133.62 3.46 33 1.80 4.80
DDH12-06* 143.35 146.4 3.05 43.3 2.75 9.40
DDH12-06* 158.05 159.09 1.04 78.3 3.05 3.29
DDH12-07* 179.78 181.05 1.27 119.0 7.90 7.70
DDH12-07* 197.2 200.45 3.25 100.0 5.50 2.60
* previously reported

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 are very pleased with the success of the program. It has increased the strikelength of the Main Zone deposit from 800 metres to 1150 metres and added an additional 120 metres locally to the downdip extent of the Main Zone. Modeling is underway in preparation of an updated resource estimate for early this fall."

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.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

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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