West Hawk Development Corp.
TSX VENTURE : WHD
FRANKFURT : H5N

West Hawk Development Corp.

May 13, 2008 09:56 ET

West Hawk and FEV Energy to Acquire Coal Mine and Coalbed Methane Operation

DENVER, COLORADO--(Marketwire - May 13, 2008) - West Hawk Development Corp. ("West Hawk") (TSX VENTURE:WHD)(FRANKFURT:H5N) (the "Company") is pleased to announce that it has entered into a letter of intent with FEV, a private Denver, Colorado based Energy Company to acquire and develop a coal mine and coalbed methane gas operation in Oklahoma and Arkansas.

Currently both companies, West Hawk and FEV, are in a due diligence process to evaluate the best mining and business alternatives for the coal property. As soon as this process is satisfactorily completed, both companies will start to develop the coal mine and coal bed methane extraction system. The property has existing infrastructure with access to rail, paved roads, water, and power on site. Water transportation is nearby and all permits are in place. The product has a long history of being used in the North American and International market and can be taken to market by either rail or water.

The coal resource has produced high quality metallurgical and thermal coal on a continuous basis since the early 1900's. Farrell-Cooper Mining Company ("Farrell"), a private company based in Oklahoma and Arkansas, has mined the Hartshorne coal seam with surface mining techniques since the 1940's. The low volatile, low moisture, 6 to 8% ash, and 1% sulfur product with in excess of 13,000 Btu per pound coal was processed through a preparation and processing plant and supplied to the high demand export and domestic metallurgical coal market.

Upon completion of a satisfactory due diligence:

- Both parties will incorporate a new limited liability company (LLC) in which West Hawk will own one third, and FEV will own two thirds

- West Hawk will manage the new company and manage the coal and coal bed methane extraction operation(s)

- FEV will manage the gas gathering and gas sales operations

- FEV and its associates are committed to provide project financing to the new LLC

- West Hawk will commission a CNI Report to provide a potential resource estimate

Farrell Cooper Mining Company specializes in surface mining and is selling the property since it will require underground mining techniques. Farrell mined this property to a highwall and West Hawk will now use underground techniques to mine the remaining coal seam as an underground resource and extract the gas in an integrated fashion.

"We are extremely pleased to work with FEV Energy, as the vision of both companies is very similar in terms of bringing clean energy to the world. They have an outstanding group of people and both teams compliment each other in terms of operations and financial capabilities. West Hawk also sees this move as strategic to our British Columbia, Groundhog project, as the two coals can compliment each other in the PCI, metallurgical, and gasification market," said Wm. Mark Hart, President and CEO of West Hawk Development Corp.

"We have been evaluating various companies to develop this underground deposit as we completed the surface mining portion of the property and we look forward to a long working relationship with West Hawk and FEV as together these companies have the operating, technical and financial strength to create substantial value," said William J. Cooper, President of Farrell Cooper Mining Company.

This coal can be used in the metallurgical market, the steam market and for gasification to Coal-to-Liquids, Coal-to-Gas, or Coal-to-Power. West Hawk proposes to extract gas from the coal seam and associated strata and distribute to nearby pipelines for distribution to the market. Subject to due diligence, it appears that the resource may be able to support three separate mining operations, with a 14 mile long outcrop.

"West Hawk Development has been seeking a financial partner to back its experienced mining operation team. West Hawk's operational capabilities and FEV's financial strength have helped the team win this opportunity," said Richard F. Braun, director at West Hawk.

"The companies were up against some very large players in the bidding process, but we have won the opportunity and we are very pleased," said Roger A. Baer, CFO of West Hawk.

"With existing permits, installed infrastructure, control over the gas rights, and an extremely hungry market for this product, we can bring this product to market much quicker than the typical operation," stated Dr. Jinsheng Chen, President of Asian operations for West Hawk.

"The Arkoma coal region has provided energy for 100 years building America, making steel, and providing a superior fuel for heat and electricity. West Hawk looks forward to working with our partners to build a world-class clean energy system on this superb property," stated Dr. Andrew P. Schissler, Executive Vice President of Engineering, West Hawk.

"Dr. Schissler is leading the due diligence and development team through to production, at which time, the project will be handed over to the operational team," stated Gonzalo Torres Macchiavello, President of North America Operations, West Hawk.

On behalf of the board of directors,

Dr. Wm. Mark Hart, President and Chief Executive Officer

About the Company: West Hawk Development Corp. is focused on providing valuable, high-demand clean energy products from a variety of sources. Assets include the Figure Four natural gas property located in the Piceance Basin, Colorado, being developed under a drilling and development agreement; the Groundhog coal property located in northwest British Columbia; the Tulita coal property in the Northwest Territories; and the Ellesmere Island, Nunavut Territory coal property.

Cautionary Note: This report contains forward looking statements, particularly those regarding cash flow, capital expenditures, coal quality and investment plans; being historic in nature, cannot be verified by the Company, do not comply with modern reporting standards (NI 43-101), and therefore should not be relied upon. Resource estimates, unless specially noted, are considered speculative. The Company has filed a National Instrument 51-101 Report on the Figure Four property. The Company has filed National Instrument 43-101 Reports for each of the Tulita coal property in the Northwest Territories, the Nunavut Coal property and the Groundhog Coal property. Any and all other resource or reserve estimates are historical in nature, and should not be relied upon. By their nature, forward looking statements involve risk and uncertainties because they relate to events and depend on factors that will or may occur in the future. Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, but not limited to, general economic factors. Cautionary note to U.S. investors: The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as "reserves" unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.

The TSX Venture Exchange has not yet reviewed and does not take responsibility for the adequacy or accuracy of the content of this news release.

Contact Information

  • West Hawk Development Corp.
    Dr. Wm. Mark Hart
    President and Chief Executive Officer
    (303) 524-1424
    (303) 524-1285 (FAX)
    Website: www.westhawkdevelopment.com