Hana Mining makes acquisition

| Friday March 5, 2010 00:00

 

Hana Mining will retain the Ghanzi copper/silver project, in Botswana, in which it currently owns 70 percent, with the remaining 30 percent interest under an exclusive right of acquisition from mining company Stellent. All mineral resources discovered to date by Hana Mining are located on the Ghanzi project.

The project is located in the centre of the Kalahari copper belt, in north-western Botswana. The property covers 2 200 km2 and contains sediment-hosted copper/silver deposits. This favourable geology extends over the entire strike length of 600 km.

The company will undertake a plan of arrangement with New Hana Copper Mining, a newly incorporated subsidiary of the company, and Hana Mining Botswana, an existing subsidiary of the company, where the company will spin out and transfer Hana Botswana to New Hana, with the intention of building a new base-metals company.

Hana Botswana holds 11 prospecting licences in Botswana, known as the Kuke property, comprising an area of 10 654 km2.These prospecting licences are outside the Ghanzi copper-silver project's prospecting licences, and there has been no exploration work conducted on the Kuke property yet.

The initial share ownership of New Hana will mirror the shareholder base of the company. There will be no change in the holdings of shareholders in the company and it will  determine a date of record for the arrangement, after receipt of all required regulatory, court and shareholder approvals.

From this effective date, under the terms of the arrangement, every ten common shares of the company will entitle the shareholders of record to receive one new common share of New Hana. It is expected that New Hana will then seek a stock exchange listing for its common shares on the TSX Venture Exchange and complete an equity offering to raise at least $500 000 to further explore and develop the Kuke property.

Hana management believes that separating its current assets into two companies will allow the accelerated exploration of the Kuke property independently by New Hana without dilution to the shareholders of the company in the more advanced Ghanzi project.

Further, Hana will continue to hold the Ghanzi project and New Hana will hold the Kuke property through Hana Botswana. The proposed reorganisation will provide greater market awareness of the company, New Hana, and its respective assets, and offer Hana Mining and New Hana increased flexibility to use and exploit their respective assets without unnecessary dilution to the other.

As part of the arrangement, it is proposed that New Hana will conduct a private placement of its securities to raise a minimum of $500 000 and a maximum of $1-million. These funds will be used for maintaining the Kuke property, conducting further exploration work, and meeting general working capital requirements.

As the Kuke property has not yet had any exploration work carried out on it, Hana Mining plans to conduct a work programme in the short term, including an initial aeromagnetic survey and preliminary soil sampling. The aeromagnetic survey is expectedto be completed in February 2010, the results of which will form the basis for a technical report.

The completion of the arrangement is subject to the fulfilment of a number of prior conditions, including exchange acceptance of the arrangement and the conditional listing of the New Hana common shares, the approval of the arrangement by the shareholders of Hana Mining, the approval of the Supreme Court of British Columbia and the completion of the New Hana financing.