Gold Hawk signs lead-zinc offtake for Coricancha

Vancouver – Gold Hawk Resources (CGK-V, CGHRF-O) has inked a five-year deal to sell lead-zinc concentrates produced from its Coricancha gold-silver-lead-zinc mine located 90 km east of Lima in west-central Peru.

The offtake agreement with concentrate dealer and base metals trader BHL Peru covers all lead and zinc output from the mine from 2007 to 2012 under what Gold Hawk reports as very competitive commercial terms.

Coricancha hosts proven and probable reserves of 436,000 tonnes grading 5.1 grams gold per tonne, 161 grams silver per tonne, 2.7% lead, 2.5% zinc and 0.3% copper. A further 651,000 tonnes of measured and indicated resource averaging 6.5 grams gold, 200 grams silver, 3.2% lead, 3.8% zinc and 0.4% copper was also recently reviewed in the polymetallic deposit.

Previously called Tamboraque, the mine was acquired by Gold Hawk in early-2006 for US$12 million.

In late-2006 the Peruvian Government lifted a 2002 stop work order on the concentrator at Coricancha allowing the company to commence commissioning of operation in February 2007 with the first lead-zinc concentrates produced. Gold Hawk expects the mine to be in full production, at the rated capacity of 600-tonnes-per-day, in April.

Historically, recoveries came in at about 68% for gold, 64% for silver, lead 70% and zinc at 58%. The company plans to add a dense media separation plant to the circuit in late-2007 to boost recoveries to expected levels of 80% for gold, silver 93%, lead 90% and zinc 92%.

The mine has 37 previously developed stopes and a modern 600-tonne-per-day concentrator with a BIOX gold-silver recovery circuit.

Infrastructure is good with paved road and rail to the front gate plus an adjacent generating plant and it is also located within 70 km of two smelters.

Metal mineralization at Coricancha occurs in hydrothermal, low-sulphidation polymetallic vein structures within andesites. The vein sets average about 0.6 metre in width but swell to 2 metres in sections. Pyrite, sphalerite, silver-rich galena, chalcopyrite, arsenopyrite, tennandite, tetrahedrite, native gold, native silver and quartz are the predominant minerals in the veins. Gold is primarily hosted within the arsenopyrite and is mostly refractory due to inclusion and encapsulation.

Shares of Gold Hawk rose 11% on news of the offtake deal to close up 6 at 59 apiece on strong volume. The stock has a 52-week trading range of 24-to-65.