News Release
west hawk to acquire 3 near term production metallurgical coal mines in us
agency agreement signed to raise a minimum of us$30 million
September 4, 2008 - Denver, Colorado, USA: West Hawk Development Corp. (TSX-V: WHD) ("West Hawk") is pleased to announce that it has entered into 3 Letters of Intent ("LOI") with 3 different parties whereby West Hawk intends to acquire 3 near term production Metallurgical Coal mines in Oklahoma/Arkansas, United States. Through these LOIs, West Hawk will acquire 85% of the Heavener Mine; 50% of Coal Creek Minerals and 100% of Rock Island.
These strategic acquisitions will provide West Hawk with near term metallurgical coal production and confirm it as a focused coal developing and mining company with an exceptional growth profile. The business combination provides West Hawk with the following benefits:
About the LOIs and related assets:
Heavener Mine's highlights. Under the agreed terms West Hawk will own 85% and FEV, a private Denver, Colorado based energy company, will own 15% of a jointly created NewCo. The NewCo will own 100% of the Heavener Mine. Within 60 days from the closing FEV has the right to acquire an additional 15% by paying US$10 million cash to West Hawk. West Hawk will be responsible to arrange approximately US$85 million necessary to put the mine into production. West Hawk is currently in discussions with several parties to provide the necessary project finance.
A NI43-101 and SEC compliant feasibility study and resource estimate was commissioned by West Hawk to WEIR International in April 2008. The NI43-101/SEC Report by WEIR will be released in accordance with TSX Venture regulations. Heavener Mine Highlights (Company Mine Plan and WEIR NI43-101 August 2008 - reviewed by Tom A. Tveten, Chief Geologist of WEIR, an Independent Qualified Person):
West Hawk has designed a preparation and processing plant that will serve the production of the above mentioned assets.
In addition, West Hawk has entered into an agency agreement with Union Securities Ltd., as lead agent, to raise up to C$35 million. The capital will be used to finance the above mentioned acquisitions, initial mine development and for general corporate purposes.
Commenting on the transaction, Wm. Mark Hart, President and CEO of West Hawk Development said, "These acquisitions solidify our corporate strategy to mine and market high grade metallurgical coal for worldwide customers".
On behalf of the Board of Directors,
"Wm. Mark Hart"
Wm. Mark Hart,
President and Chief Executive Officer
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.
About the Company: West Hawk Development Corp. is focused on providing valuable, high-demand 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 located in the Northwest Territories; and the Ellesmere Island, Nunavut Territory coal property.
Cautionary Note: This news release contains forward looking statements, particularly those regarding cash flow, capital expenditures and investment plans. Resource estimates, unless specially noted, are considered speculative. With regards to Rock Island and Coal Creek Minerals, a qualified person has not done sufficient work to classify the historical estimate as current mineral resources, the issuer is not treating the historical estimate as current mineral resources and the historical resources should not be relied upon. 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 Groundhog coal property in British Columbia, the Tulita coal property in the Northwest Territories, and the Nunavut 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 and development 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.
These strategic acquisitions will provide West Hawk with near term metallurgical coal production and confirm it as a focused coal developing and mining company with an exceptional growth profile. The business combination provides West Hawk with the following benefits:
- Near Term Production Mines. Heavener Mine approximately 18 months to production; Coal Creek Minerals and Rock Island approximately 6 to 10 months to production after financing has been arranged.
- Significant Expansion Opportunities. Heavener Mine is designed to allow significant capacity expansion.
- Significant Resource Base. Heavener Mine Measured and Indicated resources of approximately 60 million tons (WEIR NI43-101) and inferred resources of approximately 138 million tons (WEIR NI 43-101). Coal Creek Minerals resources of 20 million tons (John T. Boyd due diligence review of underground feasibility report - 3097.1 August 2005 - SEC compliant) and Rock Island historical resources (non 43-101) of approximately 20 million tons.
- Local Strategic Partnership. Farrell Cooper Mining Company will market all the Heavener and Rock Island coal production domestically and West Hawk will market all the coal production internationally.
About the LOIs and related assets:
Heavener Mine's highlights. Under the agreed terms West Hawk will own 85% and FEV, a private Denver, Colorado based energy company, will own 15% of a jointly created NewCo. The NewCo will own 100% of the Heavener Mine. Within 60 days from the closing FEV has the right to acquire an additional 15% by paying US$10 million cash to West Hawk. West Hawk will be responsible to arrange approximately US$85 million necessary to put the mine into production. West Hawk is currently in discussions with several parties to provide the necessary project finance.
A NI43-101 and SEC compliant feasibility study and resource estimate was commissioned by West Hawk to WEIR International in April 2008. The NI43-101/SEC Report by WEIR will be released in accordance with TSX Venture regulations. Heavener Mine Highlights (Company Mine Plan and WEIR NI43-101 August 2008 - reviewed by Tom A. Tveten, Chief Geologist of WEIR, an Independent Qualified Person):
- High grade metallurgical coal having British Thermal Units ("Btu") levels in excess of 14,400 Btu
- Measured and Indicated resources of approx. 60 million tons (leased in situ)
- Inferred resources of approximately 138 million tons
- Production is planned to start in 6 to 10 months
- Resources of approximately 20 million tonnes (John T. Boyd due diligence review of underground feasibility report - 3097.1 August 2005 - SEC compliant)
- West Hawk has agreed to file the NI43-101 report on SEDAR when ready
- Production is planned to start in 6 to 10 months
- Historical resources of approximately 20 million tons (Company report non 43-101)
- West Hawk has agreed to file the NI43-101 report on SEDAR when ready
West Hawk has designed a preparation and processing plant that will serve the production of the above mentioned assets.
In addition, West Hawk has entered into an agency agreement with Union Securities Ltd., as lead agent, to raise up to C$35 million. The capital will be used to finance the above mentioned acquisitions, initial mine development and for general corporate purposes.
Commenting on the transaction, Wm. Mark Hart, President and CEO of West Hawk Development said, "These acquisitions solidify our corporate strategy to mine and market high grade metallurgical coal for worldwide customers".
On behalf of the Board of Directors,
"Wm. Mark Hart"
Wm. Mark Hart,
President and Chief Executive Officer
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.
About the Company: West Hawk Development Corp. is focused on providing valuable, high-demand 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 located in the Northwest Territories; and the Ellesmere Island, Nunavut Territory coal property.
Cautionary Note: This news release contains forward looking statements, particularly those regarding cash flow, capital expenditures and investment plans. Resource estimates, unless specially noted, are considered speculative. With regards to Rock Island and Coal Creek Minerals, a qualified person has not done sufficient work to classify the historical estimate as current mineral resources, the issuer is not treating the historical estimate as current mineral resources and the historical resources should not be relied upon. 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 Groundhog coal property in British Columbia, the Tulita coal property in the Northwest Territories, and the Nunavut 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 and development 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.
Contacts
North America
West Hawk Development, 303-524-1424
Email: news@westhawkdevelopment.com