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Hana Mining Reports Zone 3 Drilling Results at Ghanzi Copper-Silver Project

Hana Mining Ltd. (TSX VENTURE:HMG)(FRANKFURT:4LH) has announced drilling results from the completion of the initial reconnaissance drilling at Zone 3, which is located approximately 5 km to the northwest of the Banana Zone, at the Ghanzi sediment hosted Copper-Silver Project in Botswana.

The Reverse Circulation (RC) drilling results at Zone 3 (between sections 50300 to 52400 and 54800 to 55400) establish an initial mineralized strike length of approximately 4.0 kilometres. The footwall contact identified from recent airborne magnetic data, shows that potential copper-silver mineralization for this zone remains open along strike, for at least 40 kilometers towards the northeast, the southwest and at depth.

Initial reconnaissance RC drilling was also carried out at Zone 5 and Zone 9, located approximately 70 kilometers northeast of the Banana Zone. Drilling at both zones intersected copper-silver mineralization (Figure 1). Given the encouraging results at Zones 5 and 9, Hana intends to carry out more drilling at these areas in 2011.

Highlights of recent drilling results:

  • Drilling at Zone 3 established an initial strike length of approximately 4.0 kilometres between section lines 50300 to 52400 and 54800 to 55400 (Figure 2).
  • At Zone 3, Intercepts of 0.86% Cu and 9.0 g/t Ag over 7.0 metres (including 3.52% Cu and 47.0 g/t Ag over 1.0 metre) in hole HA-508-R, 0.76% Cu and 8.0 g/t Ag over 6.0 metres (including 3.51% Cu and 42.0 g/t Ag over 1.0 metre) in hole HA-462-R, 0.50% Cu and 6.0 g/t Ag over 9.0 metres (including 2.28% Cu and 32.0 g/t Ag over 1.0 metre) in hole HA-443-R, and 0.27% Cu and 3.0 g/t Ag over 14.0 metres (including 1.21% Cu and 17.0 g/t Ag over 1.0 metre) in hole HA-493-R.
  • Copper-silver mineralization at Zone 3 is open along strike to the northeast, southwest and at depth.
  • In the Initial reconnaissance drilling near Zones 5 and 9 the drilling encountered anomalous concentrations of copper at the siltstone-sandstone contact. Hana intends to follow up on these results in 2011.
  • Total drilling for the Ghanzi Project in 2010 is approximately 66,700 metres.

Discussion of Drilling Results at Zone 3:

During the second half of 2010 Hana carried out an inaugural drilling campaign at Zone 3, which is located approximately 5 kilometres to the northwest of the Banana Zone, targeting coincidental soil geochemical and airborne geophysical anomalies (Figure 2). At this zone Hana drilled 30 RC drill holes of which 23 intersected significant copper-silver mineralization. These 23 holes have defined an initial mineralized strike length of approximately 4.0 kilometres. Hana's geologists estimate that Zone 3 could have a mineralized strike length of at least an additional 40 kilometres.

Like the Banana Zone, there are likely to be areas within Zone 3 that have thick widths of high-grade copper-silver mineralization. In early 2011 Hana will resume drilling at Zone 3 with the goal of identifying areas that have the potential to host higher grade copper-silver mineralization.

Discussion of Drilling Results at Zone 5:

The drilling campaign at Zone 5 was focused on two areas located approximately 5 kilometres to the southeast and southwest of the Zone 5 deposit (NI 43-101 Compliant Inferred Resources of 13.4 million tonnes grading 1.66% Cu and 12.1 g/t Ag). This drilling program was carried out in the search for copper-silver mineralization along the siltstone-sandstone contact (Figure 3).

One hole, HA-536-R intercepted 23 metres of anomalous copper-silver mineralization along the favorable geological contact between the hanging wall siltstones and footwall sandstones. Hana's geologists believe that this anomalous mineralization could be part of another zone of mineralization.

Hana intends to resume drilling at Zone 5 in 2011 and test the area surrounding drill hole HA-536-R and to identify other areas of copper-silver mineralization.

Discussion of Drilling Results at Zone 9:

Early stage reconnaissance RC drilling was also carried out a Zone 9 which is located approximately 13 kilometres south of the Zone 5 deposit (Figures 1 and 3). RC holes were drilled targeting coincidental soil geochemical and geophysical anomalies. Copper mineralization was identified along the footwall contact between the sandstones and siltstones during the initial drilling program. Hana's geologists are confident that with more drilling another discovery may be made at Zone 9.

Development Update:

The following engineering and consultation activities are ongoing to fulfill the goal of completion of a PEA by Q1 2011:

  • Preliminary mine open pit modeling has been carried out using the April 2010 resource as a basis to define the parameters to be used. A revised model will be completed after the 2010 drilling has been incorporated;
  • Resource modeling is progressing as expected;
  • Metallurgical (column leaching) work, which is being carried out by Metcon Research in Tucson, Arizona, on the Chalcocite Zone is ongoing. Results are expected to be available by the end of the year;
  • Field work for water exploration is ongoing;
  • Further details on the Ghanzi Project can be found on Hana's updated website.

Hana Mining's CEO and Chairman, Marek Kreczmer, commented as follows:

"We are very pleased with the initial drilling results from Zone 3 which has the potential to be the source of additional ore material for the proposed Banana Zone mill. With more drilling we expect that we should be able to delineate areas within Zone 3 that have thick and consistent high-grade horizons of copper-silver mineralization similar to many areas discovered within the Banana Zone. We are also encouraged with the initial results at Zones 5 and 9. More exploration work outside of the Banana Zone will be conducted in 2011."

Qualified Person and Quality Assurance/Quality Control

The drilling program and results are reviewed and approved by Vivian Park, PGeo., Senior Geologist/Database Manager for Hana. She is the qualified person as defined in NI 43-101 and has reviewed the technical information in this press release.

For RC drilling, a 35-40 kilogram bulk sample is collected from the cyclone discharge at one meter intervals. Bulk samples that have been designated as mineralized are split 75/25; 25% of the bulk sample is retained as a replica archive. Samples for assay of approximately 1.5 kilograms are extracted from the replica sample. The remainder of the bulk sample is reclaimed at the drill site.

All samples are bagged, stapled, and assembled into labelled and sealed bulk bags. They are transported to in secured wooden crates and shipped to Scientific Services Laboratory in Cape Town, South Africa. The analytical method for total Cu, Pb, and Zn is acid digestion read by Atomic Absorption Spectroscopy ("AAS"); a separate digestion is performed for Ag. The analytical method for acid soluble Cu is 5% sulphuric acid cold leach followed by AAS. Mo is read by XRF on a pressed powder pellet.

About Hana Mining's Ghanzi Copper-Silver Project in Botswana:

The Ghanzi Project is located in the center of the Kalahari Copper Belt in northwestern Botswana. The Ghanzi property covers 2,169 sq Km, and contains sediment-hosted copper-silver deposits with a demonstrated cumulative tested strike length of 70 kilometres. This favorable geology extends over an estimated strike length of 600 kilometres. Hana Mining released results of its most recent NI 43-101 compliant resource estimate for the Ghanzi Project on April 21, 2010, announcing an inferred mineral resource of 3.9 billion pounds of copper and 62.1 million ounces of silver from 177 million tonnes. This mineral resource estimate consists of 73.5 million tonnes grading 1.5% Cu and 19 g/t Ag in the Banana Zone, 13.4 million tonnes grading 1.7% Cu and 12 g/t Ag in Zone 5, 6.3 million tonnes grading 1.5% Cu and 7 g/t Ag in Zone 6; all at a cut-off grade of 0.75% Cu. Also included is 83.6 million tonnes grading 0.46% Cu and 3.6 g/t Ag at a cut-off grade of 0.30% in the Chalcocite Zone.

The Banana Zone exhibits certain areas of higher grade Cu and Ag mineralization, particularly between sections 49700 to 52000 on the North limb and sections 63000 to 71000 on both the North and South limbs, which represent an opportunity to locate starter pits and mine initial tonnages at higher than average grades. These higher grade pockets tend to be well within open pit depth parameters and represent opportunities to improve early cash flow and overall returns in development.

The project will benefit from proposed rail and power infrastructure expansions, along with proximity to local population centers and workforce. A feasibility study is currently underway (funded by the World Bank and the governments of Botswana and Namibia) to support completion of a rail line link that would connect Botswana with the Namibian port of Walvis Bay, on the Atlantic coast. The closest existing railhead to port is at Gobabis, in Namibia, approximately 550 km from our property. Construction has begun on the 600MW expansion of the government-owned Moropule Power Plant, having secured US$825 million project funding in May 2009. The Ghanzi Copper- Silver Project is currently accessed by the paved Trans-Kalahari highway, which passes within 15 km of the property.

Source: Hana Mining Ltd.

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