Hawkeye Signs LOI for $4.5MM JV on Former Producer-Mexico

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 10, 2016) - Hawkeye Gold & Diamond Inc. (TSX VENTURE:HGO)(FRANKFURT:HGT) -

Hawkeye Gold & Diamond Inc. wishes to withdraw the Press Release dated November 5, 2016 in its entirety, at the request of IIROC, and replace it with the current release to be compliant with National Instrument 43-101. Investors are advised to disregard all statements made in the previous release regarding historical resource calculations. There are currently no reserves or resources on the La Cobriza Project, and exploration will be required to establish any reserves if present. There can be no assurance that any resources or reserves can be established on the Project or that if discovered that any such resources or reserves can be economically recovered.

Vancouver, British Columbia - HAWKEYE Gold & Diamond Inc. (the "Company" or "HAWKEYE") (TSX VENTURE:HGO)(FRANKFURT:HGT)(ISIN:CA42016R3027)(WKN:A12A61): is pleased to announce it has entered into a letter of intent (LOI) to earn a 50-per-cent interest in the La Cobriza Project for $4.5-million (U.S.) from an independent third party. This gold and silver project is located 125 kilometres northeast of Mazatlan and 150 km west-northwest of Durango City, Durango, Mexico, near the Tayoltita Mine of Primero Mining Corp. The Temehuaya claim, which forms part of the La Cobriza Project, is located approximately 25 kilometres east of Cobriza.

La Cobriza project highlights

• The Project lies in the centre of the historical rich San Dimas mining district where high-grade gold-silver veins were discovered around 1757 (Dahlgren, 1882). The district has produced an estimated 9.5 million ounces of gold and 750 million ounces of silver (Megaw 2004).

• High-grade Au-Ag low sulphidation epithermal veins have been intermittently mined on the Cobriza property and will be a primary exploration focus.

• The Project contains five concessions totaling approximately 854 hectares. There are four known mineral structures in the Cobriza group and five known mineral structures in the Temehuaya concession.

• A 40-tonne-per-day flotation mill, previously operational is located 1,000 metres from the mine.

• The flotation plant is located on one hectare of privately owned land. An option may be exercised in 2018 to purchase a total of 280 hectares including the aforementioned one hectare. The plant site was chosen due to the fact that beneficiation activities have always existed on-site since early last century. Therefore, this plant pre-existed the 1985 change in the mining law and is thus classified as an old plant and is "grandfathered". Under the old regulations a final permit may be more easily achieved.

•  Anecdotal historical reports represent that in Cobriza, high-grade pockets contained values between 4,000 and 6,000 grams per tonne of silver and five to 11 grams per tonne of gold at the heart/centre of the vein. High-grade pockets as high as 38,000 g/t Ag and 270 g/t Au have previously been encountered. According to the previous owner, production grades of between 600 and 700 g/t of Ag and 1.5 to 3 g/t Au were sustained throughout the previous production period.

• The reader is cautioned that none of these values have been verified and that the investor cannot rely upon this information.

• The Temehuaya area contains quartz veins and quartz veinlet stringer zones. Two of these are three to five m wide, and one reportedly reaches eight m. Legerman (1976) reported samples up to 2.6 g/t Au, 323 g/t Ag, 0.76 per cent zinc and 2 per cent copper. These veins are comparable to Tayoltita, and San Dimas district-style veins and represent current exploration targets as the Temehuaya area is undeveloped, possibly because infrastructure is poor.

Cobriza, an old Spanish mine, has undergone extensive work in both the early 1800s and the 20th century. More recently, it has been explored, but has also seen occasional production since 2006. The properties have not been explored systematically with modern methods such as diamond drilling. In 2006, the Mexican government financed ($40,000 (U.S.)) for a small study on the Cobriza area which suggested 12,000 tons with grades of 1.5 g/t Au and 622 g/t Ag. The reader is cautioned that these values have not been confirmed and therefore cannot be relied upon. Resampling under the currently anticipated exploration program will be necessary to confirm any tonnage or grade on the Cobriza target.

The first modern studies conducted on the mine were undertaken by Olagaray and Madero, who suggested a substantial tonnage potential. Multiple reports have since been written on the Project including Buen Paso 1996, FIFOMI, COREMI, Megaw (2004) and Sookochoff (2007).

Agreement Terms

Hawkeye Gold & Diamond Inc. may earn a 50-per-cent interest in the La Cobriza project by paying $4.5-million to the vendor. The LOI provides for a 45-day due-diligence period (DDP) allowing completion of a site visit and evaluation of the property. Due-diligence will include a detailed mapping and sampling exercise, a review of the processing plant, and an analysis of the cost of rehabilitating the plant. This work is expected to take three months. Upon Hawkeye electing to move forward with the property after the DDP, the terms and conditions of the LOI will be incorporated into a definitive option purchase agreement (DOPA) subject to TSX Venture Exchange approval. Upon the expenditure of $600,000, the company will secure the right to earn 50 per cent of net cash flow from the project. When HGO earns its 50-per-cent interest, the DOPA will transition into a standard mining JV agreement between the parties.

The payment schedule, in U.S. dollars, is as follows: **

1. $75,000 to be paid upon signing of the LOI;
2. $50,000 no later than Nov. 11, 2016;
3. $125,000 payment 30 days from signing the LOI;
4. $350,000 payment 45 days from signing the LOI (end of due-diligence period);
5. $350,000 after Toronto Stock Exchange acceptance for the DOPA, but no later than 75 days from signing of the LOI;
6. $350,000 after TSX acceptance for the DOPA, but no later than 105 days from signing of the LOI;
7. $250,000 after TSX acceptance for the DOPA, but no later than 135 days from signing of the LOI;
8. $500,000 after TSX acceptance for the DOPA, but no later than 180 days from signing of the LOI;
9. $450,000 after TSX acceptance for the DOPA, but no later than 270 days from signing of the LOI;
10. $1-million after TSX acceptance for the DOPA, but no later than one year and two months from signing of the LOI;
11. $500,000 after TSX acceptance for the DOPA, but no later than one year and six months from signing of the LOI; 
12. $500,000 after TSX acceptance for the DOPA, but no later than two years from signing of the LOI.

 ** Notes: Use of Proceeds

1. The amounts in sections 1, 2, 3 and 9 totaling $700,000 will be paid to the vendor.

2. The amounts in sections 4, 5, 6, 7, 8, 10, 11 and 12 totaling $3.8-million are designated for capital expenditures (capex) for work programs, upgrading and/or purchase of new mining equipment to advance the project.

Greg Neeld, President and Chief Executive Officer, commented: "While the La Cobriza project is early stage, the project has been a past producer. We are attracted by the reported historical grade, width and strike of the known mineralized structures, its proximity to a known high-grade Au-Ag deposit, and a mill that may be rehabilitated. Near-term gold and silver production for Hawkeye is consistent with our new corporate model for acquiring cash flow projects with blue-sky discovery upside. Cash flow positive projects can provide Hawkeye with the ability to self-finance projects, reduce dilution, and increase shareholder value."

Rex property Relinquishment

With regret, the company announces the return of the Rex property to the vendor and no longer owns an interest in the claims.

Hawkeye Website

Hawkeye Gold & Diamond is currently updating its website. For further information regarding Hawkeye and the La Cobriza project, please visit the company website.

Dr. S. A. Jackson, P.Geo., a Qualified Person under National Instrument 43-101, and independent from the Company has prepared, supervised the preparation of, or approved the technical content of this press release.

HAWKEYE GOLD & DIAMOND INC.

Greg Neeld

President & CEO

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Notes Regarding Forward Looking Statements

This News Release contains forward-looking statements. Forward-looking statements are statements that relate to future events. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our industry, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Issued: 16,398,231 shares