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HAWKEYE's corporate philosophy is to build strong asset value through the exploration, development and ultimate production of its various mineral projects. To this end, the company follows an aggressive acquisition strategy for low-cost high potential mining opportunities worldwide that offer a medium to high Price/Earnings multiple and early returns on investment. Our aim is to provide minimum risk through diversification and increase revenues and opportunities for significant growth.

 

Hawkwye Gold & Diamonds Inc.  HKO   (TSVX)

San Carlos Gold Copper Project, Tamualipas.

The Company is issuing this news release to familiarize our shareholders with the location, access, geological setting, infrastructure and climate conditions of our San Carlos Gold-Copper-Silver Project (the 'Property'), which the Issuer owns an option to acquire up to a 60% interest and has received TSX Venture Exchange approval for the acquisition on March 15, 2004. The San Carlos Property totals approximately 11,000 hectares and is considered highly prospective for gold, copper and silver and has been recognized as having a geological setting similar to Freeport-McMoran's world class Grasberg deposit in Indonesia.

Location and Access

The Property is located in the State of Tamaulipas, in northeastern Mexico, near the town of San Carlos. Monterrey, a major industrial city, is situated approximately 220 kilometers north of the San Carlos Project. The capital city of Tamaulipas, Ciudad Victoria, is situated approximately 120 kilometres south of San Carlos. From Ciudad Victoria, access is via major paved roads to the town of San Carlos, a distance of approximately 150 kilometres, then for an additional 45 kilometres by good all weather roads to the San Carlos Project.

Geology

The San Carlos property is located within a north-south belt of alkalic igneous rocks, typical of those associated with back-arc environments, known as the Eastern Alkalic Province (EAP). A literature review of such rocks in east-central Mexico led to the recognition of the San Carlos area. The intrusive rocks of the San Carlos project core a 25 kilometre long prominent ridge, called the Sierra San Carlos, which the claims cover. At the north end of the ridge, in the San Jose district, the intrusive rocks are associated with skarn and copper-gold porphyry alteration and mineralization. High-grade skarn bodies were mined historically in the San Jose district.

It is believed that the geologic setting of the alkalic rocks of the EAP is very similar to that of alkalic rocks that host deposits such as the world class Lihir and Porgera gold deposits of Papua New Guinea, the Cadia and Goonoombla porphyry copper-gold deposits in Australia, Freeport-McMoran's Grasberg and Rio Tinto's Bingham Canyon porphyry copper-gold deposits of West Papua, Indonesia and Utah, USA, respectively. The geologic settings of both the Grasberg and Bingham Canyon deposits are very similar to that of the San Jose copper-gold skarn district, with shallowly emplaced alkalic intrusive complexes intruding folded limestones, and associated with copper-gold porphyry and skarn style mineralization. As an example of the quality of this type of system, Freeport-McMoranís Grasberg-Ertsberg copper-gold porphyry and skarn deposits host the largest gold and third largest copper reserves in the world which include contained metals totaling 108.7 million ounces of gold and 80.2 billion pounds of copper. The Grasberg 2003 full-year copper ore grades averaged 1.09 per cent and full-year 2003 ore milled averaged 1.54 grams per ton of gold.

The San Jose area covers an irregular area of outcrop of a multi-phase intrusive body roughly 4.5 by 3 kilometres in size. The intrusive is associated with several skarn bodies developed in limestone country rock. These skarn bodies were mined around the time of the turn of the century by a British concern, with very limited production later in the century. Historic reports indicate that the ores graded several percent copper and were accompanied by high gold grades. Between the years 1934 and 1944, 4,067 Tons of direct shipping ore averaging 11.24 grams per ton gold and 4.02 % copper were recorded to have been produced from a small scale operation. Past work includes fifteen grab samples from dumps, taken by a major company, averaged 2.58 grams/tonne gold, 15.4 grams/tonne silver and 2.99% copper. One of the highest samples from this work ran 14.25 grams/tonne gold, 100 grams/tonne silver and 7.70% copper. Work carried out to date in the San Jose area has identified large areas of anomalous soil geochemistry including areas of high Au-Ag-Cu-Zn-As-Mn values in soils and rocks in the vicinity of the contact between the intrusive and limestone country rock. These areas have had no previous work and are considered highly prospective for skarn ore bodies similar to that exploited historically in the San Jose district.

Local Resources and Infrastructure

The city of Monterrey, which has a population of 3 million people, is roughly a 3.5 hour drive south by paved roads to the town of San Carlos and the capital city of Ciudad Victoria, which has a population of 180,000 people, is about a 1.5 hour drive north to San Carlos, also by paved roads. At these centers all necessary supplies can by purchased. San Carlos has one motel of basic but very sanitary quality. Labor is abundant and can be found in San Carlos or from several neighboring villages.

Climate

The climate is arid and very hot. Temperatures range from lows in the winter of slightly below freezing to daytime highs greater than 35(C in the summer months. The duration and timing of the summer rainy season varies considerably, however rains generally are expected in the months of June, July and August. The Sierra San Carlos, which is the mountain range underlain by the intrusive complex, is covered in low bush and are high enough to be often surrounded by cloud. As a result light showers fall every one to two weeks feeding intermittent streams. The density of undergrowth varies with the seasons and abundance of precipitation.

Due to favourable climate conditions in northeastern Mexico HAWKEYE shareholders can look forward to the fact that work can be performed on the San Carlos Property year round.

Press Release 01April04