Cusac Gold to merger with Hawthorne Gold

Hawthorne Gold Corp. and Cusac Gold Mines Ltd. announce the approval by Cusac shareholders and debentureholders of the statutory plan of arrangement pursuant to which, among other things, Hawthorne will acquire all of the outstanding common shares and debentures of Cusac. At a meeting held today, Cusac Shareholders and Debentureholders voted in favour of the Arrangement by 93% and 100%, respectively.

Today is an historic day for Cusac and Hawthorne shareholders; together we are creating an emerging British Columbia gold producer with near term production and longer term development, said Richard Barclay, President and CEO of Hawthorne. The three British Columbian gold projects provide geographical synergies and we’ve built a cohesive technical and management team that will be focused on creating value for Cusac and Hawthorne shareholders in the near and long term.

I could not have hoped for better partners than the Hawthorne team to move Cusac’s vision for the Cassiar Gold Camp forward, said David H. Brett, President and CEO of Cusac. The combined company will be well positioned to leverage its high quality portfolio of gold assets and chart an aggressive plan for growth.

Under the terms of the Arrangement, shareholders of Cusac will receive one (1) common share of Hawthorne in exchange for each nineteen (19) Cusac common shares. In addition, for each two (2) dollars of principal and interest owed to each Cusac Debentureholder, Hawthorne will issue one (1) Hawthorne common share. On closing of the Arrangement, Hawthorne will issue approximately 6.15 million common shares to Cusac Shareholders and Debentureholders and Hawthorne will have approximately 22.5 million common shares issued and outstanding. Cusac stock options and warrants will be assumed by Hawthorne, using the effective nineteen (19) to one (1) ratio.

Completion of the Arrangement remains subject to certain conditions set out in Cusac’s Information Circular. Cusac and Hawthorne are diligently working to complete the Arrangement, which is expected to close within the next few weeks. Cusac’s application to the British Columbia Superior Court of Justice to obtain the final court order approving the Arrangement is scheduled for March 25, 2008. There can be no assurance that the Arrangement will be completed as proposed or at all.