Hannan Metals (TSX-V: HAN) CEO Michael Hudson on the Commencement of Drilling at the Seismic-Defined Kilmurry Project in Ireland

February 7, 2019

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Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is Chairman and CEO of Hannan Metals (TSX-V: HAN)(OTC: HANNF), Mr. Michael Hudson. Michael, it's been a little bit. How are you sir?

Michael Hudson: I'm very well. Thank you, Gerardo. Lovely to be back.

Gerardo Del Real: Well, fingers crossed that it is discovery season. Hannan has commenced drilling at Kilmurry target in Ireland. There's a lot of nuances to the news that came out earlier today. I would love for you to provide some color and some context to the drilling program that's just commenced. I know that you were eagerly anticipating permit approval, obviously that has happened, and there's a drill turning.

Michael Hudson: Absolutely, Gerardo. It's exciting times, as they say. We all love having a drill returning and we just don't know what sits below. We will soon find out. Basically, in summary, we've done all the right things technically in Hannan. The share price is obviously not reflective of that today, but technically we have a project that we understand geologically, very strongly. The seismic work that we did over the last year has pulled apart the geology. This target we're drilling now, Kilmurry, is an outcome of that seismic survey.

We have a resource at Kilbricken that we extended a little bit, not enough. We got halfway to the tonnes we think to put some economics around a potential mine. That's still sitting there. But really in this market, it's only transformatory discoveries, big hits that will really move a stock, not incremental increases to tonnages that will get bigger in a small way, I suppose, or a slower way I should say.

This target at Kilmurry, it's one of the biggest faults defined in Ireland, a 750-meter throw which is three to four times the throw or the offset that we see at Kilbricken. It's all got context, it's what we call a ramp relay system, over 10 kilometers. Lots of smoke, lots of drill holes with mineralization in positions we wouldn't expect mineralization to form well. Then, the part of the sequence or the system where mineralization should form has never been tested, even though it's got all this smoke around it.

We're extending an existing drill hole that was drilled back seven or eight years ago by Lundin, the previous owners. They never tested the mineralized sequence with that hole and they had no context to understand why they couldn't hit that mineralized position, so they stopped the hole. But with the seismics it’s given us the context and put all that smoke into the story, the smoke of the mineralization, and we should know within the next three weeks. It'll take a week to get back down to the bottom of the hole, and then we need to extend it for a few hundred meters we estimate.

Gerardo Del Real: I want to provide a little context here because the fault system is massive. It exceeds 15 kilometers in length, according to the release, and out to 2 kilometers wide. That's a very, very large fault system.

Michael Hudson: It is, and before seismics became common over the last five or six years – and Ireland has had more seismics in hard rock exploration applied than any other jurisdiction in the world and we've been one of the leaders in that push in Ireland – we just had no ability to map these faults other than drilling. It's reflective of Navan. Navan is Europe's largest base metal mine, one of the world's larger base metal deposits.

This is the kind of fault system a deposit like that sits on. The scale and the size is reflective of what we see at Kilmurry. It's got all the hallmarks to be big if it is fertile. If those mineralizing fluids came into that position, and there's a lot of that smoke that I said that suggests that they have, but at what extent and concentration will only be determined by the drilling.

Sorry. I was going to say that the point around – my apologies for interrupting – that big scale is whether this one-hole test can really tell us what we want to. That's the challenge, I think. We've got high hopes for the system, but we need to be drilling the right spot. That's the upside or the risk, either way you want to look at it.

Gerardo Del Real: That comment provides a perfect segue into my speculation. I'm going to speculate, and I know you're probably not at liberty to say, comment if you wish, but I'm going to speculate that when you have a system that's as large as this and you understand as well as you do geologically, I have to believe that companies that also understand these types of systems have to be knocking on the door about the potential in the future to test some of the many targets.

I want to make sure that everybody understands that you're testing one target here, but this is a district-scale play. Any comments on that front, Mike?

Michael Hudson: No. Nice try, I suppose, Gerardo. It has a lot of people in Ireland excited. Those technical people who understand these systems are very excited, and are waiting to see. If the system is big, we should see some reflection of that in this drill hole. Whether it's alteration, mineralization, we hope it's massive mineralization. But once again, let's see.

It's only 8 kilometers from Kilbricken, or 8 to 9 kilometers. It's all part of our one coherent block and there are multiple targets to be drilled here. This is just the start.

Gerardo Del Real: Good job dancing, Mike. I appreciate it. I appreciate the commentary and I'm looking forward to having you on. You said hopefully three to four weeks from now, right? We should have a good indication, idea of which way this is trending.

Michael Hudson: Yeah. Well, it takes a week to get down to the bottom of the hole, and then a couple of weeks to drill those few hundred meters, and then of course, we'll have to have it assayed. So that's probably another month after that to get data into the public domain. But yeah, we'll be seeing the rocks in the next three weeks.

Gerardo Del Real: Excellent. Well, if we see the kind of rock that we saw once upon a time at Kilbricken, you'll know pretty quickly.

Michael Hudson: Yeah, these systems can form very high grades over great widths, so let's have our fingers crossed for this.

Gerardo Del Real: Mike, thank you so much. I appreciate it.

Michael Hudson: Thanks, Gerardo.

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