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Mickey Fulp, the Mercenary Geologist Talks Copper, Zinc and Hannan Metals at Beaver Creek Conference

September 20, 2017

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me here at the Beaver Creek Precious Metals Summit is the one and only Mercenary Geologist, Mr. Mickey Fulp. Mickey, how are you?

Mickey Fulp: Gerardo, como estas?

Gerardo Del Real: Un placer a su orden. So Mickey, general sentiment on the conference? We were both here last year. Thoughts? Any feedback?

Mickey Fulp: Yeah, last year we thought we had a bull market, it was going to blow up on us and be really good and then the price of gold went to the downside. We lost $150 and that market evaporated. A year later, we've been above $1,300 gold now for what three weeks or something like that? Is that right? About three weeks or more?

Gerardo Del Real: Right about. Give or take a week.

Mickey Fulp: Yeah, give or take a week, so it's kind of back. We see deals being done. We see enthusiasm. We see deal flow coming around. New companies, new ideas. Some of the old places that haven't been explored say since they were producers in the ‘90s and they didn't participate in the previous bull market for gold from 2003 to 2013 arguably. So I'm enthused. There's a lot of capital here and there's a lot of things on the go.

Gerardo Del Real: Well the chatter has definitely picked up from last year. Another exciting sector is the base metal space.

Mickey Fulp: Absolutely.

Gerardo Del Real: You and I both made, I believe, contrarian calls early in the year, I think on copper and zinc. They've run up, they're consolidating. I think it's healthy but there's a lot of supply/demand fundaments that I think bode well for the next couple of years for copper and zinc.

Mickey Fulp: I would agree. I would probably say that I see the zinc window maybe not long term, but certainly mid-term. It's really hard to predict on zinc. For next two or three years we're going to have severe supply deficits in zinc. Copper, I have a very long term secular bull. I’m bullish on copper. So probably a little bit more longer term confidence in a rising copper market based on supply/demand fundaments than I do for zinc right now. Zinc's a bit of a fickle metal. It's not as big a part of the base metal space as copper is, but that said, zinc looks pretty good to me. I appreciate your point you said about these metals consolidating. So they all had their run up. Copper went to $312 closed, went to $314 one day, but immediately fell back to $302. Now it’s in the low to mid $290s and it needs to consolidate. It got way ahead of itself and so we were both cognizant of that and said be cautious here for a bit. But if it can consolidate at this level, I have a lot of confidence in the fact that copper needs to be above $3 per pound. Probably up to $3.30 a pound to support additional supply coming on stream.

As far as zinc it went down to the high $130s, maybe $135, $136, $137. Today it's back up $141, so it needs to consolidate at this level. You know, we like to see these markets go up stepwise. We don't mind two steps forward, one step back, so you want to see these sawtooth sort of charts and not an exponential chart and if we can get that, then we're good to go I think.

Gerardo Del Real: Excellent. Now you mentioned the zinc window being a two to three year window and a company that I think you and I both cover that has positioned themselves beautifully for that is Hannan Metals. Your thoughts on Hannan? CEO Michael Hudson is behind it. He cut his teeth with zinc projects early in his career with one of the largest at the time I believe zinc producers in the space.

Mickey Fulp: True.

Gerardo Del Real: Can we talk a bit about Hannan?

Mickey Fulp: Well I like Hannan and I, as you say, we both cover that. They're a sponsor of my website and I'm an early stage shareholder. I just participated in my third private placement with Hannan and they're drilling right now in Ireland. They've released a couple of drill holes on the Kilbricken deposit, both successful holes. One phenomenal hole with something like 3.3 meters of 73% lead and 9% zinc. That's essentially solid lead and zinc sulfide. The follow up hole, of course you can't replicate or hope to duplicate that, but that's a 50 meter step out and now what we're seeing, they're improving the structural model and they're understanding their controls, so I think what you're going to see is further and further step outs as they try to build this 4.3 million tonne deposit of economic grade into something larger.

The grade is economic right now. The tonnage needs to be, needs a considerable bump, but what's exciting to me and Mike Hudson puts it very succinctly is right time, right place, right project. And so from all geological scales, from deposit delineation to step outs to on trend targets to a regional exploration play that's something on the order of 100 kilometers across. They have targets so the growth potential for this to be a major zinc area is tremendous. And they've got seismic research now doing 3D seismic.

Gerardo Del Real: Among the first in Ireland I believe.

Mickey Fulp: It will be the first 3D seismic in Ireland, but seismic has really opened up the Irish zinc fields to higher grade, thicker but deeper deposits, i.e. Tara. Tara which is the giant at 100 million tonnes of past production. Now they have a larger and a higher grade deposit off on the flanks of the thing, several kilometers away.

Gerardo Del Real: I think one of the most underappreciated facts about Hannan Metals is the exploration upside that you mentioned. I think Hannan has a very clear target of 10 million tonnes of obviously economic ore grade zinc and lead, which would make it an immediate buyout target for companies in the region to frankly operate.

Mickey Fulp: At Kilbricken itself, but look beyond Kilbricken and at all scales, so very bullish on this project. We don't know where zinc supply is going to come from. We know there's a supply deficit and I would submit that the Irish zinc fields are a likely candidate for future big zinc mines.

Gerardo Del Real: Well they just recently completed a financing. There's two drills turning as we speak. It should be an exciting end of the year for Hannan and hopefully you can come back on soon, Mickey, and chat some more.

Mickey Fulp: All right, thanks a lot, Gerardo. My pleasure as always.

Gerardo Del Real: Un placer, señor.

Mickey Fulp: Gracias.

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MARKET SUMMARY

INDICES

Name Last Change
DOW 23328.60 0.71%
S&P 500 2575.21 0.51%
NASDAQ 6629.05 0.36%
TSX 15857.22 0.25%
TSX-V 789.51 0.00%

Resource Commodities

Name Last Change
Gold 1280.70 0.71%
Silver 17.04 1.23%
Copper 3.15 0.33%
Platinum 923.75 0.35%
Oil 51.29 1.46%
Natural Gas 2.87 0.66%
Uranium 20.14 N/A
Zinc 1.44 0.00%

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