Hannan Metals (TSX-V: HAN) CEO Michael Hudson on Successful Seismic Survey that Identified Multiple Drill Targets at the Clare Project

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. Mike, how are you this afternoon?

Michael Hudson: Absolutely fantastic. Thanks, Gerardo.

Gerardo Del Real You know I was in Ireland a couple of months back and you had just completed your groundbreaking survey and we talked then with Lars, with yourself, with the team. I was impressed by the technical team and we talked about how important the data from that survey was going to be as it relates to your next exploration program, which is of course finding new Kilbricken-type deposits. Today you had a news release that identified multiple new drill targets as a direct result of the interpretation of some of that data from the seismic survey and I'm hoping that you can explain to us: (1) how helpful it's been, (2) how it's going to make for much more efficient targeting and allocation of shareholder capital, and (3) when we're going to see those rigs turning?

Michael Hudson: Okay. That's a lot of questions for one response. Seismic surveying is an old technique for the oil and gas business, but a very new technique for the hard rock business. So only really the computing power in the last five years has allowed us to collect the vast amount of data that's required in these much more complex terrains at a very close scale that we need. So we are working on say 30 to 40 meter spacing to put drill holes in the ground, whereas the oil and gas business works over kilometers and much larger basins. So the technology has been around for a long time but application to what we're doing is new. An island is very well suited for this technology because what we're looking for are structures at a specific horizon that have brought these mineralizing fluids in. If we can identify those structures and then drill those that's where it's going to give us the best chance to find further mineralization.

What we've done is we've ran 41 kilometers of seismic at the end of last year. It's taken many, many months to process this data. You can imagine this huge amount of data and the science and technology and the expertise required to get to this final point has been vast. We put the results of those interpretations and targets and essentially what it has done is develop lots of targets in context that we can go and point drill rigs at. That's the simple answer.

A little bit more detail is that we can see Kilbricken. Kilbricken's composed of two bodies of essentially two million tons each, the Chimney and Fort Zones. We see the structures that form that mineralization. We see the structural level where that's formed, and then we see all these similar sites, similar settings, updip, so at shallower levels and then at deeper levels or similar levels going right across that Clare basin. And importantly, all the basin is open for us to explore. We thought this would be a U-shape fold, less incline, so in the middle of the basin it would be too deep, but it looks like everything's much closer to the surface than we expected.

The key findings also through this survey, and I'm just picking out some of the highlights, but 90% of mineralization, 95% of mines in Ireland base metal mines sit on north dipping structures. What we have at Kilbricken was always thought to be a bit of an anomaly because it's on south dipping structures, but we're starting to find significant north dipping structures just outboard from the known mineralization at Kilbricken. Great target. We have combined all these targets that we've developed with the soil geochemistry at surface and essentially we need to get the drill rigs turning. And even just around Kilbricken itself, the resource, we've got a combined strike length of 12 kilometers of targets. So we can prioritize those targets based on we're starting to see some mineralization at surface in other areas. We're getting very high-grade soils, in shallower areas adjacent to these structures, so they're priority number one targets.

Then, I think the final question was when are you going to get the drill rigs turning. We stopped drilling a few weeks ago, a month ago, perhaps. We will get drill rigs turning when the company is refinanced.

Gerardo Del Real: Excellent, excellent. Now, Mike, can you explain why it's important to find these targets along that 12-kilometer trend? Can you explain what Irish-style deposits are? Because these aren't deposits that are found in isolation, the ore bodies are not usually found in isolation. Can you give us some background there?

Michael Hudson: Each one of the mines – and there's been many in Ireland, base metal mines – has formed clusters of bodies. So we've already got two, but Lisheen, Galmoy may have been six or seven different ore bodies. And the science suggests that what we've found is the first two and there's more to find. Now, we're looking, as I said, for the structure at a certain level in the stratigraphic package and now that seismics has given us that. And why has the seismics so important? This was a three-quarter of a million dollar survey conducted over a four-week period. So it's a very costly exercise, but ultimately it will save us a hell of a lot of money and allow us to target the drilling because in the old days, pre-seismic, you had to blind drill looking for offsets in the rock package to define the structures. You just had to drill blind is what we call it.

Now, we see those offsets directly and we can target drill holes directly into them. It will mean a lot less drilling, a lot greater chance of success, and that's exactly why we ran this survey. It's really rewritten the geographical history of this part of Ireland. It really is a very exciting survey, geologically, and that leads into discovery, because if you understand your geology, then you've got a much better chance of making discoveries. 

Gerardo Del Real: Now speaking on the seismic, a variation of this seismic method won the Disrupt Mining competition. Is that correct at PDAC in Toronto? Is that accurate, Mike?

Michael Hudson: Yes, that's correct. It's starting to get some traction in the industry in a broader sense, absolutely.

Gerardo Del Real: Wonderful. So we'll have rigs turning soon, hopefully. You're understanding the geology, the layers, the structures, a whole lot better and that's critical for this project because of course, the stated goal is to find more of these ore bodies. Correct, Mike?

Michael Hudson: We think we're 40% of the way there to something that could be potentially economic in Ireland. So we need to find another one or two of these bodies. We've de-risked the project hugely with this survey. And the project is just poised now after a year of exploring, after a year of expanding the resources around the known zones, after learning about the peripheral areas and now with this seismics, it's given us that huge leap forward.

Gerardo Del Real: Mike, thank you so much for your time. I'm looking forward to having you back on once we get specifics on the next drill program. I think it's an important one for the company and for anybody that's taking a peak at Hannan Metals. I believe it presents a pretty compelling risk/reward opportunity. What's the market cap right now, Mike?

Michael Hudson: It's $8 million Canadian.

Gerardo Del Real: And how much has been spent on the project historically?

Michael Hudson: $30 million. Just something is not quite right at the moment.

Gerardo Del Real: Excellent. Mike, thank you for your time. Looking forward to having you back on.

Michael Hudson: Thanks, Gerardo.