Part of the Stock Digest group of websites: Visit Tech Stock Digest  

Hannan Metals (TSX-V: HAN) CEO Michael Hudson Announces Private Placement and Eyes Target Resource of 10 Million Tonnes @ 10% Zinc at Kilbricken Project

August 3, 2017

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?

Michael Hudson: Very good. Thanks, Gerardo. Nice to be back with you.

Gerardo Del Real: I wanted to chat with you a bit. You announced a $2 million dollar private placement financing this morning. I wanted to get the details from you and see what you're doing with the money.

Michael Hudson: Absolutely. We're topping up the kitty modestly, I could say. You know, we want to keep drill rigs turning and have lots of results flowing in when everybody comes back from their summer break and into the autumn. So, we've got one rig on the ground now. We want to increase that to two. We've started our resource expansion drilling over the last couple of weeks. We put out one of the best results in the industry, that included 3 meters at plus 80% lead plus zinc. So we want to keep that news flow going. So that's what the money is for, drilling and for seismics, as well.

Gerardo Del Real: Excellent. Now talk to me a bit about the seismic and the plans there. How do you plan on approaching that? Is that something that's under way?

Michael Hudson: It's underway. The seismic trucks are quite large, so they need a lot of permitting and traffic management, because they take up one lane of these small roads, or the full road at times. So, we've been working permitting that in Ireland over the last few months, and we've gone to tender with a number of groups. We will put that crew on the ground. They're relatively large crews, also. They're up to 20 to 30 people for a couple of weeks on the ground in mid- to late September is the plan.

Gerardo Del Real: Excellent. Now, you're in the process of drilling right now, and the last time we spoke you mentioned starting to step out from that blockbuster first drill hole that you announced. How is that coming along? Can we expect assays anytime soon?

Michael Hudson: Assays are in the lab, and they're imminent. So I can't give you an exact timeframe, but we're close.

Gerardo Del Real: Excellent. Now you have a tiny market cap. I believe it's somewhere in the order of $8 million Canadian, if I'm not mistaken. What is the target for the deposit and the project there in Ireland? Do you have a target in mind?

Michael Hudson: Absolutely, we have a target. I mean, this is the resource we also put out over the last month, the maiden resource, which was compiled from $25 million dollars worth of data that had been collected on the project over the last 7 or 8 years by previous workers. So that resource, you know, we've done no economic studies, so caveat emptor on any economic evaluation, but our target is 10 million tonnes at 10% zinc. What's worked in Ireland before, one of the last mines was Galmoy, which was 6 million tonnes at 12%, and we've got roughly around half that number today, so we think that we've got a very, very good start, and the prospect of the deposit has multiple opportunities to expand right around the current resource, and then stepping out.

And these Irish systems have multiple bodies. We found two already, and there's a very good reason, scientifically, that there could be many more, which would put us in the realm in the short to medium-term. And I'm talking in the next 12 to 24 months with something that could potentially be economic, and we'll put a PEA around that and this will be one of the bona fide, new genuine discoveries in the zinc space. High-grade bona fide genuine zinc discoveries.

Gerardo Del Real: Good. Good. So you mentioned that there's assays in the lab. You're obviously stepping out from where you drilled and announced assays from the last hole, but there's also 40 kilometers of strike potential. So there's a lot of blue sky there. Can you talk a bit about that, Mike? Are there plans for exploration drilling further outside of the main area?

Michael Hudson: Yes. As you say, we've got a large chunk of Ireland. This was a block of ground that has taken since the mid-80s to compile, and we're certainly the benefactors of that permit position of 30,000 hectares. That includes that 40 kilometer strike. Absolutely, this is the big blue sky of the project, so we're not just dealing with a little resource area that we're expanding. The focus this year will be on expanding that resource area within hundreds of meters to a few kilometers from the resource. But that seismic we talked about before is looking at 30 or 40 kilometers of seismic to test that larger area, if you like. We've got tens of thousands of soil samples that have been collected over the years that we don't have to go and re-collect, and there's so much value in the existing data. But that seismic will tie in with the soils and the geology and allow us to test targets over that larger scale.

So this is a district. You know, there's been, within a 40 kilometer radius, we're within a 40 kilometer radius of where 100 million tonnes of zinc has been found over the last 40 or 50 years in Ireland, and there's a lot more to find, and we've got a large land position with multiple historic mines on it, and a very good start with what we've got at our Kilbricken resource. So, it's very exciting.

Gerardo Del Real: Good. Good. Mike, you cut your teeth with some of the biggest zinc companies early on in your career. How important is it to have that exploration upside and that large land package? Obviously, the stated aim is 10 million tonnes of 10% zinc equivalent. That would absolutely give you a net present value, I would imagine, somewhere between $300 million and $400 million dollars, depending on what the zinc space does between now and then. But how important is it to have a large land package that is perspective like the one that you have in Ireland?

Michael Hudson: You’ve got to get the balance at both ends, so absolutely the big players want big potential. We can demonstrate that, and if we're looking to transact a discovery, you always want to have a lot left on the table for the big guys to expand into, so we will work at both ends there. Pulling together what we hope will be an economic scale resource around what we know, and be drilling to demonstrate the potential of the larger system. That's very important.

Gerardo Del Real: Excellent. Now I know you've been talking in several different funds and institutions. How has the financing been received? You just announced it this morning, but obviously there's a lot of legwork that goes into it. What kind of reception have you had in regards to the zinc space, and obviously a very, very favorable market gap and share structure that Hannan possesses?

Michael Hudson: It’s been very well received. The company and the assets, people get the story. It's a simple story, really. We've got $25 million dollars worth of data, put out a resource that looks like it's halfway there with multiple scales of opportunity to expand it. So people get the story. It's well received and at all various levels from an institutional point of view and a retail point of view. I think the opportunity's seen. However, it is quieter in the market at the moment, as people are on holidays.

Once again, sort of like exploring at various different scales and levels, you've got to put the legwork in and market the company and make sure the bigger players, who won't necessarily participate in a relatively modest financing, are there for future financings when they become a lot bigger. This will take, I guess, and this is all dependent on success of exploration, $10 to 20 million dollars to get us into that realm where we can put an economic study around this project.

Gerardo Del Real: Excellent. Well, you have a great team in place. You've obviously set up a great foundation for growth, and I look forward to having you back on soon, Mike, for the next set of assays. I know you mentioned that those would be imminent, so hopefully you take some time and come back and chat with us.

Michael Hudson: I certainly look forward to it. Thanks, Gerardo.

Gerardo Del Real: Thank you very much, Mike.

View Interview Archive

Subscribe to the RSD email list and get the latest resource stock activity directly to your inbox, for free.

MARKET SUMMARY

INDICES

Name Last Change
DOW 24461.70 0.80%
S&P 500 2753.17 0.75%
NASDAQ 7712.95 0.89%
TSX 16335.15 0.53%
TSX-V 755.33 0.00%

Resource Commodities

Name Last Change
Gold 1269.54 0.19%
Silver 16.39 0.43%
Copper 3.03 0.020
Platinum 861.00 0.19%
Oil 65.54 0.26%
Natural Gas 2.97 0.37%
Uranium 22.88 0.00%
Zinc 1.39 0.00%

@RSDigest ON TWITTER

Part of the Stock Digest family of websites
Small Cap Stock Digest