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Hannan Metals (TSX-V: HAN) CEO Michael Hudson on Kickoff of Drilling at the Ballyhickey Project in Ireland

October 4, 2018

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Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the Chairman and CEO of Hannan Metals (TSX-V: HAN)(OTC: HANNF), Mr. Michael Hudson. Mike, how are you this morning?

Michael Hudson: Good morning, Gerardo. Top of the world.

Gerardo Del Real: You're busy. You just commenced diamond drilling at Ballyhickey in Clare County, Ireland. It's an exciting time. We've been waiting a few months. I was at the project earlier this year and you were processing a lot of the data, delineating targets. This was, of course, one of the more exciting targets.

Can we talk a bit about what that looks like at your 100% owned Clare zinc project in Ireland?

Michael Hudson: Well, of course it's always exciting to get the drill rigs turning, Gerardo – or the drill rig in this case. This is a project that we de-risked extensively. We’ve collected a stack of data over the last 6 to 12 months. This is really the first drill program that is taking benefit of all that data, not withstanding we were drilling over the last year in and around Kilbricken, mainly itself, to extend the known system.

But this is the first big step out, if you like. It's two to three kilometers from the resource area. A lot shallower, so 150 to 200 meter depth targets with seismically defined structure, which is very important with kilometers of soil anomalism, where the soils take up some of the leakage from what exists underneath. And then some old mines along that whole trend that have been waiting 180 years to be tested again.

Gerardo Del Real: Now, the historic reports, it reads here that the mined ore – from historic reports of course – ran 77% and 15 ounces silver from a calcite vein 5 to 6 meters wide. Are those numbers correct, Mike?

Michael Hudson: Yeah, they certainly went after grade in Victorian times. The other interesting thing was there would have been a lot of zinc around with that mineralization as well. But zinc didn't have a use in those days like it does today, mainly for galvanizing, so zinc was literally waste material. That's why zinc isn't included in those numbers.

Gerardo Del Real: And that 77% – I should be clear – was for lead and the 15 ounces was for silver. Just to be accurate, right?

Michael Hudson: Correct, yeah. That's part of this trend, and now we conducted a seismic and seen a fault outward 5 or 600 meters from that old mine, specifically at Ballyhickey. So that's the first test.

Gerardo Del Real: Excellent. Now, the drilling is being done with a diamond drill rig. I believe it's going to be initially 2,000 meters at Ballyhickey and you should be complete in Q1 of 2019. Is that correct, Mike?

Michael Hudson: That's correct, yeah. We've got 2,000 meters along this two to three kilometer trend. So it's quite a large area. And we've got to try and find the sweet spots in that, with what is a relatively modest drill program. But we're giving it our best shot there, and that's part of a larger program of 4,000 meters.

Gerardo Del Real: I mentioned Clare County when we started the interview. And I did that intentionally because I know and I witnessed firsthand that community relations aspect to Hannan, and how well you've developed that. That's really paying dividends, as it always does.

Can you talk a bit about the permitting situation? Because it's quite unique, the fact that you were actually able to get those rigs turning. I know there was a bit of a delay that nobody's ever happy about, but you were able to work through that as a result of the great community work that you've done. Can you talk a little bit about that, Mike?

Michael Hudson: Yeah. It's mission-critical simply, social licensing anywhere that we work in the world, and Ireland is no different. In fact, it's different in the respect that I've never really worked so closely within communities, because Ireland is a relatively small nation and people have smaller farms and houses everywhere. So you're really working in and amongst the community. It's very important that we tell the community what we're doing, that we're exploring, that we hopefully will find something to mine, but doesn't necessarily mean that every drill hole will find a mine, of course, because exploration is the research angle of mining.

We talked to the community a lot about those aspects, and then the hiatus in drilling was a legislative issue that is a moment in Ireland's history. It's very easy to permit drill holes compared to a lot of jurisdictions in Ireland, but there's been a little bit of a hiatus. So we had to go down a slightly different path in the interim. That was through the Clare County Council. We're very thankful and supportive that we're able to permit in this new interim stage through the Council.

Gerardo Del Real: Fantastic. We've said that 2018 was and needs to be a year, frankly, of discovery for Hannan. This gets that process underway once again. I've got to imagine you and the team are excited. Mike, when can we start expecting to get some results?

Michael Hudson: In two months, I'd say, would be a good rule of thumb. It takes a little bit longer to drill in Ireland than other places, because we only drill during the day, and 6 days a week, just to keep the noise down during the evening. So I imagine two months is probably a good guess. So towards the end of the year.

Gerardo Del Real: Excellent. Mike, zinc is on the comeback. It seems like it's bottomed well, along with the base metals. Let's hope that continues. Any thoughts in that space? It's still relatively healthy if you look at a 5-year chart, right?

Michael Hudson: Absolutely. It's a very healthy price compared to where we were over the last 8 years, I suppose, in the zinc space. If your readers go and have a look at a yearly chart, it's a very pleasing chart. Zinc looks like it's bottomed, and it's taking a real hike up again, around $1.20 a pound. It seems to be the right time, perhaps, to be exploring for zinc again.

Gerardo Del Real: Mike, it's an exciting time. What's the market cap look like?

Michael Hudson: Around $9 million Canadian.

Gerardo Del Real: And you've spent how much – or, a better question, how much has been spent on this project historically, and with Hannan?

Michael Hudson: Close to $30 million US over the last 10 years. And Hannan has put something like $5 million dollars into the ground over the last 18 months.

Gerardo Del Real: There we go. When you talk about upside, there it is everybody. If you get a discovery, it should be fun. Thanks again for your time today, Mike.

Michael Hudson: Thanks, Gerardo. Always a pleasure.

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