Hannan Metals (TSX-V: HAN) CEO Michael Hudson on Game Changing Reduced Shale Host Confirmation at San Martin

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Hannan Metals, Mr. Michael Hudson. Mike, how are you doing today, sir?

Michael Hudson: I'm doing pretty well. Better after finding more copper in Peru.

Gerardo Del Real: That's putting it mildly. You're being really humble. I joked off air that it's shaping up to be an entire basin full of high-grade copper, and some gold, and some silver. The headline, in fairness, I don't think told the most important part of the most recent release.

So let me read the headline. The headline reads:

Hannan Channel Samples 1.6m @ 5.3% Copper and 83 G/T Silver and Confirms Reduced Shale Host at Tabalosos East, Peru

That last part is critical, I believe, moving forward. And I don't think that the market or the average speculator in the space really truly appreciates just how important that confirmation is. Can you provide us an overview of why those that do appreciate that are as excited as we are?

Michael Hudson: It is the key part of this release. It's a key part of the model that forms the basis of what we're doing in Peru, and it was very important for us to start to put some context out ourselves. So we've been doing a lot of work. And for the market to understand the context of all the copper that we've been finding. This is a hard ask in many respects, because this is a big basin scale, 120 kilometers. It's too vast for people to get their heads around, let alone us geos in the field, right?

So the key point is that this is a sediment-hosted copper style. It forms the second most prolific form of copper in the world, including the vast systems that formed the Kupferschiefer in Europe, which is still one of the largest producing areas on earth and the largest silver producer, by the way, and the Central African Copper Belt. So huge systems can form with these sediment hosted systems and porphyries of course being the first.

Now the subclasses of the sediment hosted systems are: One, a reduced facies model, we call it, which is basically a very continuous organic, rich shale. It's lots of bugs and plant material, or organics that are accumulated in a very fine grained shale is what the Kupferschiefer means. Kupferschiefer means copper shale in Polish. The key point is that the shales can extend over a basin scale over hundreds of kilometers and have the continuity we want to see.

The second style is what we'd call a red bed style, which can form smaller deposits. They're generally poddier and not as consistent, and you'd just see copper at various places. You don't have that consistency essentially.

Then there's a third style, which what you call in America is the Revett style or Spar Lake like style. That's a quartz, or it's more a sandstone bearing sequence that has some, what we say, sour gases probably as the main reductant. So an old oil or gas basin that acted as a reductant to trap the copper. So those can be very thick, less continuous, but very thick, big bodies and Udokan in Russia is another one of those examples.

In fact, we have now very much confirmed number one, the reduced facies style, which is what these results are. We're finding continuity at the basin scale within that shale and the detailed scale. We're now digging trenches beneath the soil anomalies we have every few hundred meters. We can do stratigraphic columns and we see this consistency between point to point, remembering there's very little outcrop in these areas. This is high jungle. There's less than 1% outcrop. So those are little windows into the system that we learn all the time.

And just thirdly, before I let you come back, we do have that third Revett style which is in the Cushabatay, the sandstone system that exists above our reduced facies. We've seen gossans over 50 to 80 meters in other parts of the project. So, what we're focusing on is that first style writing in this press release.

Gerardo Del Real: This of course, is exploration results from the Tabalosos East prospect, which is of course, within the San Martin JOGMEC joint venture, right? What comes next? And how excited are you, Mike? You've been at this for decades. You've made several discoveries. You've developed several projects from exploration on forward. How exciting is what you've seen at this early stage? I know that when we first started talking about Peru years ago, it was much earlier stage. This is developing into what I think is going to be one of the most exciting copper stories of 2022 and I love that people haven't caught on yet because I can get into market and buy shares at a fraction of where I think there'll be next year. But how excited are you with the results that you've gotten thus far?

Michael Hudson: Well, as an explorationist, you've got to always start with an optimistic viewpoint, because you've got to try and find something that nobody's had before. So you've got to be optimistic around data, and equally try and refute your thesis at every point or support it with more data. You've got to ask those key questions and collect the data. That's the scientific process. So what we've done is collected more and more data, and at every point the thesis has been supported. That doesn't happen very often. So for that point, as an explorationist, I'm very excited about what we're seeing. The conservative way to look at it would be, this is shaping up very nicely.

Gerardo Del Real: Shaping up very nicely. What comes next, Mike?

Michael Hudson: We've got a lot of people out there now. We've got a two million U.S. dollar budget between April to March next year and we've got multiple teams, multiple social licensing teams. The next question that you're asking is, "When are you going to bloody drill this, Mike?"

Gerardo Del Real: You know it!

Michael Hudson: We're working on the DIA, which is the EIA to allow us to put in 40 platforms. That will be submitted very soon to the authorities. We're running public meetings as we speak and those meetings will confirm with the locals that they want us there, and we know we're getting some great support. That really is just as exciting, really, that we've been able to work and demonstrate how explorers can work ethically, sustainably, and in partnership with the local stakeholders, because this is a new area that we've worked very hard to demonstrate what we're doing, and doing it, and then coming back and having those discussions again so that the people want us there. As a consequence, I can see us drilling in early next year. So Q1, Q2, around that boundary.

Gerardo Del Real: I could talk forever about the basin. I have a hundred other questions I could ask you about exploration outside of the J.V., because of course the joint venture, you obviously have a great partner. It's fully funded, it minimizes dilution, but if I'm not mistaken, the joint venture only represents about a third of the land package. Correct?

Michael Hudson: Yeah. Top 10 Peruvian land holder, one third under the JOGMEC joint venture, fully funded, and we're building up other targets. A little quieter in the background, but other sediment hosted copper targets we've got adjacent to these areas in the joint venture, and then a few hundred kilometers south we've got a new copper-gold porphyry belt that is just being worked up. So you'll see a hell of a lot more than that, and that's a discussion for another day.

Gerardo Del Real: Mike, looking forward to that discussion. Thank you so much for the update. Congrats on the great work.

Michael Hudson: Thanks Gerardo.

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