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Hannan Metals (TSX-V: HAN)(OTC: HANNF) CEO Michael Hudson on Game Changing Copper-Silver Mineralization Over 18KM 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, it's great to catch up with you. How are you, sir?
Michael Hudson: I'm a very well here on a morning Down Under and late your afternoon, so thanks again for talking, Gerardo.
Gerardo Del Real: Absolutely. It's great to have you back on. We chatted a bit off air about how exciting the San Martin project is getting. You've always been very cautious to highlight that it was going to be very important to get on the ground and be able to demonstrate scale and continuity. Then of course, we get into grade, which goes into margin. But the news that you had here yesterday, I think is ... I don't want to say game changer. I don't want to sound too hyperbolic, but it is very important news. Let me read the headline and I'll let you provide the context.
Hannan Soil Sampling Defines Copper-Silver Mineralization Over 18 Kilometres at Tabalosos East.
There's a line in the release that talks about how more than 1% of the bedrock outcrops. I'll stop talking and let you provide the context, but phenomenal, phenomenal work and congratulations as as a biased shareholder. This was good to see.
Michael Hudson: Well, let's try and not be too hyperbolic, but perhaps with my geological hat on, I can say this is a technical game changer, absolutely. Let's not put it in commercial terms absolutely. But it is a very key release and surprised us internally on the upside massively, basically, in terms of when we started getting out on the ground here over the last two or three months. We've done the initial prospecting, found the very high grade boulders, followed up and found high grade copper-silver outcrops over kilometers, but little windows. We're seeing much, much less than 1% outcrop. This is jungle terrain. The jungle canopies that drop lots of leaves develop soil profiles that cover the rocks, so we don't see much of the rocks.
So of course, the next step was to start running these soil lines continuously over the areas where we'd found outcrop and extending beyond them. The first thing we noticed was that the soils worked above the outcrop areas, so tick, the method worked. Then we started extending those soil lines at a few hundred meters along strike, and we saw that the anomalies continued. Then kilometers along strike, the anomalies continued in context in the right geological positions that we'd interpreted and where we'd expected these anomalies. Then we started running some larger lines across the area. This is the area where we've done all the environmental initial permitting for drilling. We call it the DIA area or the EIA area where we've commenced all that work, so about six kilometers by three kilometers in area.
The initial science we have now is that there's a snaking pancake that extends within that area alone, remembering we've got over a hundred kilometers of strike in our tenure. But in this area alone, there's 18 kilometers of this pancake layer that snakes around the country defined by the soil sampling. So it's worked at the scale of tens to hundreds of meters and showing continuity, which is the first time we've seen in the system. Then it's working at multiple kilometer levels when we run these soil lines, and it's throwing up new anomalies where we didn't understand we had mineralization. You can see that in the figure that we put out in that press release. There's new areas that we had no idea where mineralization was, no outcrop and nothing to show that it could be there other than these soils.
So a fantastic method, and we're running portable XRF with analytical check samples, so it means that our turnaround times are quick. We can make rapid decisions in the field and collect probably two to three times as much as we would by trying to lug samples in and out of these areas, horseback and into the labs, back to Lima. So we're doing ... the methods are working. It's very fast turnaround, and we've got very high productivity as well, which is very important in exploration.
Gerardo Del Real: There is multiple ... obviously with the land package being as big as it is, multiple areas of interest. It seems to me from the release that the Zona Sur section is one of particular note. I don't know if that's just a function of that's where you've done most of the work or more of the work. But some of the results there, two meters at 4.9% copper and 62 grams per tonne silver, and you note that more importantly, it doubles the strike length of the outcrop zone. Is the Zona Sur the most advanced area thus far as it relates to field work?
Michael Hudson: At the moment, yes, but that can and probably will change. It's just where we happened to find the initial outcrops, and where we started the soils, and where we've been able to define it with a lot more detail at the moment. Then it hangs up and probably would be the first area that we'd plan our drilling today. That's over a one and a half kilometer area of that Zona Sur alone. So yes it is, but exploration is incremental, and we're gaining incremental information elsewhere that looks just as good as Zona Sur with only 10% of the information. So let's see how the whole thing develops, but of course, this has to form at scale, which we know we've got copper over a hundred kilometers. Now we know we've got copper within that, that shows continuity at that sort of level.
As you said, I've always said the challenge in exploration will be to find continuity at the drill scale. This is one step, much, much closer to show that this stratigraphic level is continuously mineralized. Then of course, the next stage is to refine that with drills and multiple drill holes on sections and stepping out, and finding a grade that hangs together. But that's looking very, very encouraging, and certainly we've added significant value to this point, remembering drills are probably another eight to ten months away.
Gerardo Del Real: The soil sampling results are from the San Martin portion of ... or I should say the JOGMEC JV portion of the San Martin project, which of course, is a part of the overall land package. You, of course, being a top 10 land holder in Peru, can you speak to the remaining portion of the property package? Because again, it's massive, right? It's basin scale. Again, I don't think people quite understand or appreciate the scale of what you've been able to put together there.
Michael Hudson: Hannan is opening up new areas in some of the most productive metalliferous areas in the world, I suppose. We're going to these areas that are not easy. The jungle is not easy to explore. It's really tough exploration. Socially, people don't know a lot about exploration. So we've got extensive social work occurring at every point, explaining what we're doing and trying to demonstrate that we're credible and reliable partners to have in those areas with the local stakeholders. Now, the specific question was, what we've just talked about was a very ... Tabalosos East is a very small part of the JOGMEC JV. JOGMEC, the Japanese government essentially, who have an organization that funds specific companies like Hannan to make new discoveries that the Japanese can eventually find new sources of metal for their industry.
It's about one third of our landholding in Peru is under that JV with JOGMEC, which is a $35 million U.S. deal for them to own 75% over time. The other two-thirds are held 100% percent by Hannan. We've got four geologists in a larger team exploring those areas by themselves. One part of that is a sediment hosted copper area to the west of the JOGMEC joint venture that's in our own rights. You'll see some information come out about that. We've started exploring there and running stream sediment samples and prospecting work, and we like what we see there in the ground held in our own right.
Then a few hundred kilometers south of the sediment hosted areas, we've got a porphyry copper-gold area that I implore listeners to go and have a look at our latest presentation. There's very little information there and then you have to be fairly technical. But the early stage evidence is that were on to a number of copper gold porphyries over extensive areas showing impressive early stage exploration from stream sediments, to float, to outcrop and, at grades that have been identified at early stages of some of the more significant discoveries in the Andes. So early days, but an amazing portfolio, amazing metalliferous country.
Gerardo Del Real: I got to believe that you're probably fielding multiple phone calls about the other two thirds of the land package. Well said, Mike, well said. Is there anything else you'd like to add?
Michael Hudson: It's probably gone longer on an evening for you, so let's wrap up there, but we're pretty excited, very much so.
Gerardo Del Real: As am I, and again, I'm speaking with you, which implies I'm biased or we wouldn't be having the conversation. But I am also a shareholder and yes, this is one of the most exciting exploration stories, I think, in the entire space. Thank you for your time today, Mike.
Michael Hudson: Thanks, Gerardo.
Gerardo Del Real: All right, chat soon.Click here to see more from Hannan Metals Ltd.