General Base Metals
Hannan Metals Ltd. (TSX-V: HAN)(OTC: HANNF) CEO Michael Hudson on Advancing Multiple District-Scale Copper-Dominant Projects as a Top-Ten In-Country Explorer by Area in Peru
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest live from the 2022 Beaver Creek Precious Metals Summit. Joining me today is the CEO of what I think is going to be the top-performing stock in 2023 — that's Hannan Metals. This is Mr. Michael Hudson. Mike, it's great to see you in person. How are you?
Michael Hudson: Gerardo, who would've thunk? We're back together!
Gerardo Del Real: It's great to be back out here in person! First and foremost, how is the sentiment out here for you?
Michael Hudson: Well, I think there's a huge amount of enthusiasm in whatever we do in life when we get together as people face-to-face. So without a doubt, it's the biggest conference here that I've been to. I've been here pretty much at every one of these. I think I missed one over the last 10 years it's been going now. But correct me if I'm wrong… biggest crowd and a lot of enthusiasm. Markets can do a bit better, but despite the markets, there's a lot of enthusiasm.
Gerardo Del Real: So no pressure… I keep telling everybody that I think Hannan Metals in 2023 will do what Patriot Battery Metals has done in 2022. Mind you, I think Patriot, which we were both early investors in, has a lot of runway still left. So I say no pressure but there's a little pressure there. You want to tell the people why I'm enthusiastic about Hannan in 2023?
Michael Hudson: Well, to be successful in this business, you need to do a couple of things. You've got to have a very good shareholder or capital structure and a tight one so it will allow you to succeed. That's what Patriot did so well, and that's what Hannan still is. It's got a very steady group of shareholders.
We haven't raised a lot of capital. It's been three years literally since we've raised a lot of capital. We put a million bucks in between then so it's got a good solid shareholder base, a known shareholder base. So that's number one.
Then, look for elephants. We can muck around looking for smaller deposits and, of course, everyone wants to find a big one. The recipe to finding a big one is to go where they are, number one. So Quebec and lithium has obviously turned out to be that and has been that. And porphyry coppers in Peru, where we are, and a new style of mineralization in Peru, sediment-hosted copper, which forms world-class deposits. We found copper mineralization over a hundred kilometers in that style, the sediment-hosted copper.
Gerardo Del Real: Over a hundred kilometers!
Michael Hudson: We have! Clearly, if it works, it's going to be big. That's one style; sediment-hosted copper. And then, we’ve got the porphyry copper-gold targets that we're just really starting to work up, which gives me a lot of joy, actually. Geology and exploration turns my crank. Yeah, both styles are highly-impressive, and the porphyries are becoming more and more impressive as we're learning more.
Gerardo Del Real: You mentioned elephants and elephant country. And scale is clearly critical if you're going to make the kind of discovery that is a career maker or a company maker, or maybe in the case of Hannan, many company makers. Can we talk about the land holdings and how you became a top-ten land tenured holder in Peru?
Michael Hudson: Taking a big swing. We identified the opportunity early. We're in the other side of the Andes. It hasn't been looked at a lot over the years. I was there 25 years ago, and I had military escorts and it was a big drug growing area in the world there. It's cleaned up now. That's changed.
A lot more infrastructure has gone in. A lot of people have moved in there so it's more accessible. It's safer. We're really first movers, to a great extent, in that area over the other side of the Andes. Geologists call it either the foreland basins, which hold the sediment-hosted copper. Then, if you're talking about the tectonic setting, it's the back arc and that's where the porphyries are forming.
The porphyries are not necessarily meant to be out there, a bit like Bajo de la Alumbrera that was found where it wasn't thought to be, one of the greatest porphyries in South America. It's something to do with these big cross arc structures. That's what we're working through now.
Yeah, we took a big swing. If you're going to find something big, you want to have a big ground position. So here's little minnow Hannan up with BHP and Rio and all the majors as a top-ten ground holder.
Gerardo Del Real: How many square kilometers are you up to now? It was 2,400 or 2,800 last time I checked.
Michael Hudson: Yeah, it's a little less but we're still top-ten. It's at 2,100 square kilometers. It's a big patch of dirt, and we worked out how to explore it pretty efficiently too, getting around. We've been able to stream sediment sample the whole basin. The porphyry targets are over 120 kilometers, and we've got seven porphyries so far.
Our first mover into the area did the stream sediments and had the large magnetic surveys from the petroleum companies that had just become freely available. So that gave us an ability to stake broadly and widely there. And then, up a little further north, in joint venture with the Japanese government who are fully funding, I should say, the sediment-hosted work that was easily identifiable because you just walked up the creek and found the copper, green boulders as you walked up creeks. That's how we staked that area first up.
Gerardo Del Real: That joint venture with JOGMEC, I believe it's US$35 million, and that's just for a little over a third of your current land holdings. Is that accurate?
Michael Hudson: That's accurate.
Gerardo Del Real: Where's your market cap today?
Michael Hudson: At C$25 million.
Gerardo Del Real: So let me get this straight. You have a joint venture worth US$35 million; you have a C$25 million market cap. And you still have two-thirds of your land holdings, close to two-thirds, that's 100% controlled by Hannan.
Michael Hudson: Exactly, and a brand new Miocene, which is very important. The age of the porphyries is Miocene, which equates to the biggest porphyries we see up in the Andes themselves, over 120 kilometers, seven of them sticking out of the ground. We're just going through and running a big magnetic survey now, half a million dollar survey, to really narrow down that area and pinpoint those porphyries. Yeah, it's very exciting.
Gerardo Del Real: We mentioned the joint venture with JOGMEC. I know that your phone has been ringing because of the amazing exploration work that you've done thus far and because I think companies want to get positioned for what should be a phenomenal run in 2023.
It's one thing if I say it. It's very different when JOGMEC comes in and puts a stamp and says we want to be a part of that. The phone's been ringing from the majors wanting to come in and shake hands with Mr. Hudson?
Michael Hudson: I spent 10 years in a major, and if a major isn't looking at what's going on around in the junior space, they're not doing their job. We're looking for major scale targets. As a consequence, of course, there’s a lot of interest in what we're doing because it's a bit different and we're finding a lot of copper that hasn't been found before. So they're doing their job, yes.
Gerardo Del Real: Just to be clear, the commodity mix here is copper, it's gold, and there's some silver there too.
Michael Hudson: Copper-gold in the porphyries. Copper-silver, we get about 2% copper and an ounce silver on average over that hundred kilometers where we've channeled.
Gerardo Del Real: On average, right, a hundred kilometers…
Michael Hudson: On average and within a hundred kilometers, yeah. But where we've sampled, that's the average grades.
Gerardo Del Real: Phenomenal stuff. Excited for 2023. What comes next? When do we get to see the drill bit turn and see what mother nature gifted you?
Michael Hudson: Well, this is the challenge. The one big challenge is Peru and the timing to drilling. I always point to this area here. The sediment-hosted system had permits placed six months ago, and we're waiting for those permits now to be approved probably early next year. That's the guidance we can give you there.
It's going to be that same process in the porphyries. Now, it's one to two years to permit to drilling. But you'll see us work these porphyries up. We've developed one in great detail where we sampled it, we've mapped it. You'll see that happen to two other porphyries this year. So we'll just get a whole portfolio of these porphyries. It's like a ring of pearls, literally, that we're working up.
Gerardo Del Real: Some phenomenal exploration work. Anything to add to that, Mike?
Michael Hudson: Watch this space.
Gerardo Del Real: Alright, Michael Hudson, everybody.Click here to see more from Hannan Metals Ltd.