General Base Metals
General Precious Metals
Hannan Metals (TSX-V: HAN)(OTC: HANNF) CEO Michael Hudson on Strategic Investment by Teck Resources in Ongoing Advancement of Multiple Early-Stage District-Scale Copper, Gold, Silver Porphyry Systems in Peru
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, you and I had the privilege of catching up at the Beaver Creek Precious Metals Summit last week. It was great reconnecting. How are you today?
Michael Hudson: Jetlagged being back in Australia but all very well, thank you.
Gerardo Del Real: I've spent the bulk of 2022 pounding the table on two companies, and really three, but the two that I've most associated with each other have been Patriot Battery Metals, which has gone on a phenomenal run, right? Correct me if I'm wrong but I believe you were involved as well.
We helped finance the company at the 16-cent level, and, of course, the company's trading near C$7 with a lot of runway. And any time that I get the question about which company I feel has that kind of potential in a commodity that I really like, I always refer to Hannan Metals.
And I've been very outspoken about the fact that I think it has the scale, the technical acumen, the land tenure, and at one point a partner to really turn this into not just a company-maker but I think there's going to be multiple major significant discoveries that go on to be company-makers.
Now, it's one thing for little me, Gerardo Del Real in Austin, Texas, sitting in his office, voting with his dollars, saying this to people. It's another thing when JOGMEC comes in and says we like the quality of the land tenure enough to invest US$35 million, which by the way is more than Hannan's market cap. But then, it's really another thing for a company like Teck to come in and say that they want 9% of the company, which is something that you just announced.
First off, congratulations. How are you feeling?
Michael Hudson: I'm feeling great. Of course, it's a great validation for the project and team, and it's hard to separate yourself amongst the many companies. And this is one very good way that this support by dollar from Canada's largest mining company is and will do.
Gerardo Del Real: The announcement is for a C$2.6 million strategic investment. I would love for you to go over what the due diligence process looks like from two giants like JOGMEC and now Teck to secure those kinds of stamps of approval.
Michael Hudson: Well, in the mining world, JOGMEC is the arm of the Japanese government that invests in early stage projects. So we have Japan Inc. behind us and Teck, as I just mentioned, is Canada's largest mining company, base metal company. And so now we've got Canada Inc. behind us.
And remember, I suppose the very different thing here — and I think we're seeing something in the sector that is changing as the world starts to realize that the supply of metals to build out the e-revolution, to build out where the population is going — is warped in favor of not being enough metals and it's not going to be there.
So the strange thing here is that we've done some very good work. We've taken a big swing. We're looking in new frontiers where nobody's really looked before. We're one of the top ten landholders in Peru. But the thing that we haven't done is… ever drilled a drill hole yet. And we've got two of the biggest groups in the world investing in us.
Obviously, we've done a lot of work and have been banging the table about how excited we are about both the sediment-hosted copper targets, and then over the last six months, really, we've defined what is a new porphyry copper district over 150 kilometers, a few hundred kilometers south of that sediment hosted area.
So we've done a lot of work. There's a hell of a lot more work to be done but we're really uncovering two new copper districts in what was meant to be a mature area. And we're getting the support of two very solid groups before we've even got to the drill stage.
And the challenge here for us is just time… time to get to drilling because Peru is very slow in that respect. But we have the team, and the team technically, and the team socially, to advance both those projects. And it's a matter of de-risking the projects, and that takes time and dollars. And now we've got the backing of two groups who have given us that.
And Hannan, in time, has an enormous opportunity not to define one major mineral system, but multiple, because we're a first-mover in these new frontier areas with one of the largest ground positions in Peru.
Gerardo Del Real: That was going to be my next comment. You have set this land package up, this basin scale land package up, in a way where once the drill does start turning, whether that's in early 2023, whether that's later this year, whenever that happens, and by the way, there's going to be, obviously, a lot of quality work between now and then… you've now identified, as you mentioned, seven porphyry targets just in this one area that you call Valiente. And there's multiple types of mineral systems.
But once the drill gets going, you really are in a position where the company is set up to have multiple years of news flow for the same reason that, right now, you mentioned as a challenge. The permitting takes a little bit of time in Peru right now but that's actually, I think, going to prove favorable for you in 2023 and 2024 because I can see multiple years of news flow coming out of this large land package.
Michael Hudson: It's very true. We are setting ourselves up for staggered permissions for drilling and multiple mineral systems, for example, the seven porphyries. We've got one area nailed down in two dimensions at Belen. It's nearly a 10 km area that has two porphyries and an epithermal system in between it looks like. And we've almost got that up to the drill-ready stage, technically.
And then, we're going to go onto another two more areas this year and get them up to that stage. So we'll have three, ideally, porphyry targets ready to drill awaiting permissions. And they'll start to come through as we see. The JOGMEC joint venture will be ideally drilling early next year. And then, these porphyry targets will tag in behind that. So we'll be continually, over the next one to two to three years, drilling these brand new targets that, like I said, have the opportunity to be not one major discovery but multiple.
Gerardo Del Real: And just to be absolutely clear on the commodity mix for those out there that may not be familiar with this land package, we're talking potentially large copper, gold, and silver deposits, correct?
Michael Hudson: Absolutely. The sediment hosted JV with JOGMEC is clearly copper and silver. And then, down further south with the Valiente project, the porphyries are copper-gold and they are part of a subclass of porphyries we could call alkalic porphyries that are rich in gold.
And then, that's another key point, I suppose, just to touch on, that it's not just the major base metal companies that are looking at these alkalic porphyries but it's the gold companies because these are the type of systems that can produce the amount of gold that the major gold companies desire also. So it's opening up to new opportunities there.
Gerardo Del Real: I touched on Valiente, right, which is a belt within a 140 km and a 50 km area that you described in the news release very well. And you mentioned the seven intrusion related porphyry epithermal skarn targets. Am I crazy to think that there's a potential for different majors, potentially, to come in and joint venture different porphyries within the same land package?
Michael Hudson: Hey, well, remember this is all 100% still owned by Hannan shareholders. So there's many ways to cut this up. I mean, we talked a multi-year strategy here and partnering, perhaps, in some parts of these areas may be the way that the board of Hannan chooses to go.
And I think we've got a lot of work to do at this stage de-risking all these targets ourselves. But let's see where we're at when we've done the work, we've done the geological mapping, sampling, and understanding each mineral system and how it's best advanced.
Gerardo Del Real: It's great to have options. It's great to control a basin in a belt that is not just underexplored… in a lot of cases has never been explored. And it definitely hasn't happened with modern exploration tools and technology. Mike, congrats on a phenomenally structured deal. Anything to add to that?
Michael Hudson: No, I think, once again, just to end as we started, we welcome Teck onboard. They've been great to deal with, and we look forward to them being one of our major shareholders. And it's a great validation on not only the prospectivity but the team and team right across the board from the technical to the social permitting. It's never an easy exercise, and I just feel very humbled by the investment and the people that we've got working in the company.
Gerardo Del Real: Looking forward to several, several very profitable years. Thanks again, Mike.
Michael Hudson: Thanks, Gerardo.Click here to see more from Hannan Metals Ltd.