Categories: Precious Metals / Mining Stocks
Topics: Gold Stocks / Copper Stocks

Hannan Metals (TSX-V: HAN)(OTC: HANNF) CEO Michael Hudson on Advancing the Large-Scale Gold-Copper Systems at Belen and Previsto in Peru

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today for an overdue public catch-up on Hannan Metals (TSX-V: HAN)(OTC: HANNF) is Hannan CEO — Mr. Michael Hudson.

Mike, it hasn’t been that long… but it feels like a whole different precious metals and copper market ago. How are you today, sir?

Michael Hudson: I’m great, Gerardo. These moments — and certainly the acknowledgment of the mining and critical metals business — have taken on a new level. We’ve clearly moved into a market that’s now rewarding that acknowledgment.

Gerardo Del Real: Well, let’s get into unlocking that value. We’ve seen shares pull back a bit as the market — as we both know — can be impatient. It wants a discovery and rewards discoveries. 

You’re putting in a nice base between that C$0.75 and C$0.80 level, and it’s clear the market understands you have the goods at Previsto. You just need to see the permitting through and get that done.

In the meantime, long-term shareholders — committed shareholders like myself — are crossing fingers for a discovery at Belen. So I want to start by asking how drilling is coming along there. Then I want to dig into expanding the high-grade footprint by 400 meters at Previsto.

Just as importantly, you’re starting to talk in a more pronounced way  about multiple mineralized trends within a larger system. I know that’s something you identified as a focus early on with Previsto. But first, Belen — how are things coming along there?

Michael Hudson: We’ve got the two parts, as you just introduced. We’re drilling at Belen, which is 20 kilometers away from Previsto. Belen is an 11-kilometer-long system — two porphyries sandwiched between an epithermal system. 

We put three holes in at Vista Alegre. We found that the chargeable anomalies weren’t carrying the gold, and there are a lot more targets. It’s a multi-kilometer system with gold at surface, and we’ve got to get back there.

We’re now drilling our second hole at Ricardo Herrera. We haven’t released results yet but we’ve talked about a low-grade intercept in the first hole. We’ve since moved 700 to 800 meters away and are drilling the second hole as we speak. You’ll get information as results come in.

No doubt, we’re drilling these mineral systems, and the challenge now is to find where the grade is and where it accumulates. We’ll finish the second hole at Ricardo Herrera and then move 10 kilometers north to Sortilegio, which has some very high grades of up to 20% copper and 5 to 10 grams per tonne gold at surface. We’ll get two or three holes in there, then assess whether we’ve made a discovery or need to move elsewhere.

We’re not stopping drilling at Belen. It’s a big system, and I can see us drilling there pretty much continuously for the next six to twelve months. Lots of news flow to come, and any one drill hole could change the fortunes of the company with a bona fide discovery in that system.

That’s number one. Any questions around that, or shall I move on to Previsto?

Gerardo Del Real: No, the only thing that’s music to my ears is the fact that you’ll continue drilling for the next six to twelve months. It sounds like the company is very focused and confident about the discovery potential in this area.

Michael Hudson: Without a doubt. We’re now into our fourth hole and drilling our fifth, and there’s not another hole within 50 kilometers of where we’re working. This is brand-new, virgin potential. Nobody’s looked here before. These are brand-new discoveries, and there’s a lot to unravel.

I suppose the frustration for everyone is that they want a discovery tomorrow. We’ve made discoveries. But of course, what everyone wants to see are high-grade discoveries.

I reflect back, as you reminded me, on Southern Cross Gold. We had gold from the early days but it wasn’t until hole 50 that we hit a new realm — the discovery of the major system. That just shows it takes time to work through these things. Very few explorers drill a system and hit hundreds of meters of multiple grams in the first or second hole. It’s a process.

But like I said, every day I’m looking at those photos coming in from the drill rig with great anticipation.

Gerardo Del Real: I can’t wait. I look forward to the day I’m congratulating you on a high-grade discovery.

You mentioned drilling into mineralization but not yet hitting what you believe the market wants to see. Let’s talk about something I think every major and every geologist agrees on. Everyone who’s seen Previsto says, ‘We’re pretty sure about what’s there — we just don’t know how big it is, or how many high-grade trends they’ll uncover.’

That’s a bona fide gold discovery. Can we talk about the progress there?

Michael Hudson: Sure. We’ve got six geologists working full-time at site, unraveling what’s happening from a surface point of view. We’re not yet permitted to drill there, and I’ll get to that process. But remember, we only made this discovery earlier this year. 

The high grades include trenches of 130 meters at greater than one gram per tonne gold, and 25 meters at about five to six grams per tonne. That all sits within a broader five-by-five-kilometer anomaly.

We’re starting to really understand the system. It’s underpinned by a roughly four-by-four-kilometer circular structure, with hypotheses of porphyry centers around the periphery. In the middle, we’ve got this alkaline gold system where we’re seeing very high grades developing in multiple veins.

We’ve got gold not only in the intrusive rocks in the center but also in a broader peripheral area. Gold-bearing veins extend over a two- to three-kilometer area by about one kilometer wide. So it’s without doubt a massive system.

The secret, as always, is to understand the controls on mineralization and find the higher-grade zones. We’ve done that but there’s much more to find. We’re only a few percent into understanding this discovery.

It’s high jungle — around 1,000 to 1,200 meters elevation — but we have oxygen, local roads, and nearby access. It’s not the toughest terrain… although I know you’ve been out there and sweated a bit, Gerardo.

We’ve got a lot of work ahead over the next six to twelve months to unravel what’s happening at surface. We’re continuing to drill 20 kilometers away at Belen while working on the DIA — the Declaración de Impacto Ambiental — which is the environmental documentation required for a drill permit.

That’s nearly complete, and we hope to submit it before year-end. Then it will be in the authorities’ hands. Peru is improving in this respect, and despite the political upheaval, the authorities are working with us.

I’d like to see the permit approved within about six months after submission. That might not seem fast, but it’s quicker than past processes we’ve been through. So, earliest mid-next year… maybe more realistically toward the end of the year.

In the meantime, we’ll keep drilling at Belen and advancing our understanding of what is, contextually, a massive five-by-five-kilometer system — one of the biggest exploration footprints globally at this stage. 

There are only a handful of projects worldwide with this scale and potential at such an early, high-risk stage. It’s one of the more exciting discoveries out there.

Gerardo Del Real: I agree — it’s exciting. Every news release adds to the story, whether it’s drill results from Belen or new insights from Previsto. There’s a lot to uncover and plenty of exciting moments ahead.

I want a discovery as much as everyone else but it’s great to know you’ll keep drilling while also exploring and mapping Previsto. Anything to add, Mike?

Michael Hudson: Just that this is only part of our bigger play. Remember, we’ve outlined a brand-new porphyry-epithermal belt spanning 150 kilometers with around 18 mineralized centers… and we’ve only talked about three or four of them today.

We’ve got to stay focused but there’s a lot more to come over the next few years beyond what we’ve discussed. So stay tuned.

Gerardo Del Real: I know Southern Cross still has plenty of runway. It’s been fun watching you and the team build that into a C$2B company, and I suspect it continues higher.

It’s going to be equally, if not more, satisfying — especially as a shareholder — to watch you attempt to do the same here with Hannan. Mike, thanks as always. Appreciate your time, sir.

Michael Hudson: Thank you, Gerardo.

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