General Base Metals
General Precious Metals
Hannan Metals (TSX-V: HAN)(OTC: HANNF) CEO Michael Hudson on Expanding Continuity & Scale at Basin Scale San Martin Copper-Silver-Gold Project
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, the company name should be changed to Hannan a ton of metals. If this latest news release is any indication, you are going to be a very, very busy CEO for many, many years. I would love for you to provide a bit of context on the news that you just announced yesterday. I'll read the headline and then I'll let you do it justice because I'm not going to. The headline reads:
Hannan Extends Mineralization by 3 Kilometres Strike at San Martin, Peru Channel Samples 0.4 Metres @ 10.8% Copper and 124 g/t Silver
This is at the Tabalosos East prospect within the San Martin JOGMEC Joint Venture. Let me give my two brief cents and then I'll let you provide the context. When we first started talking about this basin scale opportunity, you told me the thing that was going to be critical was to establish continuity and scale. And it looks like you keep establishing continuity and scale with every press release. Please, please provide some context, Mike.
Michael Hudson: Good morning from down under Gerardo. Thanks for having me back. The key points have been made and articulated very well by you. We are doing more of the same, so people are going, "Oh my God, they've just found more metal. They've extended the system." We're actually finding higher grades than we found before over very significant widths. The context with earlier sediment-hosted copper systems is becoming more and more obvious. We've collected over 90 channels now that exceed a certain grade and thickness and they average a meter at 2% copper and an ounce silver. And that has great context with what was found in the Kupferschiefer. Their discovery hole was two meters at a percent and a half. Its got context with grades and thicknesses that are mined there the other day.
It's the largest silver deposit on earth. Geologically, it's got great context with the style of mineralization. So reduced facies sediment-hosted style is what the geologists like myself call it. And that has huge implications because we've got this very specific part of the stratographic pile that seems consistently developed across these huge areas. And that's where the copper horizon forms. And then we can start to become predictive. So your readers would've seen the first cross section in our press release. So we've been putting out a lot of plan results, 2D results that we've been de-risking and determining that continuity, which is the key question by initially boulders in creeks, walking up the creeks, finding the outcrops, then doing lots of soil sampling, finding continuity between soil sample lines over the hundred to 200 meter scale. Finding that consistent horizon and then becoming predictive about where to dig down because there's very little outcrops.
There's lots of soil cover and jungle over these areas and then channel sampling when we are digging down. And that's where this average thickness and grade comes from. And then we've started to be able to knock out the geology even more, not just the controls, those facies controls or the specific horizon controls but structurally. And then one of the key points is that there's a very big exploration target, just developing in this DIA area. That's only a few percent of our land position. One of the largest landholders in Peru, this area, this DIA one area where we are putting together the permits for drilling, is developed over nine by two to three to four kilometers wide, the copper horizon. And importantly, it's on the Western side of that DIA area, it's very shallowly dipping.
That's what we interpret. And our geologists have been able to come to the conclusion. And that's a key point because, if this is ever going to be a potential mine, it needs to be shallowly dipping. These very thin bodies don't make very good mines if they're steep. But if you can get in there and develop along them in a horizontal level room and pillar. That's what works in the Kupferschiefer also. So that's another key point. The exploration target that is shaping up is huge in its own right and only a few percent of our land area. So, when are we going to drill is the key point and maybe I'll throw it back to you just to focus me a bit but that's the high level.
Gerardo Del Real: Well, you mentioned one key point, which is the fact that these targets here that we're talking about today represent only a few percent of the 656 square kilometer of tenure at the San Martin JV area. And when we talk about the JV area, we should remind listeners, I think, that there is significant funding in place already with your joint venture partner. Can you speak to that a bit for people that maybe are new to the story are starting to realize the scale for potential massive copper, silver and elsewhere on your land tenure holdings, gold deposits. But let's focus on the copper and the silver here. Can we speak to the funding commitment that's already in place?
Michael Hudson: We have a Joint Venture with the Japanese government through their agency JOGMEC, which is tasked with sourcing future metal supply for Japanese industry. And there is a 35 million US dollar deal for JOGMEC to earn up to 75% and take this through to production. So eventually if it's successful Hannan shareholders will have 25% of a future mining project, a potential future mining project. At the moment, we own a hundred percent of it and we are working at it. It's our teams working it up but JOGMEC are funding a hundred percent. So they're spending 8 million US dollars over four years. We're just coming to the halfway point of that four year period. So this is a free option for Hannan shareholders.
Our cash position is healthy. We're not spending one shareholder dollar here on this project yet. We've got huge talk to what is potentially one of a new copper district globally. So, it's a very good and strong position that the company is in. And I must say JOGMEC are fantastic partners. They're very solid. The Japanese culture, I appreciate it every moment. They do what they say they're going to do. And they're very supportive and understand exploration risk but equally exploration opportunity.
Gerardo Del Real: You're fully funded on this portion of the land holdings. You mentioned the free ride on the other two thirds of your land holdings, which in itself has significant gold showings, copper showings, silver showings. Can you speak to that a little bit? Because again, if all we were getting at shareholders was potentially 25% and I know you said of one project but you have 656 square kilometers within the San Martin JV area. There clearly is the potential for multiple deposits within a 656 square kilometer area. But again, that's only one third roughly of the basin that you essentially control. Can you speak to that other two thirds?
Michael Hudson: We took a step back maybe five years ago and myself and a few colleagues said where can we make massive grassroots discoveries in new frontier areas? And there's no better place to go than the Andes and for various reasons the back-arc or over the top of the Andes and where it's the high jungle, basically, before it goes into the Amazon basin. It has been relatively unexplored for lots of logistical and social reasons that... I've been in Peru for quarter of a century now and was working in those areas with lots of security because they were drug growing areas, et cetera, at the time. Now that has changed dramatically over 20 years. And essentially that's no longer an industry there. There's been a lot of infrastructure put in, roads.
What took days now takes hours to get to certain places. So lots of changes. So we went in and took a big picture approach. One third is with JOGMEC as I just mentioned that JV. Two thirds is in our own right. So not only do you get the solidity in Hannan of having that fully funded, very large pro sediment-hosted project but lots of talk in a hundred percent owned projects of that ground that's Hannan hundred percent. We have actually sediment-hosted copper projects that have very robust and as good or if not better, early stage results in what is on the JOGMEC ground. And then about half hour land position is in a copper, gold porphyry belt, about 200 kilometers south. And we are just starting to get granted permits there.
We've been working over the last year, doing the high level geological work to find the centers of those systems. And you're going to see a lot more results come to the table. Detailed soil sampling, trenching down there, we're flying a huge detailed aeromag survey in the next six months. So that project will really start to pivot as this San Martin project did last year from a hope, lots of metal floating around to, my goodness, this has got context. And you'll see the same thing happen this year at Provisto.
Gerardo Del Real: Metals porphyry systems, a lot of plural there Mr. Hudson. It's always a pleasure. Thank you for coming on. I'm looking forward to additional results from all of the other work that you continue to carry out. Anything else to add to that?
Michael Hudson: Nope. Sorry for getting all geological on you there.
Gerardo Del Real: I'm not a geologist, so it's appreciated. Thank you so much.
Michael Hudson: Thanks Gerardo.Click here to see more from Hannan Metals Ltd.