Hannan Metals (TSX-V: HAN)(OTC: HANNF) CEO Michael Hudson on Exploring the 100% Owned Basin Scale Valiente Project


Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is one of my favorite copper, silver, gold plays on the planet, the CEO of Hannan Metals, Mr. Michael Hudson. Mike, how are you today?

Michael Hudson: Good morning from down under, Gerardo. I'm very well, thank you.

Gerardo Del Real: Well, let's get right into it. You have an entire basin. It's full of copper and gold and silver and some zinc. You just defined your third porphyry at the Valiente project in Peru. I wanted to have you on to provide some geological context because as you know, I am not a geologist, but I have to say, when I start looking at systems and mineralization within 140 kilometer by 50 kilometer area, and that's just at Valiente, and then we start getting sample results and we start getting all of the other types of systems that you've been able to define thus far, it's as exciting an exploration play, I believe, as is out in the market right now, especially given the market cap. I'll preface that by saying I'm biased. It's a substantial holding of mine. I plan on continuing to add aggressively to that anytime there's an opportunity. And so I say all that to say tell me why I should stay excited, Mike.

Michael Hudson: You should be excited, but I should fully declare that I'm biased too and a large shareholder and happily so and will increase my holdings as time goes when I'm allowed to as an insider, because this is something very different, Gerardo, something very different. As you stated, there's a new mineral system over 150 kilometers. We've got something like 18 different porphyry centers that we've identified. We've got a number of those now that we're starting to do detailed work on. This press release on a project called Divisoria is the southern end of the Previsto or Valiente Norte area, which is an area that we've been very keen on for some time. We've only just recently been able to get agreements with the local people to get access, and that now is all starting to open up. So there's a hell of a lot more to come from that area, Valiente Norte, and this is just the first one.

It was a peripheral part of a system. We think it's just a little deeper than where it outcrops, but we're finding all grade base metal values, zinc values up past 33% in outcrop wide zones, up to eight meters. And these base metal veins are known to exist peripherally to porphyry copper targets. So there's more work happening at Divisoria. Divisoria is about 10 kilometers east of the Belen area. So that's another area where we've done most work and got the DIA just about to be submitted for drill permitting. So we are really advancing, a lot of social work happening and just at the very margins of identifying the huge opportunity that no doubt exists in this area.

Gerardo Del Real: Valiente alone is a 1,686 square kilometer project. Can you speak to the amount of porphyry centers that you've been able to identify thus far and then speak to how much more of that 1,686 square Kilometer land package you still have to explore?

Michael Hudson: We're in a pretty good base now with the data. So exploration is all about de-risking and collecting large regional data sets and then conducting more and more detailed work until you're literally on top of the mineral system. So over the last couple of years, it was literally during COVID that we had one of Peru's best porphyry geologists wandering the creeks, making those observations, taking little fragments of rock here and here. And he's the kind of guy that knows just where those rocks sit in a porphyry system, so he was able to identify a number of these porphyry systems. At the same time we went and took stream sediment samples, the fine fraction that seems to work very well in this environment, a detail there. But that's basically sampling all the creeks and rivers that drain off the hills and when you get an anomaly downstream, you know there's something upstream, so we can identify the anomalous catchments.

And so we have geology and then the geochemistry identifying that. And then we flew something like, I don't know, a half a million dollar aeromagnetic survey over the last year also, and that was the breakthrough. That's what shows us the rocks that are magnetic and non-magnetic. And there's a very well told story about what rocks in porphyry systems and porphyries that are magnetic versus outside the porphyries, which are of course, less magnetic. So we can start mapping things through the earth's surface down quite deep, actually. And that's where we've identified 18 porphyry centers from those data sets. And then we've gone and followed up a number of these. I just mentioned Belen, where we've done most of the work and we've done all the geological mapping, detailed soils and IP, so electrical geophysics, so we find that the chargeable zones. And there's walk-up drill targets that exist, two porphyries alone at Belen and interlinked by a scan and epithermal system over about 10 kilometers. Divisoria is 10 kilometers south of the main Valiente Norte area that you'll see more information come out, which is what we love.

And then we've been backed of course by Teck who's our major shareholder here who see the huge opportunity. And then the other point is that they've been dated all these porphyry centers, many of them have. And we've taken the rocks and we've dated them with radiometric methods, which is a wonderful technique to tell us at just what time they were forming as the Andes was forming. And the date range is very restricted to a time we call the Miocene, which is one of the most productive, if not the most productive time in the Andes for metal development.

So we know they're fertile porphyries, as well as all the data that we're seeing with rocks and soils, etc. throwing out lots of copper and gold. So that's sort of the recipe that we're following. The social licensing has been very positive actually down in these areas and people want to work and we are working very hard at developing and maintaining that credibility, and we're going to have a chain of drill permits over the next one to five years knocking off all these targets. So it's something very unique. You don't see many people doing this globally, certainly not in Peru at the moment. And I think Hannan has been able to brand itself for that. So yeah, it's one of those unusual opportunities.

Gerardo Del Real: You spoke about being backed by Teck, which look, obviously a huge endorsement. You're also backed by JOGMEC, on the joint venture side of the Hannan portfolio and then which forms part of this extensive basin. Can you speak about San Martin and how things are coming on that front being that that likely will be the first land package that will get drilled?

Michael Hudson: Before we found the Valiente copper belt, a porphyry belt, we were working six to 12 months earlier about 200 kilometers north in an area called San Martin. And that's a very different type of mineralization. We're looking for a sediment hosted copper. It's more like a pancake rather than the big balloons that these porphyries generally sort of take form. So the pancakes extend again, over 120 or 130 kilometers, and we are really unraveling that part of the world. And the potential is palpable again. We've done a joint venture on that area with the Japanese government. JOGMEC, you mentioned, which is the arm of the Japanese government that funds projects like this to secure us future metal supply for its industry. So that's a free carry for Hannan shareholders. JOGMEC are funding everything. We actually own 100% of the project still, but we're working away there.

And as you mentioned, it's been going a little longer than the Valiente porphyry area. And as a consequence where we're waiting for drill permits as we speak. We've been through, we've run all the DIA, or the environmental impact statement for that drilling last year, early last year. So it's terribly slow in Peru, and that's the weakness of working in Peru and the weakness of this company at the moment in terms of just waiting, but I've got patience to wait for world-class opportunities, as does the Japanese government, as does Canada's largest mining company, as do we obviously as shareholders and believers in what we're trying to do in the Peruvian back arc over the other side of the Andes.

Gerardo Del Real: Impressive work. I should note that Hannan's market cap is right around the 14, $15 million mark Canadian. Just the San Martin portion of the joint venture, if it's fully consummated, represents how much potential total spend there, Mike?

Michael Hudson: $35 million US.

Gerardo Del Real: And you still have as a free carry the 1,686 square kilometer Valiente project?

Michael Hudson: We own that in our own right. Correct.

Gerardo Del Real: Yeah. It doesn't get much simpler than that, folks. Michael, I appreciate your time. Anything to add?

Michael Hudson: Thank you for having me on, Gerardo. This is just one of those opportunities that we're really all in the business for, right? We are not here trying to just eke our way to success by working around an old legacy project. We're doing something new, it's going to be huge, and thank you for your support.

Gerardo Del Real: Thank you. Looking forward to having you back on and looking forward to more results. I know there's a lot of results pending, so hoping to have you back on. Have a great, great holiday and we'll chat soon, Mike.

Michael Hudson: Thanks, Gerardo.

Gerardo Del Real: Cheers.

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