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

Hannan Metals (TSX-V: HAN)(OTC: HANNF) CEO Michael Hudson on Final Steps Before First Drilling at Flagship Valiente Copper-Gold Project, Peru

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the chairman of Hannan Metals Ltd. (TSX-V: HAN)(OTC: HANNF)… hitting milestone after milestone… I'm talking, of course, of Mr. Michael Hudson. Mike, how are you today, sir?

Michael Hudson: Hey, Gerardo. I'm very well. Thank you for having me once again.

Gerardo Del Real: I joked last time that you have a one-billion-dollar company that you and your phenomenal team have led from discovery to where it's at today. I'm talking, of course, of Southern Cross Gold Consolidated. Where that's at today, it keeps delivering phenomenal results in a gold market that seemingly wants to go higher and is headed much higher than $3,300 an ounce.

But you're hard at work, and you've been hard at work building what I think is going to be your next billion and multi-billion-dollar company. That's Hannan Metals. And you just achieved what is a milestone moment and what has been years and years of hard work getting to this point. Of course, I'm talking about starting the site access prep at Valiente. How is that coming along, sir?

Michael Hudson: We're going well. Thank you, Gerardo. We've got about 30 people on the ground. They're putting in the walkways. We've got rigs that are hand-portable for minimum impact on the surrounding. 

We’ve expanded those walking tracks a little bit. We’ve put the pads in, and they look absolutely clean and beautiful. We'll be ready to go by early May with the drill rig contract signed. It's just one of those exciting times. You spend a long time developing and de-risking projects, and now cometh the truth machine.

Gerardo Del Real: Let's talk about Vista Alegre. I understand from conversations that we've had and indications that you've made that Vista Alegre is likely going to be the first drill hole that is drilled. Is that accurate, the first target that gets a drill hole into it?

Michael Hudson: That's right. The area we are drilling, we call Belen, and within the 9-km-long Belen trend, there are three different target zones. They all  have different names. There's the Vista Alegre target, which is the middle of the sandwich, if you like. That's an epithermal gold project. We love gold. Everyone loves gold, and we're targeting the gold-rich parts of these systems.

Then, it's sandwiched by two porphyry copper and copper-gold projects, which we call Ricardo Herrera to the south and Sortilegio to the north. It's 40 platforms permitted over that nine kilometers, equally divided, 12 or 13 platforms in each one of those targets. Vista Alegre itself is over two and a half kilometers. 

There's gold in boulders, gold in outcrop, gold in soils. There's IP that extends and has context structurally and with the geochemistry. IP is induced polarization, a geophysical technique that can measure the sulfide content of the rock. Generally, sulfides are associated with the mineralized parts of a system, i.e. the gold-bearing parts.

So we've de-risked it. There's not a lot of outcrop, and now, we just need to drill those targets systematically. No doubt it's a gold-bearing system. But the question is, what is the grade, what is the width, and how does it all hang together? That's what only the drill rig will prove.

Gerardo Del Real: I've known you now, and I'm going to end up dating myself a bit here, and you by default, Mike, but I've known you now for roughly 16 or 17 years, give or take a year or two. You are notorious, and we talked about this off-air a little bit, you are notorious for over-delivering and under-promising. And I just could not be more excited about the upcoming program. 

For those not familiar with the potential at epithermal gold systems, like Vista Alegre, can you speak to what you're hoping to see because this last news release was the first time I saw, in a slide, the company mentioning that Vista Alegre has multi-million-ounce gold potential.  

You had been very subdued about not setting the table for that kind of expectation but you've seen these systems for many years. What is the hope, while, of course, tempering expectation?

Michael Hudson: What I want to see is simply grade, and even a little bit of grade will give hints that the system can develop high-grade. That's what you want to see, and generally, it doesn't always happen in the first hole. 

We've been talking about that, that our challenge is to find the best parts of the system as quickly as possible, not only from a cost of capital point of view. You need to drill it less with these lower market caps but we'll know the system and how it's developing the alteration association with mineralization.

Where we are in the system, these epithermal systems have windows of prospectivity as they've developed just below the boiling zone. So we'll start to piece that together, and they're always structurally-controlled. We'd love to find those structures that host and control the gold and can step out from the first hole, to the second, to the third, etc. 

That doesn't always happen as simply as that in any drill program as any geologist or anyone who follows the industry knows. But drill-baby-drill… and put lots of drilling into these systems to understand them and create the value. That's the only way it will happen so we're certainly poised for that.

Gerardo Del Real: I've seen conversations and have heard chatter about the fact that you have a C$165 million market cap without a single drill hole. I'm biased now because I'm a shareholder. It's my largest personal shareholding, and I've been a shareholder for quite some time. 

But I think people are underestimating what, potentially, even if it was just a multi-million, and I say that humbly, right, if it's just one multi-million-ounce gold discovery that Hannan ever comes up with… that's going to be worth a whole heck of a lot more than C$165 million.

I don't think people truly appreciate that you have an entire gold and copper belt, and, clearly, the people that are much smarter than I, that have degrees in geology and have studied these systems for decades on end, including yourself, Mike, understand what Previsto is “Cripple Creek,” “The Monster,” call it what you like, the potential there for tens of millions of gold ounces. 

If any of that comes anywhere near what we think the potential there is, then, again, I repeat, a C$165 million market cap is going to seem silly. How are you de-risking “Cripple Creek,” “The Monster,” Previsto, as we get to that part because I know that you're doing that simultaneously while also constructing the drill pads, getting the roads in, and getting ready to get the drills turning at Vista Alegre.

Michael Hudson: Yes, we are doing something that's very different, as you point out. There's something like 18 different porphyry and epithermal systems that we've got in this 150-km-long belt that we've defined from first principles. Few people have been sniffing around. 

There's lots of artisanal mining on that side of the Andes or smaller-scale mining, I should say. So it wasn't absent that people thought there could be something there but we've certainly done infinitely more work to define these systems. 

There are not many companies, globally, that have new porphyry belts in very fertile parts of the world. Peru is a top one, two, or three producer of copper and gold. So we just found a new one of those in a part of the Earth's crust that is so very well-endowed.

Then, we're not a one-hit wonder show, right? We're really drilling. These nine kilometers at Belen are, I hate to say it, but it's almost the second prize. We found it earlier on and we permitted it. Any one of these systems can be a significant company-making project in themselves, any one of those three that we'll be drilling over this year. 

But the large one that you refer to, “The Monster,” Previsto, which is about 22 km to the northeast of Belen, is where we found a 5 x 5 km large soil anomaly that exceeds 0.1 g/t gold, generally, over the larger area. And now, we've just started to trench, not drill, but just trench. 

In late December, we took those first samples and announced them earlier in the year. We trenched something like 26 meters at 5 or 6 g/t Au over a broader zone of plus a hundred meters that carry gold.

This is just finding pieces of rock that stick out of the very steep terrain there that is jungle-covered. So it's certainly not targeted to finding the best parts of the system. It's just finding somewhere where you can sample. And now, we're following that up. We’ve followed that up with some other high grades in context within tens of meters of that one trench. 

So we're starting to find continuity, but it's all within this larger system. It's a big mag anomaly. It's a massive potassium anomaly in the radiometrics that was flowing with the mag. These are big potassic systems.

So the footprint is huge, and if it continues to develop in the style we see… you talk about Cripple Creek. These are alkaline gold systems that can form amazingly high-grade and very large systems like Cripple Creek. So that's where the real optionality also comes. You're just not drilling three really interesting company-making potential targets. You've got this monster as well.

Then, there's a whole raft of projects that we're just really sitting on and not doing too much work because we're focusing on these two large areas at the moment. We've got years and years and years of de-risking, and the permitting is starting at Previsto. We hope that will be permitted quickly. 

The Peruvian government is actually now working much better than it has for the last three or four years. We're seeing great timeframes and turnarounds, and we're working very closely to be responsible explorers in this new area. We take that responsibility very, very highly. We're not just a one-hole hit or a one-project hit. And how do you value that if and when these projects deliver? You don't own enough of this stock, Gerardo.

Gerardo Del Real: I'm going to leave it there because I couldn't have said that any better myself. This is someone that owns a pretty significant amount of shares. I couldn't be happier. I couldn't be more excited. 

I can’t wait for the news release when we find out that the drill rig is actually turning and where you're drilling. And again, I think it's going to be a phenomenal and spectacular 2025 and 2026. 

The challenge is going to be how long is the company around before a major comes in and says, ‘We would love a whole brand new copper-gold belt’ right as copper and gold are hitting brand new all-time highs. It's a fun environment to be in. Anything to add to that, Mike?

Michael Hudson: No. Exploration is amazing value created. We've got an amazing exploration project in what is now an amazing market that a few people have seen, really. So it's all the right timing and the right project in the right place.

Gerardo Del Real: Beautifully said. Looking forward to chatting again. Thanks again, Mike.

Michael Hudson: Thanks, Gerardo.

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