General Base Metals
Hannan Metals (TSX-V: HAN)(OTC: HANNF) CEO Michael Hudson on Submitting Declaracion De Impacto Ambiental (DIA) for the Tabalosos Project, 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, how are you this morning?
Michael Hudson: I'm top of the world down under, as I like to say, Gerardo. Thanks for having me back.
Gerardo Del Real: The last several times that you and I have spoken, we've talked about the consistency of your new discoveries. You have a basin scale project, a top 10 land holding in Peru with commodity exposure to copper, to gold, to silver. And as I said, an entire basin. We've all been waiting for what I consider to be the next major, major catalyst, which is going to be letting the drill bit see what's underneath. We know there's copper and gold and silver showings all over this basin. And you just announced here a little less than a week ago, a milestone announcement for the company, with the completion and submission of the Declaracion de Impacto Ambiental, which is of course the DIA or the environmental impact statement at the Tabalosos East copper-silver project in Peru. Now this of course will allow for that drilling, that all of us are so excited about. I would love for you to provide the context and the details, and I want to congratulate you and the team because I know it's a long time coming.
Michael Hudson: Thanks, Gerardo. It's a procedural step, but a really important step. And for those who understand the process, and you do, in Peru, it is the moment really, that we're waiting for, other than the approval process, which is now going on. But this DIA has taken something like nine or 10 months to work through. It's a very extensive process of community and stakeholder negotiation and discussions. It's a very detailed archeological survey that was required, and we had to get separate certification from the Ministry of Culture around the areas in which we want to work, and that was the absence of any significant cultural remains. It was intensive environmental monitoring, conducted by third party experts, water, air, soil. So, it's a very extensive process to get drill permits in Peru.
And we are working in areas that are frontier areas. This is the opportunity, but also the challenge. I mean, we're working in the high jungle, over the top of the Andes in the eastern side, as you work towards the Amazon basin. But we're still up in quite mountainous territory. But it is in habitats that are new for exploration, and as a consequence, we want to make sure we do that work properly, respectfully, and get the approvals correctly. And then the DIA is actually quite an extensive area. It's not just a little drill pad that we're talking. We're talking about an area that's nine kilometers by three kilometers, where we've got this extensive pancake of copper mineralization that extends through this basin.
Now, if your listeners were to do the target exercise, which I'm not really allowed to do, but what I can do is provide widths and grades and scales. So that nine kilometers by three kilometers, and we've got a copper horizon that averages one meter, or just a little less than one meter at a couple of percent copper and announced silver, you can start to think of the opportunity of the scale of that target. And it's only 4% of our land holding in this area, that is fully funded by the way, by JOGMEC, the Japanese government, who are earning into a 35 million US dollar project, or earn in, I should say.
So, big area, a very compelling target. The drilling will be the first look at how continuous this is into the third dimension. We've demonstrated great continuity in the second dimension or at surface, from soil sampling, from trenching, from the LiDAR surveys that we've flown over the area. And really, this is testing the key thesis. And if we can demonstrate continuity of the mineralized horizon and the grade, which we see in two dimensions into the third dimension, I think we're really off to the races here.
Gerardo Del Real: You talk in the most recent release about 10 drill platforms that you're planning for, to test the extensive copper shale horizon with holes up to 500 meters depth. Do you have an idea or a guesstimate as to how many meters you plan on drilling?
Michael Hudson: Yeah, we can drill up to 40 platforms with the DIA. So that's not 40 drill holes, that's 40 platforms. So you can sit on a pad or a platform and drill multiple holes, like a spider's legs if you like, from one platform. So, the DIA actually gives us a huge amount of flexibility over that large area to drill a lot of holes. So, from a permit perspective, we've got the ability to drill a lot, if it works.
Now, we spoke about the initial drilling of two and a half thousand meters, which is the first test and the first budget that we've presented to JOGMEC. That will be something like a dozen holes or something like that. Holes will be very shallow from a hundred meters depth to up to 500 meters depth, as we test that third dimension at various levels. So we've got the ability to drill more and the budget flexibility to drill more if it works. But the first step is to give it a pretty good shot. Two and a half thousand meters is a good first program, and if we like what we see, we will continue.
Gerardo Del Real: The copper mineralized shale target at San Martin averages, I believe, 0.9 meters thickness at roughly 2% copper, 1.9% copper and 27 grams per tonne silver. That's eerily close to the average grades, and even a bit better than the average width of KGHM's project, which of course is one of the leading copper sources in the world, right? Copper silver source in the world. And so would you like to speak to that a bit?
Michael Hudson: Yeah, it's always important to explore for something that can be potentially mineable, and as geologists, economic geologists, we've always got to keep that, of course, in mind. So, people in the copper business are generally used to seeing copper porphyries that extend for hundreds, if not thousands of meters at the half a percent copper range. And sometimes a little bit of gold is thrown in. What we have here is a different style. The second most prolific style of copper in the world is a sediment hosted copper style. It's got some great analogs, the central African copper belt. But what you reference there is the Kupferschiefer in Poland and Northern Germany, which is another basin scale deposit, or series of deposits over vast areas, hundreds and hundreds of kilometers, like we see in Peru. And the key thicknesses there, the mineralized zone in the Kupferschiefer, ranges from 40 centimeters right through to five meters.
The discovery hole was a couple of meters at one and a half percent copper down at over 600 meters in the fifties. So, we're within the range. The grades at San Martin are actually very good, right? We like the grade of the system. We do see the mineralized horizon going from those thinner zones, right through to multiple meters of thickness, which average at the moment at that 0.9 meters. So it's all within the range of what we see in some of the best analogs. And the Kupferschiefer today, KGHM is the largest silver producer on earth today from those deposits that have been mined in the modern day, since the 1960s, but go back to Roman times.
Here in San Martin, we're talking about a virgin discovery essentially, that has had a few artisanal mines on it over the years, but you can count them on your hand, and the grade looks very good. And it comes back to that continuity question, which we have demonstrated in 2D, and let's see if it works in the third dimension with this drill program that's coming up.
Gerardo Del Real: Exciting times. Congratulations, Mike. I'm looking forward to more news. This of course covers the San Martin JV with JOGMEC, but of course does not cover the roughly two-thirds of 100% controlled tenure by Hannan Metals, correct?
Michael Hudson: Correct. Correct. We've got about a third of our portfolio with JOGMEC, and two-thirds in our own right. And we'll talk about that separately another day, but we're equally excited about that, the new frontiers we're opening up for copper gold porphyry exploration, a few hundred kilometers south of the San Martin project.
Gerardo Del Real: There's also a little project in Ireland that I still a little like. It's a zinc project. And with zinc here, right near the $2 a pound level, let's make some time to talk about that here in the near future.
Michael Hudson: I'd love to. It's been a while since we've been able to talk zinc, and it is zinc's moment.
Gerardo Del Real: I'm also looking for a great excuse to go back to Ireland. So we'll chat.
Michael Hudson: Sounds great.
Gerardo Del Real: Thank you, Mike. Appreciate the time.
Michael Hudson: Thanks, Gerardo.