Hannan Metals (TSX-V: HAN)(OTC: HANNF) CEO Michael Hudson on Unlocking Underground Potential of New Copper-Gold Mineral Camp in Peru’s Underexplored Foreland Mineral Basin

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, great to have you on. How are you, sir?

Michael Hudson: I'm doing very well, thanks, Gerardo. Yourself?

Gerardo Del Real: I am well. Thank you for asking. Another day, another copper-gold porphyry discovery, right? I almost think you are becoming, at least in the market, a victim of your own success. I think most people confuse these discoveries with previous ones. And so you've recently provided an exploration update on the Belen copper-gold porphyry discovery in Peru that you've done some quality work in. 

Now, the release that you put out here was very technical in nature, so I'm glad to have you on so you can give us non-geologists a primer on the importance of this release.

Michael Hudson: It was a horrible release, wasn't it?!

Gerardo Del Real: It was a fantastic release!

Michael Hudson: It was written absolutely for technical people to understand, and the summary, I apologize, needs to be given more verbally because it's very hard to write these things without the substance. And it needed the substance, we figured. We always try and get the balance right between technical and simplicity, and this time, I think we erred on the technical.

So what's important here, Gerardo, is simply number one, that we now have validated one porphyry with mapping and observation, and that tells us we've got a kilometer-by-kilometer porphyry outcropping leach cap. It's the very top parts of a porphyry. So all that soil sampling in those boulders and rivers, we've now been able to map and understand the distribution in the weathered profile. 

And goodness knows what could be below there. But a kilometer-by-kilometer footprint of not only geochemistry at surface, but now all the right geology, the right alteration, the right veining, the right host rocks, the right mineralization — and the right mineralization mix is ever so tempting.

Number two, we’ve found hints of a new porphyry about eight kilometers to the northwest that has similar scale as the one in the southeast. So the one in the southeast, where we've done the more detailed work, we call Ricardo Herrera. The one to the north, the little hints that we're getting with surface geochemistry is called Sortilegio.

And then third, we've just finished a C$500,000 airborne magnetic survey, which will unlock this whole area where we've got close to 1,000 square kilometers. And we flew every piece of our land with airborne magnetics. 

These porphyries are for the most part magnetic. So we'll definitely find more than we know today sticking out of the ground. So it was a really key moment for us to be able to complete that survey in areas that are variably cloudy and foggy. And this is high jungle, so getting helicopters around there and doing it safely and effectively in a cost-wise manner was very pleasing to have achieved.

Gerardo Del Real: I'm going to ask you a very non-technical question. Can we name the next copper-gold porphyry discovery the Gerardo Del Real copper porphyry? I figure if we can do a Ricardo Herrera, we can do a Gerardo Del Real, right?!

Michael Hudson: These are the names of the local villages. So I think you have to have a chat with some of the locals first… 

Gerardo Del Real: I love it! Listen, there were a couple of things in the release that really stood out to me. The comment about this being the first bona fide bedrock find at the Valiente project; that stood out to me. Can you explain in more detail what that means and why it's so important to you and the team… because, look, again, I'm a biased shareholder. 

But when I look at the boxes that you mentioned that are being checked off — the right geology, the right geochemistry, the right outcropping, the right signature — when I look at all that, that's a lot of things to get right. And that, obviously as a shareholder, excites me because of the tremendous scale of this basin-scale land package that you've been able to amass. And then, that first-mover advantage is clearly starting to show itself. But can you speak a bit more, Mike, to the bona fide bedrock find at Valiente?

Michael Hudson: Our job as explorers is to de-risk projects, Gerardo. So we collect data that's fit for purpose at each stage of exploration. In the earlier stages, you want to sample larger areas and narrow down your search. So we start with stream sediment sampling that samples big catchment areas over hundreds of square kilometers literally. 

And then, you come down to walking up and down creeks, sampling the boulders in those anomalous catchments. Then you walk up the hills and try and find the outcrops where these boulders have come from. You take soil samples over the areas where you think there's more potential, and then you narrow down soil sampling from hundreds of meters down to tens of meters as you start to pull it together.

And then, you really try and find a source for all your anomalies. And that was what we've done. This is high jungle. So it's not just sticking out of the ground that you can see from a satellite. It's under thin soils and lots of trees. And we were able to scrape away the soils and start doing that more systematically as we narrowed down the search space in Ricardo Herrera. We now have mapped all the right types of ingredients we need to see in a porphyry environment. And we've mapped the porphyry.

It's clear, but when you get anomalies, you hope they have context. And the context is that we have an outcropping porphyry in the leached environment. We don't expect to see very high grades, but we expect to see the metals mix. We expect to see some metals moving around with all the water and oxygen moving them around. 

And copper is a great example. It's very leached, whereas gold has a habit of staying in those leached environments. And so we're seeing all those right metal movements that we want to see. We expect very significant upgrades when we get below that weathered horizon. And that's why we need to drill.

So I’ve received lots of emails from technical people. Remembering we just had Teck invest C$2.6 million a few weeks ago; they’ve become a 9% shareholder. So, of course, they've been out and done their due diligence and have seen these targets start to develop as we've described them here. 

So it really rings true in the eyes of people who know what we're looking for there. We’ve not only found one porphyry but there's hints of seven of them across this target area, and this is the most advanced one. And now we can map it and see it in outcrop and tell the story ever so more clearly.

Gerardo Del Real: Here is another point that was interesting to me: the fact that in 1984, the Peruvian geological survey conducted mapping in the central part of the central cordillera. And then, there was actually some exploration, though there's not very many records of the exploration that was done by companies like Newcrest, like BHP. 

So it's clear to me that this region has always been prospective for discoveries. But the security situation at the time, the way that I understand it, Mike, and please correct me if I'm wrong, didn't allow for further exploration. But it is interesting to me that the Newcrests of the world and the BHPs of the world have looked here before. Can you speak to that a bit?

Michael Hudson: Yeah, I suppose we put a little bit of the discovery history in there. So the history is always written by the winners. We thought it was good to acknowledge some of the past work that had been undertaken here. It's been very sparse. Of course, Peru is not one of those jurisdictions where the government requires companies to hand in the information they collect. 

So in many countries in which we work, you have to report all of your results annually in very detailed technical reports. And it's government-owned data. They're giving you the right to explore an area, and if you move on, then the government wants to have new companies come in and leverage off that old information. 

Now, Peru doesn't have that system. It just has a pay-by-year policy to keep the mineral concessions active. But it leads to huge gaps and overlap right through the country. And that's a discussion for another day.

But we know there were people exploring here in the past. We know there was pretty sparse work. We know that it was very difficult. The roads weren't existing in those times. It was a big narco area back 20 to 25 years ago. But there were hints, and even INGEMMET, which is the Peruvian geological survey, did map intrusives out in these areas where they weren't really meant to be. 

This is really rewriting the geology of the Andes, but there were hints there, and then some of the data that Perupetro put out that they made public a few years ago from all the oil explorers. So actually, there is a data set there. The oil guys have been very good; the mineral guys have been less so. And that gave us more hints.

So there was work but it was just very tough. And then, we were very fortunate, I think, that during COVID, which was very difficult for Peru and others around the world, we were able to take a step back and just put experts into the field, one person specifically, and let him wander around from those early-stage discoveries and start putting the puzzle together. And that's what really led to this definition of this belt in much more detail than anyone had ever looked before.

Gerardo Del Real: What comes next, Mike? You've been very clear and public about the fact that you only want to continue working and investing in areas where you are welcomed, where Hannan's team is welcomed, and when there is a mutual respect and understanding between stakeholders, the community, the team at hand. And what comes next?

Michael Hudson: Absolutely. You can't do otherwise these days. So that is our approach. The next steps are to, one, work up the other porphyry targets to get them into basically drill-ready status. So Ricardo Herrera is clearly drill-ready now. Sortilegio, there's a lot of work ongoing there right now. There's a huge porphyry. Between the two porphyry targets, we have a 2.5 km epithermal gold-bearing target that fills between them. So that's just another target that we haven't spoken about.

And this is only one porphyry center. We've got seven others. So we just talked about Sortilegio and Ricardo Herrera as one area. So we've got to go to those other seven areas and do the same de-risking work at Ricardo Herrera and Sortilegio. We are starting drill permitting. So we will bring in a whole lot of cultural experts, environmental experts, and archeological experts and start doing all that baseline mapping that's required for drill permitting. So that will take a number of months to undertake that work.

And then, we'll submit our DIA, it's called. It's quite the process. And then, the Peruvian authorities will take at least a year to approve that. So it's nail bitingly frustrating. But that's the process we're working with in the country, and while we are waiting for that first drill permit, we'll be working up the other areas. And then, over the next one, two, three years, we'll be drilling multiple porphyries right up and down the spine of this new belt we control.

Gerardo Del Real: Fascinating stuff! The upside is ridiculous in my eyes. I will be voting with my checkbook as I always do. Mr. Hudson, always a pleasure. Anything to add to that?

Michael Hudson: No, thank you once again, Gerardo, for the opportunity to try and explain what was a very technical release in somewhat simpler terms.

Gerardo Del Real: Looking forward to the Gerardo Del Real porphyry center!

Michael Hudson: Very good mate… see you later.

Gerardo Del Real: Thanks, Mike.


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