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

Joe Mazumdar of Exploration Insights on Junior Bull Market & Hannan Metals Monster Discovery

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the man leading the ship and the fight over at Exploration Insights, and one of the most honest people in the business, Mr. Joe Mazumdar. Joe, it has been a bit since we caught up, both publicly and privately. So thank you for taking some time, and I know you've been busy.

Joe Mazumdar: No worries. Thanks for the invite.

Gerardo Del Real: Well, let's get right into it. We talked briefly off-air about the commodity space and where we are in the cycle. And we touched on exploration and how we both feel, I believe, that we're finally at that point where exploration that leads to discovery is actually leading to substantial price gains. Right? Where do you see that cycle at? And where do you see it going over the next couple of years, given an environment where gold is pushing 3,400, copper seems primed to make new record highs? And that could go on with uranium turning and the announcement today from the Trump administration. But it looks like we got the market we've been waiting years for.

Joe Mazumdar: Yeah. I mean with all the noise about tariffs and all these other things that are impacting commodities and equity markets, debt markets, I've sort of retracted back to exploration. Because they're sort of less impacted by these global events and more impacted... They're more the alpha than the beta. And the beta is harder to predict now, because you're not sure which way it's going to go.

I do have some stocks that are linked to a thematic. But a lot of the success we've had over the last year or more has been in exploration with respect to results. And companies that have had strategic placements by big companies that have good teams on the ground doing the right work. And actually making gains in their exploration and getting rewarded. And that's the big deal, is that they're getting rewarded for that. And it hasn't been just gold, it's been mostly copper for us, in terms of exploration plays that have done well.

Gerardo Del Real: Excellent. Listen for a lot of people that, because we're going to get a lot of new eyes and we're starting to see that, for people that aren't familiar with your background and your service, you're one of the few services that I recommend to everyone. And I tell everyone, "Hey, if I'm not your cup of tea or if Nick, my business partner, isn't your cup of tea, go check out Exploration Insights and Joe Mazumdar." Again, one of the most honest straight shooters and intelligent well-written letters that's out there. So tell people a little bit about yourself and where they can find your work, sir, 'cause it's fantastic. Good stuff.

Joe Mazumdar: Yeah, I mean, my background is mostly industry, so I worked in exploration. And been in Canada, Australia, and South America mostly. And then I did a finance degree in Colorado and then I started working in finance, market analysis, trading in Phelps Dodge in Phoenix, and then corporate development and that in Colorado for Newmont. And then became an analyst, an equity analyst for six years. And then I took the letter over at Exploration Insights from Brent Cook who founded it back in 2008. And now I've been writing it longer than he has. We're on to easily our 10th year right now.

Gerardo Del Real: Man, well, congratulations. I think services like yours are going to continue to be more and more important as we get further along the cycle. Because I think in the next couple of years, we're going to get to a point where a million new companies with the word “gold” or the word “copper” start popping up all over the place. And being able to separate the wheat from the chaff is going to be hyper critical and important. So that you don't take a bull market and mistake it for brains and end up losing some money, 'cause that can happen even in bull cycles, right?

Joe Mazumdar: Yeah. And the thing is not to expand your portfolio too much, such that you're running around looking at news from 50 different companies. As opposed to just adding positions and people you trust, projects you like, jurisdictions you're fine with. And then going more into that and understanding that more, as opposed to trying to dilute yourself with too much. And so, that's what we've done as well. Usually we have a range of 20 to 25 companies in the portfolio, we've gone to below 20. I think the magic number is between 15 and 20, probably somewhere in there where you could do a really good job in following it, and also have the bandwidth to look at new stuff.

Gerardo Del Real: Yeah, completely agree with you. I'm going to ask you a selfish question, selfish because it's my single largest personal holding, one that I've had, a position I put on pretty aggressively a couple of years ago. And that's Hannan Metals. I know that you were just at the project, I was at Previsto, which obviously I want your take because look, I was there and saw the three projects, Vista Alegre, Sortilegio, and Ricardo Herrera. I saw those. But we also did a nineteen-hour day. I'm going to see what they're saying is the Monster or Cripple Creek 2.0. I'm not a geologist though, so when I see boulders of blue oxidized copper just oozing out of the ground, sure, I get impressed. When I'm walking two hours into a jungle and there's just gold boulders popping up all over the place. Yeah, absolutely. That screams fertile system to me, and it screams that there's a lot there that hasn't been discovered.

But you are an economic geologist and you were just there. I got to get your take first on the Monster or Cripple Creek 2.0, or if you just want to call it by what it's called, Previsto. Because that seems like a globally significant, potentially globally significant discovery that you just don't see that kind of footprint. But I want your take on it. Forget what I think.

Joe Mazumdar: Yeah. I mean the thing is that we've had... I've known Mike Hudson for a while now. First time I met him was up in Finland. I took shares in a position in his Southern Cross in Australia. But before then, I had taken a position in Hannan Metals, but not because originally it started off be Hannan was because the Irish focus on zinc.

Gerardo Del Real: Zinc. Yeah.

Joe Mazumdar: Yeah. And it wasn't until they got to Peru that I took a position. And this would've been, I don't know, four or five years ago. For sediment hosted copper in the northern part of Peru. And at that time, they had the third-largest position in Peru, which is hard to do considering how prospective Peru is. But that changed once they started increasing their land package for alkali porphyry epithermals. And so as they got the JOGMEC deal worked out for the northern stuff, which was probably more difficult to permit and more difficult to access. And that was being funded by JOGMEC. They could turn their focus on the alkali stuff. And that was where I had more of my interest. And so my first site visit was about two and a half, more than two years ago. And at that time, I visited all the Ricardo Herrera, Sortilegio, 'cause that was easier to access. Because Previsto, all I could get is to the eastern part, into the creeks where there were boulders of what we ended up finding, what they ended up finding only about eight months ago. They found the source, I think, of this. And so, this was an alkali porphyry system. And so, we speculated and they found where it was actually coming from, outcropping.

And so the access, as you know, is not easy. I mean the first time I went there, and that was the other project before they put the roads in, was an incredible day of jungle and snakes and things like that. And then the next time we went, this recently, was two hours just to get to their camp. And then it was probably another four hours wandering around looking at their trenches, and then another hour down. So like a seven-hour, eight-hour hike, which was a good hike.

Gerardo Del Real: It was a good hike. Yeah, I work out twice a day. I box, I jog four miles a day during the week, and I was cramping by the end of that day. I think we were on hour number nine. And you're trying to hydrate, but I mean you're just sweating all this stuff out. Your body's not keeping up. And it was the first time that a physical activity caused me to cramp in a very, very long time, man.

Joe Mazumdar: Yeah. No, no, it was good. It was good. But I knew it was coming, I knew it was coming.

Gerardo Del Real: There you go.

Joe Mazumdar: So yeah, it was an excellent trip. So you saw the structures, you saw how hard it is to do this work as well, so it's not for everybody.

Gerardo Del Real: No.

Joe Mazumdar: And you know why it's a grassroots discovery because nobody else went here.

Gerardo Del Real: Sure.

Joe Mazumdar: It's not like you're walking over and then you see a sample or you see a drill hole. There's nothing there.

Gerardo Del Real: Yeah. You can't Google map that one, right? You're not flying over with your little drone. And you're either in there and you're chopping trees and you're taking the samples and doing the work, or you're not. But fortune favors the bold. And kudos to them 'cause it seems like a significant, significant discovery.

Joe Mazumdar: Oh, yeah. Most of the industry people I talk to are all talking about this, like, "Geez, I really like what Hannan's doing." I like the fact that they have, not to get too technical, megacrystic porphyries. The fact that they're finding roscoelite, which is emblematic of this kind of system. And they're getting the copper in bornite as well.

And then I spent another couple of hours going through all their rocks at their rock library at their new office. And all those had indications. And it's good because they've got eight Peruvian geologists working there, a good blend. And I know that the guy leading the charge, Lars Dahlenborg, is leaving the company or has left the company. But I know Mike's working hard in getting a guy now to actually live in Peru and do this. 'Cause as they're drilling, they're going to need more boots on the ground activity. And as Peru is constant engagement with the locals to keep that access door open. But they've cut road or a trail, the rigs. And then I've seen them, like in my letter, I documented all their basically carrying the generators, carrying the rods by foot up this trail. That took two weeks, it took 50 people to cut this trail into the jungle.

Gerardo Del Real: That's phenomenal work.

Joe Mazumdar: Yeah. And even that job wasn't easy. But this is what it's like. This is what it's like to find new things. If you read about the Grasberg stories and all these other stories, they're all about people going to places nobody's been. I mean, this Alkali porphyry story in the back arc of Peru has been known for decades, but nobody's done this much work.

Gerardo Del Real: Yeah. No, it is truly trailblazing, pun intended. What's the potential? Again, it's easy for me because of my holding in the company, and because I've known Mike for nearly two decades now. It's easy for me to say, "I think we got the next Cripple Creek at Previsto." It at least has that potential. Right? How realistic is that analog? I mean, you've seen... It's five by five and it's open on all sides right now, the way I understand it. The top, my simple non-geologist way of describing it, it's a sea of gold. It's 0.01 grams per tonne over five kilometers, and that's just the top of it. That's insane to me.

Joe Mazumdar: I mean, every deposit’s different, but the system has parallels. It has parallels to Cripple Creek, but it's also got parallel to Porgera in Papua New Guinea, which is a significant deposit. And the fact that majors are looking at these things is important. And this sort of thing within a major would be, I think, a high priority sort of play. But obviously in terms of us doing well on the equity side, as long as they can raise money, they want to keep this within Hannan as long as they can.

Gerardo Del Real: Absolutely.

Joe Mazumdar: And I think that's the way to do it. But most of the time, once you start drilling and start doing the hard work, I think eventually they'll have to get a partner.

Gerardo Del Real: It's expensive drilling. Sure.

Joe Mazumdar: But it's also access, because I think you'll need a chopper, probably at Previsto to drill it, because it won't be easy. And that's where a big company can come in and earn into that project. And I've had that sort of success in other projects in Kazakhstan and Australia where a major was doing some of the work. And some of the work they were doing a hundred percent of, and I think the JOGMEC stuff is totally a different story.

Gerardo Del Real: Yeah. Yeah, yeah, yeah.

Joe Mazumdar: And I don't think the market, I don't know, I am not paying attention to.

Gerardo Del Real: Yeah, it's nice, it's cute. But let's be honest, I think the prize is next year likely, Previsto, I think what happens during this drill program with the drill training at Vista Alegre, I want to talk about that. Because I think these three projects that are going to get drilled over the next several months is how we get to the part where if there are discussions for a partner at Previsto, we make sure those majors are paying up. That they're not coming in and taking 49% or what-have-you at two or three bucks.

I know Vista Alegre, according to Mike and the team, they believe there's multi-million ounce gold potential in that epithermal target. Can you speak to the target and in the likelihood of a discovery there? Because look, Previsto is exciting for its own reasons. You don't get Cripple Creek analogs every day. But I'm excited about Vista Alegre. If we can discover a couple of million ounces of high-grade Epithermal gold with easier access, in the meantime while we permit Previsto, it's a heck of a setup. And that's not even counting Sortilegio or Ricardo Herrera, which copper, gold and gold, copper porphyries there that also have the potential to be company makers maybe.

Joe Mazumdar: Yeah. The problem with that area is that there's just not a lot of outcrop. There's not a lot to see. And so, a lot of the targets are more based on geophysics. And you take that as you want. What I like about Previsto is you could see it.

You don't need geophysics to tell you it's there or it's not there. But at Ricardo Herrera, Vista Alegre, Sortilegio, and that, the rocks I saw in their rock library indicated that there is potential. I saw the megacrystic porphyry there, I saw these lamprophyre dikes as well, which are a good indication of a deep plumbing system. So, it's there. But I'd be more concerned about the fact that we're relying a little bit on geophysical targets. But it's definitely worth drilling and it's got all the indications that it could be a significant system. The drilling is important, but there could be a concern that they don't hit anything. The stock goes down when really the prize is Previsto. And so you could get a bit of that, but take your point that if they do hit something there-

Gerardo Del Real: It's off races.

Joe Mazumdar: Yeah. Then the stock will definitely roar.

Gerardo Del Real: Yeah. Well, we'll know soon. I know drills are turning. What else are you looking at out there, Joe, before I let you go? I want to be respectful of your time, but I haven't had you on for a minute, so I want to pick your brain. What else do you like out there?

Joe Mazumdar: Well, like I said, I'm doing a lot more grassroots. And it's not like a lot of this stuff after they drill it is overvalued. So after they drill it, I looked at it and I could still buy it on the market. So, I'm not doing a lot of private placements. I don't care about the warrants, and rather they didn't do warrants. So I buy a lot more in the market, and it helps the subscribers because sometimes that's all they can do.

And so, I'm checking out a lot more of these ones that I know the people, I've been talking to them for years, and now they've stumbled onto something. And so, I don't have to do due diligence on the management jurisdiction or anything. And it's similar to Hannan in that I've known Mike for a long time. And once he sort, I don't want to say tripped, but I mean he got something of interest, it was easy for me to take a position in it.

Gerardo Del Real: Sure. You know it's going to get managed correctly, they’re not going to blow out the share structure, do social licensing the way it's supposed to be done.

Joe Mazumdar: Yeah, so, I don't have to do that kind of due diligence. And that's the hardest due diligence. The geology stuff is almost easier than that. But once you got the right... And that's why your portfolio can be a lot smaller, because there's very few of those kinds of people around.

Gerardo Del Real: Yep. I couldn't agree with you more, Joe. Look, I think we're in for an exciting couple of years. I want to do this more often. I think Hannan's going to be fun to watch for many, many years. I'm really curious to see how long it takes before a partner pops up and tries to take it out.

Joe Mazumdar: Well, I mean, I get a lot of... I was at Proexplo and I talked a lot. And now it's more like an industry conference, which are the ones I almost prefer. You get a lot of people talking about that one.

Gerardo Del Real: Yeah. And it's the right people. That's the thing that's been impressive to me. At this early a stage, anybody that's seen it or has looked at the data knows it's significant. It's just a matter of let's get the permitting done, which they've been successful at. The social license.

Joe Mazumdar: But yeah, that took two years, and good for Mike and how Hannan's share price stayed up during that entire period when I've seen other companies that have taken longer or as long, not even as long. Their share price just totally collapsed.

Gerardo Del Real: People quit caring. But again, you get that many... And before you go, let me ask you one last question. They have an entire belt, and I don't think a lot of people appreciate this yet. When people go, "Well, man, the stock's at a buck 10, it hit a buck 50. They haven't drilled a single hole yet." And I'm trying to provide context for people in my biased way because again, I'm a shareholder. But I don't think people appreciate the fact that Previsto is going to be globally significant. These three projects are great, but there's an entire belt of projects. They barely touched the bulk of what could potentially be. That's insane to me.

Joe Mazumdar: Yeah. That's where a project earn-in or something like that gets more boots on the ground.

Gerardo Del Real: On the rest of it.

Joe Mazumdar: On the rest of it, just like this thing I've got in Kazakhstan. Same sort of thing. They have a major doing a lot of the other ground, and they're focusing in on a significant belt of their own. But there's so much ground available and they've taken such a big position that they need help. Because otherwise, it's hard for a junior to bring everything up at the same time.

Gerardo Del Real: Yeah, it’s a lot.

Joe Mazumdar: Because as you know, Sortilegio and Ricardo Herrera and Vista Alegre are more advanced than Previsto because Previsto only got access about eight months ago. So, a lot of what we're talking about has only happened over the last eight months. But thankfully two years ago, I went there and saw another bit of Previsto, which is the reason I kept Hannan, because of what I saw there. Which were the indications of what was to become Previsto East and Previsto Central.

Gerardo Del Real: It's got to be satisfying for you to have been there two years ago and get a peek through the window, per se. Then hypothesize what could potentially be there. And then be able to walk straight up to the system and go, "Oh, it's right there all over the place." Right? That's got to be neat.

Joe Mazumdar: Yeah, they found it not me. But I mean, they were sending me pictures of the outcrops these guys were finding as they were going up. And every day they were finding new stuff. And it was like the creek. After a while, I got my eye in and then I would bang a rock, I would see the roscoelite, I'd see the bornite. And I'd go, "Holy cow." But they said that the area with the big mag anomaly that they wanted to access at that time, they didn't have access to. And that was that big hill under a mist of clouds that looked like, "Oh wow, that looks pretty ominous." And it was.

Gerardo Del Real: Yeah kudos to them. They've done brilliant work. Excited for this drill program. Excited on, you mentioned, we're only eight months into really trying to put the puzzle together over at Previsto. So I think the sampling they're doing right now, and we've had great sampling results already. But I think it's going to be important to really, really hash out the scale of this thing. Because man, the monster is a phenomenal name for it. It absolutely applies.

Joe Mazumdar: And then also manage between the drilling, which is a different sort of skill than the grassroots stuff. And I think they have a great grassroots team that probably should focus on the grassroots. And now bring in this new people to help them manage their drill program, because Southern Cross drills a lot. And they have systems in place in terms of drilling that now Hannan's going to adopt.

Gerardo Del Real: Yeah, it's champagne problems I think, for us shareholders. Exciting times. Joe, it's a pleasure as always, man. Let's do it again soon.

Joe Mazumdar: All right, thank you very much.

Gerardo Del Real: Exploration Insights, everybody. Go check it out. Great, phenomenal work. Thank you, Joe.

Joe Mazumdar: All right, cheers.

Gerardo Del Real: Cheers.