Golden Copper Haul
Advancing Multiple District-Scale
Copper-Gold-Silver Assets in Mineral-Rich Peru
TSX-V: HAN | OTC: HANNF
Click Here to Read Sponsor Disclosure
Canada-based Hannan Metals Ltd. (TSX-V: HAN)(OTC: HANNF) is a Peruvian-focused mineral exploration firm focused on the advancement of two basin-scale copper-gold-silver projects in Peru’s mineral-rich, yet vastly underexplored central eastern mining belt.
In terms of mineral exploration, this is bona fide elephant hunting in true elephant country.
Peru, with its world-class mineral fertility, has the type of large-scale, polymetallic mineral endowment that makes this type of grassroots exploration and district-scale discovery potential possible.
Already, the Hannan team, by exploring where virtually no one has ever explored before, has confirmed the early identification of sediment-hosted copper-dominant mineralization over hundreds of kilometers along with a new copper-porphyry zone over 150 km long in the undrilled Peruvian back-arc.
The discovery potential is so robust that, without yet having drilled a single hole at either of the two co-flagship properties, Hannan Metals (“HAN”) has been able to attract some of the biggest names in the mining industry to the table.
That includes:
- A strategic investment by Teck — Canada’s largest mining company.
- A US$35M joint venture agreement with JOGMEC — the main mining arm of the Japanese government.
It bears repeating… that’s all without putting a single drill hole in the ground.
It points to the immense discovery potential of the vastly underexplored mineral belts Hannan will soon be exploring via the drill-bit, already with multiple high-priority targets lined up at the two co-flagships.
Of course, Peru is not the United States, Canada, or Australia… and, thus, the permitting process can be quite lengthy and challenging at times.
Despite these and other challenges, Peru’s mining sector is an integral part of the country’s economy and is expected to grow in the coming years.
In March 2024, BBVA Research echoed that sentiment, saying the sector would exceed pre-pandemic production levels by the end of 2024 with growth of at least 5%. The global research firm also sees mining investment in Peru, the world’s #2 copper producer, topping US$60B over the next decade.
And therein lies the district-scale opportunity for HAN: While some mineral exploration firms have shied away from the South American nation, the intrepid Hannan Metals team is “all-in” in Peru and has already amassed a wealth of experience along with an impressive string of successes leading to the near-term commencement of Phase-1 drilling at San Martin.
The bottom line is that Peru has a larger and richer untapped metals endowment than most other countries on Earth… and that’s what swinging for the fences is all about in terms of basin-scale greenfields exploration.
As you’re about to discover, Hannan has already received a key drill permit for its San Martin project (sediment-hosted copper-silver; US$35M joint venture with JOGMEC ) and has additional drill permitting at various stages of the approval process, which should have the company drilling multiple targets across the two co-flagships starting in 2H 2024 at San Martin and continuing for the next 3 to 5 years.
Trading undiscovered around C$0.60 per share — at a market cap of roughly C$70 million — Hannan Metals has established a Top-Ten in-country tenure position in Peru at a staggering 1,820 sq km.
That’s about two-thirds the size of the state of Rhode Island.
As noted, Hannan’s first-mover advantage in this virgin mineral district is already beginning to attract industry attention — and strategic investment — from some of the global mining sector’s biggest players.
Teck Resources (NASDAQ: TECK) — has come in with a C$2.6 million strategic investment (9.9% interest) in Hannan. Clearly, Canada’s largest mining firm wants to be an integral part of Hannan’s immense potential upside in the region.
And hailing from the opposite side of the globe, Japan’s main mining arm — JOGMEC (Japan Oil, Gas and Metals National Corporation) — has entered into a US$35 million strategic joint venture with Hannan on its San Martin Copper-Silver Project.
Make no mistake about it… something big is potentially brewing in this untapped South American precious and base metals district with tiny, undiscovered Hannan Metals squarely at the helm with the backing of industry heavyweights Teck and JOGMEC.
With the massive scale involved — and with the key green-energy metals commodity-mix (copper, gold, silver) in-play — there’s no doubt that the broader mining industry will soon have their eyes fixated on Hannan as the junior explorer begins putting the first drill holes in the ground.
Again, therein lies the immense ground-floor, pre-drilling opportunity for speculators seeking exposure to what may soon prove to be the next district-scale copper-gold-silver area play to emerge in the Americas.
A quick introduction to the two co-flagships:
San Martin Copper-Silver Project (JV with JOGMEC) represents mining concessions covering 120 km of combined strike, encompassing a newly-identified, basin-scale, high-grade copper-silver sediment-hosted system extending over 200 km by 100 km situated along the foreland region of the eastern Andes Mountains.
Valiente Copper-Gold Project (100%-owned) represents mining concessions defining a previously unknown porphyry and epithermal mineralized belt within a 140 km by 50 km area — situated 300 km southeast of the San Martin property — characterized by the identification of 18 intrusion-related porphyry/skarn targets.
In the mineral exploration world, it’s simply not possible to establish that level of land tenure while simultaneously attracting some of the biggest names in mining — BEFORE a single drill hole is put into the ground — without having the right people at the controls.
Hannan Metals has that in spades with a highly experienced and serially successful mining team led by professional geologist and Australia-native Mr. Michael Hudson, CEO, whom you’ll be hearing from first-hand in our exclusive interview coming right up.
Mr. Hudson is credited with a number of large-scale precious and base metals discoveries around the world, including in Peru, Australia, and in Europe.
Based on what he’s seeing on the ground to-date, Michael firmly believes HAN in Peru is going to deliver the biggest discovery, and perhaps “discoveries” of his distinguished career.
Michael is highly-respected in the industry, and his successes over the last 30 years are a big part of why Hannan has been able to put together such a large strategic land package while bringing in the likes of Teck and JOGMEC at this early stage of development.
“Teck’s investment in Hannan is a demonstrable vote of confidence in the technical merits of the Company’s projects as well as our team. Over the last two years, Hannan has recognized the significant potential for large copper-gold-silver deposits in Peru and has aggressively staked a large and commanding Top-Ten tenure position in-country. This bold grassroots strategy has attracted some of the largest industry participants to partner with Hannan, with both Teck and JOGMEC now involved at equity and joint venture levels, respectively. — Michael Hudson, CEO
With its dominant 1,820 sq km land position in Peru’s foreland region, Hannan Metals offers a true first-mover advantage in a vastly underexplored mineral belt with robust potential for hosting multiple district-scale copper-gold-silver deposits.
Before we dive deeper into the two co-flagship projects, let’s take a quick look at the bull market that’s forming in the global copper space.
Copper Deficit in 2024 & Beyond
Copper is “THE” metal of electrification… making it absolutely essential to the global energy transition.
The billion-dollar question is… will there be enough of the red metal available to meet escalating demand in this greener, highly-connected, hyper-electrified world?
The amount of copper needed for the transition, and for the planet to attain net-zero emissions by 2050, would require more copper production, in a relatively short period of time, than the world has ever witnessed.
The problem is… the last major copper investment cycle occurred way back in the 1970s when there were still plenty of large-scale, high-grade copper deposits to be found.
And while the sector is presently entering a period of increased greenfields and brownfields exploration, new copper discoveries of merit are proving extraordinarily difficult to come by and are falling woefully short of compensating for the precipitous decline in ore grades from established mines.
In other words… most of the “easy” copper deposits around the globe have already been found, and the vast majority of the easy-to-reach high-grade ore has already been scooped up.
Another major roadblock for bringing new supply online is the exorbitant amount of time required for bringing a new copper mine from discovery to production.
We’re talking 10-plus years from the time an economically viable copper resource is discovered all the way through the various stages of feasibility, permitting, and mine construction.
All of those factors are combining for what many industry experts predict will be a protracted global copper shortfall that could last for decades.
And it’s why investing in select small-cap copper stocks in areas with large mineral endowments and strong governmental support for mining makes plenty of good sense as we kick off the second half of 2024.
In viewing the 5-year copper price chart below, one can see that the overall price trend of the red metal has been bullish, albeit a bit choppy, since early 2020 when copper was languishing just above the US$2/lb mark. Since then, we’ve witnessed multiple price spikes above US$4.50/lb with the most recent occurring in Q2 2024.
Commodities, and base metals such as copper in particular, are typically beset by short-term cyclical price volatility as indicated by the temporary, healthy pullback the metal is experiencing at the present moment.
With indicators pointing to higher copper prices in the global energy transition, the longer-term outlook for copper remains exceedingly bullish as higher prices will be required to incentivize new exploration and project development worldwide — including in Peru, the world’s second-largest copper producer behind only Chile.
Further, the reopening of China’s economy, and the high level of demand growth expected in the country’s EV, 5G, and energy transition sector is only going to stoke further demand for the red metal going forward.
As alluded to, copper demand is set to undergo a generational shift as decarbonization efforts ramp up across the globe in efforts to attain net-zero carbon emissions.
Al Chu, lead portfolio manager at BNY Mellon, says, “Copper is typically used as a construction metal for wiring for building, wiring for machinery and what not, but if we look at the decarbonization net zero energy transition trend — copper is the new oil.”
The bottom line is that, when it comes to electrifying something and transmitting electricity, you need copper — plain and simple. And that means everything from wind and solar power generation and the much needed revamping of electrical grids to EVs, 5G, and consumer electronics.
For example, EVs require up to 175 lbs of copper per vehicle, which is roughly 4X the amount used in a typical combustion engine vehicle.
Plus, the global EV boom really can’t happen without the building out of $Billions in EV charging infrastructure, which is also highly copper intensive.
Turning to renewables, wind energy requires 2,000 tonnes of copper per gigawatt on average. Solar needs even more; about 5,000 tonnes of copper per gigawatt.
The global electricity grid needs to double by 2050 to meet net-zero targets with an estimated cost of roughly US$20 trillion to achieve that.
The Oregon Group recently published a report stating that 427Mt of copper will be needed by 2050. That’s more than 8 times the current demand level for wind turbines, solar panels, and energy storage combined.
That same report highlighted that, in order to meet those targets, annual investment will need to increase from US$274 billion in 2022 to US$1 trillion by 2050. This year, global annual spending is expected to increase to US$300 billion.
McKinsey & Company states that, for the world to meet its net-zero emissions targets, it will be short 50Mt of copper by 2030.
In other words, the global energy transition is highly dependent on an ample supply of copper.
And while recycled material plays an important role in copper stockpiles, there is no current methodology for the economic retrieval of the metal from the billions of tonnes of lower-grade waste rock scattered around the world’s past and present copper mining operations.
It all points to the near and long-term profit potential of well-run, well-structured copper-dominant exploration and development firms with district-scale discovery potential.
Enter Hannan Metals Ltd. (TSX-V: HAN)(OTC: HANNF).
San Martin Copper-Silver Project:
Maiden Drill Program in 2H 2024
The 656 sq km (65,600-hectare) San Martin project is being advanced by way of a strategic joint venture agreement with Japan’s national mining arm — JOGMEC — Japan Oil, Gas and Metals National Corp.
JOGMEC has the option to earn up to a 75% interest in the project by spending up to US$35 million leading to the production of a Feasibility Study.
Hannan spent the last two-plus years conducting the early-stage grassroots exploration at the project, including geophysics and mapping.
The stage is finally set for a first-pass maiden drill program on the highest-priority targets at San Martin — with JOGMEC covering the drilling expenditures — starting in 2H 2024.
The San Martin project comprises a basin-scale, high-grade, sediment-hosted copper-silver system — spanning an almost unheard of 120 km of combined strike — situated along the foreland region of the eastern Andes Mountains.
Hannan’s detailed geological facies analysis across the project — which includes LiDAR and advanced machine learning — has identified the economic geological implications for high-grade stratabound sediment-hosted copper-dominant mineralization that may have significant lateral continuity.
The copper-silver mineralized shale drill targets at San Martin average 0.9 meters thickness at 1.9 % copper and 27 grams per tonne silver from 105 surface channels.
This first set of priority targets has been further defined by soil sampling and LiDAR over an area of 9 km by 1 km with potential extensions to the west between 2 km and 4 km with a target-depth ranging from surface to 500 meters.
HAN has received its environmental permit — Environmental Impact Statement (“DIA”) — from Peru’s Ministry of Mines to allow for low-impact mineral exploration programs, including drilling.
The initial DIA allows for 40 drill platforms spanning an area of roughly 7 km by 3 km (2,700 hectares) at the Tabalosos East target.
Mr. Michael Hudson, CEO, commented:
“The approval of our DIA is a watershed moment for Hannan and our joint venture partner, JOGMEC, for exploration in the foreland basins and back arc of the Andes in Peru…”
The Hannan team expects to have drill rigs on the ground at San Martin (following final authorization from the Ministry of Mines and receipt of a Water Use Permit) in 2H 2024 for the commencement of a two-stage drill program.
San Martin Project: Two-stage drill program at Tabalosos East target set to commence in 2H 2024:
- Stage 1: 2,000-meter diamond drilling program over a 2 km strike of mapped surface mineralization down to 800 meters depth.
- Stage 2: Subject to Stage 1, a further 1,500-meter drill program to test the continuity of mineralization.
- Subject to results of Stage 1 and/or Stage 2: Additional areas may be tested within the 7-km-long permitted area.
As you can see in the above image, the drill targets at Tabalosos East are lining up.
In addition to those initial targets, the Hannan team, on 20 March 2024, confirmed the discovery of a new style of sediment-hosted copper-silver mineralization just west of Tabalosos East.
The mineralization is outcropping — highlighted by 5.8 meters at 3.1% copper and 65 grams per tonne silver from surface through sampling — and has been mapped over 2.3 km of strike in an area located less than 50 km west of the recently approved DIA drill permit area at Tabalosos East.
Mr. Michael Hudson added:
“This is an exciting new discovery demonstrating consistently thick (>10 m wide) zones of high-grade copper and silver mineralization over multiple kms of strike length. Copper mineralization of this style and tenor was previously unknown at the San Martin project until these recent discoveries. This new discovery is located 45 km west from the recently granted drill program (DIA Tabalosos East). We are looking forward to advancing this new discovery with more detailed geological mapping and geochemical sampling while we also prepare for the upcoming drill program at Tabalosos.”
It’s worth repeating that the upcoming 2,000 to 3,500 meter drill program at Tabalosos East will be fully funded by JV partner JOGMEC.
That truly speaks to the district-scale potential of the San Martin sediment-hosted copper-silver project.
After multiple years of geophysics, mapping, and permitting — the HAN team is finally set to see just how much mineralization exists below surface via this upcoming 2H 2024 first-pass program.
Valiente Copper-Gold Project:
New Miocene-Age Porphyry Belt
Hannan’s 100%-owned Valiente project — located 19 km east of the township of Tingo Maria in central Peru — defines a previously unknown Miocene-age porphyry-epithermal copper-gold mineralized belt within a massive 140 km by 50 km area.
Situated 300 km southeast of the company’s San Martin property, the project area spans 1,164 sq km (116,400 hectares) and is prospective for back-arc porphyry copper-gold systems with 18 porphyries identified to-date.
HAN’s first-mover advantage in this Miocene-age district is characterized by an extensive 140 km of combined strike with intense veining and alteration of float and outcrop associated with intrusive clusters.
Those highly-favorable geologic features are coincident with large-scale geochemical stream sediment anomalies that provide a compelling set of exploration criteria for the Hannan Metals geologic team.
To-date, a total of 8 intrusion-related porphyry / epithermal-skarn targets have been identified at the Belen and Previsto trends alone, of which the Belen prospect is currently the most advanced.
Field teams have been active at Valiente since last quarter with a 10-person exploration team continuing to build and strengthen exploration targets at the high-priority Belen prospect.
Mineralization at the Belen trend has been defined over an expansive footprint (8 km to 10 km of strike) with initial indicators of a high-grade system developing at the Sortilegio target with assays up to 16.0% copper and 4.4 grams per tonne gold from a porphyry boulder grab sample.
Mr. Michael Hudson commented:
“...The work by our field team continues to successfully expand and refine the mineral system at Belen. The high-grade copper-gold boulders at Sortilegio, within the Belen trend, demonstrate the potential of a new high-grade target at Sortilegio and importantly, we are now mapping mineralization over a large footprint. This is highlighted by the development of the 4 km long base metal gold skarn target east of Sortilegio within the 10 km long linked porphyry copper-gold and epithermal gold mineral system…”
Fieldwork is ongoing at three primary Belen targets: Ricardo Herrera, Vista Alegre, and Sortilegio:
- Ricardo Herrera: Newly-identified leached copper-gold porphyry with well-developed quartz veining.
- Vista Alegre: 1.8-km-long gold-bearing epithermal target area characterized by large gold-mineralized boulders of quartz-pyrite and iron oxides.
- Sortilegio: Emerging copper-gold porphyry target located 7 km northwest of Ricardo Herrera; assays up to 16.0% Cu and 4.4 grams per tonne Au from a porphyry boulder grab sample.
The DIA application for the Belen area was submitted in January 2024 and has been progressing through the system at a much faster rate than previously anticipated by Hannan’s management. Social support for the Valiente project remains robust.
Drill permitting times also appear to be improving with Hannan already receiving observations and feedback from the relevant Peruvian authorities. The company recently completed the last observation to the DIA application, which was essentially a water use survey by the local water authority.
The DIA permit area contains two outcropping porphyry targets at the Belen prospect (Ricardo Herrera and Sortilegio) along with a single mineralized zone (Vista Alegre) displaying traits of both porphyry-epithermal and skarn mineralization.
And while Belen is the most advanced prospect at the 100%-owned Valiente project at present, it hasn’t been the only area of exploration by the Hannan field team. Not by a longshot.
In fact, in Q2 2024, (and in addition to earlier porphyry discoveries at Serrano Norte, Serrano, and Pucacunga), the Hannan field team identified a large 1,800-meter by 400-meter copper-gold porphyry target called Previsto East at the northern end of the Valiente project.
The Previsto East discovery is the eighth significant porphyry and/or epithermal target discovered within an area of 25 km by 10 km at Previsto and Belen, which Hannan now believes represents a giant porphyry cluster.
Mr. Michael Hudson states:
“Hannan’s 100%-owned Valiente project keeps getting better with our teams expanding and making new discoveries every month. The scale of the Previsto East gold-rich copper porphyry system identified here competes with some of the best pre-discovery stage porphyry projects. The larger Previsto area remains largely unexplored, and our teams are now actively expanding the footprint to identify additional copper and gold rich targets adjacent to Previsto East…”
The copper-oxide outcroppings discovered to-date at Previsto are impressive, to say the least (see below)… yet, they only tell one small part of the full discovery tale. The drills will soon tell the rest.
The initial discovery at Previsto East has since been expanded to include Previsto Central (located 2.5 km west of Previsto East) where outcropping porphyry-style copper-gold mineralization has been discovered over a significant area with mineralization remaining open in all directions.
Mr. Michael Hudson commented:
“The Previsto Central discovery, at this pre-drilling stage, appears to be an extremely large porphyry-epithermal system in the making. What we are initially seeing in outcrop at Previsto Central is just a glimpse of what may be hidden under thin soil cover, and only a very small portion of the target area of about 10 km by 5 km has been prospected to date…”
Following that discovery news, Hannan, on 2 July 2024, announced a doubling of the gold anomaly footprint at Previsto Central to 4 km by 2 km — again, with mineralization remaining open in all directions with only about 20% of the 10 km by 5 km target area explored to-date.
At present, a team of six geologists is working on the project’s advancement supported by two technicians and further accompanied by a group of local residents acting as field support during Peru’s dry season.
Visually impressive copper-rich outcrops (formed from blue azurite, a copper oxide) have been identified with assays beginning to trickle in from a recently completed 192-meter-long channel sampling program.
The most recent batch of assays (announced on 6 August 2024) produced a number of highlights, including 126 meters at 0.22% copper from channel sampling.
The ongoing program has further expanded the footprint of the porphyry mineralized system at Previsto Central from 4 km by 2 km previously to now over 5 km by 3 km.
Mr. Michael Hudson commented:
“Field work during the optimal dry season with a large 30-person team continues to expand the Previsto Central porphyry system with top of ridge soil sampling, mapping, and prospecting in creeks over 5 km x 3 km. We are now starting to understand this mineralized system better, with gold-rich areas in the upper western areas (800 m higher vertical relief) transitioning to more copper-rich areas lower in the system to the east. We look forward to further results, including the first geophysics on the project, as the large team continues to de-risk the project and move it forward to drill permitting as soon as possible.”
Integral to that de-risking process, HAN is making final preparations for a 70-line-km IP survey across the entire system at Previsto (slated for September 2024) with the aim of demonstrating the scale and extent of the mineralized system to-depth in three dimensions.
That forthcoming program will additionally include a large-scale LiDAR survey across the Previsto Central and Previsto East areas to accelerate exploration by identifying outcrops and mapping the geology of the mineralized system.
As noted, the Previsto discovery is the eighth significant porphyry and/or epithermal target discovered within an area of 25 km by 10 km at Previsto/Belen, which the Hannan team now believes represents a district-scale porphyry cluster.
Taken altogether, Hannan Metals is making discoveries at San Martin and Valiente that, individually, could command a higher market capitalization than what the market is currently assigning to Hannan’s entire basin full of copper, gold, and silver showings.
As mentioned earlier, Hannan’s market cap currently sits at roughly C$70 million.
It’s early-stage exploration… it’s pre-drilling… and that’s typically the time where foresighted speculators who understand the exploration cycle jump in to take advantage of the relatively quiet moments prior to the start of drilling.
Here to paint a clear picture of the milestones achieved to-date and the upward momentum that’s now building toward drilling at San Martin is none other than Hannan Metals CEO Mr. Michael Hudson.
Exclusive Interview with
Hannan Metals CEO Michael Hudson
As promised, our own Gerardo Del Real of Resource Stock Digest and Junior Resource Monthly sat down with Hannan Metals CEO Mr. Michael Hudson for an in-depth discussion on the company’s first-mover advantage in Peru’s unexplored foreland basins, plus next-steps in the advancement of the two co-flagship properties prior to the start of drilling.
We hope you’ll enjoy the candid conversation.
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the chairman & CEO of my favorite copper-gold exploration play, and it will probably be that for years, folks, Hannan Metals — Mr. Michael Hudson. Mike, how are you today, sir?
Michael Hudson: Good morning from down under. I'm very well. Thanks, Gerardo.
Gerardo Del Real: Let's get right into it. I'm going to try to be brief in my intro, unlike how I normally do things: Hannan channel samples 126 meters of 0.22% copper from Previsto Central in Peru. You've expanded the copper-gold porphyry footprint over at least 5 km by 3 km.
I want you to really explain it to me like a fifth grader, as a non-geologist, why this is so significant and why it’s so unique. It's early, and I'll caution that to listeners and readers. But it's a unique system at Previsto… and we can get into the details in a bit.
Michael Hudson: Sure, standing back, we have a new copper-gold porphyry belt in Peru. There's no doubt about that now. We've got 18 porphyries, and we've identified 5 that we've worked on in more detail.
We've done all of the regional surveys and magnetic surveys. And we’ve identified the 18 porphyries and have worked on 5 of them. We've done soil sampling and geophysics. And we have some that are much closer to drill permitting, which is the ultimate truth-machine as we know.
But this one, called Previsto, is the monster that we’ve found. The footprint is something like 3 km by 4 km, which is a very large footprint. And I will caution that it is early; soil sampling and channel sampling are only two-dimensional. We need to get three-dimensional information. And the drilling will be that.
We'll be doing some IP [Induced Polarization] soon, which is a geophysical technique that will show us how much sulfide is in the ground going down to a depth of about 500 to 600 meters. So that's one thing we cannot wait to see.
But with this footprint and the scale, the grades that we're seeing in the soils are very high. And now, with this press release, we're starting to find outcrops, remembering that outcropping in this high jungle means it's about a thousand meters high, and it's hilly, steep, and quite difficult terrain.
When you get into the creeks, you can see a little bit of outcrop or where the rock comes to surface and is not covered by soil or trees. That's probably 0.2% of this very large area where we get to see these little windows of outcrop. And now, we're starting to trench hundreds of meters at 0.1% to 0.2% copper. That, in itself, is an impressive number in leached rocks.
The copper basically gets weathered out near-surface and moves down below the surface, or gets washed away, in simple terms. If we're seeing those kinds of grades at surface, then there are good expectations that that will be upgraded quite significantly at-depth.
It's a unique system in terms of the scale. It's part of a big new porphyry belt. This doesn't happen very commonly on Earth these days where new porphyry belts are found. It's the same age as the major porphyries that are located about 50 to 70 km west of us in the higher Andes, which produce some of the world's largest mines.
Peru is the second-largest copper producer on Earth. We're in the right area searching for elephants. And it certainly looks like we've got the head of one that's developing and developing very nicely.
Gerardo Del Real: You used the word unique. I use the same word. How special is the system? And mind you, this is just Previsto Central. We can talk about Previsto East here in just a bit. But how special is it to have a 10 km by 5 km airborne-magnetic and radiometric anomaly? How often have you seen that, Mike?
Michael Hudson: In isolation, magnetic anomalies are quite common. But in the context of finding the mineralized rock and all of the very high-grade soils and channels we're finding, we definitely know we're in a porphyry system. And it's varying from a very gold-rich top at the top of the hill. And then, down 800 meters, we're seeing the copper-rich part.
We're seeing the system transition, and we know we're at the top levels of a porphyry. I've never seen anything at this scale in terms of what I've been involved with. Again, this is cautionary because we haven't got the drill holes into it yet. But the footprint and the scale of this system is equivalent to some of the biggest porphyries in the world.
You just don't see the scale of these systems very often. You can, if anyone wants to do the exercise, go and find the footprint of something like Escondida in Chile, which is one of the world's biggest mines, and put it next to the scale that we're finding. It's a simple analogy. We have more work to do but that's what we're comparing with.
Gerardo Del Real: Again, I want to be clear, what I just described, and what you just described is just Previsto Central. Two and a half kilometers to the east, you have Previsto East. You mentioned in the news release that the style of mineralization observed at both targets shows strong similarities. Is it possible that the entire system is connected?
Michael Hudson: Well, that's why we're doing the geophysics. What we’ve found at Previsto East is some very high-grade copper and gold in rocks. And it's actually the most gold-rich part of the system. We haven't found outcrop there; it's just very large, almost car size blocks, right down to very small.
It could be sourced very locally. Or it could be a debris flow from about 3 km away, which would make it a massive system in itself if we're seeing it shedding from that far away.
And that does happen in geology. Something like Yanacocha, which is one of the world's largest gold deposits, not too far from us, has some glacial deposits that are mined from the system, and they've been moved by glaciers over time.
So we need to determine if there is a bedrock source to Previsto East or if it's just shedding from the monster 3 km to the west.
Gerardo Del Real: What comes next in terms of de-risking the project? And then, what comes next as far as the areas that get drilled first? It's a hypothetical question because I know the answer but I'm excited about the drilling at the Ricardo Herrera target at the Belen trend.
I'm really excited about drilling the monster at Previsto. What steps are you taking now to further de-risk the project so that you can work on permitting the Previsto part of the project?
Michael Hudson: Yes, as you mentioned, we're getting closer to the end of the permitting process at Belen, which comprises two porphyries and an epithermal system over 12 kilometers. And we have 40 drill platforms that we're permitting there. We hope to see more permitted platforms in Q3 or Q4 at that boundary that's about 12 or 13 km from Previsto as it is all part of this same porphyry belt.
At Previsto, the challenge is that it is such a large system. We’ve got more work to do. We currently have 30 people onsite; 8 geologists along with all of the support technicians and local support.
And then, doing the geophysics is an exercise in logistics in itself doing 5 or 6 km lines through the jungle. We're putting lots of people on it so that we can fast-track it to determine the way the system works and what parts of the system are the best and what areas are most easily accessible for getting the drill rigs in.
There's a road going past Previsto East. You can literally drive a car to it. Then, as you go further west, you end up going up a hill that’s about 800 meters high, as I mentioned… so that's a little more challenging.
So, again, what are the best parts of the system? How does the system develop? And then, what are we going to start permitting to be the first parts of that big system to drill so that we can make sure we’re testing the best parts of it?
I'd say, by the end of this season, which is around October, we will have done all of that work. And we will have started all of the environmental work that we need to collect from the flora and fauna, air quality, water quality, etc., to be in a position to put in a permitting application at the end of the year.
So that's where we’re going. And we’re really going for it so that we can get the answers we need that will allow us to make sensible decisions by around year-end.
Gerardo Del Real: The first drill bit that goes in at Valiente will go into the Belen area. Can you speak to — and, of course, we're assuming the permitting process goes as quickly as it has recently with Peru making efforts to bolster the exploration budgets for companies by expediting permitting… and, to my simple brain and my simple eyes, there has definitely been a more consistent approach by the Peruvian government — so as far as Belen goes, what are you hoping to see from the drill bit when you finally get in there and start drilling later this year or early next year?
Michael Hudson: Yes, so we have the 40 drill platforms permitted at the Belen trend for the two porphyries, Ricardo Herrera and Sortilegio. They are 1 km by 1 km in themselves, which is a significant footprint.
They're dwarfed by Previsto but, nevertheless, are of significant dimension. We've completed geophysics at Ricardo Herrera, and we can see that the system continues to great depth, and we literally know where to drill tomorrow.
The key when drilling a porphyry and the associated skarns around the edge of it, and, in this case, the epithermal systems coming off to the side, is just to try and get into the best bits of what's there in terms of grade.
There's no doubt that the mineral system is there. But what's the grade? Is it going to be a 0.4% porphyry? Is it a 0.7% porphyry? If it's 0.7%, then it’s literally world-class in terms of grade. And it’s at those higher grades where mines are being developed.
A 0.4% porphyry is not the number you'd probably want to see unless you've got some very favorable characteristics. Twenty years ago, 1% was the number. Ten years ago, it was around 0.7%. Now, it's coming down to 0.5%. So it's a question of grade.
Where do we focus as a junior? We know that there are gold-rich systems for kilometers. And gold is an easier story to tell and drill out than a porphyry zone. So we want to get those initial holes in and see what the system is and see what that grade is.
And then, we can make the correct decisions on how to allocate our scarce capital and drill the best parts for the best bang for our buck for our shareholders.
Gerardo Del Real: Looking forward to it. Anything else to add to that, Mike?
Michael Hudson: No, just that it’s an exciting time, Gerardo. Peru has been slow to permit these things. We know that. But it's getting better, like you said. Certainly, we're seeing at least double the permitting speed at Belen as compared to what we saw at our other project to the north at San Martin in terms of where the Peruvian government currently is in that regard.
We're getting support from the highest levels of government now, and they really want to demonstrate that the country is open for business. So that's a key part. We're onto a very large system, and we're starting to peel back the layers of the onion in working out where the best parts of the system are located.
So keep an eye on things as we’ll have lots of news flow coming out with such a massive team on the ground.
Gerardo Del Real: I’ve got to believe your phone is likely ringing. I’ve got to believe that majors are watching. Obviously, one of the largest shareholders is a major mining company. They have to be thrilled with what they're seeing.
Michael Hudson: Well, the whole reason Canada's largest mining company currently owns 9.9% of Hannan is that they got in in the early days when we had only very little information about the system at Valiente. In terms of their support, they’ve come in in three tranches of financing over the last couple of years, and they've continued to follow their money and increase their position to now 9.9%.
It's an independent validation that we have something unique. Without drill holes, we have a 9.9% holding from Canada's largest mining company, and we have a joint venture with the Japanese government on our other project at San Martin.
So we're being backed by some of the biggest and the best.
Gerardo Del Real: I’m looking forward to getting out there in September. Thank you so much for your time, Mike.
Michael Hudson: Thanks, Gerardo.
The Hannan Metals Opportunity
As a Top-Ten mineral explorer by area in Peru — at a staggering 1,820 sq km — Hannan Metals Ltd. (“HAN”) presents a true first-mover advantage in Peru’s underexplored foreland mineral basin region by way of two co-flagship properties: San Martin and Valiente.
Even prior to the start of Phase-1 drilling, the junior firm has been able to successfully attract and secure a C$2.6 million strategic investment from Canada’s largest mining company — Teck Resources (NASDAQ: TECK) — and establish a key joint venture agreement with JOGMEC — Japan’s main mining arm.
At San Martin — which is the US$35 million joint venture with JOGMEC — the Hannan team is systematically delineating a high-grade, basin-scale, sediment-hosted copper-silver system situated along the foreland region of the eastern Andes Mountains.
HAN has received its environmental permit — Environmental Impact Statement (“DIA”) — from the Ministry of Mines to allow for low-impact mineral exploration programs, including drilling.
The Hannan team expects to have drill rigs on the ground at San Martin (following final authorization from the Ministry of Mines and receipt of a Water Use Permit) in 2H 2024.
At Valiente, Hannan is focused on a new Miocene-age porphyry copper-gold belt in the Peruvian back-arc where the team has discovered 18 mineralizing systems spanning an area of 140 km by 50 km.
The primary focus at Valiente is on the near-drill-ready Belen target, which covers a large mineralized zone with two porphyries and an epithermal system in between. Further discoveries are being unearthed at Previsto East and Previsto Central.
Geologically speaking, analogues include the Spar Lake sediment-hosted copper-silver deposit in Montana and the giant Kupferschiefer deposits in eastern Europe where KGHM Polska Miedź operates the largest silver producing mine in the world; more than twice the production of any other operation and also the 6th largest copper miner on Earth.
The average widths and grades delineated to-date through channel sampling at San Martin have context with historical drill numbers found during the discovery of the vast Kupferschiefer copper-silver deposits.
In other words, the scale is there… the near-surface mineralization is there… the potential for world-class discovery is there… and the proper team is in place to get the drills pointed in the right direction.
You heard directly from Hannan Metals CEO Michael Hudson. He says:
“It's a unique system in terms of the scale. It's part of a big new porphyry belt. This doesn't happen very commonly on Earth these days where new porphyry belts are found. It's the same age as the major porphyries that are located about 50 to 70 km west of us in the higher Andes, which produce some of the world's largest mines. Peru is the second-largest copper producer on Earth. We're in the right area searching for elephants. And it certainly looks like we've got the head of one that's developing and developing very nicely.”
That means the news flow is set to increase in the coming quarters… pointing to the early-stage “pre-drilling” copper-gold-silver opportunity at-hand for foresighted speculators.
We talked at length about the longer-term positive trend in copper. The same thing is happening in both gold and silver.
In fact, gold, in its entire history, has never traded higher. It’s currently at all-time highs above US$2,500 an ounce and appears poised for a run to US$2,600-plus before year-end. Silver, which trades in tandem with gold, is currently just below US$30 an ounce and is gaining upward price momentum as well.
That means the timing is spot-on for the clean-energy metals mix HAN is currently exploring for in Peru’s mineral-rich, yet vastly underexplored central eastern mining belt.
Hannan is also well-structured with ~120 million shares outstanding on a fully-diluted basis with 14% of those shares held by insiders.
Trading undiscovered around C$0.60 per share, Hannan’s market cap is currently right around C$70 million.
It’s explore… explore… explore… leading up to the all-important start of drilling, which is where the real excitement is set to begin for Hannan Metals and HAN / HANNF shareholders starting in 2H 2024 with a maiden drill program at San Martin.
Now is the opportune time to start taking a closer look at Hannan Metals as the company continues to make near-surface copper-gold-silver discoveries ahead of drilling at its two Peruvian flagships.
A great place to start is Hannan’s corporate website where you can learn more about the flagship properties, the team, and sign up to receive updates directly from the company’s IR department.
Also, click here for more of our ongoing coverage of Hannan Metals, including additional late-breaking interviews with upper management as developments arise.
Hannan Metals Ltd. trades on the Toronto Venture Exchange under the symbol HAN and on the US OTC Bulletin Board Exchange under the symbol HANNF.
— Resource Stock Digest Research
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