Hannan Metals (TSX-V: HAN) CEO Michael Hudson on Drilling at Kilbricken Zinc Project in Ireland and the State of the Zinc Market

September 8, 2017

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is Chairman and CEO of Hannan Metals (TSX-V: HAN)(OTC: HANNF), Mr. Michael Hudson. Miguel, how are you this afternoon, sir?

Michael Hudson: Gerardo, como estas?

Gerardo Del Real: Excelente, excelente, señor. How are things over your way, Mike?

Michael Hudson: Going pretty well, thanks, Gerardo. We closed a financing, we oversubscribed, we've got rigs turning, and we've got big seismic surveys about to happen. We're going to execute as we said we would.

Gerardo Del Real: Well, let's take that in order. You mentioned the seismic and you mentioned the rigs turning. Can you give us some details there?

Michael Hudson: Sure. We're in the starting end of an 8,500 meter resource expansion program at our Kilbricken zinc project in Ireland. We put out a resource that was quite substantial from an Irish point of view. We think we've got a very good start but the most important part of the story is that the resource is open and expandable along strike, downdip, updip, in every direction. It's basically been handed to us on a platter to extend and that's what we're doing with this drilling. We're around 1,400 meters into that 8,500 meter program.

We've got one rig turning at site now. We've got another rig turning up next week. We'll have two rigs turning in a few days. We've got the assays from one hole, which everyone's aware of those results. We put those out a month or so ago and had one of the most mineralized drill holes in the property. It's one of the most mineralized drill holes I've seen in my career. Remember I spent a decade or more in the world's largest zinc company so that was a great start. Now we've got the second hole assays imminent, that will be on the way within the next week. Then, we have two rigs turning, looking to expand that source in every direction.

Gerardo Del Real: Excellent. You also mentioned the seismic. I know this is something that I believe that is unique to Ireland. Am I accurate in saying that, Mike?

Michael Hudson: Not really, Gerardo. It's certainly a very applicable technique in Ireland. A lot of companies are using it there, you're right in that respect. Seismic is a hundred year old technique for the oil and gas business but it's really only through computing power and the ability to collect lots of data. The hard rock people, ourselves, we call ourselves the metals business, the hard rock business, can utilize this technique. It's been utilized broadly over the last five years in Ireland.

Basically it just maps the geology in that third dimension that we never see. It's finding the mineralized horizon and it's looking for the structures or the faults that brought that mineralizing fluid in. It's quite unique in that respect.

Gerardo Del Real: Excellent, now you have several targets on this district because you have 40 kilometers of strike length. Can we talk a bit about the exploration upside?

Michael Hudson: Yeah. We're looking first within a kilometer or so of the mineralized body. We're looking at the obvious extension. We're drilling now 700 meters immediately along strike from one of the two mineralized bodies that we have on the property is open now, and that's what we're targeting first up to look for extensions there. Of course, you don't recoil from mineral is the way that we say it, so you look for the mineralization and you look to extend it. Of course, progressively, as we move the rigs out, we'll move the rigs out, and start looking for repeats. We've got 40 kilometers of strike of the prospective horizon on our property. This is a generational block of ground that's been compiled and put together and we're the beneficiaries of since the 1980s. We've got 15 kilometers of untested mineralization position, which is pretty much unheard of in Ireland. It doesn't really exist anymore because Ireland's been explored pretty extensively since the ‘50s.

In all respects at all different scales, we can expand this project. We're not just looking at a little postage stamp of kilometer by kilometer. This is a big block of thirty plus thousand hectares. The key point is that we're looking at immediate resource expansion, which is lower risk exploration without a doubt. We're looking like mines do on their margins.

Gerardo Del Real: Excellent, excellent. Now last but not least you're doing some metallurgical test work and this is critical especially because Hannan has a stated goal of reaching 10 million tonnes, which of course would make it attractive as a take out target. Can we talk about the work there?

Michael Hudson: Yeah, it's just de-risking it at every point again. The metallurgical work that was done by the previous company Lundin showed no red flags so that's fantastic. Irish style zinc is generally very good in terms of how it beneficiates, that means basically it's a sought after product, the zinc and lead concentrates come from Ireland. We're putting samples into the labs now to do more work to really understand the variability through the deposit and to do some more, what we call, lock cycle test work, which is real life demonstration of what may happen if we can find something economic in a concentrate. It's de-risking, understanding more, and making sure all those absences of red flags continue to exist.

Gerardo Del Real: Excellent. Lastly, and this time I mean it, lastly give me your thoughts on the zinc market. Obviously, in a breakout mode when it comes to zinc and copper as well some would say gold maybe soon. Give me your thoughts on the zinc market. You obviously started your career very familiar with the space, you're leading the charge here at Hannan. What are your thoughts there as far as supply deficits go?

Michael Hudson: Well, I suppose everybody has an opinion on the market and the macro story is absolutely there. Gerardo, we've got dwindling supplies and dwindling supplies, so it's the perfect storm in that respect. I've spent a long time in the zinc business and generally it's the Chinese that have always come and opened up operations that have been mothballed, if you like, until prices increase. I've seen that occur multiple times when we've had these price rises in the zinc market. That hasn't happened. We've seen it in graphite, and we've seen it in rare earths, and it looks like that clean up and those environmental restrictions on some of those operations in China are just not leading to the Chinese coming and dumping into the market as they have before. That looks very real. Then we've got an absence of exploration over the last 20 or 30 years in the zinc business. We've got projects that are opening up that have literally been on hold for up to 70 years here in Australia. That's been on hold because that's had metallurgical issues, it's had manganese in the ore

Now, you can see we're going to the poorer quality deposits to even mine those in the business around the world. It's really important to know that this discovery we have here in Ireland is one of those few high-grade discoveries that is new. It's never been out there in the public to mine. It's a relatively new discovery made over the last 10 years and as such hasn't been hammered and looked at in the greatest of detail. We think we're very fortunate to have one of those new high-grade discoveries in the space that is really in short supply.

Gerardo Del Real: It's definitely a compelling project. I encourage everyone to get familiar with Hannan Metals. The market cap is still tiny. Where is that at right now, Mike?

Michael Hudson: Goodness me, Gerardo, you've got me on the spot but it's around the 12 to 13 million guess with the new dilution, we'll have to get back to our readers on that one, with sheer price and capital structure changing over the last few days I need to go back and check.

Gerardo Del Real: I'll help you out here. We'll call it sub-15 Canadian. How does that sound?

Michael Hudson: That sounds perfect.

Gerardo Del Real: Like I was saying, I encourage everyone to go and get familiar with the project and the company. The website is Hannanmetals.com.

Michael Hudson, Chairman and CEO, thank you so much for your time, sir.

Michael Hudson: Excelente, thanks Gerardo.

Gerardo Del Real: De nada.

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