Hannan Metals (TSX-V: HAN) CEO Michael Hudson on Recent Oversubscribed Financing & Upcoming Drilling of Multiple Zinc-Lead Targets at the Clare Project in Ireland

August 14, 2018

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

Michael Hudson:  Top of the world. Thanks, Gerardo.

Gerardo Del Real: You know it's been nearly a month, I believe, since you and I had the opportunity to chat. You just closed a $1.1 million oversubscribed financing. That money, of course, is going directly in the ground. Today you had some news, you're preparing to diamond drill multiple zinc-lead targets in Ireland. There's three that you're very keen on, and there's one in particular – I'd like to start in order – Ballyhickey, which seems extremely prospective. And I know the team is excited because the data compilation here in the last several months is what led to this target. Can we start by talking about the approach? And then let's talk about the three targets.

Michael Hudson: Yeah, thanks, for that intro, Gerardo. The targets have been in the making, you could say, for almost 140 years, and we're better placed than ever in those 140 years to be drilling those targets. Of course that sounds a little silly, but we're testing targets that were mined back in Victorian times, in the 1840s, in scratchings and little pits, actually. Significant enough in the time.

In fact, we're testing the most significant mining operation that existed in that part of Ireland, and surprisingly, it's been undrilled as a target. It's Ballyhickey that you referred to. And the seismics and the soils that we've done, especially over the last 18 months, and with all the rigor that's gone into the project has really defined that target better than it's ever been defined before.

There were some holes, 10 to 15 years ago, put underneath the pit. Only a handful of holes, but the seismics show that we're 600 or 700 meters away from the pit where the major structure, which has got a 200-meter throw, which is the same type of throw or movement that we see at Kilbricken, is located. So it's only after the seismics that that target's come together. It's 2.5 kilometers of extremely high base metals in soils. It's got the seismics, it's got the historic mining. There's at least three workings along that 2.5 kilometers. And of course, we've got to find the sweet spot in that 2.5 kilometers. So that's what we're going to be focused on. And most importantly, the target is shallow compared to Kilbricken. We're looking from one to two hundred meters depth. So that obviously gives us much more bang for our buck when we drill this target.

Gerardo Del Real: You mentioned historic mining, and I understand that there's historic reports saying that the mined ore ran as high as 77% lead. Is that accurate?

Michael Hudson: It is accurate. That's some of the old records. They are of course after the lead and the silver. There was a lot of zinc in the ore at the time, as they called it. But they just threw the zinc away because there was no use for zinc in those days. So the zinc still forms in the walls of the paddocks around the old mine, but the silver and the lead had the value. And it was only 60 years later that zinc started to have some sort of value.

Gerardo Del Real: And at the time, again, you mentioned the silver, I think that was running 15 ounces silver?

Michael Hudson: Yeah, very rich silver, as we found in Kilbricken, our resource which sits about 2 kilometers from Ballyhickey. These are quite silver-rich parts of the system. Importantly to point out that Ballyhickey is in a vein that's about 6 meters wide that sits 70 to maybe up to 100 meters above our target zone. So like at Kilbricken, there was an old historic mine from the Victorian ages that sat up to 400 meters above the main target zone where we find and know and understand mineralization forms with the predominant tonnes. So this is just a little window above what we hope is a bigger system at depth.

Gerardo Del Real: And how many diamond drill holes are going into Ballyhickey?

Michael Hudson: At least a dozen over that 2.5 kilometers. We've got to drill it on 300 meter space cross-sections along that trend.

Gerardo Del Real: And I understand drilling should start by the end of this month. Is that correct?

Michael Hudson: Yeah, we're waiting just for final permitting approvals, and the Irish system has always been very efficient. So we hope to have the rig within days, weeks, or at least sometime during this month. We've got a contract signed, and we're ready to mobilize.

Gerardo Del Real: Excellent, now there's two other targets. Can you tell me a bit about those two? Those will see less drilling initially, but there's also a lot of excitement around those. Tell me about the other two targets, Mike.

Michael Hudson: Well, we're just focusing around the Kilbricken resource area, number one. And of course, we've got a much larger target area, but the focus really needs, at this stage, to focus around Kilbricken. So we're looking within 2 kilometers. Ballyhickey is out to the northeast, but we've got a target just about 600 meters north of Kilbricken called Finanagh, which is where we found outcropping mineralization only three or four months ago. One of the first discoveries of outcropping mineralization since the 1840s, literally. They were very efficient at finding mineralization, so we're putting one or two holes underneath that discovery. We just need to work that out and understand it with much more rigor, I suppose, before we go and put a lot more drill holes into that target. We don't have the seismics to really define the structural targets there as well as we do at Ballyhickey. So that's a let's test this and let's upgrade it to the next level type of target and hope we can hit something immediately below those mineralized outcrops that we found with the very high soils above at Finanagh.

And then the other target is called Doora, which is about 2 kilometers west of Kilbricken, so it's sort of 4 kilometers away from Ballyhickey. And that's where we see some very good structure. These deposits form with faults. The mineralization comes up these faults. So if you can map the faults, then you can start to really become predictive where the mineralization is. And we've got lots of very good, fertile looking faults at Doora, as well.

And most importantly there we've got a rock type that's developed over 100-plus meters that we call a breccia, a dissolution breccia. And that only occurs where we see mineralization in other parts of the system, especially at Kilbricken. It's well developed.

So we've got the right rocks and the right structure. It's a little deeper down there, so we can only get three holes into that part of the world, about 600 meters depth. But once again, just de-risking the project, advancing it, and bringing up a number of different targets.

Gerardo Del Real: Well, Mike, I think you put it best. These are targets that are multiple generations in the making. It's an exciting time. I know it's a tough junior resource space, especially with the summer right now. But I got to congratulate you on all the work that went into the target selection. And fingers crossed, and I can't wait to get those rigs turning.

Michael Hudson: Thanks, Gerardo. Yeah, we're giving it our best shot and we've had great support from our shareholders to get that money into place, to be given the mandate to continue drilling on what is a very prospective part of the world in Ireland there.

Gerardo Del Real: Well, full disclosure, I eat my own cooking. I participated in the financing. I've bought and purchased shares in the open market and will likely continue to do so. So consider me biased, obviously. I love the targets. I love what the team is doing. I love the science that's gone into the target selection. I think the second half is going to be an exciting time for Hannan shareholders.

Michael Hudson: Well thank you, Gerardo, for your support. And I concur, no doubt, from the science point of view. It's one of the most rigorous programs that I've seen in what is now becoming a long-ish career. And let's hope the science delivers on what's promised.

Gerardo Del Real: Let's hope the wisdom of all those years pays off for us, Mike.

Michael Hudson: That's the idea.

Gerardo Del Real: Thank you. Appreciate your time. We'll chat soon.

Michael Hudson: Cheers.

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