Hannan Metals (TSX-V: HAN) CEO Michael Hudson on Discovery of 2 km Long Zone at the Massive High-Grade Copper-Silver San Martin Project in Peru

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

Michael Hudson: Very well. Thanks, Gerardo. Thanks again for having me.

Gerardo Del Real: The last time you and I chatted, we discussed how critical it was to have the support of the communities in which you're exploring in. Obviously, the San Martin project is a massive, massive project that is early stage, and you're exploring in an area that, frankly, has not been explored before. The amount of data that you have available to you now, I believe, is the first time it's been aggregated, compiled and reviewed and applied in the manner that Hannan is applying it. And this release that you just had today really speaks to that. 

But before we get into, frankly, a lot of more great looking rocks and results on a massive scale, I want to talk about the update that you provided within that release about the social license and your approach. How are things coming along there? I'm not a geologist and I also have not been to the project yet, which I'm obviously looking forward to getting out there sometime when things resume back to the new normal. But can you speak to the social license aspect of it? How are things coming along?

Michael Hudson: Well, we have a very large area. We've got 656 square kilometers that extend over 120 kilometers of trend here. So we've got a lot of different communities and stakeholders in such a large area. In terms of previous exploration, just to touch on it, to give the history I suppose, and how people react to what we're doing. The petroleum industry was there from the early '90s, late '80s. In fact, the '70s was when they first went into the Huallaga basin. But a lot of the work was done in the late '80s, early '90s. That was the first foray of any explorers, very different explorers, but we've benefited from that data that you touched on.

Then in the late '90s, early 2000s, Rio Tinto were there for a year in the southern part of the area and did a bit of reconnaissance. Then about 10 years later, there was a private company, a Canadian company, who did a little bit of work in the southern area. That's really been it. So our work is far exceeded in terms of area extent and understanding some of those earlier work. We don't have the data from the earlier work, but we certainly know where people were working.

So people haven't really got an understanding of the mining industry out there greatly, what exploration is and what mining is. So it's a first principle approach without a doubt. We've got a very professional and, as I said in the press release here, respectful program, uber sensitive about doing the right thing with communities. If you get it wrong at the start, then you're really off on a wrong foot.

We've been dealing with all levels of government and administration, and then right down through to local landholders, of course, on an area by area basis. We're dealing with the police, the ronderos. And broadly we've been very well accepted. The people are very welcoming for the most part. We've been getting access, and that's how we've been getting onto the ground and taking these samples. 

It's very much a work in progress, but there's a lot of things happening here that are surprising us. People are basically very supportive. You just have the conversations and do things at the grassroots level and work your way up and tell people what you're going to do, and then come back and show them what you've done and say, "This is what we'd like to do next." That's how we're approaching it.

Gerardo Del Real: You mentioned the scale of the land package. How much of it, or is any of it within a protected area or a nature reserve zone? I've had questions about that from subscribers and shareholders that, again, with the story developing and with the exciting results – and the share price reflects it – people are now starting to comprehend the geologic potential and the potential for, maybe not just one company-maker, but several. 

But of course, we all know the rocks could be excellent, the metallurgy could be great, but at the end of the day, looking forward 10 years down the road, if you're in the midst of a nature reserves zone, it's not going to matter or translate into a more advanced development scenario. How much, if any, of your land package is within these protected areas?

Michael Hudson: None, basically put. We put a map into the press release and none of the granted claims are in any of these areas. I think it's 3 of the 87 applications that we put in in total are overlapped. There's a couple of municipal protection areas that came up subsequently after we made a few applications. So maybe 3 of the 87 will be observed or not granted in time, but we're not in those areas and we've avoided them. Likewise we've, for the most part, avoided the indigenous areas, because they take a lot more time to permit. You've got to go through a UN-based consulting process that takes time. So we've got about 5% of our area today in indigenous areas.

So we have gone and tried to make it as simple as possible to get on the ground, stay around infrastructure. The infrastructure has changed dramatically in the last 10 years in this area, mostly paved roads now. What took many, many, many, many hours only 20 years ago is now an hour or two drive. Everything changed in that respect, easier access to Lima for the locals. We've gone out of our way in avoiding anything that would make it more challenging.

Gerardo Del Real: A bit more context, the release mentions on a basin-scale the San Martin project exhibits district-wide mineralization hosted in reduced sedimentary rocks, covering at least 120 kilometers of strike and 50 kilometers of width. 

I hate to keep using the same adjective, but this is massive, Mike. You now have a new 2-kilometer long zone of high-grade copper-silver mineralization. And frankly, this stuff is everywhere. 

Can you speak to the results that you announced today from boulders, from this new trend and new zone, and what you're doing moving forward?

Michael Hudson: Everywhere we look we're finding more, without a doubt simply put. The grades always seem to be quite impressive in what we're finding. We're finding fewer outcrops, but starting to find more and more. The boulders are easier and easier access up creeks to find. Then when we find the boulders, we move up the hills and find these outcrops. 

That's the way that we've defined this new area where we've got 0.6 meters at 9% copper. There was a boulder at 30% copper and 600 grams silver that we followed up. We started to extend that zone up along creeks and through boulders. We've found that it extends for at least 2 kilometers. It's part of a 20-kilometer long series of outcrops and boulders that we found in the southern part of the area, the Sacanche, Saposoa area. That's important. 

There's no doubt that we've got to demonstrate the continuity at all scales here. There's copper and silver over very vast areas without a doubt, 100-plus kilometers. We're starting to map it out at the meters to tens of meters to hundred meters on the ground in other areas. And then starting to see these kilometer-long areas where we can put the same geology together and the same mineralized positions together. 

The next stage will be to de-risk that and drill it and prove continuity at all those different scales. But that's what we're doing. This is an early-stage exploration project. There's no shortage of opportunity here in terms of areas that we're finding.

Remember, this is the early days. This is a 2.5-month program, essentially, since we had the claims granted and a team of 4 geologists and 4 or 5 support staff, as well as the social teams that have been quite active as well. So it's really a few months into the process, and we've got more rocks that are sitting in sheds that have got green sparkly stuff in them that we're keenly waiting to get to the lab when the lockdown in Peru ends, which should be sometime through June early into July, if current government estimates are correct.

Then I think that what you're touching on was the model. This is a sediment-hosted copper model. Then there's various sub-classes in that model, and I think we put a link into the USGS there as to what the potential was. The conventional wisdom by some was that they knew there was copper out in this area, and then it may have only been red bed hosted, which is potty and doesn't develop big tonnages. That's certainly not what we're seeing out there. We're seeing these reduced facies, which are basically rocks that lack oxygen when they were being formed. 

That's what the copper likes to drop out into. We're seeing those rocks developed at multiple levels of the stratigraphy over hundreds of meters up and down. But these things extend for 100 kilometers and have context. That's where you can start to develop tonnes and grade within these reduced rocks.

That's how we see this system developing. We've got lots of data to support that, literally 18 months of reconnaissance work to support that. We've seen a lot more rocks in this area than anybody else has in the history of geological research. That's how it is.

Gerardo Del Real: Well, I'm not a geologist, I haven't been to the property, but I do want to quote someone, obviously, that's working with a company that has been there. He's a very renowned geologists and that's of course, Dr. Quinton Hennigh who described this as, well, let me just quote him. He said, "It is starting to appear as though we are dealing with a basin-wide mineralizing event." 

Mike, I sense you're going to be extremely busy over the coming months and years demonstrating the potential here. Is there anything else that you'd like to add?

Michael Hudson: I think there the key point, geological opportunity, making sure we get access to the ground appropriately in an area that is a frontier area and bit by bit we're piecing this together.

Gerardo Del Real: Thank you, Mike. Looking forward to having you back on as always, I appreciate the time.

Michael Hudson: Thanks, Gerardo.