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

Hannan Metals (TSX-V: HAN)(OTC: HANNF) Commences Drilling at 100%-Owned Valiente Project, Peru

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the executive chairman of my largest personal holding, as most of you know. Of course, I'm talking about Mr. Michael Hudson from Hannan Metals (TSX-V: HAN)(OTC: HANNF). Mike, it’s an opportune time to have you on. How are you, sir?

Michael Hudson: I'm very well, thank you, Gerardo. Thanks for having me back as always.

Gerardo Del Real: Well, listen, let's get right into it. We have been working — and by we, I mean you, the team, and us shareholders have been working for roughly four years — to get to what is a milestone moment. 

That, of course, is the commencement of drilling at the 100%-owned Valiente Project, more specifically at Belen, and more specifically at Vista Alegre, which is an epithermal gold project with multi-million ounce gold potential. I want to congratulate you first and foremost, so congratulations on that, sir.

Michael Hudson: Thank you. It's a major milestone, no doubt. We established a new porphyry copper-gold and gold belt in the back arc of the Andes, and it's been a long time to pull that apart and waiting to get the permits where Peru was slower. Now, it's faster. And here we are at a major moment.

Gerardo Del Real: Let's get right into the elephant in the room. I, of course, woke up yesterday to the prime minister of Peru stepping down and then national protests, which were scheduled, and they happen roughly once a month in Peru. But that coincided with the stepping down of the prime minister. 

Then, of course, there were local outlets that were reporting — and there were some comments made by a faraway mayor that were interpreted to be negative and potentially affecting the long-awaited drill program at Belen.

And so I wanted to have you on to just talk about that head-on and see where the drilling program is because I woke up to celebrate and instead was responding to shareholders as well as — obviously, it's a large personal holding of mine — me digging into all of the facts. And so I wanted to have you on and just kind of touch base on everything that's going on and how things are coming along.

Michael Hudson: Yeah, it's business as usual. We've got the rig, and it's turning. The article you were talking about was from somebody an hour and a half away who has been opposed to the project for a long time, who has no jurisdiction, and he was banging the table. 

But he has no authority or any responsibility over the project, and he's got his own reasons for wanting to garner support for what he's doing as a local politician. But a long way from the project. We've got overwhelming support from the local people where we're drilling. 

We've got all of the official permits in place from the mining authority, from the archeological side of things, from the environmental side of things, and, again, importantly, from those public participation meetings where we've had 100-plus people who are supportive of the project. 

We've got the written support, again, from the local community that has just been restated and gone to the regional governor of the area. It's conflation outside of Peru on something that was irrelevant inside Peru.

Gerardo Del Real: I’ve got to tell you — and this is the value of site visits — when myself and Nick Hodge and our audio-video guy Tim Hicks were down there for the very thorough site visit to multiple projects, I had the good fortune of being able to sit down in a very tangible way and have very sincere conversations with the locals. 

When I woke up, and I saw the price action, and then woke up the next day and saw the price action again, and then, after the third day of figuring out where it was coming from, I’ve got to tell you, that site visit provided a lot of peace and clarity on my end of it. Because I know, personally, just how supportive the local community is, and that's a testament to you and the team. You've done it the right way. Social license has been granted in a very eager way. 

It's been very important to the locals, and I was told this directly, that you've done everything that you've said you were going to do and continue to do so. And so that gave me a lot of calm and gave me a lot of peace that this would be short-term noise. 

But again, I can't overstate how much local support there is for figuring out what we have. So let's talk about potentially what we have. I know we're going to drill three projects but let's start with the one where the drill is turning now. Can you talk to me about Vista Alegre?

Michael Hudson: Vista Alegre is the meat in the sandwich, if you like. So we’ve got the two loaves of bread or slices of bread that are the porphyries at each end, Ricardo Herrera and Sortilegio. 

The sandwich is about 9 km long between porphyry to porphyry. And in the middle is Vista Alegre, which is this epithermal gold project over about 2.5 km. We've got specifically 40 platforms across that whole area, that 9 km, with about 13 to 15 platforms where we can drill multiple holes off of each platform in any one of those three areas. 

At Vista Alegre, we have gold in outcrop, in boulders, and in soils, and we've done very detailed IP anomalies. So we're drilling combined IP, which is induced polarization, a geophysical technique that maps the sulfide, the disseminated sulfide in the rock, that when the charge is turned on and off quickly, the sulfide releases that charge a little slower. 

It holds the charge more so than the rocks that don't have sulfide. So we can map the sulfide bodies, and, generally, sulfides are associated with the metals that we're after; in this case, gold. We know there's gold at surface, and we just have to work out the controls and what is the grade at depth. 

The truth machine will tell us that; the drill rig will tell us that. There's something like three or four holes we're going to drill in each target. There’s about 5,000 meters in the program that we’ll drill over the next three or four months. We're drilling 24/7. And then, we'll drill three to four holes in each of the three target areas and then come back into areas where we've got interest and start to drill out a little bit more. 

We don't want to just touch each one lightly. We want to give each target a fair go. But we also want to make sure we test the system before we get too focused. It's that fine balance that we're trying to achieve. We will bring in another rig once we get the systems up and the understanding of the geology over the coming months so we can increase the drill speed. But at the moment, we've just got the one rig.

Gerardo Del Real: I’ve got to say, Mike, a couple of things. One, I am delighted to hear the confidence that you have in these targets. The fact that you think with four or five holes at each of those is sufficient for an initial test — at the very least, to get an idea of orientation and potentially what's there — brings a smile to my face. 

The other thing I must say is you're on a heck of a run. You've taken Southern Cross Gold now to a billion dollar valuation, obviously, on the back of the phenomenal Sunday Creek gold-antimony discovery, which is one of the most exciting gold discoveries here in recent memory. 

These three projects are exciting enough in their own right. I mentioned the potential, and I'm using your words for multi-million ounce gold deposit at Vista Alegre. But I have to ask you before I let you go, how is the exploration work coming along at ‘The Monster’ or ‘Cripple Creek 2.0’ otherwise known as Previsto?

Michael Hudson: We're working away on that project. We have a team of geologists and field assistants supporting the drilling, but, equally, we've got the same team that has made the discoveries out at Previsto working away about 20 km as the crow flies from the drill rig; 20 km to the northeast. 

It's a few hours drive getting down and up to the project from the drill rig, and there's always ongoing work there, prospecting, expanding beyond those fantastic channel results that we made a few months ago; the 60 meters at a number of grams, including 25 meters at 5 or 6 grams. I don't have the numbers off the top of my head exactly but in that realm. 

We are expanding that footprint and understanding that system, and it's a very small part of the 5 x 5 km 0.1 gram soil anomaly that we've got. So that is the big prize without a doubt but, notwithstanding where we're drilling, any one of those three targets could be a company-maker in their own right also. 

So many options here. And then, remembering these two projects are only a smaller part of the larger Valiente Project where we've got something like 18 different porphyry copper-gold epithermal targets. So this is a very large-scale multi-option company.

Gerardo Del Real: I think when it's all said and done, there are going to be multiple company-makers that come out of this brand new, never drill-tested, never explored in any kind of modern way gold and copper belt that you so brilliantly put together. Want to be absolutely clear, the rig is turning. The locals are supportive. Expecting assays next month. Is that accurate?

Michael Hudson: I can't put a four-week timeframe on it but something, the turnaround, we need to get the drill holes done and sampled. And generally, it's a 6 to 8 week process from a hole being drilled to getting assays. So I'd expect it would fall within those sort of timeframes. I said I wouldn't put a timeframe but I think I just did.

Gerardo Del Real: I'll give myself kudos for getting you to do it. Last but not least, when do you expect to get more results from Previsto? I know, right now, we've had conversations, and you've said this publicly, that you really want to prove out this sea of gold that is potentially there and that sure in the heck looks like it's there. 

Look, it's great to have the grades that you've been able to sample thus far but the continuity is as critical. Is that accurate?

Michael Hudson: That's very true. I mean, you look at these alkaline gold systems — be it Cripple Creek, that you referred to, or Porgera — they were made on very high-grade bodies that were small, hundreds of meters, 700 or 800 meters long and tens of meters wide. 

That's where the majority of the ounces were first found. But they were, in what you so well-put there, a sea of gold, which is now where Cripple Creek is at; mining at low grades. But there are still millions of ounces at those lower grades. 

So they're twofold. They're very high-grade systems. They can form very high-grade systems. And understanding the controls is very important. But notwithstanding, a sea of lower grade is what forms the meat and potatoes, if you like, of the system. 

The sweet spots are obviously what you need to focus on early if you can. And we've demonstrated already that we do have very high grades within this sea of gold. But it's understanding the controls and how much of that high-grade material there is and where it heads to from those initial discoveries, basically.

Gerardo Del Real: Excellent. I understand that environmental studies for permitting are underway as well. Is that accurate?

Michael Hudson: That's very true. We've got a lot of people up there collecting all of the environmental data: the soil, the fauna, the flora, the noise, the social side of things, the archeological side of things. 

It’s what you need to do to go through one of these DIAs — Declaración Impacto Ambiental — which we've done now twice. This is our third one. And that work will be completed over the coming months, which will set us up to put drill permits in around Q3 of this year in terms of when we'll be applying for the drilling at Previsto. 

The last drill permit took something like 11 months. But we're challenging the Peruvian authorities to make it even quicker. And I think they can. What we've done over the last two DIAs is a lot of education for everybody because we're in new areas that people haven't explored before. 

There's a lot of responsibility on us to do the job well. But equally, the authorities are learning about how things should be done in these areas at the same time. We're working together to make sure it's done perfectly.

Gerardo Del Real: Excellent. Mike, thank you so much. I appreciated you getting a release out as soon as possible. I understand why it was a brief release. I appreciate you coming on and providing more details on the very exciting drill program that's ongoing at Vista Alegre. 

I appreciate the details and look forward to having you on here, frankly, the rest of the year and likely for several years talking about drill holes and discoveries and results and what I think is going to be a historic gold and copper market and one of, if not, the most exciting copper and gold exploration stories in the world. Anything to add to that, sir?

Michael Hudson: That's a wonderful way to end. Thank you for your support, and I'm very excited to continue to update you. You don't make discoveries like this very often in your career, and I'm very excited to see where it all goes, as you are.

Gerardo Del Real: Thanks again, Mike. I appreciate the time.

Michael Hudson: Thanks, Gerardo.

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