Hannan Announces US$2M Jogmec JV Annual Budget at San Martin, PERU
1305 – 1090 West Georgia Street, Vancouver, BC, V6E 3V7
Phone: +1 604 685 9316 / Fax: +1 604 683 1585
NEWS RELEASE MAY 02, 2022
HANNAN ANNOUNCES US$2M JOGMEC JV ANNUAL BUDGET AT SAN MARTIN, PERU
Vancouver, Canada – Hannan Metals Limited (“Hannan” or the “Company”) (TSXV: HAN) (OTCPK:
HANNF) is pleased to announce that its joint venture (“JV”) partner in Peru, Japan Oil, Gas and Metals National
Corporation (“JOGMEC”) has confirmed a US$2M budget from April 2022 through to March 2023 for the San
Martin project.
Highlights:
JOGMEC has confirmed a US$2M budget from April 2022 through to March 2023 for the 714 sq km San
Martin Joint Venture Project (the “JV Agreement”) as part of th e Third Base Earn-in Period. Under the
JV Agreement, JOGMEC has the option to earn up to a 75% beneficial interest in the project by spending
up to US$35,000,000 to deliver to the joint venture a feasibility study;
The primary focus will be drill testing the target at Tabalosos East (“DIA1”) where a diamond drill program
is planned of up to 3,500 metres at Tabalosos East. The aim is to test for continuity of the surface
mineralization mapped and sampled over 9 kilometres long and 1 kilometre at Tabalosos East, and focus
on shallow dipping and sub-horizontal zones;
The second objective will be to expand known mineralization within and outside the Tabalosos East area
by systematic field work and to initiate field activities at the Gera target.
Michael Hudson, CEO, states: “We are again thankful for JOGMEC’s continued support for the San Martin JV
sediment-hosted copper-silver project in Peru. This budget year has the potential to be transformatory for the
project, with our maiden drill program planned to commence on a pproval of our Declaracion de Impacto
Ambiental (“DIA”) or Environmental Impact Statement. During the last year we have demonstrated width and
grade (average 0.9 metre @ 1.9 % copper and 27 g/t silver) from 105 channel surface samples (lower cut 0.5%
copper), within an area about 9 kilometres long and 1 kilometre wide at Tabalosos East, that compare with those
found during the initial modern-day drill discovery of the Kupferschiefer copper-silver deposits . Detailed
stratigraphic mapping demonstrates that copper mineralization is hosted by defined and mappable organic rich
shale facies within an approxima tely 10 metre thick bleached an d altered copper anomalous package of shaly
siltstones. Social work is ongoing with successful engagement with all key stakeholders from local communities
to provincial leadership, over the large area.”
The San Martin JV Project is in north-eastern Peru. Project ac cess is excellent via a proximal paved highway,
while the altitude ranges from 400 metres to 1,600 metres in a region of high rainfall and predominantly forest
cover. Hannan has staked a total of 98 mineral concessions for a total of 714 sq km within the project area,
covering multiple trends within a 120 km of combined strike for sedimentary-hosted copper-silver mineralization.
A total of 62 granted mining con cessions for 441 sq km have been granted, while the remainder remain under
application.
Channel samples are considered representative of the in-situ mineralization samples and sample widths quoted
approximate the true width of mi neralization, while grab sample s are selective by nature and are unlikely to
represent average grades on the property.
Field and social teams are actively engaged in the area, with Hannan’s policy to undertake exploration activities
only within areas where full support from local stakeholders exists. Hannan aims to have a transparent approach
prior to, during and after technical field work. Hannan speaks to all stakeholders to gain authorization to conduct
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surface exploration. The Company has a dedicated social team a nd has hired local representatives and used
local radio to inform a wider audience on the Company’s plans.
About the San Martin JOGMEC JV Agreement (Copper-Silver, Peru, 98 mining concessions for 714sq km)
On November 30, 2020 Hannan announced that it had signed a binding letter agreement for a significant Option and Joint
Venture Agreement (the “JV Agreement”) with JOGMEC. Under the JV Agreement, JOGMEC has the option to earn up to a
75% beneficial interest in the San Martin Project by spending up to US$35,000,000 to deliver to the joint venture (“JV”) a
feasibility study.
The Agreement grants JOGMEC the option to earn an initial 51% o wnership interest by funding US$8,000,000 in project
expenditures at San Martin over a four-year period, subject to acceleration at JOGMEC’s discretion. JOGMEC, at its election,
can then earn:
an additional 16% interest for a total 67% ownership interest b y achieving either a prefeasibility study or funding
a further US$12,000,000 in project expenditures in amounts of a t least US$1,000,000 per annum (for a
US$20,000,000 total expenditure); and,
subject to owning a 67% interest, a further 8% interest for a t otal 75% ownership interest by achieving either a
feasibility study or funding a further US$15,000,000 in project expenditures in amounts of at least US$1,000,000
per annum (for a US$35,000,000 total expenditure).
Should JOGMEC not proceed to a prefeasibility study or spend US $20,000,000 in total, Hannan shall have the right to
purchase from JOGMEC for the sum of US$1, a two percent (2%) Pa rticipating Interest, whereby Hannan’s Participating
Interest will be increased to fifty-one percent (51%) and JOGME C’s Participating Interest will be reduced to forty-nine
percent (49%). At the completion of a feasibility study, JOGMEC has the right to either:
p u r c h a s e u p t o a n a d d i t i o n a l t e n p e r c e n t ( 1 0 % ) P a r t i c i p a t i n g I nterest from Hannan Metals (for a total 85%
maximum capped Participating Interest) at fair value as determined in accordance with internationally recognized
professional standards by an agreed upon independent third-party valuator; or
receive up to an additional ten percent (10%) Participating Interest from Hannan (for a total 85% maximum capped
Participating Interest) in consideration of JOGMEC’s agreement to fund development of the project, by loan carrying
Hannan until the San Martin Project generates positive cash flow.
After US$35,000,000 has been spent by JOGMEC and before a feasi bility study has been achieved, both parties will fund
expenditures pro rata or dilute via a standard industry dilution formula. If the Participating Interest in the Joint Venture of
any party is diluted to less than 5% then that party’s Particip ating Interest will be automatically converted to a 2.0% net
smelter royalty (“NSR”), and the other party may at any time pu rchase 1.0% of the 2.0% NSR for a cash payment of
US$1,000,000. Hannan will manage exploration at least until JOG M EC ear n s a 5 1 % i n ter est , af ter w h i c h th e m aj or i ty
participant interest holder will be entitled to act as the operator of the joint venture. Initial exploration activities will focus
on the collection of the geological, geophysical, and geochemical datasets in the JV project areas.
Sediment-hosted stratiform copper-silver deposits are among the two most important copper sources in the world, the
other being copper porphyries. They are also a major producer of silver. According to the World Silver Survey 2020
KGHM Polska Miedz’s (“KGHM”) three copper-silver sediment-hosted mines in Poland are the leading silver producer in the
world with 40.2Moz produced in 2019. This is almost twice the p roduction of the second largest producing mine. The
Polish mines are also the sixth l argest global copper miner and in 2018, KGHM produced 30.3 Mt of ore at a grade of
1.49% copper and 48.6 g/t silver from a mineralized zone that averages 0.4 to 5.5 metres thickness.
About Japan Oil, Gas and Metals National Corporation (JOGMEC)
JOGMEC is a Japanese government independent administrative agency which among other things seeks to secure stable
resource supply for Japan. JOGMEC has a strong reputation as a long term, strategic partner in mineral projects globally.
The mandated areas of responsib ilities within JOGMEC relate to oil and natural gas, metals, coal and geothermal energy.
JOGMEC facilitates opportunities with Japanese private companies to secure supply of natural resources for the benefit of
the country's economic development.
About Hannan Metals Limited (TSXV:HAN) (OTCPK: HANNF)
Hannan Metals Limited is a natural resources and exploration co mpany developing sustainable resources of metal needed
to meet the transition to a low carbon economy. Over the last d ecade, the team behind Hannan has forged a long and
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successful record of discovering, financing, and advancing mineral projects in Europe and Peru. Hannan holds 2,093 square
kilometers of granted mineral concessions and applications in Peru making it a top ten in-country explorer by area.
Mr. Michael Hudson FAusIMM, Hannan’s Chairman and CEO, a Qualified Person as defined in National Instrument 43-101,
has reviewed and approved the technical disclosure contained in this news release.
On behalf of the Board,
"Michael Hudson"
Michael Hudson, Chairman & CEO
Further Information
www.hannanmetals.com
1305 – 1090 West Georgia St., Vancouver, BC, V6E 3V7
Mariana Bermudez, Corporate Secretary,
+1 (604) 685 9316, [email protected]
Forward Looking Statements
Certain disclosure contained in this news release, including the Company’s expectations regarding the Agreement and the payments and earn-in upon the
successful completion of certain milestones, the Company’s futu re plans, the projected proceeds from the exercise of Warrants and the use of procceds
from any such exercises, may constitute forward-looking informa tion or forward-looking statements, within the meaning of Canad ian securities laws.
These statements may relate to this news release and other matters identified in the Company's public filings. In making the forward-looking statements
the Company has applied certain factors and assumptions that are based on the Company's current beliefs as well as assumptions made by and information
currently available to the Company. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties
and other factors which may caus e the actual results, performan ce or achievements to be materially different from any future r esults, performance or
achievements expressed or implied by the statements. These ris ks and uncertainties include but are not limited to the potenti al impact of epidemics,
pandemics or other public health crises, including the current c oronavi rus pandemi c known as COV ID-19 on the Company’s bus iness . Readers are
cautioned not to place undue reliance on forward-looking statem ents. The Company does not intend, and expressly disclaims any intention or obligation
to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.
Neither the TSX Venture Exchange nor its Regulation Services Pr ovider (as that term is defined in the policies of the TSX Vent ure Exchange) accepts
responsibility for the adequacy or accuracy of this news