Hannan Receives Local Approval and Initiates Environmental Baseline and Permitting Programs at Tabalosos, PERU
1305 – 1090 West Georgia Street, Vancouver, BC, V6E 3V7
Phone: +1 604 685 9316 / Fax: +1 604 683 1585
NEWS RELEASE MAY 14, 2021
HANNAN RECEIVES LOCAL APPROVAL AND INITIATES ENVIRONMENTAL BASELINE AND
PERMITTING PROGRAMS AT TABALOSOS, PERU
Vancouver, Canada – Hannan Metals Limited (“Hannan” or the “Company”) (TSXV: HAN) (OTCPK:
HANNF) is pleased to announce the initiation of baseline studies and p ermitting to undertake advanced
exploration work, including diamond drilling, at its 100% owned Tabalosos Copper-Silver Prospect at the San
Martin Joint Venture Project in Peru. Japan Oil, Gas and Metals National Corporation (“JOGMEC”) has the option
to earn up to a 75% beneficial interest from Hannan in the San Martin Project by spending up to US$35,000,000
to deliver to the joint venture (“JV”) a feasibility study.
Highlights:
Hannan has received approval from two local hamlets at Tabalosos to initiate work for an Environmental
Impact Statement (Declaración de Impacto Ambiental, or "DIA") study.
The DIA is the primary environmental certification required to allow low impact mineral exploration
programs, that include diamond drilling, to proceed in Peru;
The area for the DIA allows for 40 drill platforms and covers a n area approximately 9 kilometres long
and 3 kilometres wide (2,700 hec tares), including the main targ e t a r e a s a c r o s s b o t h h a m l e t s o f
Cunchiyacu and Pucayoc at Tabalosos East;
Baseline studies for the DIA will take approximately 3 months to be completed and will involve up to 12
specialist consultants during May a n d J u n e u n d e r t a k i n g s o c i o - e conomic and environmental baseline
studies, environmental monitorin g, archaeological investigation s , c o m m u n i t y w o r k s h o p s a n d l i a i s o n
activities. Final DIA and other approvals are anticipated during early 2022.
Michael Hudson, CEO, states: “Our detailed work over the last months finding high-grade cop per and silver
outcrop discoveries at Tabalosos has allowed for the next key s tep of permitting initial drill programs. We are
very appreciative of the support shown by the local people in t he area to allow this wo rk to proceed, and will
continue to work in an open and transparent manner for the benefit of all stakeholders.”
The DIA is the primary environmental certification required to allow low impact mineral exploration programs,
that includes drilling programs, to proceed in Peru. Work for t he DIA will include professional archaeological
investigations, community workshops and liaison activities to collect appropriate information necessary to make
submittals for approval to the General Directorate of Mining Environmental Affairs of the Ministry of Energy and
Mines, Peru. Final DIA and other approvals are anticipated dur ing early 2022. Hannan continues to explore,
derisk and develop drill targets within the large area at Tabalosos. Eight geologists and additional team members
are in site performing BLEG stream sediment sampling, prospecting, mapping, rock chip sampling, trenching and
detailed soil sampling.
About the San Martin JOGMEC JV Project (Copper-Silver, Peru, 88 mining concessions for 660 sq km)
The San Martin Project is located in north-eastern Peru. Project access 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 88 mineral concessions for a total of 65,600 ha (656 sq kms), covering multiple trends within a 120 km of
combined strike for sedimentary-hosted copper-silver mineralization. A total of 43 granted mining concessions for 329 sq
km have been granted, while the rest remain under application. The Tabalosos project is located 80 kilometres north of
Sacanche where earlier work by Hannan at San Martin has identif ied a 20 kilometre strike trend which includes channel
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samples such as 2.0 metres @ 5.9% copper and 66 g/t silver, 0.6 metres @ 8.7% copper and 59 g/t silver and 3.0 metres
@ 2.5% copper and 22 g/t silver.
On November 30, 2020 Hannan announced that it had signed a binding letter agreement for a significant Option and Joint
Venture Agreement (the “Agreement”) with JOGMEC. Under the 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 at 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%) P articipating 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 feas ibility 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 JOGMEC earns a 51% interest, after which the majority participant
interest holder will be entitled to act as the operator of the joint venture. Initial exploration activities will focus on th e
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
successful record of discovering, financing, and advancing mineral projects in Europe and Peru. Hannan holds 1,864 square
kilometers (186,400 hectares) of granted mineral concessions an d ap p l i c ati o n s i n P er u m ak i n g i t a to p ten i n -c ou n tr y
explorer by area.
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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, may constitute for ward-looking information or forward-looking statements, within the meaning of Canadian
securities laws. These statements may relate to this news relea se 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. The se statements address future events and conditions and, as such , involve known and
unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by th e statements. These risks and uncertainties include but are no t limited to the potential
impact of epidemics, pandemics or other public health crises, including the current coronavirus pandemic known as COVID-19 on the Company’s business,
timing and successful completion of the baseline study, permitt ing and planned drill programs. Readers are cautioned not to p lace undue reliance on
forward-looking statements. The Company does not intend, and ex pressly disclaims any intention or obligation to, update or rev ise 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.