Hannan Soil Sampling Continues to Extend Scale and Define Continuity of Copper-Silver Mineralization at Tabalosos East, PERU
1305 – 1090 West Georgia Street, Vancouver, BC, V6E 3V7
Phone: +1 604 685 9316 / Fax: +1 604 683 1585
NEWS RELEASE AUGUST 09, 2021
HANNAN SOIL SAMPLING CONTINUES TO EXTEND SCALE AND DEFINE CONTINUITY OF
COPPER-SILVER MINERALIZATION AT TABALOSOS EAST, PERU
Vancouver, Canada – Hannan Metals Limited (“Hannan” or the “Company”) (TSXV: HAN) (OTCPK:
HANNF) reports on the results from the soil geochemical sampling program from the Tabalosos East prospect
within the San Martin JOGMEC JV sediment-hosted copper-silver project in Peru (Figures 1 and 2).
Highlights:
Soil sampling has identified significant extensions of the sub- cropping mineralized c opper-silver shale
horizon at Tabalosos East, which now extends over 24 kilometres of strike;
The soil survey confirms both the continuity of previously reported high grade copper mineralization at
Tabalosos East which included ou tcrop mineralization of up to 2 .0 metres @ 4.9% copper and 62 g/t
silver as well as infilling and significantly extending previous reported soil sample results to the north and
west;
The area is covered by dense jungle vegetation and in parts relatively steep topography. It is estimated
that <1% of the bedrock outcrops;
A total of 2,090 sites have been soil sampled. Additional infill and extension of the area is ongoing given
the success of the technique;
Tabalosos East is located within a 24 sq km area, which is a small subset of the 815 sq km area Hannan
is exploring in joint venture with Japan Oil, Gas and Metals National Corporation ("JOGMEC");
Next steps are to extend the soil survey to the west and south where scout lines have identified new soil
anomalies and commence trench sam pling the soil anomalies by ha nd to expose sub cropping
mineralization;
Permitting to undertake advanced exploration work within Tabalosos East, including diamond drilling, are
ongoing with Environmental Impact Statement (Declaración de Imp acto Ambiental, or "DIA") baseline
studies underway with support of the local communities at Tabalosos East;
Michael Hudson, CEO, states, "These results continue to demonstrate the scale and increased understanding of
the continuity of the Company's vast sediment-hosted copper-silver project in Peru. Although these data confirm
the continuity of mineralization over 24 km at Tabalosos East, the area tested represents less than 3% of the
total tenured area in joint venture with JOGMEC. The soil sampling technique, utilizing both in-situ and pressed
pallet pXRF analysis directly in the field, is working very eff ectively to test these large areas rigorously, rapidly
a n d c o s t e f f e c t i v e l y . W e c o n t i n u e t o w o r k w i t h t h e s u p p o r t o f the local communities, and environmental
permitting for drill planning continues.”
Hannan is rapidly advancing the Tabalosos East target and demonstrating scale and continuity of copper-silver
mineralization over 24 kilometres of combined strike, within a 6 kilometre by 4 kilometre area (Figure 2). Three
geological teams with more than 10 local assistants and guides are systematically sampling traverses across the
densely vegetated jungle. Soil anomalies vary between 20 to 3,8 11 ppm copper with background ranging from
below detection limit to 20 ppm copper. The program consists of approxim ately 36-line kilometers of sur vey
lines covering an area measuring 6 kilometres by 3 kilometres. The main survey lines are spaced at 250-metre
centres running east-west, with shorter infill survey lines spa ced at 150-metre centres. Soil samples were
2
c ollec ted every 20 metres along eac h of the survey lines. Approximately 2,090 samples to date have been
collected and assayed.
Future work during the dry season at Tabalosos East will focus on continued systematic soil sampling, trenching,
and sampling of key soil anomalies and detailed geological mapping to aid in the definition of drill targets.
About the San Martin JOGMEC JV Project (Copper-Silver, Peru, 88 mining concessions for 660 sq km)
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 by 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 feasibility 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 Parti cipating Interest will be automatically converted to a 2.0%
net smelter royalty (“NSR”), and the other party may at any time purchase 1.0% of the 2.0% NSR for a cash payment of
US$1,000,000. Hannan will manage exploration at least until JOG MEC 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 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 largest 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.
Technical Background
All soil samples were collected by Hannan geologists using an i n-house protocol for soil sampling in jungle areas. The
samples were subsequently analyz ed with a portable XRF deployin g a protocol developed by Hannan for the San Martin
project. The method is designed to minimize risk of contaminat ion and ground disturbance. In most cases the sample
media is the “B-horizon” of the soil profile. Only 100g of sample material is collected from each site. From the soil sample
a pellet is being produced which is dried and analyzed by a por table XRF (pXRF). Certified reference material, blanks and
3
field duplicates are routinely added to monitor the quality of the pXRF data. In addition, 10% of all samples are submitted
to ALS in Lima for 4-acid ICP-MS analysis to check the quality of the pXRF data.
Channel samples are considered representative of the in-situ mineralization samples and sample widths quoted approximate
the true width of mineralization, while grab samples are select ive by nature and are unlikely to represent average grades
on the property.
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 mine ral projects in Europe and Peru. Hannan is a top ten in-
country explorer by area in Peru.
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 may constitut e forward-looking information or forward-looking
statements, within the meaning o f Canadian securities laws. The se statements may relate to this news release and other matters identified in the
Company's public filings. In making the forward-looking stateme nts the Company has applied certain factors and assumptions tha t are based on the
Company's current beliefs as well as assumptions made by and in formation currently available to the Company. These statements address future events
and conditions and, as such, involve known and unknown risks, u ncertainties and other factors which may cause the actual resul ts, performance or
achievements to be materially different from any future results , performance or achievements expressed or implied by the state ments. These risks and
uncertainties include but are not limited to: the political environment in which the Company operates continuing to support the development and operation
of mining projects; the threat associated with outbreaks of vir uses and infectious diseases, including the novel COVID-19 viru s; risks related to negative
publicity with respect to the Company or the mining industry in general; planned work programs; permitting; and community rela tions. 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.
4
5