Vancouver, Canada – Hannan Metals Ltd. (“Hannan” or the “Company”) (TSXV: HAN) (OTCPK: HANNF) is pleased to announce that it has entered into a Letter of Agreement with arm’s length private parties that provide an option for Hannan to acquire up to 100% of the Cerro Rolando Copper Porphyry Project, located within the Paleocene metallogenic belt 100 km northwest of Calama, in Region 2 of northern Chile.
- Letter of Agreement with arm’s length private parties pursuant to which Hannan has been granted the option to acquire up to 100% of the Cerro Rolando Copper Porphyry Project, a high value porphyry copper target in the Paleocene Belt of Region 2, Chile.
- Airborne EM data models a conductor at the base of 200 metre thick pampa cover over 1.2 km of strike. The conductor is interpreted to be a potential chalcocite enrichment blanket lying above a modelled magnetic body, interpreted to be the potassic core of a copper-bearing porphyry;
- The project presents a low cost entry and short timeframe to drilling, while the Company awaits drill permits across its vast Peruvian grassroots copper programs in San Martin and Valiente, Peru.
Michael Hudson, Chairman & CEO of Hannan states, “The Cerro Rolando project represents a key strategic move for the Company into Chile, one of Latin America’s premier and endowed copper mining jurisdictions and plays to the Company’s strengths in defining grassroots copper opportunities in Latin America. Critically the acquisition provides Hannan with a low-cost entry to drill test a high value porphyry copper exploration target in the short term, while awaiting drill permits on our vast and extensive Peruvian holdings.”
The Cerro Rolando project is located within the Paleocene metallogenic belt about 100 km northwest of Calama, in Region 2 of northern Chile. The project consists of 16 contiguous exploration concessions covering a total of 48km2. Elevation in the area ranges from 1290m in the east to 1050m in the west. The project is accessible using existing roads and tracks.
The Cerro Rolando Copper Porphyry Project is a high value porphyry copper target in the Paleocene Belt of Region 2, Chile. Around 80% of Chilean copper production comes from copper-gold porphyry deposits, with most situated in northern Chile (Figure 1). The Paleocene Belt hosts important porphyry copper deposits and mines such as Cerro Colorado (BHP), Spence (BHP), Sierra Gorda (KGHM & Sumitomo) and Relincho (part of Nueva Union – Teck-Goldcorp), yet the belt has seen less exploration as it is mostly under pampa cover.
Regional magnetics shows Cerro Rolando to be located on a major north-south trending structure. This structure is thought to be the control for a regional basement high. Historic airborne EM data models a 1.2 km long conductor at the base of 200-metre-thick pampa cover (overburden defined by seismic surveys), just above a modelled magnetic body from historic airborne data. This is interpreted to be a potential conductive chalcocite enrichment blanket above the magnetic potassic core of a copper-bearing porphyry.
Rapid and cost-effective ground geophysical surveys are planned immediately to define accurate drill targets and includes ground magnetics followed by moving-loop ground EM surveys. Hannan is now seeking quotes and will mobilize a geophysical contractor at the start of April, 2023.
Stage 1: Letter of Agreement
The Letter of Agreement grants Hannan the sole and exclusive right to conduct initial assessment work to determine if the property merits entering into a detailed option to purchase agreement. Under the terms of the Letter of Agreement Hannan will pay US$32K and complete the following minimum exploration expenditures on the Property in three work stages within 12 months following the date that Hannan obtains all the necessary permits to perform drilling on the Property:
- Stage A: US$15,000 of ground magnetic surveys;
- Stage B: US$30,000 of electromagnetic surveys; and
- Stage C: up to US$400,000 of drilling.
Each stage of work represents a “gated hurdle”, such that if each work program (Stages A-C above) does not merit additional exploration, Hannan can exit at any point.
Stage 2: Option to Purchase
Assuming positive results from the Stage 1 Letter of Agreement exploration program, Hannan can then enter into a Stage 2 Property Option Agreement that grants Hannan the right to earn up to an undivided 100% right, title and interest in and to the property. The option is exercisable in three stages over a total period of seven years by spending a total of US$15m in exploration expenditures and issuing 6.0m Hannan ordinary shares, as follows:
- An option to acquire an initial 51% interest in the Property within 12 months following the date that Hannan or its affiliate obtained all the necessary permits to perform drilling on the Property (the “Phase 1 Option”) by issuing 1.7m Hannan common shares;
- An option to acquire an additional 29% interest in the Property, for a total 80% interest, within a total of 4 years from Hannan exercising the Phase 1 Option by spending an additional US$5m on exploration on the project and issuing 2.3m additional Hannan common shares; and
- An option to acquire an additional 20% interest in the Property, for a total 100% interest, within a total of 7 years of Hannan exercising the Phase 1 Option by spending an additional US$10m on exploration of the project and issuing 2.0m additional Hannan common shares.
Once the Company completes the exercise of the Stage 2 Option, a 2.0% Net Smelter Return (“NSR”) Royalty on the property will be payable by Hannan but Hannan has the right to buy one percent (1.0%) of the NSR Royalty at a fair and reasonable valuation provided by an independent valuation, at any time during the pre-feasibility stage of the property. The Optionor will also grant Hannan a right of first refusal for the acquisition of the remaining NSR Royalty up to pre-feasibility.
Hannan will be the operator of the project and has already conducted significant legal, social and environmental due diligence to advance towards the signing of the option and purchase agreement. If the Company exercises its right pursuant to the Stage 1 Letter of Agreement, the Company and the Optionor will enter into the Stage 2 Property Option Agreement which will be subject to TSX Venture Exchange (“TSXV”) approval.
About Hannan Metals Limited (TSXV:HAN) (OTCPK: HANNF)
Hannan Metals Ltd. is a natural resources and exploration company developing sustainable resources of metal needed to meet the transition to a low carbon economy. Over the last decade, the team behind Hannan has forged a long and successful record of discovering, financing, and advancing mineral projects in Europe and Latin America. Hannan is a top ten in-country explorer by area in Peru and has recently optioned a copper-porphyry project in Northern Chile.
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,
Forward Looking Statements. Certain disclosure contained in this news release may constitute forward-looking information or forward-looking statements, within the meaning of Canadian 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. Forward-looking statements in this news release include statement regarding completing the conditions under the Stage 1 Letter of Agreement and the Stage 2 Property Option Agreement and the planned exploration on the Cerro Rolando property. These 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 the statements. These risks and uncertainties include but are not limited to: Successful completion of the Stage 1 Letter of Agreement, Hannan’s exercise of its right under the Stage 1 Letter of Agreement, TSXV approval of the Stage 2 Property Option Agreement, the political environment in which the Company operates continuing to support the development and operation of mining projects; the threat associated with outbreaks of viruses and infectious diseases, including the novel COVID-19 virus; risks related to negative publicity with respect to the Company or the mining industry in general; planned work programs; permitting; and community relations. Readers are cautioned not to place undue reliance on forward-looking statements. 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 Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Figure 1: Cerro Rolando is located in Region 2 of northern Chile in the highly productive Northern Paleocene belt. Tenements cover 48km2. Elevation slopes gently from 1290m in the east to 1050m in the west. The project is accessible using existing roads and tracks.