The San Martin Project is located about 30 kilometres northwest of Tarapoto.  Mining concessions cover 120 kilometres of combined strike of the prospective host horizon.  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.

San Martin encompass a newly identified, basin-scale high-grade copper-silver system situated along the foreland region of the eastern Andes Mountains in Peru and neighboring countries.  Geologically, these share similarities with sedimentary copper-silver deposits including the vast Kupferschiefer deposit in Eastern Europe and deposits of the African Copper Belt situated in sub-Saharan Africa, two of the largest copper districts on earth.  Hannan recognized the exceptional potential for large copper-silver deposits in this part of Peru and has aggressively staked a commanding land position.

The Hannan Team During Reconnaissance Prospecting


Hannan signed a binding letter agreement for a significant Option and Joint Venture Agreement (the “Agreement”) with Japan Oil, Gas and Metals National Corporation ("JOGMEC"), announced on 30 November 2020. 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 San Martin Project covers 656 square kilometres of Hannan’s 940 square kilometre Peruvian holdings (Figure 1). Hannan will continue to progress exploration on its remaining Peruvian projects.


  • The Agreement grants JOGMEC the option to earn an initial 51% ownership interest by funding US$8,000,000 in project expenditures at San Martin over a 4-year period, subject to acceleration at JOGMEC's discretion.  JOGMEC’s minimum commitment is to fund US$1,000,000 from 01 April 2020 to 31 March 2021 and JOGMEC has agreed to reimburse Hannan for all project related costs from 01 April 2020;
  • 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$12,000,000in 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 total75% 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$1.00, a two percent (2%) Participating Interest, whereby Hannan Metals’ Participating Interest will be increased to fifty-one percent (51%) and JOGMEC’s Participating Interest will be reduced to forty-nine percent (49%);
  • At the completion of a feasibility study, JOGMEC has the right to either:
    • Purchase up to an additional ten percent (10%) Participating Interest 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 Participating 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 JOGMEC earns a 51 per cent interest, after which the majority participant interest holder will be entitled to act as the operator of the joint venture; and
  • Initial exploration activities will focus on the collection of the geological, geophysical, and geochemical datasets in the JV project areas. The first phase of exploration is expected to conclude March 2021.

San Martin Project Key Points

  • A new frontier basin-scale copper (chalcocite) district.
  • Permit applications for 65,600 hectares (“ha”) covering 120 kilometres (“km”) of strike.
  • Initial prospecting has identified high-grade mineralization in outcrop and float and alteration in an area covering 100 km x 50 km.  Similar style of outcrop/boulders have been discovered over 100 km of strike.
  • Best results from outcrop - 20 km apart:
    • 3m @ 2.5% Cu and 22g/t Ag (LD190517-19)
    • 2m @ 5.9% Cu and 66g/t Ag (TC190536-38).
  • Mineralization forms at multiple stratigraphic levels and is spatially linked to salt structures.

Hannan has staked a total of 87 mineral concessions at the San Martin project which have been either granted or are under application 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.  Additionally, the Company has staked 28 mineral concession applications for 27,700 ha for copper-silver in the broader Huallaga Basin and 9 mineral concession applications for 8,000 ha prospective for coper and/or gold in Peru.

The San Martin project is an early stage exploration project.  Previous mineral exploration in the area is limited.  RTZ worked in the southern and northern areas for one year in the late 1990’s and conducted reconnaissance sampling and drilled 3 diamond drillholes in the transitional lead-zinc parts of the system in the south.  A private Canadian company completed soil sampling and some geophysics during a one year period in the southern project area.  These data are not available to Hannan.  Hannan’s in-depth regional geological understanding has been derived from the substantial data gathered during petroleum exploration activities undertaken in the Huallaga Basin since 1989.  This data, which recently has been made publicly available, includes >2,000 kilometres of 2D seismic, 618 kilometres of geological traverses, 1,600 gravity stations, 13,000 kilometres of aeromagnetic surveys and >2,000 rock samples for geochemical and petrological studies.  This information has provided Hannan a tremendous amount of data to guide exploration and support geological models. 

During late 2018 initial reconnaissance sampling was conducted on the Tabalosos claims.  While only a smaller proportion of the claims were accessible owing to seasonal rains, four separate areas of high-grade mineralized copper-silver boulders were discovered over a 15-kilometre strike, across multiple structures.  Grab samples taken from nineteen mineralized boulders (>0.1% copper) within creeks which drain outcrop returned values ranging from 0.1 to 8.3% copper and 0.2 to 109 g/t silver with an average grade of 2.8% copper and 27.2 g/t Ag over 15 kilometres of strike across two structural corridors, highlighting the potential for discovery of a strike extensive near-surface, sediment-hosted copper deposit.  Grab samples are selected samples and not necessarily representative of the mineralization hosted on the property.

Additional work was conducted at the western part of Tabalosos in July 2019.  Grab samples obtained from six mineralized boulders (>0.1% copper) range in grade from 0.8% to 11.5% copper and 8 g/t silver to 28 g/t silver with an average grade of 4.2% copper and 17 g/t silver over a 5-kilometre strike.  The new area is located 3.5 kilometres immediately west of the initial discovery made in late October 2018.  Additionally, a grab sample from a boulder located 8.5 kilometres south of Tabalosos South West assayed 12.3% copper and 70 g/t silver in an adjacent anticlinal fold limb.

During March 2019 the Gera claims were visited for early-stage reconnaissance mapping.  The work identified similar style geology as the Tabalosos and Sacanche prospects and the Gera prospect is prospective for similar style mineralization.  In total the Gera claims cover 10,000 hectares and are located immediately NW of the Tabalosos claims.  During late 2019 and the first quarter of 2020 the Company explored the project with 4 field teams before suspending operations due to the COVID-19 pandemic.

The San Martin project lies in the Sub-Andean zone of Andean Cordillera.  Since the 1970’s the area has principally been explored for petroleum, delivering large seismic datasets similar to those being used by Hannan for targeting of zinc in Ireland.  Seismically-defined basin structures and stratigraphy are now being interpreted in the context of sediment-hosted copper mineralization.

The Sub-Andean zone is underlain by a series of retro-arc foreland basins that were inverted during the Mid-Eocene and the Miocene.  The inversion exposed a rift sequence initiated in the late Permian, composed of red beds and thick basin-wide evaporites.  These rocks are contemporary to the Pucara and Mitu Groups in western Peru.  The geological history shows a strong similarity to sedimentary basins which host giant sediment hosted copper deposits with respect to the stratigraphy, basin architecture, presence of thick evaporites and long periods of quiescence.

Copper and silver mineralization is hosted by the 150 Ma Saraquillo Formation, which was deposited in an intra-continental basin during the Jurassic-Early Cretaceous period.  The Saraquillo Formation is 1.2-1.8 kilometres thick and extends for over 1,000 kilometres of strike.  The Saraquillo Formation is spatially associated with salt domes which supports the seismic observations of widespread evaporitic strata, with several small artisanal salt and copper mines present in the area.  Copper mineralization discovered to date is associated with the contact of fine-grained reduced carbonaceous sandstones with highly oxidized red beds of the Saraquillo Formation.  Chalcocite is the dominant copper sulphide and it is always found together with carbonaceous material.  Chalcocite occurs as fine disseminations, fracture filling and centimetre-sized massive aggregates.  Secondary copper minerals are common on exposed surfaces.  Albitization and silicification is associated with the mineralization, where the former dominates in more strongly mineralized samples.

In July 2020, the Company received notice from the Geological, Mining and Metallurgical Institute of Peru (“Ingemmet”) that a total of 43 granted mining concessions for 329 sq km have now been granted at the San Martin project in Peru.  Under Peruvian mining law, a mining concession provides the holder with exclusive rights to undertake exploration (and mining activities subject to additional permitting) within a pre-determined area.  The concession provides secure tenure and allows for more advanced social and exploration work programs to be executed including drill permitting.

In July 2020, Hannan completed a regional 17,500 square kilometre stereographic geological remote study using detailed terrain corrected topographic elevation data and the Sentinel-2 super-spectral satellite data from the European Space Agency (ESA).  The resultant product was a geological and target map highlighting the prospective mineralized trends over 120 kilometres of strike at the Company's sediment-hosted stratiform copper-silver project in north-eastern Peru and identification of several new stratabound copper silver target areas for immediate follow-up in the field.

Remote sensing in geology is a data acquisition method that complements field observation, as it allows mapping of geological characteristics without physical contact of the areas being explored.  Since the late 1970’s geological remote sensing has evolved in parallel with the progression of satellite technology and has significantly improved remote sensed geological mapping.  The basis of remote sensing is that each object on earth has a spectral signature that is a specific response to the radiation to which it is subjected.

The study for Hannan was undertaken by stereographic imagery experts, Gavin Daneel & Associates.  Expert interpretation of stereographic imagery provides rapid and accurate mapping of a variety of features of interest over a wide range of scales.  Remote sensing proxies the geology, using features such as soils and vegetation that preferentially grow above different types of rocks, to help infer the underlying geological patterns including stratigraphic and lithological trends, structural controls and geobotanical anomalies where vegetation stress and abnormal growth may be due to metal accumulation in soils.  The remote sensing study utilized data from the Sentinel-2 constellation of two twin satellites that systematically acquire optical imagery at high spatial resolution (10 metres to 60 metres) over land and coastal waters.  Sentinel-2 has been developed and is being operated by the European Space Agency, and the satellites were manufactured by a consortium led by Airbus Defense and Space.

The studied area mapped the stratabound copper silver mineralization at the Sacanche project area over 73 kilometres of strike.  Known mineralized zones were identified including those recent discoveries mapped and channel sampled within a 20 kilometre strike trend at Sacanche, which include:

  • 2.0 metres @ 5.9% copper and 66 g/t silver
  • 0.6 metres @ 8.7% copper and 59 g/t silver
  • 0.6 metres @ 0.8% copper and 12 g/t silver
  • 3.0 metres @ 2.5% copper and 22 g/t silver
  • 0.8 metres @ 2.8% copper and 14 g/t silver
  • 0.2 metres @ 6.9% copper and 32 g/t silver

Channel samples are considered representative of the in-situ mineralization samples and sample widths quoted approximate the true width of mineralization.

The remote geological study at the Tabalosos project defined and constrained the target position of stratabound copper-silver mineralization over a 30 kilometre trend;

Two target styles have been defined:

1.           A stratabound position in the upper levels of the Saraquillo Formation, defined by the presence of debris organic material that hosts high-grade copper-silver mineralization.  This zone is correlated over a 30-kilometre-long trend and over 5 kilometres in width across the Tabalosos project area and is the same mineralized stratigraphic level identified in outcrop at Sacanche, located 80 kilometres to the south.

2.           A structurally controlled sandstone hosted copper-silver target has been identified in the southern part of the project.  This area is 7 kilometres long and up to 5 kilometres wide in Tabalosos.  The target is analogous with the base metal gossans discovered earlier this year at Sacanche South, located 80 km to the south.

This new interpretation at Tabalosos is the first in the district to combine seismic data with modern remote surface observation from high resolution satellite imagery.  Within the 30 kilometre trend four key zones have been defined over a 5 kilometre cross strike width:

1            Three zones over a 3.5 kilometre strike, where 16 grab samples from boulders (>0.1% copper) averaged 2.7% copper and 29 g/t silver and ranged from 0.1-8.3% copper and 0.2-109 g/t silver.

2.           A zone with 3 grab samples from boulders (>0.1% copper) with two different lithologies, averaged 3.3% copper and 12 g/t silver and ranged from 0.2-6.9% copper and 2.2-27 g/t silver.

3.           Three zones over a 5 kilometre strike, where 6 grab samples from boulders (>0.1% copper) averaged 4.2% copper and 17 g/t silver and ranged from 0.8-11.5% copper and 8-28 g/t silver.

4.           One zone where quick reconnaissance sampling identified a small shale-host boulder that assayed 12.3% copper and 70 g/t silver.

Grab samples are selective by nature and are unlikely to represent average grades on the property.

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 production 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 metres to 5.5 metres thick.

At San Martin, the Company believes it has identified an opportunity that could result in a significant discovery and, as a project generator, new opportunities are continually reviewed.  At the same time, Hannan needs to consider all options to advance a district scale opportunity at San Martin.  The results from our initial work to date has attracted the interest of a number of major mining companies.  While in the early stages of our work programs, it would remiss to not consider partnership opportunities that the Company believes are in its best interests.  To date the Company remains in discussion with select parties.

Future Developments

The Company has continually monitored the impact of the COVID-19 outbreak.  Peruvian social and technical teams were back in the field during November 2020, with COVID-safe and appropriate work practises.

Social work continues with successful engagement with all key stakeholders from local communities to provincial leadership, over the large area.  Local representatives are now working to support the community during the COVID-19 pandemic.



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