Hannan and JOGMEC partner at San Martin copper-silver project in Peru

Hannan Metals Ltd. [HAN-TSXV; HANNF-OTC] has signed a binding letter agreement for a significant option and joint venture agreement with Japan Oil, Gas and Metals National Corp. (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, subject to regulatory approval. The San Martin Project covers 656 km² of Hannan’s 940 km² Peruvian holdings. 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$12,000,000 in project expenditures in amounts of at least US$1,000,000 per annum (for a US$20,000,000 total expenditure);
• subject to owning a 67% interest, a further 8% interest for a total 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$1.00, a 2% participating interest, whereby Hannan Metals’ participating interest will be increased to 51% and JOGMEC’s participating interest will be reduced to 49%.