In this company update, we are joined by Andrew Thomson, President and CEO of Palamina Corp (TSX.V: PA | OTCQB: PLMNF). With a vast portfolio of high-grade assets in Peru, Palamina is currently undergoing a strategic spin-out of its silver-copper projects.
Andrew provides a comprehensive look at the creation of Cult Silver, the upcoming drill programs at the flagship Usicayos gold project, and why the shifting jurisdictional climate in Peru is creating a "sea change" for resource explorers.
Key Discussion Points:
The Cult Silver Spin-Out: A detailed breakdown of the transaction involving seven silver-copper projects, including the share distribution ratio (1 Cult Silver share for every 3 Palamina shares held) and the $2.75 million financing currently underway.
Galena Silver District Strategy: Why the company is prioritizing the Galena property, located in the same trend as the massive Berenguela deposit, with plans to be drill-ready by August.
Usicayos Gold Project Update: Progress on the essential road construction and the timeline for drilling high-grade gold targets in late summer.
Peru’s Jurisdictional Shift: Observations on the improving permit reliability and the migration of capital back to Peru as security and permitting challenges persist in neighboring Mexico.
Portfolio Management: Plans for the remaining six gold assets within Palamina, including ongoing joint venture negotiations in the Puno Orogenic Gold Belt.
If you have any follow up questions for Andrew please email me at [email protected].
Investment disclaimer: This content is for informational and educational purposes only and does not constitute investment advice, an offer, or a solicitation to buy or sell any security or investment product. Investing in equities, commodities, really everything involves risk, including the possible loss of principal. Do your own research and consult a licensed financial advisor before making any investment decisions. Guests and hosts may own shares in companies mentioned.
Hey, everyone. Welcome to the K E report in a company update chatting with Palimina and the president and CEO Andrew Thompson.
Palimina is traded on the TSX venture exchange under the symbol PA and on the OTC QB under the symbol PLM and F.
Lot for Andrew and I to talk about here, just a quick overview of the company holds a vast portfolio of projects in Peru.
Recently, the company announced they are spinning out seven of the silver copper projects into Colt Silver and I also want to get Andrew to give us a lay of the land of what the plans are for the gold projects this year.
So Andrew, first and foremost, let's talk about this spin out seven projects going to Colt Silver, explain this transaction here, where the shares are going, what current shareholders of Palimina again and what Colt Silver in terms of projects looks like on the back end, please.
So I've been active now in Peru since 2017 and since that time in 2017, we state the property, we call Galena and we've done a fair amount of work on that property and it sits in the same trend as aftermath of his baranguila and we believe that below the decasable canics, we can drill through them and find a very similar style deposit to baranguila, which is again one of our experts largest holdings and, you know, they're moving forward to development.
So we spent a fair amount of time since then actually acquiring properties in the district and so we switched with a view to spinning out a silver company and I guess the separated things in the last, we really started about six months ago last June with these projects for drill ready, so the concept here is to spin the four projects in the central or sea district and then drill Galena, you know, pretty much out the gate like we're hoping to drill and we're hoping to get the transaction completed.
We didn't be drilling by August of this year and then, you know, the balance of projects are made up of there's one sedimentary copper, we're, we're kind of north of hints and juke mix sedimentary hosted coop for sheep or like silver copper deposits should be missing all these are, you know, are fairly high numbers, high grade and that's the plan.
So Andrew, in terms of financing this back company and what current shareholders to Palabena get of this company, walk us through the strategy there for kind of a lay of the land of what could come from cult silver when listed.
So so for every three shares of Palabena, you receive one post silver share, we went out and raised half a million dollars already in debt, which is being put towards the completing the transaction and then there's another 2.25 million financing private placement that's underway.
We should conclude that in short order it's filling up pretty quickly with the silver pricing.
We hope to approve it all at our AGM, which is sort of towards the end of July and then, you know, the focus will be on starting a drill program shortly thereafter on our Galena silver copper manganese property.
Okay, Andrew, let's pivot then back to Palabena. You still hold a portfolio of gold focus projects in Peru. What's going to be the focus? Yeah, I think there's a total of what six projects that you're still going to have within Palabena.
So we we were in negotiation for the surface rates on the kiosk on our flagship Uso kiosk project last June when we elected to focus on bringing forward our copper silver assets and part of the issue with going drilling and raising funding is that it dilutes the the what shareholders will receive from in terms of cult silver shares.
So we also had the rainy season, which started in early October this year and it doesn't end till April. So this was a good time to move forward with the copper silver transaction or cult silver transaction.
So we're back we've been back at site now at us the kiosk. We're completing a road. The road is taken much longer than we thought.
It's we're completing the road up to the solar or south area. We will be switching out the motors for the drill and then the plan is to drill the kiosk on where we still have surface negotiate negotiating for the surface rights. But that's the best area.
Again, we had seven meters 18 grams in that area and until we've completed this transaction. So our hope is to be able to go drilling some time in late July early August.
I'm hoping we can drill both both these assets at the same time. The one in cold silver Galena property and our usi kiosk likes at property. We also have interest in joint venture. We've been we've had some fairly lengthy negotiations that we are ongoing for some of the projects in the put or generic belt. They'll be sitting the ones that will be left. The six projects left in Palamina.
Okay, that's what I was going to ask about too. If you are going to focus a lot on kind of the kiosk project. What about all these other assets? They've been in the company for a while. So it sounds like you're going to look into bringing on partners for them.
Well, we've been in discussions for some time on quite a few assets. It's it's I think what's of interest of late is on the silver side.
Mexico was really running harder and further ahead than Peru. We've now seen the Peruvian silver companies move for fairly quickly. And in Puno in the area where we're working.
Corranny is probably the most notable in the sense that it's one of the largest. It's either the second largest undeveloped or I think they're promoting it is the first largest pervaded.
But regardless, it's over 200 million ounces of silver. And it's right in the area that we're we're working in. And you've also got after mass silver now that's that's a fairly serious market cap.
You know, so what we've seen just in the last two months with the security issues in Mexico is that there's not a lot of product for the the people that want to buy silver.
So I think our decision to spin out cold silver is very timely. And I have to say this is one of the better decisions.
So, you know, part of the the issue with cold silver is that we have a warrants in Palamina that if exercise will participate will dilute the transaction.
It's effectively there could be another seven million cold shares that that are issued. You know, on the transaction will be approved at the AGM then we still have to get the exchange to prove it.
So it's a bit of an odd situation where I don't really want to do a lot of dilution and palamine in that time.
And I do think that we'll see enough money coming from from our warrants that we'll be able to carry out the additional drilling campaign.
Okay, that's what I was going to ask. What kind of cash do you have within Palamina to advance to that drilling?
Well, right now there's only about 900,000 in in Palamina. And again, we've just raised 500,000. We haven't yet announced it, but the the adventure is done.
And that those monies will be used to take cold silver public and then by the AGM, you know, I hold a fair bit of the warrants.
So I'm not shy about putting money at the 20 cents. So we should be able to maintain that. And again, it's a tight structure, but the concept here is we want to hit on drill programs.
And we feel pretty confident that we've got fairly good targets at the lane. We're running mega gravity right now. We're about to.
We're in the process of drill perforating and we've also got to continue to run XRF programs. And then at
UCIAS, we're going to put the road in switch to drill out and run some additional sampling programs. But, you know, again, most of those drill targets are picked and, you know, we want to move forward with those fairly quickly.
So Andrew, we've talked for quite a few years now as you built out this project portfolio.
Had some transactions with some of the projects within Palamina, but it's a very different market right now, which I guess is obviously playing into this cold silver spin out.
But what does that mean for more aggressively advancing exploration past just let's say one drill program that we're talking about this year?
Well, I think what we're talking about to one of the silver company cult and one in Palamina, but I think that the sea change really is that the gold properties that we have in the
put on organic belt, we really are shut down for six to seven most due to the rainy season. Whereas the full silver assets, which are primarily in the
center of the sea district, we can operate year-round there. It's about an hour and a half to two hours, depending on which project you're looking at from a field office.
It's on a main highway. There's railway lines going through Belena. There's electricity. I mean, it's about as good as it gets an elevation, plenty of water.
So I think the sea change from a macro point of view is Palamina will retain 10% of cold silver. And I think we'll participate in that.
Then we'll also, you know, in terms of the Arucicios project, there is a, you know, we'll have completed the road and our
band project that we got back. There's a road and a winch on that one from our former operators. So, you know, the ability to operate
during that five months and get more work done is there. And again, I think Peru is back in favor. You know, that's really the
big sea change for many years. It was hard to raise money for Peru projects. Now it's come back. And so I think that's going to contribute quite a bit to our success.
One of the things in Peru, too, is that some people are complaining about how long it was taking to permit in the country. Any updates on that as
they think changed on that front? Well, both Gabon and because are permitted, we're only applying for an FTO, which is 20 drill permits at the Galena
project. And we've been in that added now for half a month. We have a three and a half month schedule to get a
permitted. And what I will say is that the government is functioning better than it had been. You know, they were, they were getting everything in
electronic format. It's still, in my opinion, very expensive and takes time. But I can say that now, at least, you have, there's some
reliability to it, whereas before, you know, they're in the process of getting everything, some of the departments were not part
of their critical path electronic system. All that's in place now. So it is a bit still cumbersome, in my opinion, because it's a critical path.
But we're good at it. And, you know, I'm pretty confident that we're not going to have the same issues we had previously as a result.
Okay. Andrew, thanks for the update here. I know it had been a little while since I last had you on the shows. You were, I guess, sorting out this spin out and also planning the program for this year. So
appreciate the update here and for everyone listening, please email me any follow up questions you have for Andrew, regarding what's going on at Palomino. Post a link in the show notes to the Palomino website.
And I'll also follow up with Andrew as we get some more news on the spin out and the progress towards drilling. So Andrew, again, thank you very much for your time in this update.
