Palamina Corp. (TSX-V: PA) President Andrew Thomson on Expanded Gold Zones after Successful Channel Sampling Campaign at the Coasa Gold Project in Peru
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is President of Palamina Corp. (TSX-V: PA)(OTC: PLMNF), Mr. Andrew Thomson. Andrew, how are you this afternoon?
Andrew Thomson: Very good, thanks.
Gerardo Del Real: Let's go over this morning's news. More good news from one of the five district-scale land packages that you've put together in Peru. Let's start with the headline and then let's talk about what it means. The headline reads, "Palamina reports 620 grams per tonne gold and 1.8 meters of 19.6 grams per tonne gold at the Coasa Project in Peru." Give me the details.
Andrew Thomson: Previously, the campaign that we were running at Coasa was a chip sampling program where again we were seeing quite high grades of 39 gram per tonne material from our chips. So really the secret here is to go back and follow up with channel sampling. What the channel sampling does – if it's horizontal and perpendicular – you're trying to now get volume or an understanding of whether or not the wall rocks, which in this case are slate, are also mineralized.
So, the significance of the high grade is really there as a chip sample just to show that we're finding different zones. So the last time that we spoke, we were quite encouraged that we found one visible gold zone. We're now up to four zones. One of those new zones where we took a chip sample is running 19.9 ounces, which is bonanza grade for these style systems. So really that is a bit of a flash in the pan, but where it starts to become more important is when you do your channel sampling across, which in this case is rock saw, and those samples get sent in, when you start seeing minable widths, i.e. a meter and a half and above that, at good grade, which in this case is 1.8 meters and 90.6 grams. That's when it starts to get exciting because that's when you can start building or working towards something where you can get tonnage in a resource.
So we're quite encouraged that these slates, the initial chip samples were in quartz, as is the high grade here, but we're also seeing that mineralization in the wall rock, which are the slates. There's a chart there with about 22 samples. I think about 20 of them are channel samples, and they're all very consistent in terms of the grade. Again, our rule of thumb is that we're looking at a gram per tonne for open pit and 6 gram per tonne over say a meter and a half at depth to be able to do what we call underground mining. From our perspective, we fulfilled both of those requirements with this program. So it's been fair to us that we probably should drill this zone. This is about as good as it gets in terms of getting results back.
Gerardo Del Real: Now, this is from the Veta zone. Is that correct, Andrew?
Andrew Thomson: Yes.
Gerardo Del Real: What area is this mineralization now covering? Give me a little bit of scale and perspective here.
Andrew Thomson: Previously, I think it was 4 by 700 meters. Now, it's 800 by 500 meters. We're seeing anomalous values of 1.8 kilometers by 500 meters. But really the main zone now that we're working, which is this 800 by 500 meter zone, within it there's about a 200 meter zone. In the release, you'll see that there's above a gram, which is really to demonstrate that we may have some potential for an open pit, but there's quite a few values there that range from about 4 grams to up to the 620, but more importantly, in the channels, we've got 0.9 of 100 grams. There's 1.8 meters of 19.6 grams. 1.8 meters of 4.2 grams.
These are over roughly a 200 meter area. We're working out from that area to be able to define more mineralized zones, so we're quite encouraged that again these programs that we're running are really starting to define a very specific area which we're seeing repeated in other zones within this trend. So, again, we're out there working those now. We've got another program that we're running at Phusca, but to be clear, there's nine anomalous zones on the property that we've identified. This is obviously one of the more promising zones and it comes off the main Phusca structure, but it really is telltale of what could be at depth.
Gerardo Del Real: Well, it's truly district scaled. The last time you and I spoke, we talked about the heliborne geophysical survey that was underway. How is that coming along? And how is that aiding in delineating these targets?
Andrew Thomson: At Coasa, we're flying it on three of our properties. We're almost done on the two other properties, Gaban and Cori. I think they had three more lines to do on that one, and the helicopter went up today. At Coasa, we're about half done. It's a higher elevation, so the weather is a little more difficult in the sense that we have to have clear days, so we've been spending more time on the others. I suspect the schedule now says it will be done in five days.
The key thing to understand is that GoldMining, their Crucero deposit, there's 2 million indicated and some economic ounces in today's gold price, but mother nature has still provided 2 million ounces. So it puts a check mark on what I call the volume scale in the sense that we've got a deposit in the same structure as our Phusca zone. And again, ours is offset, which if you know anything about orogenic systems, it's all about structure, structure, structure.
Typically, when you see these offsets is where you can get a fair amount of volume. Again, in our orogenic belt there's Ollachea, where Minera drilled 81 kilometers. Most of our team is made up of former Ollachea explorationists. They defined a deposit there that's plus 1.2 million ounces that's open ended. Then, we have Rinconada, which is a deposit with informals. There's no stats on it, but there's 35,000 informal miners mining it today and we're quite certain it's produced at least a million and a half ounces.
So from our perspective, this is the same geology more or less in terms of the orogenic systems. It obviously has some different attributes, but that gives us some sense of the contribution in terms of there being volume scales. So the purpose of the helicopter survey, the geophysical survey, is there's also an association with pyrrhotite. Normally you can't see gold with magnetics because it's not magnetic. But flying this when it's associated with pyrrhotite, we're quite certain that we'll be able to see the structures. Right now our interpretation of Veta, as an example, is that it's something coming off the main Phusca zone. Again, it's at a higher elevation than the Phusca zone.
But even the visible geology of Phusca and these areas is quite significant. We're just really starting to get into this. Obviously, we're getting a 43-101 done. We're applying for drill permits. We've got our environmental survey underway, so we're really readying it for a drill program now. And we know at least at Veta right now we've got drill targets to establish a third dimension.
Gerardo Del Real: Excellent. How are relations with the locals there? That social license is so critical, right?
Andrew Thomson: There's basically three different communities at Veta right now. We've had no issues. More recently, there was a local fair where we had a hot dog stand, or the equivalent of, and I think we gave away over 1,200 dinners to people at this fair. So, that was very well-received. We tend to do things that benefit the entire community as opposed to buying a guy a computer. To date, we've had no issues. We've started, obviously, negotiating. The good thing about this is a lot of it's private land, so they're individuals and we're negotiating with them. We've come up with certain parameters that are very affordable, and so we haven't seen any real issues.
We're in the process of trying to sign those off as part of our overall permitting, etc. for environmental and drilling. We have to have that, the surface rights in place. There are some areas that have communities on them, and again, we're not seeing any resistance or problems, so cross your fingers. It's gone quite well so far.
Gerardo Del Real: You mentioned the team earlier briefly. It's very experienced in Peru. Can you give a little bit of their background, just their experience there?
Andrew Thomson: So, Don McIver and Yury Valdivieso who are the two leads, they were the two senior geos at Minera IRL and they were part of the team. Ollachea was a known deposit, but they're really the ones to go in and systematically explore it with what I would call a North American standard. Again, all of our projects in this belt have been known for some time in the sense that they've been ground trooped by informals. The ground hasn't been available for quite a while, and when all of it came open at once, we picked up most of it.
Where it gets quite interesting from my perspective is, again, at Ollachea they drilled 81 kilometers, but there's also a mineral suite that they understand that we need to have in place for there to be mineralization, specifically at depth. And so we need to see those signatures. These are associations of things like arsenic, tungsten, etc. We're seeing those as well in these areas. So from my perspective, when you've got two guys with 35 years experience in this belt, not only is it important from a geologic point of view, but I can tell you, when we had to set up our office at Juliaca, when we had to navigate the roads and we had to talk to the communities, all of that stuff. We're not reinventing the wheel.
That really is why we're having real success in the field, being able to go as quickly as we can. I can tell you, the one thing about being an explorationist, you can have all these things in place, but if mother nature isn't cooperating, a lot of the money that's raised, even if it all goes into the ground, if she's not cooperating, you've lost it. But in this case, the good news is that as we suspected, the geological risk, in my opinion, is lower because of the experience and the ability to just go out and define these sorts of zones.
It doesn't happen every day. So from my perspective, we're getting lucky and part of it obviously has to do with the fact that these guys know the terrain. I don't have to tell you, some of this is at elevation. They're acclimatized, they know how to work at those levels. It's an all Peruvian team, so I'm very, very happy with the bang for the buck, if you want to call it that.
Gerardo Del Real: Share structure and market cap, Andrew. It's obvious early days but you got five phenomenal land packages and another project in Mexico that doesn't get a lot of attention, and we'll talk about it another time. But what does the share structure and the market cap look like right now?
Andrew Thomson: Well, our stock is up a little bit today with the news. We're just under 30 million shares out, just under I think 40 million fully diluted. We're trading at $0.34, $0.35. The stock is up two or three cents today. Again, we're still sitting around about a $10 to $11 million market cap with about I would say 8% in cash right now using those metrics.
Again, the market right now is obviously dipped, but if you'll look at our chart and you'll look at the first year being acquisition and assessment, and this being the second year where we've chosen a project to take forward, I think we're fulfilling the mandate that we set out when we went to Peru, which is effectively to try to find a million ounce plus gold deposit. I think we're making very effective use of the funds that have been awarded us.
Gerardo Del Real: Well, it sounds like you have a busy rest of the year. Andrew, thanks for the update. I'm looking forward to results as they trickle in. I assume you're going to have quite a steady stream of news flow here over the next couple of months.
Andrew Thomson: Yeah. Monthly, we're pulling in somewhere between 150 to 350 assays, and we have been working Bendi, our other project. We're also seeing some glory there in terms of being able to find big systems and zones. Again, as you know we've had some interest from third parties. So I'm very confident that moving forward we should be able to at least drill test some of these zones.
Again, when you see these sorts of bonanza grades, there's two ways of looking at it. The cautious person would say, "It's selective sampling and until you drill it, you won't know." But the reality is that we've got a very experienced team. We're actually quite conservative in the way that we approach this stuff in the sense we've immediately channeled it and gotten results, so we're not trying to live off that one number.
This last press release was something like 120 to 220 samples, depending on how you look at it. Again, it's very anomalous, the entire zone that we've defined. And I think it's going to get bigger. From that perspective, again, I don't think it gets much better.
Gerardo Del Real: Fantastic. Andrew, thanks for the update. I appreciate it.
Andrew Thomson: Thank you, Gerardo.