Palamina (TSX-V: PA) CEO Andrew Thomson on Channel Sampling Results & Drilling Plans at the Coasa Gold Project in Peru
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Palamina (TSX-V: PA)(OTC: PLMNF), Mr. Andrew Thomson. Andrew, it's been a bit. How have you been?
Andrew Thomson: Great, great. Other than sitting at home and probably eating one or two donuts too many, I'm doing well.
Gerardo Del Real: Listen, it sounds like you're also discovering more gold. The most recent release – and you've had a couple recently that I want to get into – but the most recent headline reads, “Palamina Channel Sampling Returns 14.2 gpt Gold over 1.5 Meters at the Coasa Gold Project.” This is now the eighth gold-bearing structure at the Veta Zone.
There's a lot of nuggets, pun intended, buried in this release that I absolutely want to get into. I want to start first by letting you provide an overview of the release, and then let's get into some of those nuggets that I mentioned.
Andrew Thomson: The key here is that initially when we started on this property we were doing more chip sampling, and then we moved everything quickly to a minimum meter sampling over meter widths, and we're still getting good grades. We're in the process of permitting the Veta Zone for drilling. We're right at the end of that process.
There's an intrusive that comes out right next to the two main zones, Veta and Cayos, Cayos being the new discovery zone. But we hadn't done a lot of work to the northeast. We actually kind of worked around the intrusive and we found a new zone, which we're calling the Veta NE Zone. It's 500 meters along strike, so it increases the mineralized strike length from the Cayos Zone to the southwest end to the northeast end of Veta, to 2 kilometers. It was already significant, but it's more significant.
There's still a fair amount of work to do. This is really just an initial program. In the Veta Zone, where we're permitted to build 40 drill pads, we're just waiting our Initiation of Activities. The 1 meter of 14 grams, that's in the northeast end, and we got a much better understanding. There's different structures within that zone we're planning to drill, and we're in the process, we have four pads built now. We're just at the point now where we're still doing surface work to try and understand the breadth of those structures. It's quite encouraging that we got those results.
Then the results that are 500 meters northeast, again, they're in the 2 gram range. The key is that all the mineralization is centered around this big intrusive. We're starting to build a model around that, where we've always felt there was potential for an intrusive-related gold deposit, but it's starting to bear that out.
Gerardo Del Real: You joked about being home, but obviously you've been busy. You've raised some cash. You've closed on some deals. You've advanced the property, and you mentioned waiting to be able to get in there with a drill.
Can we go over the cash position and what that looks like right now? Because, again, you've been active. It's just not the most visible of times, given the situation in Peru. We can talk about that a bit in a second.
Andrew Thomson: Yeah. Currently the company in cash and equity has about $1.3 million. We have a big shareholding, 18.6% of Winshear Gold. In terms of recent financings, we did the $1.1 million into Palamina. Then Winshear, again, which we have two board seats and are a fairly large shareholder, I'm also the largest individual shareholder, we did $1.35 million. Then we closed on another half million on the warrants. That company's well-financed, and they're moving forward rapidly.
If you're buying a Palamina share, you get that equity participation and royalty. They also paid us a $25,000 US advance royalty payment last month. There's annual royalty payments that scale every year. From a really macro perspective, there's likely going to be two drill programs, one on our flagship property, Coasa, and one on Winshear's Gaban project. We're back to work, so we're pretty active in the field right now.
Gerardo Del Real: Let's talk COVID and Peru in the age of COVID. You mentioned that you're back to work. What does that look like right now, and what can we expect moving forward for Palamina?
Andrew Thomson: My interpretation is that we're just getting out of winter. Peru is call it nine months behind China, six months behind North America, so it's a bit like the beginning of May for North America. As they come out of winter, things are going to get easier, I think. I think the good news is that they may not get a second wave based on the fact that they've actually had quite a few people contract the disease, and so they're building immunity. But more importantly, whether it's a vaccine or they're taking steroids with blood thinners, everybody has a solution to be able to survive it, and I think that Peru and South Americans have been hit pretty hard, but I think when they come out of it, they're less likely to have a second wave than the balance of North America.
Gerardo Del Real: Well, that bodes well for seeing drilling activities, whether that happens in the next several months or it happens in 2021. I'd love your thoughts on that front.
Andrew Thomson: Where we're at, we received our DIA, which is our impact environmental study, approved last December. The timing of it was good for a May drill program. Post the DIA, there's an Initiation of Activities.
One of the things that is a bit of a problem for us is Puno, the province we're in, isn't as sophisticated in terms of registering things like land title. We're drilling on private ground, but we needed to register it and it never showed up in Lima. We actually, at the end of January, had to go through the process of not only convincing the community to register it so that it will show up eventually, but we had a map from the Ministry of Mines, and long story short, everything's been completed except for that map. Even the water permit, from what I understand, is going to see approval. From my perspective, they've said they want to go out and check the coordinates,. Again, in the time of COVID, we're lucky enough that they prioritized us.
At the end of the day, I think we'll be permitted this year in short order. I don't want to overstate the fact that we've been thinking this now for a good while since we got our DIA. If you do look at the companies, I think Camino started drilling last week. A new company, Pucara, got their drill permit. We use the same person on our permits that they do. You see Kaizen's drilling. They are starting to move a little more quickly, so I'm quite hopeful.
Again, it's a waiting game. The long and short of it is I think that South American junior stocks are more depressed than North American, and I think they're going to have their day in the sun in short order based on the amount of drilling we're seeing.
Gerardo Del Real: Well, if the drill bit delivers anything like what the samples and all the work that you've done up till now, if you deliver those kind of numbers or exceed that, I think it's going to be much higher share price in very short order. Andrew, anything else that you'd like to add to that?
Andrew Thomson: Again, I just would impress people to understand our business model, and that is that there's 100,000 informals. We think they're mining 3 to 5 grams a day, mining 2 million ounces at surface, all visible. We've got lots of it on our ground. But the key here is that this is an under-explored orogenic belt where we have first mover advantage. We're titled. We're going to get our drill permit in short order. There just isn't anyone else, other than Winshear, which is our sister company if you want to call it that, our equity partner. They're going to be drilling, so there's really two kicks at the can.
If you step back a bit and look at it in the context of everybody's been very patient, we're just asking for a little more patience and the opportunity to actually deliver in terms of getting a drill intercept out of the ground.
Gerardo Del Real: You have an excellent share structure and a tiny market cap. Can you remind everyone where that stands?
Andrew Thomson: Yeah. We're at 45 million shares outstanding. Again, the four principals hold a fairly large amount. I would say there's only about 15 million in the float. It trades by appointment, but in a hot gold market with a hot drill intercept, we could easily turn the liquidity issue around.
Gerardo Del Real: I've seen you do it before. I've made money with you before, and I'm looking forward to doing it again. Andrew, thank you so much.
Andrew Thomson: Okay, thank you.