Palamina Corp. (TSX-V: PA) CEO Andrew Thomson on Private Placement, the PDAC Curse, & the Peruvian Mining Boom

March 15, 2019

Sign up for the free RSD newsletter to get the latest
news and interviews delivered to your inbox.


Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Palamina Corp. (TSX-V: PA)(OTC: PLMNF), Mr. Andrew Thomson. Andrew how are you?

Andrew Thomson: Very good, thanks.

Gerardo Del Real: Thanks for coming on. It's been several weeks, I want to say maybe a month to two months actually, since we last caught up. I can't help but notice you were at PDAC, and I also can't help but notice that you just completed the first tranche of a pretty robust private placement, especially considering the state of the markets right now.

Let's go in order. I'd love to start by talking about how things are coming along with Palamina.

Andrew Thomson: There's a thing they call the “PDAC curse.” If it's real, which I think it is, in the sense that this is that moment in time where people decide whether they want to play hard or not. I'm of the opinion it hit about a month early, and what we're seeing, from a macro point of view, is all sorts of money sitting on the sidelines wanting to play. But when the seniors move, which they have in the last 6 months, and the juniors stand still, there's a whole pocket of money that was invested last summer. When you see gold really move and the juniors don't move, all that money will sit because they don't have the premium. At the end of the day the brokerage firms only have so many clients. So what we're seeing on the broker’s side is it's still falling apart to some extent.

Having said that, the private money is wanting to come in. So when we announced our placement, about 5 weeks before PDAC, we had a tremendous amount of interest. We were actually oversubscribed at one point, we increased it. And then when we actually tried to get the money in, a lot of people were coming in for less than they said they would. Effectively, the way I look at it, it's the same pot of money reapplying itself within the industry. And the seniors, because of the sharp drop in July/August, they have a certain amount of cash that they're willing to dispense, but suddenly there's 60 new companies in front of them, so they're being a little bit slow.

But this all lends itself to the beginning of a bull market. This is a very typical sort of scenario, but most importantly you're seeing the commodities start to sharpen up and become more robust. And things like Brexit, and some of the internal problems in places like France and Italy, and even the United States now, would sort of indicate that we might be coming into inflation, etc.

So from my perspective, we've managed to attract more newsletter writers, we've got some very serious funds that have come in. What I find interesting is they're not committing a lot of money, they're sort of dipping their toe on the exploration side. But this is all a very good indication that things are going forward. In addition to that, we're looking to close the balance of the placement by the end of March, but the use of proceeds really is to go drilling on our Veta Zone.

The rainy season is now. We've now got our processed airborne data, and we've also got a structural report that was completed by a PhD out of London where we're seeing a flower structure on our main Coasa property.

So this all lends itself very well for us going drilling in Veta. And again, in our Veta Zone we're going to commit to 25,000 meters of drilling, and submitted a permitting to be able to go do that.

Gerardo Del Real: Now the private placement is up to $2.2 million. I know that you're looking forward to drilling Veta. Companies wise, you have multiple projects. What else can shareholders, and people that are looking at Palamina, expect here for the rest of the year?

Andrew Thomson: Well we've seen a lot of interest, because of some of the results we've put out, and what's happening in Puno itself where Miramont is about to release results, I believe, on their Cerro Hermoso project. And we've seen a lot of good indications that that's going to move forward with some zeal. So in the off, rainy season, we tend to focus on the projects outside of Puno. We have four of those. So we're running very quick programs on those, and those are projects we have in-house with a view to joint venture. And we're actually seeing a lot of interest. I really do feel this is the beginning of the Peruvian exploration boom. And if you look at Miramont’s price, partially because Quinton Hennigh is part of it, and again, Auryn is another one that comes to mind with Ivan Bebek. Those projects are also being drilled.

So, I think what it really boils down to is Peru hasn't seen a lot of drilling, there's tremendous upside opportunity for those companies that were able to either title property or get involved two to three years ago, where they've got some runway to be able to find things. And we're just starting to see the beginning of that boom, and it's attracting a lot of – we're early, is really what it amounts to.

So I'm pretty encouraged by the market, generally overall, it's really starting to move. We've got a play, 14 kilometers southwest of Cerro Hermoso, which is the one that Miramont's about to put the results on, and the same geology, with various similar historic numbers. And that, coincidentally, was one of the projects we've already had the project title, because we staked it, I think, over a year ago. So we ran a quick program, but we've actually got joint venture interest in it already, and they haven't even put out results. So it leads me to believe that in the cycle, Peru is about to have what I would call a sunny period.

Gerardo Del Real: Excellent. Talk to me about working in Peru. Obviously like Mexico, like everywhere else, like real estate, it really is local right?

Andrew Thomson: Yup.

Gerardo Del Real: Municipalities can change drastically within a few kilometers. Talk to me about where you're working, and the overall environment there.

Andrew Thomson: Well, I think there's sort of two trains of thought, glass half full and glass half empty. My experience, anywhere that I've operated in the world, is you have to be very transparent, and you have to be very upfront as to what you're doing. So we've been very, on our Coasa project where we're going drilling, we've given out food packages to the locals during the fairs. We have a Quechua-speaking engineer where we have meetings with the communities following radio spots, where we're bringing people out.

But we've got 90% of the community on our side, and I think it's wrong to say, “This district won't work and this will.” I think it's really about having an ongoing relationship with these communities. And I still feel, as I like to say, there's a lot of Polish people that won't go to Vancouver. There's a lot of people in East LA, there's Southern Memphis, however you want to look at it. There's all sorts of area of the world where there's problems.

But really what it amounts to is just making sure when you establish a presence in the community, you don't oversell yourself, and that you carry yourself with what I would call North American rules. They've tried to formalize the informals in Peru. At Madre de Dios, which is the watershed of a lot of the Orogenic Belt, they've actually gone in and they're trying to save the rainforest by moving in troops to change the way things are going.

So Peru is moving in the right direction in my opinion. I'm curious to see whether or not this next boom, which I think is just starting, how it's going to change Peru because not unlike South Africa, they're dealing with a lot of internal politics where there's what I would call a poor lower class that is struggling to get ahead, that all they want is sustenance and education for their children.

And then you've got the upper class of Peruvian mining companies who, it's not that they disregard them, but I think that there has to be some accommodation. And I really feel strongly Peru is one of the most mineral-rich countries for both gold, copper, and silver. It just is at the point now where I think it's going to boom again. So for me, when dealing with communities, again I think it's specific to the companies, in terms of how they handle themselves.

Gerardo Del Real: Well said, Andrew. Well listen, I hope that you come back on soon. I expect a busy year of news out of Palamina. I tell everybody if I'm talking to a company on air, I'm likely biased. Palamina is no exception, I'm a shareholder. I plan on being a shareholder indefinitely. Is there anything else that you'd like to add, Andrew?

Andrew Thomson: Well, the rainy season starts in early December, and we've got all the process data – we were the first people to fly the Puno Orogenic Belt, and the gold occurs with pyrite, so we can see structure. We had a structural geologist out, followed by which we had a PhD out, where we're seeing this flower structure, we've got re-mobilization, and we think that is one of the petals and that there's a source to it all.

And what I'm really excited about is that the strike of this thing just keeps getting bigger. And right now the Veta Zone is at least two and a half times the size of the contiguous Crucero deposit that GoldMining owns, and that's at 2 million ounces. It's a million indicated, a million inferred. And we've got 602 grams at surface, where they had nowhere near that. In some of the other zones we're getting 3 meters of 30 grams.

So from my perspective, we've had a very positive last 3 months in terms of getting all of our reports done, putting all the data together, and seeing out the other side something, which again, I think we're going to hit gold. It's whether or not we get continuity that's going to be the key, because if you go look at our channel results, and our latest presentation, it seems obvious there's a fair amount of gold at the surface. But at the end of the day, really what we're trying to establish is whether we have open-pit-ability, and whether there's consistency within the system. If we can establish either one of those, we're off to the races.

Gerardo Del Real: Well there's only one way to do that, I'm looking forward to drills turning. And again, I'm looking forward to having you back on, Andrew.

Andrew Thomson: Okay. Thank you very much.

Gerardo Del Real: Appreciate it.

View Interview Archive

Subscribe to the RSD email list and get the latest resource stock activity directly to your inbox, for free.

Part of the Stock Digest family of websites

Small Cap Stock Digest



Name Last Change
DOW 25962.50 0.84%
S&P 500 2854.88 1.07%
NASDAQ 7838.96 1.40%
TSX 16244.59 0.47%
TSX-V 641.21 0.00%

Resource Commodities

Name Last Change
Gold 1308.20 0.57%
Silver 15.46 0.00
Copper 2.90 0.020
Platinum 854.50 1.86%
Oil 59.98 0.42%
Natural Gas 2.82
Uranium 26.00 0.95%
Zinc 1.30 0.00%