Toronto, Ontario–(Newsfile Corp. – May 15, 2019) – Palamina Corp. (TSXV: PA) has signed a letter of intent (“LOI“) to sell 100% of the application and mining rights to the Gaban Gold and Tinka I.O.C.G. Projects in Peru to Helio Resource Corp. (“Helio“; HRC:TSX.V). In exchange Palamina will receive a total of 10 million common shares of Helio and a 2% Net Smelter Return Royalty (“NSR“) on each project. Helio retains the right to buy back 1% of the NSR for $1,000,000 per project. Helio will make an Advance Royalty Payment (ARP) of $25,000 to Palamina on the first and second anniversaries of closing the Transaction. The ARP will double every two years until such time that Helio has either completed a total of 5,000m of drilling or has abandoned the properties.
As per the terms of the LOI, Palamina will receive 5,000,000 shares of Helio on successful completion of a 30-day due diligence period. The balance of the 5,000,000 shares is payable within two years and will be issued by Helio to Palamina on completion of future equity financings by Helio or shareholder approval. Under the terms of the LOI, Palamina has agreed to act as the operator of the two projects for the first year. In addition, Palamina will have the right on closing of the transaction to place one director onto the board of directors of Helio and to nominate a second director to stand for election at the next annual general meeting of Helio.
Andrew Thomson, President of Palamina stated, “Today’s announcement reaffirms our focus on advancing the recent gold discoveries at Coasa, reduces our land carrying and management costs and brings in a partner to focus on the opportunities at Gaban and Tinka. By acquiring a board seat and a significant equity stake in Helio, Palamina will retain significant exposure to all of Helio’s projects while moving Coasa forward.”
Helio Resource Corp. is a Vancouver based junior gold company whose primary focus has been the exploration and development of the SMP orogenic gold project in Tanzania. Helio held 4 Retention Licences within the SMP gold project area until June of 2017 when changes to the Mining Act announced by the Tanzanian government resulted in the Retention License classification being abolished. As a result, the ground covered by the Retention Licences was transferred to the Tanzanian government. Helio has, after consultation with the Tanzanian government, re-applied for Prospecting Licences to replace the ground previously held under Retention Licences.
The Gaban Gold Project covers 17,400 hectares under application and title all of which are being transferred 100% to Helio on closing of a definitive agreement. The Gaban gold project covers the town of San Gaban and hosts excellent infrastructure for building a mine. The town sits at a 550 metre elevation and is a 4 hours’ drive by the Trans-oceanic highway to the Puerto Maldonado airport. The San Gaban hydro-electric dam has a 206 MW capacity and provides power to the town of San Gaban. Gaban was acquired to locate the hard rock source of alluvial gold in the Yanamayo river which drains into the Madre de Dios basin. Over 10 sets of alluvial miners are recovering coarse gold from the Yanamayo river.
The Tinka iron oxide copper-gold (I.O.C.G.) Project covers 1,800 hectares under application and is located at less than 2,000 m elevation 45 km southeast of Ica, capital of Ica Department & 300 km southeast from Lima along the Pan-American highway.
Mr. Alistair Waddell, BSc (Hons), a Member of the Australian Institute of Mining and Metallurgy (MAusIMM), is a director of Palamina Corp. He is a Qualified Person as defined by National Instrument 43-101 and has supervised the preparation, compilation and review of the geological and technical contents of this press release.
About Palamina Corp.
Palamina holds the application and mining rights to five gold projects in south-eastern Peru in the Puno Orogenic Gold Belt (POGB), a silver copper project in the Santa Lucia district and 2 copper-gold projects in Southern Peru. Palamina recently signed a letter of intent with Helio Resources Corp. to sell its Gaban gold and Tinka I.O.C.G Projects for 10,000,000 shares of Helio and a 2% NSR per project. Upon completion of the sale, Palamina will retain six Projects in Peru. Palamina has 36,228,636 shares outstanding and trades on the TSX Venture Exchange under the symbol PA.
FOR FURTHER INFORMATION PLEASE CONTACT:
Andrew Thomson, President
Phone: (416) 987-0722 or visit www.palamina.com
This news release contains certain “forward-looking statements” within the meaning of such statements under applicable securities law. Forward-looking statements are frequently characterized by words such as “plan”, “continue”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements include, but are not limited to, the use of proceeds of the Offering and the Company’s future business plans. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. A more complete discussion of the risks and uncertainties facing the Company appears in the Company’s continuous disclosure filings, which are available at www.sedar.com.
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