This morning Pacific Rim announced that they are starting the process of acquiring Clifton Mining company’s Remance project in Panama. This announcement comes less than 24 hours after Pacific Rim announced they are delisting from the NYSE AMEX. While Pacific Rim tried to put a positive spin on the delisting announcement, its a fairly serious development in the company’s ability to raise the capital necessary to continue its operations in El Salvador, including their expensive CAFTA claims. The timing of the announcement is surely a signal from Tom Shrake and Catherine McLeod-Seltzer that they aren’t throwing in the towel quite yet.
The terms of the deal seem pretty good for Pacific Rim – it’s a formal option agreement that allows Pacific Rim to explore and apply for permits before committing to purchase. Upfront they will pay Clifton $200,000 and give them 5 million shares of Pacific Rim stock, which is selling for around $0.20/share. If at the end of an “Option Period,” during which Pacific Rim will explore, complete its environmental analysis, and apply for permits from the Panamanian Govnerment, Pacific Rim wants to take 100% ownership of the mine, they will pay Clifton $5,000,000 in cash or common stock.
Even with such good terms, Pacific Rim will still need to come up with the capital for their new exploration activities. Their delisting from the NYSE AMEX makes them pretty unattractive for most investors. Unless Pacific Rim or Clifton already has a financer lined up, its hard to see how they will be able to do much with their new property.
In the company’s press release they stress that the Remance site is geologically similar to the El Dorado site in Cabanas – meaning that there is a lot of gold that could make them rich. They also point out that unlike El Dorado, the Remance site is in a remote location with few inhabitants and no agriculture. I suppose after tangling with civil society organizations in Cabañas and the complexities of Salvadoran politics, Tom Shrake and Catherine McLeod-Seltzer need a more remote location – somewhere quiet where they can go lick their wounds.