Subsequent Events

9 Months Ended

Dec. 31, 2020

9.	Subsequent Events

The JV Agreement

As stated in Note 1, on January 8, 2021, we entered into the JV Agreement with PAU to fund and develop the Project consisting of the Silver Bow Claims (102 lode mineral claims) and the Blue Horse Claim, a patented mining claim, all of which are located in Nye County in the State of Nevada (the “Venture”). The Joint Venture will be carried out through a newly established corporation or such similar structure agreed to by the Venturers (“Newco”).

The Project has already had preliminary work done which, in turn, has led to the planned Phase I exploration program to be completed by the Joint Venture (the “Phase 1 Program”). PAU’s interest in the Project consists of (a) its rights to acquire the Silver Bow Claims, subject to a two percent (2.0%) net smelter returns royalty, pursuant to a property option agreement (the “Underlying Option”) entered into with Donald Jennings and Boies Hall and (b) its control of the Blue Horse Claim, subject to a one percent (1.0%) net smelter returns royalty, pursuant to a mining lease (the “Underlying Lease”) entered into by its wholly owned subsidiary, Provenance Gold USA, with Thomas Perkins, Trustee of The Thomas E Perkins 2000 Trust, the Estate of Ruth Ann McNeilly, and the Estate of Randall Clark Dugan.

PAU will contribute its interest in the Project and its full-time expertise in the mining operations of the Venture, and in exchange, our Company will fund the Venture as follows: (i) on or before January 29, 2021, a cash payment of $100,000 USD to Newco, (ii) on or before February 12, 2021 a cash payment of $50,000 USD to Newco, (iii) on or before February 26, 2021, a cash payment of $125,000 USD to Newco, and (iv) on or before March 12, 2021, a cash payment of $125,000 USD to Newco.

PAU, in combination with PLYN, is currently in the process of transferring all project plans and entitlements, claims, leases, and options in the Silver Bow and Blue Horse Claims to GS Exploration Corporation, the newly formed JV company.

We will provide additional funding to a maximum of $50,000.00 USD on no less than ten (10) days written notice by PAU; which additional funds shall be deposited into Newco and used directly for any overage from the original estimated budget for the Phase 1 Program.

Following completion of the payments, the initial percentage ownership of each of the Venturers will be as follows: (a) PLYN 49.5% and (b) PAU 50.5%. The interest of each Venturer in any profits or losses and/or liabilities that may result from the Venture and their interests in all property and equipment acquired and all money received in connection with the performance of the Project shall be based on the same ownership percentages indicated above.

In the event we fail to complete the required payments, the Joint Venture shall cease and our percentage ownership in Newco shall be adjusted as follows: ratio of the amount we actually invested over $400,000 (our required total payments) times 49.5%. As an example, if we invest $150,000, our percentage ownership in Newco will be 18.56% ($150,000 divided by $400,000 times 49.5%). We will retain our ownership percentage until such time as PAU contributes further funds to the Project, at which point our interest will be diluted. In the event we invest a minimum of $225,000, then we will have met certain minimum thresholds as set forth in the JV Agreement and the Joint Venture will continue.

The mining operations and management of the Joint Venture shall be conducted by Newco utilizing PAU’s and our Company’s management and consultants.

Debt Mitigation

In January 2021, the certain creditors agreed to cancel the amounts owed to them. The following table reflects the creditors, types of debt and amounts cancelled.

		Principal		December 31, 2020 Accrued Interest
Joel Cortez	Due to related party	$	146,425	$	—
Joel Cortez	Note payable – related party		25,600		786
Ka Wai, S.A. DE C.V.	Note payable – non-related party		50,000		2,192
Miko Roka, S.A. DE C.V.	Note payable – non-related party		5,000		289
Viveka Limited	Note payable – non-related party		58,000		4,605
		$	285,025	$	7,872

We paid no consideration to these creditors in exchange for the cancellation of their debts. The former founder of the company, Mr. Joel Cortez, through a private share sale to non-related third parties, extinguished his debt and paid these creditors. The transactions will be accounted for as extinguishments of debt during the three-month period ending March 31, 2021.

Palayan Resources, Inc. 10-Q