The Other Side of the Warrant Bank: Where the Torque Comes From

Since 2024, Palisades has built its portfolio around a simple thesis: junior resource markets are deeply cyclical, and the leverage accrues to those who position early, and in size, in the highest-quality names.

That thesis has two sides.

The first is straightforward. Find the best-established explorers, developers, and producers in the sector and finance them near the bottom of the cycle, ideally with full warrant coverage, on the conviction that valuations revert as sentiment turns.

That side of the book is playing out now. Equities are moving, and we’re seeing something more telling: no-warrant and strategic financings are getting done. The market has caught up to stories we underwrote years ago.

The second side is less obvious at first glance. It’s also where the largest outcomes live.

Betting on Explorers

Alongside the go-to names, Palisades has financed dozens of micro-caps — pure exploration plays, early-stage companies built around a single geological question. A modest amount of capital and a drill bit can answer it.

Individually, these are high-risk positions. Held collectively and balanced against a larger book of established developers and producers, they are the source of the most asymmetric returns in this sector.

Several are now starting to deliver. Two recent examples:

Decade Resources (TSX-V: DEC) — At the Bonaparte copper-gold property, Decade’s first-ever deep test beneath a high-chargeability IP anomaly intersected porphyry-style copper mineralization, validating a target the company has worked toward for years. Results to date are visual observations only; assays are pending.

The stock is up 100% on the visuals and 400% from our Q4 2025 entry. Palisades holds a 3.9% partially-diluted position, including 10,000,000 warrants exercisable at $0.05 with an average expiry of October 19, 2029.

VR Resources (TSX-V: VRR) — At New Boston in Nevada, hole NB26-003 returned 317 meters of 0.77% CuEq from surface, and below that, 419 meters of 0.48% CuEq — near-continuous polymetallic mineralization across an 881-meter hole, along with the discovery of a previously unrecognized mineralized porphyry intrusion.

Shares have moved almost 250% on the news. Palisades holds a 12% partially-diluted position: 3,094,000 shares and 1,900,000 warrants at an average exercise price of $0.22, with an average expiry of February 8, 2029.

VR still requires reassay of prior holes and further drilling to substantiate the discovery. If it holds, the scale could be significant — the system carries copper, tungsten, and silver, all three on the United States’ 2025 critical minerals list, alongside molybdenum. We intend to write on this in more detail in the coming weeks, and we have decided to add to the position.

Where the Torque Comes From

None of this guarantees a mine. That’s the nature of exploration, and most of these holes won’t become one.

What warrants change isn’t the geological risk — a warrant on a failed explorer expires worthless like anything else. What they change is the shape of the payoff. Because we acquire that exposure at minimal cost and hold it for years, a miss costs us little and a hit pays multiples. Across dozens of positions, that asymmetry is the entire point.

We built this warrant bank one financing at a time, often when nobody else would write the check. As a handful of those positions have drilled into real discoveries this year, the market has begun to re-rate them.

Producers and developers give us steady, predictable re-rates as the cycle matures. Explorers give us the asymmetric ones. It only takes one.

We’ll keep you updated as news unfolds across the portfolio.

Sincerely,

The Palisades Team