Golden Arrow Resources Corp. (GRG:TSX.V; GAC:FSE; GARWF:OTCQB) and Silver Standard Resources Inc.'s (SSO:TSX; SSRI:NASDAQ) joint venture in Argentina was announced in April. The two companies joining forces has allowed Golden Arrow to add "mining and operations" to its company description and has given the junior more capital to invest in itself and other projects.
On May 31, Golden Arrow announced the official closing of the JV transaction, forming "a joint venture called Puna Operations Inc., which combines the Chinchillas project with the producing Pirquitas operation. The joint venture is owned on a 75% / 25% basis by Silver Standard and Golden Arrow, respectively. Silver Standard will be the operator."
At the recent International Metal Writers Conference, Golden Arrow's VP of Exploration and Development, Brian McEwan, highlighted that Golden Arrow is "valued at CA$100 million" with accrued earnings of $20 million since signing the deal with Silver Standard.
McEwan went on to note that Silver Standard has years of production experience and has "beat their guidance year after year." He stated that the junior venture deal with Silver Standard is the best option for Golden Arrow to break into the production side of mining.
The full video of Brian McEwan's talk at the conference is available here.
In a May 24 article, "How Undervalued is Golden Arrow Resources?", Peter Epstein supported Golden Arrow's view on why the JV deal with Silver Standard has upside. He highlighted the $20 million the company will receive once the JV deal closes and the "additional C$7M from in-the-money options & warrants, plus an estimated C$11M stretching out into mid-2018 from its share of cash flow from processing stockpiles at the Pirquitas mine" will contribute to funding both Chinchillas and other projects.
Epstein concluded that "the JV interest is arguably worth more to a suitor with multiple mines, as it would serve to diversify its asset portfolio and the suitor could more efficiently spread overhead expenses across the entire enterprise."
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1) Melissa Farley compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
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Disclosures from Epstein Research ER, "How Undervalued is Gold Arrow Resources?" May 24, 2017
At the time this article was posted, Peter Epstein owned shares of Golden Arrow Resources, but neither Peter Epstein nor Epstein Research have any prior or existing relationship with any person or company mentioned in this article.