Golden Arrow Resources Corp. (GRG:TSX.V; GAC:FSE; GARWF:OTCQB), operating the Chinchillas gold/zinc/lead deposit and the Pinquitas silver/zinc mine in Argentina, released significant news toward the end of 2017. In November, the company announced it was initiating a $1 million "exploration program at its 100% owned Pescado Gold Project" in San Juan, Argentina. "The exploration program will include additional geophysics and surface work to refine drill targets, with up to 1,800 metres of drilling budgeted," according to the press release. "Work permits have been granted by the provincial mining authorities, and the technical team is now commencing exploration at the Yanso target area."
In December, Golden Arrow announced Puna Operations Inc., "a joint venture comprised of the Pirquitas property and the Chinchillas property, owned 25% by Golden Arrow," had secured "approval of the Environmental Impact Assessment from the Argentine regulatory authorities in Jujuy Province, Argentina, and therefore is now permitted for exploitation."
For Brien Lundin, writing in the December-January issue of the Gold Newsletter, "Golden Arrow fits the mold of near-term production stories that I think will perform well in the new year, assuming the precious metals markets play out like I expect."
Lundin noted that among the "vast footprint" of the company's holdings in Argentina, "the key holding in its portfolio is its 25% interest in Puna Operations, a joint venture with long-time Gold Newsletter constituent SSR Mining, the updated moniker for Silver Standard Resources."
This joint venture "includes current production from stockpile mining at [the] Pirquitas mine," as well as "a plan to extend the mine life at Pirquitas by trucking ore from the companies' now-shared Chinchillas silver-lead-zinc project," Lundin wrote.
"Golden Arrow plans to use the funds from operations at Pirquitas and Chinchillas to make additional property acquisitions in Argentina. It also plans to spin out its large exploration portfolio into a separate company in early 2018, so shareholders who buy in before this event will get to participate in that portfolio's considerable upside," Lundin added.
GSA-Silver also reacted favorably to news from Golden Arrow, adding the company to its GSA Silver Fave 5 Portfolio. In its analysis, GSA pointed out that "Golden Arrow has history of exploration success." The company possesses "many potential upside opportunities," including a "possible spinout of exploration assets [that] could create additional value" and the possibility that "UG mine expansion focused on small scale, high grade feed at Pirquitas could boost already strong Puna [production] and economics."
In an article published on Seeking Alpha, writer Steven Goldman noted that "the Puna JV with SSR Mining will be a cash-generating operation anticipated to begin in H2 2018 generating annual revenues for Golden Arrow equal to about 2 million oz of Silver Eq."
Goldman noted that, "for those willing to take on some risk at its current share price, trading close to its 52-week lows, Golden Arrow presents a very attractive investment opportunity with a substantial upside."
Commenting on the joint venture with SSR, Goldman wrote that, "Based upon the PFS, Golden Arrow's 25% interest, once fully operational, should effectively generate approximately 2 million Silver Eq ounces per year at a cash cost of $7.40/oz (AISC $9.75 per oz). Based upon current silver prices of approximately $17.00 per oz. . .Golden Arrow would be receiving approximately $15 million to $20 million per year [as] a passive joint venture shareholder partner."
Goldman believes Golden Arrow has "evolved from an exploration company into a revenue-generating entity," and is "grossly undervalued." Though investment in the company comes with risk, he added, "the potential upside in Golden Arrow could be substantial. "
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Disclosures from Gold Newsletter, December 2017-January 2018
The publisher and its affiliates, officers, directors and owner actively trade in investments discussed in this newsletter. They may have positions in the securities recommended and may increase or decrease such positions without notice. The publisher is not a registered investment advisor. Authors of articles or special reports are sometimes compensated for their services.
Disclosures from Seeking Alpha, Steven Goldman, Dec. 4, 2017, "Golden Arrow Resources: Undervalued with Catalysts"
Disclosure: I am/we are long GARWF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Additional disclosure: The CEO of Comstock Metals (TSX.V: CSL.V) is Dr. David Terry who is also a board member of Golden Arrow. I am a member of the board of directors of Comstock Metals.
Disclosures from GSA-Silver, Dec. 20, 2017
Companies do not pay for coverage. Selection for coverage is entirely determined by GSA-Silver's staff and based in part on: 1) Stock trades in North America; 2) Current Silver production and/or a published independent feasibility study showing a deposit to be economic; 3) Current or potential 1+ mil oz/yr production. All rights reserved/protected under US Copyright Law. No reproduction of any portion without specific permission. GSA-Silver owns a token number of shares in all firms covered for information purposes. The Editor/Publisher and Employees may buy/sell securities of firms herein at any time, increase/decrease and trade around positions, but never act contrary to SSA’s basic recommendation.