Festive season is “as good an entry point (for silver) as you’re ever going to get before lift off.”
I’ve commented on the upsides of Golden Arrow Resources Corporation. (TSXV: GRG | OTCQB: GARWF) (“Golden Arrow”) on a number of occasions, but investors interested in silver should be aware that this festive season is about as good an entry point as you’re ever going to get before lift off. A set of crucial permits are due to be approved this month, taking some pressure off the share price and allowing it to catch up to a more reasonable valuation.
The company’s stock is currently trading at the lower end of its 52-week range, leading me to believe that the granting of the environmental permits will be what inspires the confidence necessary to send the stock on a good run to the top of the channel. Golden Arrow’s VP Exploration Brian McEwan stated at the Silver & Gold Summit in San Francisco on November 20th that the last local community has signed off on the permitting and that the permits for the project will be obtained in December.
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These permits are crucial for bringing the joint mining and processing venture (Puna Operations Inc.) with SSR Mining into reality. The venture cleverly combines Golden Arrow’s Chinchillas project and SSR’s Pirquitas project to create a producing operation far more rapidly than would otherwise be possible. Construction of the POI Chinchillas / Pirquitas project, once permitted, is expected to move quickly to completion. Much of the preliminary work, contracting and equipment ordering has been completed in anticipation of a positive permitting outcome. The company expects that the project will be operational in the second half of 2018, generating annual revenues for Golden Arrow to the tune of 2 million oz of Silver Eq.
The fact that precious metals prices are on the up is one thing, but there are many opportunities to increase the silver/zinc/lead resources, mine life and value of the Puna JV in the future. A study is currently underway by Puna to delineate potential additional resources at Pirquitas and should be available early in 2018, opening the door to expanding the Pirquitas underground resource to produce high-grade silver ore as a smaller satellite operation to complement the silver, zinc, lead ore extracted from Chinchillas.
Pirquitas produced 10.4 million ounces of silver during 2016, but has since reached the end of its proven life, ceased mining activities and is now processing stockpile material. It is expected to produce in excess of 6.0 million ounces of silver eq. in 2017, which is greater than originally forecast earlier this year. Once the JV is fully operational, with or without the satellite deposit, Golden Arrow intends to continue to acquire and develop properties with significant potential through , and being a Grosso Group company certainly has advantages in terms of experience and contacts.
Golden Arrow’s exploration portfolio already includes approximately 215,000 hectares across four provinces of Argentina. Last quarter, the company announced that its exploration phase land packages had have been transferred to a newly incorporated subsidiary, New Golden Explorations Inc. (formerly B.A. Exploration Corp.) (“Golden Explorations”), through which all new exploration will be conducted. The operation is intended to eventually raise capital via equity financings, with the first public offering coming in the very near future.
Golden Arrow has 114,508,192 shares outstanding fully diluted and is currently trading at CAD$0.55 (+on 20 December 2017, with a market cap of $52.15 million. This year, buy yourself a Christmas present that will give back for years to come.