Issue link: http://resourceworld.uberflip.com/i/612354
28 www.resourceworld.com d e c e m b e r / j a n u a r y 2 0 1 6 Untitled-2 1 11/25/2015 4:56:43 PM "I believe that international mining investment will be a priority of the new government in an effort to turn around the economy," said Grosso. Golden arrow resources Corp. of which Grosso is Executive Chairman, President and CEO, has a number of min- eral projects in Argentina. The company recently signed an innovative and mutu- ally beneficial agreement to combine its flagship Chinchillas silver project with the Pirquitas silver-zinc mine of silver standard resources inc. [SSO-TSX; SSRI-NASDAQ]. Under the terms, Golden Arrow and Silver Standard are placing the advanced-stage Chinchillas Project and the producing Pirquitas Mine, located only 30 km apart in Jujuy Province, into their own spin off company. Silver Standard will pay Golden Arrow up to $2 million on completion of cer- tain milestones and invest up to US $12.6 million with a minimum commitment of spending US $4 million on the Chinchillas Project to demonstrate its economic and technical viability. An earlier positive PEA will be updated. Assuming these pre-development pro- grams are successful, a new jointly-owned mining company (Silver Standard 75%/ Golden Arrow 25%) will be formed. With this agreement, Golden Arrow achieves commercial production faster than going it alone, owns 25% of a producing mine and is already earning an amount equal to 25% of the Pirquitas Mine's cash equivalent earnings during the Preliminary Period, less certain costs, retroactive to September 30, 2015. In addition, Golden Arrow won't suffer share dilution with further equity fund- ing and the Chinchillas Project extends Pirquitas mine-life by 12-14 years at a minimum cost. Pirquitas, with less than five years of production left, will be able to defer mine closure costs for at least five years and continue the use of its infrastruc- ture with the nearby Chinchillas Project. And, of course, the Chinchillas Mine won't need its own mill. The Pirquitas Mine is expected to pro- duce 9.5-10.5 million oz silver and 10-12 million lbs zinc in 2015. The Chinchillas Project hosts indicated resources totaling 104 million ounces of silver Eq. and 140 million ounces Eq. inferred (25.9 Mt grad- ing 77.2 g/t silver indicated and 92.0 Mt of 50.2 g/t silver inferred). Chinchillas also hosts indicated resources of 379 M lbs of lead and 379 M lbs zinc plus 544 M lbs lead and 661 M lbs zinc inferred. The Chinchillas PEA showed an after- tax NPV (8%) of $266 million and a 24.3% IRR (based on $22/oz silver, $1/lb lead and $1/lb zinc). The PEA envisaged an 8,000 tpd open pit with 2.4:1 strip ratio for 8 M oz silver/year. Silver Standard will be the operator of the new company. The arrangement is subject to shareholder, court and regu- latory approval. While it is too early to make a decision, it is possible that the new