After lots of reconnaissance exploration at several of their projects, Golden Arrow Resources (GRG.V, GARWF.US, G6A.FSE) is ready for the follow-up, and recently commenced drilling at two different projects. These are the Rosales Copper project in Chile, and the Terra Dorada gold project in Paraguay. The company also completed an IP and magnetics surveys, and a mapping/rock sampling program at their Yanso gold project in Argentina. Furthermore, it finished a trenching program at the Esperanza target, part of the Flecha de Oro gold project in Argentina. Lastly Golden Arrow Resources very recently signed an option agreement for the Libanesa silver-gold project, also in Argentina, the longtime base for the company, and plans to do reconnaissance exploration on this project soon. These activities and more will be discussed with VP Exploration Brian McEwen in this article.
All pictures are company material, unless stated otherwise.
All currencies are in US Dollars, unless stated otherwise.
After a lackluster summer, the tide for mining seems to be turning, as large scale shortages for many metals cause renewed multi-year high spikes in metal prices, from copper to zinc, from uranium to lithium. These shortages have been caused by a combination of reasons, mostly underinvestment combined by economic recovery after COVID-19, and subjects like inflation. Increasing inflation, caused by extremely dovish policies by central banks around the world, took a while to develop, but now it seems to be there, and one of the benefits of a devaluating US Dollar is higher metal prices, including gold and silver. It is anticipated that central banks are wary to end their stimulus programs, as the world economy is far from out of the woods yet, and fragile. This dovish environment is interpreted as good for stocks, as interest rates are kept low and money has to produce returns somehow. It seems Golden Arrow Resources is positioned well in this context, as it is exploring precious metals projects, but also a copper project. The two recently commenced drill programs, if successful, should be able to generate much more investor interest compared to the last 2 years:
Share price 5 year timeframe (Source: tmxmoney.com)
As the share price still seems to be bottoming, with investors waiting for exciting exploration/drill results from multiple projects, and with plenty of cash in the treasury, management viewed this as a good opportunity to announce another buyback of up to 10% of the public float, or 10.13M shares, after they did a similar buyback from March 17,2020 to March 16, 2021. During this program, 3,147,076 shares were repurchased. The current program started at September 1, 2021, and will end at August 31, 2022 or earlier. Since September 1, 2021, 1,191,000 shares have been bought back.
As per the last financials (June 2021) the company owns 675,580k shares of SSR Mining (SSRM.TO), this equity being worth C$13.55M at the moment (October 15, 2021, share price C$20.05) as well as C$4M in cash. As such it is clearly fully funded for upcoming exploration programs for at least the next two years. Keep in mind the current market cap is C$19.78M, which is almost exactly the value of the SSR shares and cash, which is not only extremely rare for explorers, but also hardly assigning any value to the array of various projects.
Let’s have a look at these exploration projects of Golden Arrow Resources.
Rosales Copper project, Chile
Golden Arrow Resources has been busy all year at their Rosales Copper project in Chile with surface exploration, including geophysical surveying. The goal of the recent geophysics program was to detect and delineate prospective electromagnetic conductor responses consistent with near-surface copper stockwork mineralization, potentially related to larger copper systems at depth, and associated with surface anomalies. As a reminder, the Rosales Copper project includes several targets, with one located on the Margarita Trend, which is a structural trend that continues from the adjacent operating Margarita mine southwest onto the Rosales Project:
Mineralized occurrences were sampled and returned high values from rock chip samples in a target area.
The company completed the first pass of sampling in February, and has completed a Transient Electromagnetic (TEM) surface geophysical survey in June. This survey generated better than expected results, as they identified large areas with near-surface anomalies, starting about 100m depth, which can be seen here:
The anomaly G1, as indicated on the left map, is the highest priority target, based on size, conductivity and correlation with high grade copper sampling (up to 4.37% Cu). The second target is G2, as indicated on the right map below. The third G3 target to the north is the smallest target and thus the lowest priority, although all three targets returned significant sampling grades. As the high conductivity seems to be continuing to the south, the company decided to apply for additional concessions to cover the entire anomaly zone.
The company also completed three lines of TEM soundings, crossing the G1 and G2 anomalies, to provide resistivity, displayed in vertical images. These TEM sounding sections reveal one or more upper zones of moderate conductivity above 250m from surface, interpreted to correlate with the conductors detected in the previously reported fixed in-loop TEM surveys.
It was very interesting to see the large and intense conductor at approximately 500m depth and appear to resolve increased conductivity below G1, proximal to a vertical corridor postulated to represent a feeder-structure. The flat-lying and layered appearance of the anomalies, combined with the copper sulphide mineralization observed at surface, are consistent with expectations for copper manto deposits.
The geophysical consultant Miles Rideout was enthusiastic about what he observed from the readings:” The observed TEM responses show broader conductors consistent with manto deposits and strong narrow features consistent with feeder structures. It is easy to recommend drilling based on these very positive results."
VP Exploration Brian McEwen was excited as well:
“We are very excited by this additional data from TEM soundings, which suggests a stratabound or mantos-style copper deposit model, which is further supported by the mineralization, alteration and host rocks identified to date at Rosales. This type of high-flat-laying, layered, high grade (1-2%) copper deposit is common in Chile, with well-known examples including the El Soldado and Mantos Blanco mines. We are very excited to have the drills turning to test our interpretation”.
and didn’t hesitate long on this recommendation, and decided to commence drilling as soon as possible on a 3,000m program, which was announced on September 23, 2021. The first phase of drilling will include approximately 1,400 metres in four holes, to test both the upper and lower conductors and confirm the geophysical interpretation. As can be seen in the sections, 4 trajectories of upcoming drill holes are planned, and as I like big targets, drill hole P2 is the one I’m particularly interested in as it will be directed to hit the large conductor at depth. The subsequent 1,600 metres will be used to test the extent of the anomalies as well as other targets. The program is expected to continue through this quarter, and as the turnaround time for assay labs is about 6-8 weeks now, the first results can be expected somewhere after this timeframe.
Tierra Dorada gold project, Paraguay
Management considers their Tierra Dorada project in Paraguay its second flagship project. As a reminder, highlights of the last drill program completed early this year at their Alvaro target were DHTD18 returning 0.5m @143.5g/t Au from 3m, and DHTD35 returning 3.16m @11.8g/t Au from 1.7m. Golden Arrow initiated a new 2,000m diamond drill program on September 28, 2021, focusing on better defining this target, and drill-test a new target 10km southwest of Alvaro called Itayuru, with one hole. Sampling from the past returned up to 7.04g/t Au, an outcrop returned 3.49g/t Au recently, and assays of a recent, extensive 475 soil sample program are pending.
The program will start with shallow drilling of up to 1,000 metres in 50 holes, as already permitted. All application requirements for the full exploration permit, which allows for deeper drilling, are complete and management is anticipating the granting of that permit imminently. The alternative deep program includes up to 1,536 metres in 12 holes as a first priority, with up to 17 holes or 2,096 metres in total. The company had to wait longer for the full exploration permit than expected due to COVID-19 outbreaks, but fortunately this kind of delays seem to be something of the past now.
Libanesa silver-gold project, Argentina
The company executed a definitive option agreement at October 12, 2021 to acquire a 75% interest in the (now fully) drill-permitted, 14,500ha Libanesa silver-gold project from Mirasol Resources in the Santa Cruz province of Argentina, which is a mining friendly province as it hosts many mines and mining projects:
Libanesa is a drill-ready project hosting several diversified geological, geochemical and geophysical supported drill targets. Mineralization at Libanesa is developed as localized hydrothermal and phreatic breccias, sulphide-quartz veining and gossans. Analysis of geological and geophysical results suggest that soil anomalies form two parallel northeast-trending structural belts associated with a series of andesitic dykes. The more pronounced northern belt, which hosts the Cerro Plomo Breccia, is open-ended to the east and west, and produced silver/gold-polymetallic anomalies, developed intermittently over 1.2 kilometers of strike length:
When seeing the small inserted ground magnetics image, I wondered if Golden Arrow is looking to explore the strong magnetic zones to the northwest. VP Ex McEwen answered that target delineation is on-going throughout the properties.
Based on the work to date, Cerro Plomo is the principal target and is characterized by a mineralized Au/Ag hydrothermal breccia that is exposed at surface, and both chargeability and resistivity geophysical anomalies at depth. Trenching at Libanesa returned results up to 18g/t Au, and 3910g/t Ag:
The geophysical anomalies can be observed in the following section below. One is a 250m long conductive anomaly, potentially representing the continuation of the outcropping breccia, another is 200m long, potentially related to a soil anomaly, indicating a blind breccia body:
Vendor Mirasol already defined 2 drill targets as can be seen in the section above, and Golden Arrow management is looking to refine these targets further. Additional targets within Libanesa include the peripheral polymetallic veins at the Libanesa Main prospect; and, the Lagunita prospect, which has reported rock chip values up to 7.2 g/t gold.
The 75% interest in Libanesa will be earned in by Golden Arrow Resources over 6 years by the following terms:
- incurring exploration expenditures totaling US$4,000,000
o US$500,000 per year during the first 2 years, with a minium of 2,000m of drilling at the end of year 2; and
o US$750,000 per year thereafter.
- making cash payments to Mirasol totaling US$1,000,000
o US$100,000 to be paid on the 2nd, 3rd and 4th anniversaries;
o S$250,000 on the 5th anniversary; and
o US$450,000 on the 6th anniversary.
It is good to see the company only has to spend C$600k per annum during the first two years. The initial US$500,000 in exploration expenditures is a firm commitment. Golden Arrow will be the operator, and after completion of the option, Mirasol and Golden Arrow will hold 25% and 75% in the resulting JV. If an interest is diluted below 10%, it will convert to a 2% net smelter return royalty.
Golden Arrow Resources has concrete plans to start exploration as soon as possible, as it is planning to mobilize an exploration team to Santa Cruz this month. The goal is to complete additional surface work which may include geophysical surveying, with the intent of refining targets as mentioned for a drill program to start in the first quarter of 2022.
Yanso gold project, Argentina
The 100% owned Yanso Gold Project is a gold-copper intrusive-related target with a 300 metre by 90 metre zone of strong alteration coincident with gold and other geochemical anomalies, which is open along strike and untested at depth. It includes 12,480 hectares in five non-contiguous concessions, situated approximately 27 kilometres south of the Gualcamayo mine in San Juan province, Argentina. Previous sampling returned 16m @ 0.6g/t Au, 2m @ 3.46g/t Au and 2m @ 3.15g/t Au.
Golden Arrow Resources announced a new exploration program on July 23, 2021, which includes a 6.6 line-kilometre Induced Polarization (IP) resistivity survey. Gold-copper mineralization at Yanso is associated with pyrite or related oxidized surface minerals, so management believes that this technique will provide an excellent tool to understand the subsurface extents of the mineralized zone based on chargeability. The survey will cover the known target area and test for extensions to the north and south over a distance of 2.4km, most of which is under recent alluvial cover. In addition, Golden Arrow's field team will complete a 700-hectare ground magnetics survey, and the field team will initiate a surface reconnaissance program of mapping and rock sampling. According to VP Ex Brian McEwen, the IP survey is completed along with a portion of the magnetics and the mapping and sampling program. McEwen expects to announce the compiled and interpreted results later this quarter.
Flecha De Oro gold project, Argentina
The Flecha de Oro project includes the La Esperanza, Puzzle and Maquinchao properties, and the company completed a trenching program at the Puzzle property last December and January, and subsequently at La Esperanza. The trenching program of Puzzle didn’t return the desired results, so McEwen decided to prioritize Esperanza for ongoing exploration. This property hosts multiple vein corridors defined by outcropping quartz veins, boulders and quartz float (quartz float are discrete pieces of quartz vein at surface, likely from closer to the source than a boulder).
Since the commencement of trenching at Esperanza on March 1st, 2021, Golden Arrow completed 30 trenches totaling 2,200 metres across surface quartz veins and sheeted veinlets that range from a few centimeters to two metres in width. Assays have been announced for 10 of these trenches, generating results like 1.8m @ 3.19g/t Au, and 5m @2.98g/t Au. I wondered what the current status of the program was, if new results will be announced soon and what the next plans for La Esperanza are. McEwen stated that the trenching was completed and results compilation and interpretation is continuing for La Esperanza. The company is also waiting for permits to start working at the third property in the project area, the Maquinchao tenement which was optioned in June 2020. In the meantime, the field team has been deployed to Yanso and Libanesa.
With 5 projects being drilled, explored or planning exploration soon, Golden Arrow Resources is clearly intensifying its activities after the quiet COVID-19 period, becoming one of the more active juniors I know of. As the company discovered and advanced several meaningful deposits in the past, I’m sure they aren’t satisfied by exploring and killing assets into eternity, but they are focusing on real discoveries. Their extensive network and expertise in Latin America, their huge treasury, extensive portfolio of projects and turning mining sentiment should be strong fundamentals in order to achieve a successful discovery sooner or later.
In a time of slowly improving gold sentiment, and increasing (base) metal prices due to increasing shortages everywhere, as the world economy is picking up pace after the worst of COVID-19 seems behind us, Golden Arrow Resources is ramping up their exploration activities. Drill programs have recently commenced at their copper project Rosales in Chile, and their other gold project Tierra Dorada in Paraguay. The first results for both projects may come by the end of the quarter. This is not all, as the company is working on three projects in Argentina, Libanesa, Yanso and Flecha de Oro. With exploration at five projects underway soon, Golden Arrow has several chances to hit significant mineralization in Latin America, which in the current environment of improving sentiment should be a serious catalyst for a higher share price.
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The author is not a registered investment advisor, currently has a long position in this stock, and Golden Arrow Resources is a sponsoring company. All facts are to be checked by the reader. For more information go to www.goldenarrowresources.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.
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