Golden Arrow Resources Corporation announced that the Company has completed the transaction with Silver Standard Resources Inc. and formed a joint venture called Puna Operations Inc. which combines the Chinchillas project with the producing Pirquitas operation, both located in Jujuy province. The joint venture is owned on a 75% / 25% basis by Silver Standard and Golden Arrow, respectively. Silver Standard will be the operator.
«This news release cannot do justice to express the huge significance that the formation of Puna Operations Inc. has for Golden Arrow and our shareholders,» stated Joseph Grosso, Executive Chairman, President and CEO of Golden Arrow. «We are looking forward to play any role that best supports our partnership in the merged assets.»
Transaction Highlights include:
- Provides Golden Arrow an opportunity to fast-track development of the Chinchillas property, in a capital efficient manner, through use of the existing production facilities at the Pirquitas operation and establishment of common infrastructure.
- Near-term production from Chinchillas based on construction beginning in the third quarter of 2017, followed by ore delivery to the mill in the second half of 2018.
- Immediately benefits from existing infrastructure, operating capabilities and cash flow generated by the currently producing Pirquitas operation.
A pre-feasibility study contemplates a joint venture project requiring an initial investment of US$81 million to develop a mine to deliver ore to the existing Pirquitas mill that has an operating life of eight years, producing an annual average of 8.4 million silver equivalent ounces.
Based on and subject to the permitting process, construction at Chinchillas is anticipated to begin during the third quarter of 2017 with ore delivery to the Pirquitas mill expected in the second half of 2018. The permitting process continues to advance with positive support from the local communities and government authorities. The Chinchillas Environmental and Social Impact Assessment has been prepared and submitted to the Argentine regulatory authorities, and is in the consultation process. Work is in progress with local communities on social programs and understanding of the Chinchillas project as it advances to production.