Categories: General Market Commentary / Precious Metals
Topics: General Market Commentary / General Precious Metals

Silver Standard JV With Golden Arrow: Will They Or Won't They?

March 31, 2017

Summary

Under a court approved Plan of Arrangement, Silver Standard has an option that expires today to proceed with a massive silver deposit/mine joint venture with Golden Arrow.

Until a few months ago, it was almost a certainty that Silver Standard would exercise that option.

Silver Standard's resolution of a major outstanding export duty litigation with Argentina probably the driving force to whether or not Silver Standard will proceed to exercise the option.

Leaving the exercise of the option to the last minute suggests a strategy by Silver Standard to try to negotiate last minute concessions either with Argentina or Golden Arrow.

Golden Arrow Resources Corporation ("Golden Arrow") (TSX.V: GRG) (OTCQB:GARWF) is a Vancouver, B.C.-based junior mineral exploration company, which owns the rights to more than 214,000 hectares of valuable natural resource properties located in Argentina. Most of the shares are traded on the TSX Venture (symbol: GRG). Golden Arrow's flagship property, the Chinchillas Silver Project, contains more than 240 million oz. (equivalent) of high-grade silver, with massive amounts of lead and zinc as byproducts. Only a relatively small portion of the property has been drilled to date, so there is still an enormous amount of exploration potential remaining.

Back in October 2015, Golden Arrow announced a conditional business combination (joint venture) agreement, which it entered into, with Silver Standard Resources Inc. (referred to as Silver Standard or SSRI (NASDAQ:SSRI) which owns and operates the Pirquitas silver/zinc mine located approximately 35 km away from Golden Arrow's Chinchillas Silver Project in Argentina, which is subject to a court ordered option that has not yet been exercised by Silver Standard. There was apparently some confusion as to whether the option expired yesterday or today, March 31, 2017. Last night, there was a press release issued that the parties have agreed to extend the deadline to today, March 31. Otherwise, there is no indication (publicly) whether or not the option will be exercised.

I set out the details of the Plan of Arrangement in my November 28, 2016, article found here.

In summary, Silver Standard's Pirquitas mine is running out of silver ore and now using its remaining existing stockpiles of ore, which will run out later this year or early 2018 (according to its March 23, 2017, Form 40-F filed with the SEC).

As Silver Standard already owns the entire infrastructure necessary to produce silver, zinc, and lead, having access to Golden Arrow's Chinchillas Silver Project will produce a lot of attractive synergies for both companies at relatively little cost and relatively low risk. The Chinchillas Silver Project will effectively be a satellite mine for the Pirquitas mine.

To continue reading please click link https://seekingalpha.com/article/4059395-golden-arrow-will-silver-standard-exercise-jv-option-today?app=1&auth_param=10de7t:1cdsjec:fca0696e424b69fcd062e3fc871b2f0b&dr=1&utoken=7164f789acda2341a420fb743b479620#alt2