Golden Arrow Resources (GRG.V) has announced it re-negotiated the deal announced in January whereby a new investor would acquire a 3% stake in the Chinchillas silver deposit for a consideration of US$3M. As per the new terms, the investor – which is Golden Arrow’s drill contractor- is swapping its 3% equity interest for a stake of 3% in the company. This means Golden Arrow is issuing 1.26 million shares for $3M resulting in an average price per share of $2.38 (or C$2.64/share) It’s truly remarkable to see a company raising a substantial amount of cash by issuing new shares at a price of approximately 10X the market price and once again emphasizes the value of the Chinchillas project.

Golden Arrow has also announced it restarted drilling at Chinchillas and plans to eventually drill 25,000 meters. A first step of 6,000 meters will be drilled in 52 holes during Phase III of the drill program which is designed to both expand and upgrade the current resource estimate of in excess of 100 million silver-equivalent ounces.

All stars seem to be aligning for Golden Arrow, and it’s truly remarkable the company was able to top up its cash position at a substantial premium to the market price.

> Click here to read the press release

Disclosure: The author holds a long position in Golden Arrow Resources. Golden Arrow is a sponsor of the website. Please see our disclaimer for current positions.

Leave a comment