Golden Arrow Resources (GRG.V) has announced it attracted an Argentinean investor who will take a direct stake in its Chinchillas Silver Project in Argentina’s Jujuy province. The investor will pay GRG’s subsidiary which owns the Chinchillas project $3M in cash for a 3% stake which results in an overall value for the project of $100M which further validates the potential of the project after the PEA which was released in December 2013 showed an after-tax NPV of $98.5M.
The $3M will be used to fund a 25,000 meter drill program which will commence shortly and will be aimed at increasing and upgrading the current resource estimate of almost 105 million silver-equivalent ounces. We think the involvement of the investor won’t be limited to a 3% equity stake and it’s not unlikely this stake can be increased if the Chinchillas project continues to expand. On top of that, it’s always extremely good to have a domestic investor participating in a project as it might help with the permitting process and governmental relations.
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