Vale (NYSE:VALE), Golden Arrow Resources’ (GRG.V) Joint Venture partner at the Mogote project has started a Phase II drill program that will consist of approximately 7500 meters of drilling. Vale expects to drill 10 deep holes to test earlier identified zones for copper-gold mineralization.
The Mogote Project is located in the San Juan province in Argentina and has a surface area of 83km². Vale is currently earning a 70% interest in Mogote by spending $6.8M in exploration expenditures and paying Golden Arrow Resources $2.8M over four years. After reaching the 70%, Vale can elect to fund a feasibility study to gain a further 15% interest, after which it can purchase Golden Arrow’s stake at market value.
At Chinchillas, the company has increased the footprint of the mineralized zone by factor 2.5, from 9 hectares to approximately 23 hectares. Golden Arrow Resources has now completed almost 2500 meter of the planned 6500 meters and has reported excellent new drill results with an intercept of 9 meters at 258g/t silver and 1.8%ZnPb as highlight.
VP Exploration Brian McEwen is pleased with these new results and expects preliminary metallurgical results within 6 weeks. The recovery rates will be extremely important to incorporate into a PEA, which is expected later this year. Golden Arrow remains on track to release a maiden resource estimate for Chinchillas in H1, and after these drill results, we reaffirm our short-term target of 50Moz of silver equivalent in this first resource estimate. We still believe Golden Arrow is on track to table a resource estimate containing in excess of 100M equivalent-ounces before the end of 2014.
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