Golden Arrow Resources (GRG.V) has announced it has exercised the put option on its Premier Royalty warrants, which allows the company to sell its 1M warrants at a price of C$1.25 per warrant. Golden Arrow received these warrants as part of the sale of the Gualcamayo NSR to Premier Royalty in 2012. As Sandstorm Gold (SSL.TO, SAND) has acquired Premier Royalty, it has to honor the put agreement.
This is a good way to raise more cash without issuing new shares, and the C$1.25M inflow will be beneficial for Golden Arrow’s cash position as it continues to aggressively advance the Chinchillas silver project in Argentina’s Jujuy province. Even though the cash balance will increase, exercising the put option won’t have an impact on Golden Arrow’s working capital position, as the warrants were already held as current assets.
Additionally, the company has also reported the final holes from the 9,000 meter Phase III drill program at the Chinchillas project in Argentina. These intercepts were once again very good, with for instance 31 meters of 334g/t silver equivalent and 34 meters of 248 g/t silver equivalent, including one very high-grade intercept of 5 meters at 1180 g/t silver equivalent (this is almost 38 silver-equivalent ounces per tonne of ore!). Two of the three reported holes expand the mineralization to the northwest, whilst the third hole is confirming the potential of Chinchillas at depth.
Drilling has now been completed and the assay results will be incorporated in an updated resource estimate which will be the basis for a feasibility study. These are exciting times for Golden Arrow, and we’re looking forward to see the feasibility study which should increase the NPV substantially.
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.