Golden Arrow Resources Corp (TSX-V:GRG, OTCQB:GARWF) has announced that its New Gold Explorations Chile (NGE) subsidiary has entered an option agreement with Sociedad de Servicios Andinos (SSA) that will provide funding to advance its San Pietro copper-gold-cobalt project in Chile.
Under the agreement, SSA has the option to subscribe for 333 shares in the capital of NGE for a roughly 25% stake in the company. To exercise the option, SSA must contribute US$5 million, including US$2 million in six bimonthly installments of US$333,333 starting on February 1, 2024.
SSA also has to spend US$3 million performing drilling services, heavy machinery services, truck rental, as well as any other goods or necessary services for the development of field activities at the San Pietro project by July 2025.
"We are very pleased with this arrangement with SSA as this deal represents the equivalent of approximately C$7 million of non-dilutive financing for Golden Arrow, in a difficult market,” Golden Arrow chairman, CEO and president Joseph Gross commented in a statement.
“The investment will allow us to complete an aggressive exploration and drilling program to continue evaluating San Pietro's many targets, and in support of our first NI 43-101 mineral resource estimate for the project which we are aiming to complete by the end of year."
NGE holds a 100% interest in the San Pietro iron oxide-copper-gold-cobalt (IOCG+cobalt) project in Chile. The project covers nearly 18,500 hectares, approximately 100 kilometres north of Copiapo and hosts multiple targets with strong IOCG+cobalt mineralization.
In 2023, the company completed approximately 4,000 metres of diamond drilling in 13 holes to add to the database of roughly 34,000 metres of historic drilling at San Pietro. All targets tested reported strongly mineralized intervals.
With the completion of the arrangement with SSA, Golden Arrow said it is fine-tuning its geological modeling to finalize the drill spacing and program required to support a NI 43-101 mineral resource estimate at San Pietro.
The company said it plans to announce the full 2024 exploration and resource delineation drilling program in the coming weeks.
Its shares were up 8.3% at $0.065 by 11:30am in Toronto.
~Updated with share price movement~