Golden Arrow Resources Corp (CVE:GRG) updated on its Silver Standard joint venture in Argentina, saying it expects an exploitation permit for the Chinchillas project by the end of August this year.
The venture, named Puna Operations Inc (POI), combines the firm's Chinchillas project with Silver Standard's producing Pirquitas operation.
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The latter will be the operator of the combined assets in the new joint venture, holding 75%, while Golden Arrow will have 25%.
The Pirquitas operation continues to process stockpiled ore from the Pirquitas pit, with 25% of the profits attributable to Golden Arrow, the group said today.
Chinchillas will be mined by conventional drill, blast, truck and loading open-pit methods, it added.
Chinchillas is expected to supply Pirquitas with milling ore in the second half of 2018, and average annual silver-equivalent production is anticipated to be 8.4mln ounces over an eight-year life of mine at a 4,000-tonne-per-day (tpd) throughput.
Golden Arrow's 25% share of average annual production will be equal to 2.1mln ounces of silver equivalent, representing total attributable after-tax undiscounted cash flow of US$66.75mln, according to a recent prefeasibility study.
In fact Golden Arrow noted, it had already received an option exercise payment of $17.8mln from Silver Standard, which is 25% of the Pirquitas mine earnings less certain expenditures for the period from October 1, 2015, to May 30, 2017.
Thus, Golden Arrow is in a favourable financial position to finance its 25% share of the projected capital expenditures for POI to develop the Chinchillas project.
After Chinchillas is developed, Golden Arrow will focus on acquiring prefeasibility stage, near producing or producing mineral projects, as well as royalty or equity interests in projects, it added.
Golden Arrow shares eased over 4% to 61 cents in Toronto.