Golden Arrow Resources Corp (TSX-V:GRG, OTCQB:GARWF) said it has executed a definitive option agreement to acquire a 75% undivided interest in the Libanesa project in Argentina’s Santa Cruz province from Mirasol Resources Ltd. (TSX-V:MRZ, OTC:MRZLF)
The company said it plans to mobilize an exploration team to Santa Cruz this month to complete additional surface work, which may include geophysical surveying, with the intent of refining the targets for a drill program to start in the first quarter of 2022.
"Our team is eager to move forward on this highly prospective project and we are finalizing the field programs to quickly and efficiently advance the targets towards discovery," chairman, president and CEO Joseph Grosso said in a statement.
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Libanesa is a 14,500-hectare silver-gold (lead) project at the northeastern margin of the Deseado Massif gold-silver metallogenic province. It is about 70 kilometres (km) west of the port of Puerto Deseado, 40 km northwest of the Cerro Moro Mine operated by Yamana Gold (TSX:YRI) Inc and 100 km northeast of the Don Nicolas mine operated by Cerrado Gold Corp.
Golden Arrow said the project hosts several diversified geological, geochemical and geophysical supported targets and is permitted for drilling.
Mirasol has granted Golden Arrow an option to earn the 75% interest in Libanesa over six years by incurring exploration expenditures totaling US$4 million including US$500,000 per year during the first two years and US$750,000 per year thereafter. It will also be required to make cash payments to Mirasol totaling US$1 million, with US$100,000 to be paid on the 2nd, 3rd and 4th anniversaries, US$250,000 on the 5th anniversary, and US$450,000 on the 6th anniversary.
Golden Arrow said the initial US$500,000 in exploration expenditures is a firm commitment, but it may be incurred over 24 months instead of 12 months, if all permits required for exploration are not in place by the end of March 2022.
In addition, it said it is required to complete a minimum of 2,000 metres of drilling by the end of the second year. It will be the operator during the option period.
Upon completion of the option, Mirasol and Golden Arrow will hold 25% and 75%, respectively, in a participating JV company holding Libanesa. If either party's equity interest is diluted below 10%, it will convert to a 2% net smelter return royalty.
A member of the Grosso Group, Golden Arrow is exploring a portfolio that includes an epithermal gold project in Argentina, a district-scale frontier gold opportunity in Paraguay, a base-metal project in Chile, and more than 180,000 hectares of properties in Argentina.
Contact the author at stephen.gunnion@proactiveinvestors.com