Golden Arrow gets lift from drill results

Step-out drilling at Golden Arrow Resources Corp.’s (GRG-V) Chinchillas silver project in Argentina’s Jujuy province has returned several long intercepts including 29 metres grading 631 grams silver per tonne, the company reports.

The near-surface intercepts come from the project’s Silver Mantos target, which remains open to expansion in all directions. Highlights of the drilling include 22 metres of 591 grams per tonne silver including 10 metres of 1,234 grams silver per tonne in hole CGA-38; 29 metres of 515 grams per tonne silver including 7 metres of 1,463 grams per tonne silver in hole CGA-39; and 23 metres of 217 grams per tonne silver in hole CGA-34. Holes CGA-34 to CGA-39 were all drilled vertically and therefore reported lengths are close to true widths, the company says, noting that it has completed a total of 3,224 metres of drilling to date and released results from 23 of 27 holes.

The Chinchillas project is about 30 km north of Silver Standard’s (SSO-T, SSRI-Q) producing Pirquitas mine and 75 km northwest of Glencore International’s (GLEN-L) Mina Aguilar mine and lies in the prolific Bolivian silver-zinc-tin belt that extends into northern Argentina. The Chinchillas property is about 4,000 metres above sea level and 60 km west of Abra Pampa in northwest Jujuy. The property is road accessible and can be explored year-round.  

Management believes the geology at Chinchillas is comparable to Sumitomo Corporation’s San Cristobal mine in Bolivia, where low grade silver-zinc-lead mineralization is currently being mined from an open pit within a similar diatreme breccia environment.

Chinchillas is a Tertiary-aged maar diatreme volcanic complex that erupted through the Paleozoic basement schists. The resulting depression or basin—filled with volcanic breccias and tuffs—is about 1.5 km in diameter. 

Golden Arrow has the option to earn a 100% interest in Chinchillas from the Argentine owner of the property and believes that the project has the potential to host a large silver-zinc-lead deposit. Previous operators had drilled a total 2,996 metres in 14 holes in the north-central portion of the property. 

“There was some historic drilling on the property with positive results and that’s what initially attracted us to it,” says David Terry, a member of Golden Arrow’s board of directors who worked as the company’s VP Exploration for eight years before leaving to head up Oremex Gold Inc. in late 2011.  “The historic drilling was carried out by two companies in the mid 1990’s and 2000’s and of the fourteen holes that were completed, eleven had significant intercepts of mineralization.  Collectively the geological environment and the historical results suggested to us that there was significant potential to expand the previously identified zones of mineralization.”

Golden Arrow struck the option agreement last year and since then has progressed through the program planning, permitting, and local community access agreements, Terry explains in a telephone interview from his home in Vancouver.

Golden Arrow intends to finance future drilling on the project through the sale of its 1% net smelter return royalty on Yamana Gold’s (YRI-T, AUY-N, YAU-L) Gualcamayo gold mine to Premier Royalty (PG-T) for $17.75 million, which is subject to shareholder approval.

“The Silver Mantos zone is flat lying, near surface and the mineralized layers, or mantos, appear to have good lateral continuity from the drilling to date” Terry says. “We think that there is excellent potential to expand the Silver Mantos zone and to delineate additional mineralized zones elsewhere on the property.”

When asked about the degree of political risk in Argentina under President Cristina Fernandez, Terry said that despite some of the things that are going on at the federal level that are reported in the media, Golden Arrow has a long track record of operating successfully there. 

“All exploration has some degree of inherent jurisdictional risk and we focus first and foremost on having a solid relationship with the local stakeholders and local government—mining is provincially regulated in Argentina” he says, adding that the South American nation has great mining potential.

“I view Argentina as a country that has huge undiscovered mineral potential and so from that standpoint alone it’s a great jurisdiction to explore because the chances for a new discovery are better than in areas that are more developed such as Chile and Peru,”

Golden Arrow is part of the Grosso Group of companies, a management group that specializes in resource exploration that has been working in Argentina since 1993.

News of the drill results pushed Golden Arrow’s shares up 12.5%. At press-time in Toronto the company was trading at 32¢ within a 52-week range of 23¢-40¢ per share.