Technical Presentation - Golden Arrow Resources Corporation

January 2015
Chinchillas Silver-Lead-Zinc Deposit
GROSSO GROUP MEMBER COMPANY
Technical Update
Disclaimer
Forward-Looking Statements
This Presentation contains “forward-looking statements” within the meaning of Canadian securities legislation. Such forward-looking statements concern the Company’s
anticipated results and developments in the Company’s operations in future periods, planned exploration and development of the Chinchillas project, plans related to its business
and other matters that may occur in the future. These statements relate to analyses and other information that are based on expectations of future performance as outlined in
the PEA, including silver, lead and zinc production and planned work programs at Chinchillas. Statements concerning reserves and mineral resource estimates may also
constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if the Chinchillas property is developed and, in the
case of mineral reserves, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically exploited.
Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those
expressed or implied by the forward-looking statements, including, without limitation: risks related to precious and base metal price fluctuations; risks related to fluctuations in the
currency markets (particularly the Argentinean peso, Canadian dollar and United States dollar); risks related to the inherently dangerous activity of mining, including conditions or
events beyond our control, and operating or technical difficulties in mineral exploration, development and mining activities; uncertainty in the Company’s ability to raise financing
and fund the development of the Chinchillas project pursuant to the PEA; uncertainty as to actual capital costs, operating costs, production and economic returns, and uncertainty
that development activities will result in a profitable mining operation at Chinchillas; risks related to mineral resource figures being estimates based on interpretations and
assumptions which may result in less mineral production under actual conditions than is currently estimated and to diminishing quantities or grades of mineral resources as
properties are mined; risks related to governmental regulations and obtaining necessary licenses and permits; risks related to the business being subject to environmental laws
and regulations which may increase costs of doing business and restrict our operations; risks related to the Chinchillas property being subject to prior unregistered agreements,
transfers, or claims and other defects in title; risks relating to inadequate insurance or inability to obtain insurance; risks related to potential litigation; risks related to the global
economy; risks related to the Chinchillas property being located in Argentina, including political, economic, social and regulatory instability. Should one or more of these risks and
uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statements. The
Company’s forward-looking statements are based on beliefs, expectations and opinions of management on the date the statements are made. For the reasons set forth above,
investors should not place undue reliance on forward-looking statements.
The information provided in this presentation is not intended to be a comprehensive review of all matters and developments concerning the Company. It should be read in
conjunction with all other disclosure documents of the Company. The information contained herein is not a substitute for detailed investigation or analysis. No securities
commission or regulatory authority has reviewed the accuracy or adequacy of the information presented. The Company undertakes no obligation to publicly update or revise any
forward-looking statements.
We advise U.S. investors that the SEC's mining guidelines strictly prohibit information of this type in documents filed with the SEC. U.S. investors are cautioned that mineral
deposits on adjacent properties are not indicative of mineral deposits on our properties.
The contents of this presentation have been reviewed and approved Mr. Brian McEwen, P.Geol., VP Exploration and Development of the Company and a Qualified Person as
defined in National Instrument 43-101.
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Chinchillas Silver Project Overview
 Updated PEA provides positive economic outlook
for 12 year open-pit mine life at 8,000 tpd:
 After-tax NPV8% of $226M & 24.3% IRR
 Pre-production capital costs of $237M
 Cash operating cost of $9.22/oz Ag
 Indicated Resource:
 72.3 Moz Ag / 95.9 Moz Ag Eq
 (24.6 Mt @ 91g/t Ag, 0.65% Pb, 0.31% Zn)
 Inferred Resource:
 40.2 Moz Ag / 68.7 Moz Ag Eq
 22.0 Mt @ 57g/t Ag, 0.61% Pb, 0.68% Zn
 Project remains open for expansion & New drill
targets throughout the properties
 Project advancing to feasibility
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3
Chinchilla and Chinchilla 1 Properties
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NI 43-101 Resource Statement
Mineral Resource Statement for the Chinchillas Project, August 29th 2014by Kyle Howie, MAIG, Bruce Davis, FAusIMM,
Bruce Smith MAusIMM
Resource
Class/Zone
Tonnage
Ag
Pb
Zn
Ag Eq
Ag
Pb
Zn
(Mt)
(g/t)
(%)
(%)
(g/t)
(Moz)
(Mlbs)
(Mlbs)
Total
Ag Eq
(MOz)
Indicated Resources
Silver Mantos
12.6
84.7
0.48
0.45
113.4
34.2
131.7
123.4
45.8
Mantos Basement
12.1
98.2
0.83
0.16
129.0
38.2
219.8
43.2
50.1
Total Indicated
Resources
24.6
91.3
0.65
0.31
121.1
72.3
351.5
166.6
95.9
Inferred Resources
Silver Mantos
6.2
60.1
0.59
0.62
97.8
11.9
80.3
83.7
19.4
Mantos Basement
5.3
98.8
0.85
0.11
128.8
16.7
98.9
13.1
21.8
Socavon del Diablo
7.3
27.3
0.44
1.13
76.2
6.4
70.3
182.8
17.9
Socavon Basement
3.2
49.9
0.62
0.72
91.6
5.2
44.6
51.3
9.6
Total Inferred
Resources
22.0
56.9
0.61
0.68
97.1
40.2
294.1
330.9
68.7
1. The AgEq formula used is (Pb x 31.172) + (Zn x 31.172) + (Ag x 1).
2. Totals may not add correctly due to rounding
3. A resource constraining shell was developed based on metal prices of US$35.00/ounce silver, US$2.00/pound zinc and US$2.00/pound lead. Within that shell, the resource has
been reported using a cutoff grade of 40 g/t Ag Eq. The cutoff was determined using operating costs of US$16.00/tonne for processing, US$9.00/tonne for G&A (US$25.00/t total)
with metal prices of US$22.00/oz silver, US$1.00/pound zinc and US$1.00/pound lead, and a process recovery of 90%, based on the 2014 Preliminary Economic Assessment. (See
reported filed on SEDAR dated January 20th, 2014 for details.) The pit slope used for the resource shell is 45 degrees.
4. Mineral resources, which are not mineral reserves, do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental,
permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
5. The quantity and grade of reported Inferred resources are uncertain in nature and there has been insufficient exploration to classify these inferred resources as Indicated or Measured,
and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured category.
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Mining Comparison
Pirquitas (Silver Standard)
Chinchillas
200m
$NSR
Ref: www.silverstandard.com,
Sept 2013 corporate presentation
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• Favourable flat lying
geometry & near
surface mineralization =
low strip ratio
(Blocks)
>= 15
>= 25
>= 40
>= 50
>= 60
>= 70
6
Attractive Mining Scenario
✔Open pit amenable
Low strip ratio
Mineralization starts at surface
✔Higher grade silver core in Silver Mantos Zone
✔Multiple flat-lying mineralized zones
✔Highly Altered Rock
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Infrastructure
 PEA:
 Two all-season access routes
 66 km High Voltage line upgrade
required;
 Access to water from local and
regional wells
 Thickened tailings to be stored in
lined impoundment built from mine
waste rock
 OTHER ITEMS
 Communications available
 Other existing precious/metal mining
operations
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PEA & Metallurgy
✔ High recoveries of silver, lead & zinc (bench scale locked-cycle testing)
✔ Standard flotation methods
✔ Chinchillas to produce 2 separate saleable concentrates: silver-bearing
lead, and zinc
Lead Concentrate (Silver grades are annual averages)
Ore_1 (BAS)
Ore_2 (MAN)
Ore_3 (SOC)
Lead
Silver
Lead
Silver
Lead
Silver
Recovery
93.5%
95.0%
95.0%
94.5%
94.5%
93.0%
Grade
70.0%
8.3 kg/t
62.2%
10.3 kg/t
66.0%
3.8 kg/t
Zinc Concentrate (Silver grades are annual averages)
Ore_1 (BAS)
Ore_2 (MAN)
Ore_3 (SOC)
Zinc
Silver
Zinc
Silver
Zinc
Silver
Recovery
75.0%
3.0%
80.0%
2.3%
85.0%
4.0%
Grade
52%
1.3 kg/t
53.0%
271 g/t
60.0%
70 g/t
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PEA Model Parameters
Summary of Parameters
Processing rate
Strip Ratio
Average Annual Silver Production
Total Ag produced
Average Ag grade
Average Ag recovery (Pb Con)
Life of Mine
Total Unit operating cost
Unit
tpd
Moz
Moz
g/t
%
years
$/t feed
8000
2.4:1
8
90.4
85.5
94%
12
$23.19
Total Unit cash cost without credits
$/oz Ag
$9.22
From NI 43-101 Technical Report titled “Preliminary Economic Assessment Update for the Chinchillas Silver-Lead-Zinc
Project, Jujuy, Argentina” by Kuchling et.al. Effective date October 30th 2014, Filing date December 3rd 2014.)
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PEA Cost Summary
Capital Costs including 20% Contingency
Pre-production Capital
(Includes pre-stripping,
infrastructure)
mining capital
(US$ M)
costs,
process plant,
Sustaining Capital over life-of-mine
$237
$84
TOTAL CAPITAL
$321
Unit Operating Cost Assumptions
Unit Cost
US$/t feed
$2.33
$7.90
Mining – Feed
$/t material
Processing
$/t feed
$12.25
$12.25
Tailings
$/t feed
$0.09
$0.09
G&A
$/t feed
$2.95
$2.95
TOTAL
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$23.19
11
PEA Cash Flow & Sensitivity
Summary of Results
Before Tax
After Tax
NPV 0% (millions)
$883.2
$569.6
NPV 5% (millions)
$515.2
$321.8
NPV 8% (millions)
$372.8
$225.5
30%
24.3%
3.2
3.4
IRR
Payback period (years)
Silver Price
Per Ounce
After-tax
NPV8%
(millions)
IRR
Payback Period
(years)
$17
$ 90.2
14.9%
5.2
$22
$ 225.5
24.3%
3.4
$25
$305.0
29.2%
2.6
*All values quoted in US dollars, using base case metal prices of $22 per ounce silver, $1 per pound of lead, $1 per pound of zinc.
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Chinchillas Path to Feasibility
 Goal is to continue rapid advancement, and move to a Feasibility Study stage
2012
2013
2014
2015
2016
Property Acquisition
Social/Enviro
Studies
Phase I Drilling
Phase II Drilling
Metallurgy
Resource Estimate
PEA
Phase III Drilling
Resource Update
PEA Update
Phase IV Drilling
Engineering Studies
Permitting
Feasibility Study
Development
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Growth Strategy
─ Baseline resource/PEA
Completed
─ Recent resources
expansion, PEA update
─ 16-20,000 m Phase IV
program will infill to upgrade
resource categories, test
limits, and provide possible
expansion of resources
─ Subsequent programs will
target Chinchillas South
which has potential for 100
to 160 mt grading 32 to 40
g/t silver equivalent
─ ~70% of the property
remains under explored
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Note: Target Potential grades and quantities are conceptual in nature; there has
been insufficient exploration to define a mineral resource nor is it certain that
further exploration will results in the target being delineated as a resource
14
Chinchillas – A low risk opportunity
Chinchillas provides investors with the potential for near term production at
anticipated low capital and operating costs.
CATEGORY
RISK
COMMENTS
Resource
LOW
Good potential that resource will increase
significantly and be converted to reserves with upside potential
Metallurgy
LOW
+90% recoveries in preliminary test work.
Mining and
Processing Method
LOW
Open pit 2.4:1 strip ratio with higher-grade, lower
strip ratio starter pit.
Concentrator plant process proven technology
Infrastructure
LOW
Existing roads with power and water in close
proximity.
HSEC and
Permitting
LOW
Good community support, existing operating mines
in close proximity
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Capital Structure
Shares Issued
Warrants
7,964,600
Options (avg price = $0.35)
5,685,000
Fully Diluted
Market Capitalization
Ownership (insiders/friends/family)
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48,978,789
62,628,389
~$12.5M
~50%
16
Contact
Corporate Head-Office:
Suite 709, 837 W Hastings St
Vancouver, BC, Canada V6C 3N6
Telephone: 604 687 1828
Toll free: 1 800 901 0058
[email protected]
www.goldenarrowresources.com
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Appendix A - A Visionary
Mr. Joseph Grosso is a respected entrepreneur with extensive international business
experience having operated for decades in North/South America as well as in various
European and Asian countries. Of Italian descent and fluent in Italian, English and
Spanish, Mr. Grosso lived in Argentina and Peru where he acquired a very deep
appreciation for Latin culture and successfully developed a vast network of contacts
which have been very beneficial to the associated companies of the Grosso Group.
Mr. Grosso has developed a strong network of long-term national and international
financial relationships. He has experience in financing, marketing strategies and has
successfully formed strategic alliances and negotiated with mining industry majors
such as Barrick, Teck, Newmont, Yamana Gold and Vale S.A.
JOSEPH GROSSO
Executive Chairman
CEO and President
During a family visit to Argentina in 1993, Argentina’s undeveloped geology east of
Chile was the great motivator for Mr. Grosso’s career change into the mining industry
where he became a mining pioneer in Argentina and thereafter discovered the
world-class Gualcamayo project, now in production by Yamana Gold. Mr. Grosso’s
additional discoveries include the world-class Navidad silver deposit now held by Pan
American Silver; the Rio Tabaconas gold project and now he is on the trail of yet
another discovery with the Chinchillas silver project.
Led 3 major discoveries:
 Navidad (Pan American Silver)
 Gualcamayo (Yamana)
 Chinchillas (Golden Arrow)
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Appendix B - Key Management
BRIAN McEWEN PGeol. - VP Exploration & Development
Mr. McEwen is a professional geologist with more than 30 years of exploration and production experience in open-pit and
underground mining projects and operations. The extent of his experience is global in managing numerous projects in
Canada, US, Europe, Asia, Africa and throughout Latin America. Mr. McEwen’s previous roles include more than a decade
with MRDI (AMEC Peru) where he was responsible for project management, economic resource and reserve calculations for
various precious and base metal companies worldwide, including BHP Billiton, CM Antamina, Teck, Hochschild and Phelps
Dodge among others.
DARREN C. URQUHART, C.A.– CFO & Corporate Secretary
Mr. Urquhart is a Chartered Accountant with more than 10 years of experience working in both public practice and industry. Mr.
Urquhart is presently engaged in public practice accounting offering CFO and accounting services to TSX Venture Exchange
listed exploration companies in the Vancouver area. Mr. Urquhart began his career working as an audit accountant with Grant
Thornton LLP, then later worked as a senior tax accountant with Lohn Caulder Chartered Accountants and more recently
served as a consultant to an international private equity company. Mr. Urquhart obtained his Chartered Accountant designation
in 2001 and is a member of the Institute of Chartered Accountants of British Columbia. In 1995, Mr. Urquhart obtained his
B.A.Sc. (Electrical Engineering) from the University of British Columbia.
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Pioneering Exploration In Argentina
1993:
A Mining
Vision
2013:
A Mining
Reality
Argentine
discovery
Grosso
Group
discovery
Grosso
Group
property
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0 20
Appendix C – Option Terms
Chinchillas Option Terms
Golden Arrow may acquire a 100% interest in the Chinchillas project by making
the cash payments to the vendor as follows:
Timing
On Signing
Cash Payments
($US)
PAID
$20,000
By January 2012*
$80.000
PAID
By July 2012
$150,000
PAID
By July 2013
$250,000
PAID
July 2014 to July 2015
$466,000*
ONGOING
By July 2015
$900,000
Total
$1,800,000
Furthermore the Company must make an additional payment of $1.2 million to the vendor upon the
commencement of commercial production. See August 3rd, 2011 Press Release for further details.
*An amendment to the original Option Agreement was signed on July 11, 2014 whereby a US$150,000 payment was made upon signing (completed), a final payment of US$250,000
is due by the end of 12 months, and on the 21st day of each month subsequent to the signing an additional payment of US$6,000 is due, for a new maximum total 3rd anniversary
payment of US$466,000. The Company can at any time make the final payment of US$250,000 without penalty, thereby cancelling all further US$6,000 monthly payments.
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