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Letter To Shareholders

December 9, 2015

Dear Shareholders,

No doubt you are aware that management of Golden Arrow Resources Corporation has negotiated an arrangement with Silver Standard Resources Inc. on the Company's Chinchillas silver project. The details of the arrangement are set out in Company's information circular dated November 17, 2015, which can be viewed on SEDAR. Due the complexity of the agreement, I would like to provide the following brief summary of the synergy which led to the agreement and the positive benefits to Golden Arrow shareholders.

Silver Standard owns the Pirquitas open pit silver mine, located in in the province of Jujuy in Northern Argentina. According to guidance issued by Silver Standard, Pirquitas is expected to produce between 9.5 and 10.5 million ounces of silver and 10 to 12 million pounds of zinc in 2015. The mine has a limited mine life and Silver Standard considers the arrangement with Golden Arrow to be an opportunity to extend the life of the Pirquitas operation.

Golden Arrow's Chinchillas silver deposit is located a short distance of 30 kilometers away from the Pirquitas mine and has the potential to provide mill feed to Pirquitas and extend its mine life. This synergy, if Golden Arrow shareholders vote in favour and if executed, would bring Chinchillas into production much sooner than as a standalone operation and at a much lower capital cost than if the Company was to advance the project itself. Golden Arrow also gets the benefit of Silver Standard's experienced mine production development team to open the Chinchillas mine.

The typical time frame to achieve production at a new mine is 5-6 years, and could require capital expenditures of US$275 300 million which would be very dilutive to shareholders.

Subject to the election to proceed by Silver Standard, the creation of the proposed joint venture between Golden Arrow and Silver Standard based on Pirquitas providing infrastructure and expertise and Chinchillas providing a mill feed stream this is considered to be the optimal strategy to generate value from the Pirquitas-Chinchillas combination.

Work currently underway is focused on resource delineation, geotechnical, metallurgical and hydrological evaluations leading to the development of a joint production model that tests the production of both deposits using a single processing infrastructure. This program is being funded by Silver Standard and is estimated to cost up to US$12.6 million. Under the agreement with Silver Standard, Golden Arrow will receive a standby fee of up to CDN$2M and, if Silver Standard provides the election to proceed to the joint venture, will receive a cash payment reflecting the cash earnings at Pirquitas, less certain expenditures, from October 1, 2015.

In Summary:

Golden Arrow believes that it negotiated a great win for its shareholders during this difficult economic / mining market:

  • If Silver Standard provides the election to proceed, a 25% joint venture interest in a new silver producing company that includes earnings in the Pirquitas mine while continuing to fast track Chinchillas to production;
  • Silver Standard may fund up to US$12.6M to evaluate a production model for the combined assets;
  • Golden Arrow receives up to CDN$2M cash in addition to the previously subscribed private placement of CDN$1.5M by Silver Standard;
  • Minimal dilution to Golden Arrow's shareholders as compared to having to wait the long six risky years that it would take to put Chinchillas into production; and
  • Without the requirement of potentially having to raise an estimated US$275 300 million for capital expenditures.

Continued Operation of Golden Arrow:

  • Continue as a listed company on the TSX Venture Exchange;
  • If the production model is successful, at Silver Standard's election, the Company will complete and form the joint venture company as described herein;
  • Golden Arrow retains all of its 100% interest in all of its non Chinchilllas extensive property portfolio;
  • Continue with exploration in search of Golden Arrow's next world class discovery; and
  • Expansion of shareholder base.

The Board and Management recommend voting in favour so that this arrangement can proceed as it is very valuable and positive for Golden Arrow's shareholders. We ask that you to vote in favour at the upcoming Special Meeting of Shareholders on December 16, 2015.

If you have any questions please do not hesitate to contact us.

Yours truly,
Joseph Grosso, Executive Chairman, President, CEO

This letter contains certain "forward-looking statements" and certain "forward-looking information" as defined under applicable Canadian securities laws that may not be based on historical fact, including, without limitation, statements containing the words "believe", "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect" and similar expressions. Forward-looking statements are necessarily based on estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as the factors we believe are appropriate. Forward-looking statements in this letter include, but are not limited to, statements relating to: Silver Standard exercising its election to proceed with the completion of the arrangement; the completion of and benefits to be derived from the arrangement with Silver Standard; receipt of shareholder and other necessary approvals for the arrangement with Silver Standard; the mine life of Pirquitas; the potential for the Chinchillas project to provide mill feed and extend the life of the Pirquitas mine; the potential synergies created by the arrangement with Silver Standard, including bringing Chinchillas into production sooner and at lower production costs than if the Company advanced the project itself and the benefits of an experienced mine production team; Silver Standard's funding of the joint development model; Golden Arrow receiving benefits from earnings of the Pirquitas mine since September 30, 2015; financial returns to shareholders of the Company; and the reduced dilution to Golden Arrow shareholders through the arrangement with Silver Standard.

These forward-looking statements are based on the beliefs of Golden Arrow's management, as well as on assumptions, which such management believes to be reasonable based on information currently available at the time such statements were made. However, there can be no assurance that the forward-looking statements will prove to be accurate. Such assumptions and factors include, among other things, general business and economic conditions, completion of the arrangement with Silver Standard; Silver Standard not terminating the arrangement prior to completion; that the joint arrangement will result in synergies that would not otherwise be available to the Company; the Company receiving earnings of the Pirquitas mine since September 30, 2015; Silver Standard expending greater than the minimum US$4 million in expenditures on the production model; and synergies from the combination of the Chinchillas project and Pirquitas mine following completion of the arrangement with Silver Standard.

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, but not limited to, the risks associated with the arrangement with Silver Standard as well as the risks described in under the heading "Risk Factors and Uncertainties" in the Company's most recently filed management's discussion and analysis which is available on SEDAR (www.sedar.com). 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. These forward-looking statements are made as of the date of this letter and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by applicable securities laws. Investors are cautioned that forward-looking statements are not guarantees of future performance and are inherently uncertain. Accordingly, investors are cautioned not to put undue reliance on forward-looking statements.


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