PROJECTS

CHINCHILLAS SILVER PROJECT

Highlights

Chinchillas Deposit

  • Being developed by Puna Operations Inc., a 75-25 JV between SSR Mining (formerly Silver Standard Resources Inc.) and Golden Arrow
  • Chinchillas deposit will be an open-pit mine with ore trucked to the Pirquitas mill
  • Low capex and fast-tracked development using infrastructure from the Pirquitas mine
  • Positive pre-feasibility study with robust economics
  • JV also producing Silver concentrate from processing Pirquitas ore stockpiles

Discovery to Development

Between 2012 and 2015 the Chinchillas project was advanced by Golden Arrow from a grassroots discovery to a major new silver lead and zinc deposit. This was the third significant deposit discovered by a Grosso Group company.

In late 2015 Golden Arrow entered into a Business Combination agreement with Silver Standard (now SSR Mining, NASDAQ/TSX: SSRM,"SSRM”) to evaluate the feasibility of developing Chinchillas as a satellite deposit to extend the mine life of SSRM’s nearby Pirquitas silver operation. The Pirquitas mine achieved commercial production in 2009. The San Miguel open pit at the Pirquitas operation concluded mining activity in January 2017 and since that time the operation has been processing stockpiled ore in a conventional mineral flotation plant. The silver concentrate produced from the plant is shipped to third party smelters.

On March 31, 2017 Golden Arrow received the required notice from SSR Mining to exercise its option on the Chinchillas project and complete the joint venture to combine the Chinchillas project with the producing Pirquitas Mine into a single new operation. The joint venture, called Puna Operations Inc., is owned on a 75% / 25% basis by SSRM and GRG, respectively. The final permit (“EIA”) for Chinchillas was received at the end of December 2017, and construction and development activities are underway. The first delivery of ore to the mill is expected in the second half of 2018. The remaining stockpiles from the Pirquitas silver deposit are being processed in the first half of 2018. SSRM is the operator of the joint venture and reports the detailed operational results as well as updated resource and reserve tables in their quarterly and annual reporting, which is available on their website or SEDAR profile.


1First Pre-Stripping Blast at Chinchillas 0318. Photo credit: SSR Mining.

Pre-feasibility Study

A pre-feasibility study (“PFS”) was completed for the joint-venture development of Chinchillas, as detailed in Golden Arrow’s new release dated March 31, 2017. The supporting National Instrument 43-101 technical report has been filed on SEDAR dated May 15 2017.

Highlights include:

  • Mineral Reserves of 11.7 million tonnes containing 58 million ounces of silver at a grade 154 g/t, 310 million pounds of lead at a grade of 1.20% and 127 million pounds of zinc at a grade of 0.49%.
  • Measured and Indicated Mineral Resources (inclusive of Mineral Reserves) of 29.3 million tonnes containing 96 million ounces of silver at a grade 101 g/t, 581 million pounds of lead at a grade of 0.90% and 386 million pounds of zinc at a grade of 0.60%.
  • Average annual silver equivalent production of 8.4 million ounces over an eight-year mine life at a 4,000 tonne per day plant throughput.
  • Robust operating margins based on cash costs of $7.40 per payable ounce of silver sold over the life of mine.
  • Post-tax net present value of $178 million using a 5% discount rate and metal prices of $19.50 per ounce silver, $0.95 per pound lead and $1.00 per pound zinc.
  • Attractive post-tax internal rate of return of 29%.

(All financial results are in U.S. dollars and all technical data are presented on a 100% project basis.)

Geology & Exploration

For a detailed description of the geology and exploration history of Chinchillas, please see the most recent technical report here.

Puna Operations – Future Growth Potential

There is property and regional exploration potential at both Chinchillas and Pirquitas, and it is expected that Puna operations will continue to explore for resources to further extend the mine life. In addition, there is potential for small-scale underground mining of resources at Pirquitas to supplement the ore from Chinchillas.