Golden Arrow Resources Corp. [GRG-TSXV; OTCQB-GARWF; GAC-FSE] said Thursday December 28 that its Chinchillas silver-lead-zinc joint venture project in Argentina has been permitted for exploitation (mining). Chinchillas is a key component of Golden Arrow’s Puna Operations joint venture with SSR Mining Inc. [SSRM-TSX, SSRI-NASDAQ], formerly Silver Standard Resources Inc.
The announcement comes after an environmental impact assessment (EIA) was approved by Argentine regulatory authorities in Jujuy Province, Golden Arrow said in a press release.
Puna Operations Inc. is a joint venture comprised of SSR Mining’s Pirquitas Mine and Golden Arrow’s Chinchillas property. It is owned 75% and 25% respectively by each company. SSR Mining is the operator of the joint venture.
Covering 2,043 hectares in the Puna region of northwestern Argentina, Chinchillas is a silver-lead-zinc deposit located 42 km by road from the Pirquitas property. A 2017 pre-feasibility study on the Chinchillas Project evaluates the development and construction of an open-pit mine and supporting infrastructure, which is expected to supply ore to the Pirquitas processing facilities over an eight-year active mining period.
The study said Chinchillas could be mined by conventional drill, blast, truck and loading open pit mining methods. It also said a fleet of 35-tonne road haul trucks would transport the ore to the Pirquitas processing facilities. During the mine’s lifespan, Pirquitas processing facilities are expected to produce a silver-lead concentrate and zinc concentrate for shipment to international smelters.
Those plans are based on proven and probable mineral reserves at Chinchillas of 58 million ounces of silver at an average grade of 154 g/t, 310 million pounds of lead, grading 1.20%, and 127 million pounds of zinc, grading 0.49%
Pirquitas is a mature operation that hosts probable mineral reserves of 0.4 million ounces of silver at an average grade of 139.2 g/t, and 9.2 million ounces of silver in stockpiles at an average grade of 118.1 g/t.
First production from Chinchillas is expected in the second half of 2018. According to a pre-feasibility study, Chinchillas is expected to produce 8.4 million ounces of silver equivalent annually at a 4,000 tonne-per-day plant throughput.
“The EIA permit represents a very important step for the Puna operation’s joint venture partnership, paving the way to extract Chinchillas ore integration with the Pirquitas mill for processing in 2018,’’ said Golden Arrow President and CEO Joseph Grosso. He said 2017 has been a significant year that saw the combination of assets that has decades of production potential.
Additionally, as a second shareholder value stream, Golden Arrow will continue exploration on the permitted Antofalla Project, a Chinchillas-like project, and on Pescado, Grosso said. Those projects are also located in Argentina.
Golden Arrow shares jumped 7.8% or $0.05 to trade at 69 cents on Thursday.