Silver Standard To Take 8-percent Stake In Golden Arrow Resources
Golden Arrow Resources continues to make progress at its Argentina-based Chinchillas silver project, and on Wednesday received a vote of confidence from miner Silver Standard Resources. The two companies have entered into a subscription agreement under which 1,500,000 common shares of Golden Arrow will be issued to Silver Standard in exchange for shares of Pretium Resources.
Golden Arrow Resources (TSXV:GRG) continues to make progress at its Argentina-based Chinchillas silver project, and on Wednesday received a vote of confidence from miner Silver Standard Resources (TSX:SSO,NASDAQ:SSRI). The two companies have entered into a subscription agreement under which 1,500,000 common shares of Golden Arrow priced at $0.35 each will be issued to Silver Standard in exchange for shares of Pretium Resources (TSX:PVG,NYSE:PVG). After the transaction closes, Silver Standard will hold about an 8-percent stake in Golden Arrow. According to Golden Arrow, its plan is to sell the shares of Pretium it receives from Silver Standard, then use the proceeds for general working capital and to continue work at Chinchillas. The Pretium shares will be "free-trading and unencumbered," so it appears that Golden Arrow will be able to translate them into cash relatively quickly. That might sound like a roundabout way to get funding, but Golden Arrow definitely seems pleased with the plan. Joseph Grosso, the company's president and CEO, commented positively on the deal in Wednesday's press release, noting, "[t]his investment by an experienced operator and significant silver producer like Silver Standard validates the quality of our Chinchillas Silver Project. This financing ensures that Chinchillas continues to advance creating value for all of our shareholders." Looking more specifically at what's set to happen at Chinchillas, the company states that at the moment it's updating the geologic model and resource estimate for Chinchillas so that they include new diamond drill results from the ongoing Phase IV program at the project. Golden Arrow expects that a "significant portion of the resource" will be bumped up to the measured and indicated category.