February Chinchillas Silver-Lead-Zinc Deposit. Technical Update GROSSO GROUP MEMBER COMPANY

Transcription

1 February 2016 Chinchillas Silver-Lead-Zinc Deposit GROSSO GROUP MEMBER COMPANY Technical Update

2 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. Statements concerning mineral resource estimates and the interpretation of drill results may also constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if the Chinchillas project is developed. These statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about the following: assumptions made in the Chinchillas Mineral Resource Estimate, including geological interpretation, grade, recovery rates, silver, zinc and lead price assumptions and operating costs; the availability of financing for exploration and development activities, including Silver Standard Resources Inc. ( SSRI ) meeting certain milestones and exercising its election to proceed with the transactions contemplated under the Business Combination Agreement dated September 30, 2015 among the Company, SSRI and certain other parties; the Company s ability to attract and retain skilled staff; the Chinchillas project development schedule; the exchange rates of the Canadian dollar and United States dollar to the Argentina peso; market competition; ongoing relations with impacted communities; and general business and economic conditions. 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 the transactions contemplated by the Business Combination Agreement; 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, including as recommended in the Chinchillas Mineral Resource Estimate; 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 project 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; and risks related to the Chinchillas project 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 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 other than as required under applicable law. 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 GRG.V 2

3 Corporate Overview & Strategy Member company of The Grosso Group Pioneers in Argentina since 1993 Multiple discoveries made in multiple provinces Impeccable corporate citizenship Golden Arrow Strategy: Build value for investors by leveraging the corporate and technical expertise of the Grosso Group to advance the Chinchillas silver-lead-zinc project to a feasibility decision, while maintaining a stable of exploration projects. GRG.V 3

4 Chinchillas Silver Project Overview Located in mining-friendly Jujuy province, NW Argentina; Good infrastructure Strategic Partnership with Silver Standard (TSX- SSO) Working towards business combination with Pirquitas Mine, ~ 30km away US$12.6M program underway to evaluate combined mining operation Indicated Resource**: 104 Moz Silver Equivalent ( g/t Ag, 0.66% Pb, 0.66% Zn) Inferred Resource**: 140 Moz Silver Equivalent ( g/t Ag, 0.52% Pb,0.64% Zn) GRG.V 4

5 Proposed Business Combination with Silver Standard (TSX: SSO, NASDAQ: SSRI) Silver Standard operates the Pirquitas silver mine ~30km from Chinchillas Operating since 2009, now <5 years mine life remaining The two projects are to be combined into a 75% (SSO) 25% (GRG) mining joint venture in Argentina, with SSO assuming the role of operator Prior to the JV, a pre-development study period of up to 18 months: GRG will accrue a 25% interest in Pirquitas mine s cash equivalent earnings, less expenses, during the Preliminary Period Minimum US$4M to be spent by SSO, with an estimate of $12.6M Trade-off studies will be completed to evaluate combining the two operations Further C$2M to be paid to GRG in stages during the Period See original news release dated October 1st, 2015 GRG.V 5

6 Benefits of the Business Combination Advancement of Chinchillas Project with No Shareholder Dilution No dilutive financing to complete pre-feasibility Brings Chinchillas to pre-feasibility stage, regardless of deal completion GRG Jumps from Explorer to Miner with Earnings GRG accrues 25% share in Pirquitas cash-equiv earnings during the Preliminary Period GRG becomes 25% owner of Pirquitas mine in new JV Combined Operation May Reduce Capital Costs & Finance Risk Potential to significantly extend mine life at Pirquitas at lower cost than alternatives Existing production facilities at Pirquitas and common infrastructure are expected to lower the capital and operational cost at Chinchillas vs a stand-alone operation Immediate Strengthened Financial Position GRG receives up to C$2M from Silver Standard, during the preliminary period Increased Operating Capabilities The combined operation will be managed and overseen by a proven operational management team with extensive in-country mine construction and operational expertise. Enhanced Community Benefits GRG and SSO will maintain extensive engagement with communities and stakeholders to provide long-term employment opportunities and lasting community investment GRG.V 6

7 Chinchillas Properties 100% owned by GRG Additional payment of $1.2 million due to vendors upon the commencement of commercial production. No royalties >2000 hectares, largely underexplored GRG.V 7

8 NI Resource Statement **Mineral Resource Statement for the Chinchillas Project, July 31 st, 2015 by Rob Sim, P.Geo, Bruce Davis, FAusIMM, Bruce Smith MAusIMM Zone Mtonnes AgEq Ag Pb Zn AgEq Ag Pb Zn (g/t) (g/t) (%) (%) (Moz) (Moz) (Mlbs) (Mlbs) Indicated Silver Mantos Silver Mantos Basement Socavon Total Inferred Silver Mantos Silver Mantos Basement Socavon Socavon Basement Total The AgEq formula used is AgEq = Ag g/t + (Pb% 36.09) + (Zn% * 36.09)). 2. Totals may not add correctly due to rounding 3. Mineral resources are contained within a pit shell generated using a silver price of $25/oz. 4. The following technical and economic parameters were used (all prices are in US dollars): Metal prices for AgEq calculation: silver $19/oz, lead $1/lb, zinc $1/lb; Recoveries: 90% silver equivalent; Mining cost: $2.45/t; Process cost: $16/t; G&A: $8.30/t;Pit slope: 45 degrees 5. 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. 6. 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. GRG.V 8

9 Infrastructure Two all-season access routes on same road as Pirquitas, approximately 35 km away Potential direct transport of ore to Pirquitas mill by road or pipeline Power to property with High Voltage line 66 km away; Access to water from local and regional wells Communications available GRG.V 9

10 Mineralization starts at surface with flat-lying geometry Higher grade silver core in Silver Mantos Zone Potential for fast startup open pit mining and shipping of material to Pirquitas Attractive Potential Mining Scenario GRG.V 10

11 Metallurgy High recoveries of silver, lead & zinc (bench scale locked-cycle testing) Standard flotation methods can create separate saleable concentrates: silver-bearing lead, and zinc Pre-feasibility program to evaluate processing of ore through Pirquitas mill Summary of Overall Metallurgical Test Performance Lead Concentrate Comp_1 (BAS) Comp_2 (MAN) Comp_3 (SOC) Lead Silver Lead Silver Lead Silver Recovery 96.3% 96.1% 97.5% 94.6% 97.0% 93.4% Grade 69% 4.6 kg/t 62.2% 10.5 kg/t 66.0% 4.2 kg/t Zinc Concentrate Comp_1 (BAS) Comp_2 (MAN - low zinc) Comp_3 (SOC) Zinc Silver Zinc Silver Zinc Silver Recovery 84.7% 3.4% 20.3% 2.3% 86.0% 4.9% Grade 52% 307 g/t 3.15% 271 g/t 60.0% 133 g/t GRG.V 11

12 Exploration Potential Chinchillas South Seven drill holes, multiple intercepts silver, lead and zinc, mainly low grade over long holes Good potential for new resources Majority of the property remains under explored Future acquisitions and exploration will focus on rapid building of new resources Chinchillas South (yellow circle) 2013 Resource/PEA 2014 Resource expansion, PEA update 2015 Resource expansion GRG.V 12

13 Argentina De-risking Q Presidential election installed new government with interest and will to improve economic and mining policies. Policy shifts in Dec 2015: Lifted currency controls devalued Peso may result in lower costs for project development Eliminated export taxes including 5% on gold/silver doré Some import restrictions lifted may allow better sourcing of equipment Anticipated lifting of export taxes on concentrates in

14 Anticipated Growth Clearing a Path to Production with a Recognized Mining Partner US$12.6 pre-feasibility level program initiated to evaluate options for combining the Chinchillas & Pirquitas operations Phase 5 drill program ~15,000 m nearing completion Infill drilling to upgrade resource to Measured & Indicated Geotechnical drilling Condemnation drilling Metallurgical test work on Chinchillas material Exercise of option by Silver Standard will trigger immediate payments to GRG, formation of JV company, and 25% participation of GRG in Pirquitas Continued Blue Sky from Exploration Golden Arrow will work to define a 4 th exceptional deposit through exploration & acquisition Existing stable of good projects New projects under evaluation GRG.V 14

15 Capital Structure Shares Issued 55,836,767 Warrants 2,741,400 Options (avg price = $0.35) 6,150,000 Fully Diluted 64,728,167 Market Capitalization ~$13M Ownership (insiders/friends/family) ~50% Ownership (Silver Standard Resources) ~8% Share Structure at Nov 26, 2015 GRG.V 15

16 Contact Corporate Head-Office: Suite 411, 837 W Hastings St Vancouver, BC, Canada V6C 3N6 Telephone: Toll free: info@goldenarrowresources.com GRG.V 16

17 Appendix A Key Management 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) GRG.V 17

18 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. GRG.V 18