Golden Arrow Resources (TSX-V: GRG) David Terry on Ramp Up to Full Production at Chinchillas & Portfolio of Exploration Projects in Argentina

August 28, 2018

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Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is Director for Golden Arrow Resources (TSX-V: GRG)(OTC: GARWF), Mr. David Terry. And that's Dr. David Terry, if I'm not mistaken. Right, David?

David Terry: I guess you can use that, yes.

Gerardo Del Real: We're going to go with doctor for the purpose of this conversation. So, David, this is the first time that you and I have an opportunity to chat. I would love to get a bit more familiar with your background. Can you go over that a little bit for us?

David Terry: Sure, Gerardo. I'm a geologist by background, have been involved with mineral exploration my whole career since I graduated from university. I've worked on a number of different types of projects over the years. A lot of work in Latin America, a lot of work on both precious metals and base metals. I've been involved with Golden Arrow as a director and an officer since we formed the company back in 2004.

Gerardo Del Real: Excellent. It's obviously a tough precious metals market right now. I think anybody that's been involved in this space for any amount of time knows how cyclical this space is. We're obviously hoping that we're in the middle of a bottoming process that hopefully doesn't last too much longer. We have Labor Day coming up and hopefully we can put the summer doldrums behind us.

But Golden Arrow has done a very good job of advancing its projects, of bringing in partners that can help advance the projects. Can you go over the flagship? And then let's talk a little bit as well about the drilling at Antofalla, which is a silver-gold-base metal project in Argentina. I'd love for you to provide just a brief overview of each project there. And then let's talk about what's going on on the ground right now.

David Terry: Sure. Obviously, everybody involved in this sector would like the precious metal – and base metal, for that matter – prices to be higher. It's been a tough summer, but we just keep our head down and keep moving forward on our projects. And as you said, we've got a very, very strong partner and we're on budget and on schedule with Puna Operations in the Chinchillas project development. We're looking forward to transitioning into transporting ore from the Chinchillas mine to the Pirquitas mill complex later this year.

Gerardo Del Real: Excellent. Talk to me about the exploration potential because that's always intriguing to me.

David Terry: Yeah, so what we've done at Golden Arrow, we've structured the company in such a way that we have sort of two subsidiaries under the public company Golden Arrow now. We've got our 25% ownership of Puna Operations, which the other 75% of that is owned by SSR Mining. That's going to be the side of the company that develops Chinchillas and we've decided to focus the funds that we receive from that, the profits from the mine, into more advanced-stage opportunities and royalty interests and that sort of thing.

And then on the other side, we've formed a subsidiary called New Golden Exploration that now holds our more than 200,000 hectares of highly prospective mineral properties in Argentina. We're continuing to advance that portfolio and at the same time evaluate other opportunities to augment it. So, we are active on the exploration front at the same time as moving forward into producing from our Chinchillas deposit.

Gerardo Del Real: Now the leverage in regards to the operations obviously comes from the 25% ownership of Puna Operations, which of course, again, we mentioned it is a tough market right now for precious metals. I think your production costs (per ounce of silver) are right around the $14.73 level, if I recall correctly from the latest news release and we're kind of right there. There is leverage to the upside in a better market. I think that's clear as day for anybody that's paying attention.

But the exploration from New Golden Explorations, which you mentioned the 200,000 hectares, can you talk a bit about the geological gold belt and silver belt that exists and why it's such an attractive land package?

David Terry: Well, we have projects that are located in a number of the premier mining districts in Argentina. I'll just back up and quickly clarify something you said there. The $14 an ounce all-in sustaining cost is for production that's actually occurring right now from stockpile material that we've been processing for the last year and a half at Pirquitas. The forecast costs from the pre-feasibility study on Chinchillas, which are in the presentation, are around $10 all-in sustaining costs, net of byproducts. And that's from the pre-feasibility study and obviously we'll see what it is once we get into production, but they're sort of two separate things.

Gerardo Del Real: That's an important distinction. I appreciate that, David, that's very important.

David Terry: On the exploration property front, we've got the Antofalla project, which is located in Catamarca. And that's the one that we've focused on over the last year. We carried out a drill program, we're just assessing the results from that. We've got a very similar geological environment to what we see at Chinchillas, with widespread polymetallic results from previous drilling on the property and our own surface sampling. So, it's a very interesting project in an interesting area.

Further to the south, we've got several projects in San Juan province, which is one of the more premier mining provinces in Argentina, including Potrerillos, which is just east of Veladero and Pascua Lama, the large Barrick gold deposits in the Cordillera.

Further north, Mogote, which is immediately south of all of the NGEx projects including Los Helados, Josemaria, and Filo del Sol, which has now been spun out into another company.

And south of Gualcamayo we've got the Pescado project. We've got a large number of projects spread around in some of the really prospective areas.

Gerardo Del Real: What would you consider exploration-wise the flagship? Or are you still determining that with the drilling that's going on?

David Terry: They're all different. Obviously, we prioritized the Antofalla project this year, but we go with the results and so we'll see where we're at a little bit later in the year.

Gerardo Del Real: When do you think you'll have a better handle on that? When are you anticipating being able to publish results and kind of getting a better idea once you put all the data together?

David Terry: Well, we're continually assessing that. I would assume that that would be over the next little while, but we're really focused right now on the developments at Chinchillas and transitioning into full production on that.

Gerardo Del Real: Excellent, excellent. David, I really want to thank you for your time. Is there anything else that you'd like to add? What can shareholders expect here the last four months of the year? I mentioned getting the summer doldrums out of the way. That's always a welcome time, although it's always sad to say goodbye to the summer, it's always great to get to more activity in the space.

David Terry: We're expecting to start producing or transporting ore, more than 4,000 tonnes a day, from Chinchillas to Pirquitas sometime in the 4th quarter. So that'll be a real watershed event for us. We're moving forward with the restructuring of the company to spin out New Golden Exploration, and we're right in the Argentine winter right now, but we'll be coming out of that into spring and starting a lot of our exploration programs down there.

Gerardo Del Real: Fantastic. David, fingers crossed for a better market. Thanks again for your time today.

David Terry: Thanks so much.

Gerardo Del Real: Alright, you take care now.

David Terry: You too.

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