Golden Arrow Resources (TSX-V: GRG) VP Brian McEwen on Robust Treasury & Portfolio of Gold and Copper Projects in Argentina, Chile and Paraguay
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the VP of Exploration & Development at Golden Arrow Resources (TSX-V: GRG)(OTC: GARWF), Mr. Brian McEwen. Brian, how are you?
Brian McEwen: I'm doing well, Gerardo. How are you?
Gerardo Del Real: I am well. It's been a bit since you and I chatted. We talked about it off-air briefly. Before we get into how exciting the gold price near $2,000 is and silver near $30 is, I have to ask you, you're trading at a discount to cash and equivalents. Am I reading that wrong? Is that accurate?
Brian McEwen: No, that's accurate. It is accurate. Should be a great buying opportunity.
Gerardo Del Real: Again, just to be clear, you have 148 million fully diluted shares. I believe approximately 28 to 29 million of those are at the $0.37 and $0.55 price level, but even taking those into account, your shares are currently trading at around the $0.20 level. Is that accurate?
Brian McEwen: They're trading at, I think, exactly $0.20 right now. I have to trust your numbers. I don't have them in front of me.
Gerardo Del Real: Okay, that's fine. That's about where it's at, $0.20 cents, 20 and a half cents. But again, can you provide everybody just a quick snapshot of the cash and equivalents that you have in the treasury?
Then let's talk about the projects, because you have a team that's been able to monetize projects in the past. You guys are experts in the regions that you're working in – and we'll get into some of the projects that you've picked up and some of the newsflow that people can expect. But walk me through the cash and equivalents part of it because I think, again, in this market it's an absolute bargain.
Brian McEwen: Yeah. Things worked out very well for us when we sold our percentage ownership in Puna Operations. The remaining 25% we had in our project with Chinchillas and Pirquitas Puna Operations. We sold that, I can't remember when, a ways back. We had a million shares of SSR Mining, and then there was some cash that came with it. That was done at I believe around $20 a share. I don't know the exact amount, but it was somewhere in there. So that ended up being a $20 million cash equivalent. Then the SSR Mining shares went on a run, and they were up to trading now in the area of $30.
So that deal in itself, our cash equivalent went from $20 million to $30 million. We made $10 million in the midst of the pandemic, which was very nice to see. We sold some of those shares. Now I think we're down around 700,000 shares, and we have cash in the bank from some of the shares that we've sold previously. Right now we're sitting in a very enviable position of a junior company to have roughly $29 million, $28 million, whatever the number is, in cash and cash equivalents. It gives us the ability to do advanced projects, but we're also out there looking for something else to invest in.
Gerardo Del Real: Let's talk about the regions that you're operating in. You mentioned the cash position. You mentioned the fact that you have some very exciting projects and are on the M&A hunt, obviously with some leverage, given the strong, strong treasury.
Walk me through Paraguay, Argentina and Chile. How are things in each of those countries as it relates to the projects that you've been able to bring to the company?
Brian McEwen: Our home is in Argentina and it will remain to be in Argentina. But a couple of years ago we were feeling with the election that was coming up and we always felt we were getting this Argentine discount. Not everybody's keen on Argentina. We still have some good projects, but we thought we should throw the net a little further out. So we started looking at projects initially in Chile. Then this project came to us from Paraguay. So we managed to pick up these projects in Chile and Paraguay that are a little earlier stage than what we were in fact looking for, but they've got great potential.
In Argentina, we've kind of zoned in on an area further to the south near to Santa Cruz, where we have the Cerro Vanguardia area, and using that as a model, we picked up this big area within Rio Negro, where we've had multi-ounce samples. We've got visible gold showing up. We've got a trenching program and geophysics plan there, and then hope to be drilling at the end of the year when the whole COVID thing kind of slowed us down. We can't travel down in that part of the country now, so we're limited to doing some exploratory work in one of the other provinces, but those are really good projects in Argentina.
In Chile, we're faced with a similar kind of story there where we can't travel to Chile, but we've got Chilean contractors working on a copper project that we picked up while we were looking at some other advanced projects in the region called Rosales. We've got three or four zones there now, all plus-5% copper, and it's at the surface. It's a project that once we can get in there and drill, I think we could advance that very, very quickly. We picked up another thousand hectares on that project, so things are going there. We've got a team working. We can expect news coming out of that.
Then in Paraguay, again, we flew all our geophysics equipment into the country and then it got shut down. So the geophysics stuff is on the ground ready to go. But what we did do is we managed to get a drill. We started drilling there on Friday, a diamond drill. We're drilling ahead of what we normally would have done. So it's a little bit more of a wildcat drilling type stuff. There's over a hundred grams per tonne in some of the samples we've taken. 30, 40 grams, multi-ounce samples. So a lot of high-grade visible gold. Paraguay is a new frontier and any one of these three projects, Gerardo, any one of these three countries could be a country-maker on its own. As you mentioned, because of our cash position, we're doing a lot of shopping, kicking a lot of tires. I think we're in really quite a good position right now.
Gerardo Del Real: In Paraguay where you're drilling now, that's a 500-meter diamond drill program initially, correct?
Brian McEwen: Yeah. I know it's not impressive when you talk about in amount, but the deal in Paraguay is that you've got two levels of exploration permits. The first exploration permit is more of a prospecting permit, and you're only allowed to drill 20 meters. So those are 20-meter holes. They're very shallow holes, the stuff right at the surface. As I mentioned, we would like to do the geophysics before we go after the deep target. We've applied for deeper drilling, but this way we are able to start drilling, get some information out in the market and try to get on this gold wave.
Gerardo Del Real: Again, just to provide context for everyone, you provide good exploration exposure on multiple commodities. Obviously it's gold, it's silver and copper, right?
Brian McEwen: Yes. We're a precious metals based company, but if a good copper project comes along, we're going to go after it.
Gerardo Del Real: Excellent. Absolutely, absolutely. COVID-19 restrictions aside, let's assume and hope that things continue to trend in a better direction and you're able to get back in the field. Can you walk me through what the rest of the year hopefully will look like in terms of prioritizing the next drill program that could be significant? Of course, we're expecting results from the current program, but walk me through what the rest of the year might look like there.
Brian McEwen: We've actually put together a budget and a plan for exactly that. Because we're in the financial position we are, we've got full crews. There's not a favorite son in the group here. They all had pretty much the same kind of program where we're doing the surface sampling, the geophysics and drilling. We had planned on drilling all over them before the end of the year.
The reality is we'll be drilling the ones in Paraguay. Hopefully we'll get the permission to drill the deeper holes, so we'll continue to drill in Paraguay. It's unlikely that we'll get to drill in Rio Negro from what they're laying out, but we should be able to be doing some trenching and geophysics.
That'll be the same thing in Chile. We may be drilling in Chile. One of the real advantages of working in Chile is they've got a very advanced infrastructure there and you can get permitting done quickly. There's a lot of equipment around. We could be drilling in Chile by the end of the year as well.
Gerardo Del Real: Well, a lot to like there, Brian. Thank you for the time. I'm looking forward to updates and the rest of the year. I think in the precious metals space and the copper space it should be exciting. You have no shortage of potential catalysts. Anything else that you'd like to add to that?
Brian McEwen: No. I just think that you started this off talking about being undervalued, and we're working to remedy that. I think that once people start catching on and realize that these projects, even though they're early, they have the chance to advance quickly. We're dealing with visible gold on both of our gold projects and better than 5% copper on our copper project. This is not moose pasture we're talking about. These things could advance quickly.
Gerardo Del Real: I encourage everybody to go to goldenarrowresources.com. Click on the investor presentation, go to Slide 21, pull out a calculator and just do some basic math on the market cap and the cash and equivalents. Then keep in mind that we are in a precious metals bull market that is just getting going.
Brian, thank you for your time today. I appreciate it.
Brian McEwen: My pleasure, Gerardo. Anytime.