Joseph Grosso, Executive Chairman, CEO and President of Golden Arrow Corporation (TSX-V: GRG): 100% owned Chinchillas Silver Project, Strategic Partnership with Silver Standard, Accelerating Development

By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 8/5/2016
Golden Arrow Resources Corporation (TSX-V: GRG) is focused on its 100% owned Chinchillas Silver Project located in the province of Jujuy, Argentina. We learned from Joseph Grosso, Executive Chairman, CEO and President of Golden Arrow, that the strategic partnership has been worked out with Silver Standard who owns nearby Pirquitas Silver project that is near the end of its mine life. This could allow Golden Arrow to use the Pirquitas mine infrastructure and to start exploitation of the Chinchillas deposit within one year instead of waiting six or seven years. According to Mr. Grosso what makes Golden Arrow stand out from other mining companies is the decision they made 23 years ago to become the early stage developer of mining in Argentina, a country with huge geology potential that had zero mining going on in 1993. According to Mr. Grosso the new government in Argentina is mining-friendly, and with the turn in the market the company will continue its quest towards new discoveries.

Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-chief of Metals News, interviewing Mr. Joseph Grosso who's Executive Chairman, CEO and President of Golden Arrow. Could you tell me a bit about what differentiates Golden Arrow from other companies?

Joseph Grosso: Well Dr. Alper, if we're talking about a precious metals exploration junior company there's not much difference. The difference is that 23 years ago we deliberately chose to and became the early stage developer of mining in Argentina. We realized, at that time, that Argentina shared a 5,000 kilometer border, with Chile to the West with 150 years of mining production. Some of the giant mining projects were right on the border with Argentina. Argentina, on the other hand, on the East side is the eighth largest country in the world. It has a huge geological potential and there was zero mining going on in 1993. We obviously saw a great opportunity that knocked on our door and we took advantage.

The advantage now is that we own some 214,000 hectares of property in proximity or contiguous to some of the producers’ major projects in production today. We took advantage of an opportunity 23 years ago and have developed that opportunity finding three discoveries. The first one was Gualcamayo which is owned now by Yamana and producing gold. The second one was Navidad Silver, which is now owned by Pan American Silver and has over 600 million ounces of silver resources. We found that in 2004. The third one, Chinchillas, is the latest, which because of its location, is an excellent candidate for development. After all it is location, location, location. Golden Arrow has been totally involved within Argentina for 23 years and the projects that we have secured for the company are fully paid and we own 100%.

Dr. Allen Alper: That is great.

Joseph Grosso: Well it's a significant difference if I know our industry as well as I think I do.

Dr. Allen Alper: Could you elaborate on Chinchillas? I understand it's one of the largest silver discoveries.

Joseph Grosso: Well that not what we claim. I think there are other silver discoveries. Navidad for instance that we discovered in 2004 is over 600 million ounces of silver resources. The great value of Chinchillas is its location in proximity to Pirquitas Silver, which is owned by Silver Standard and they are extremely close to finishing up with their mining. That is the significance of Chinchillas’ location. We are only 21 miles away from such an infrastructure, which would be incredibly expensive for us to recreate.

Therefore the fortune and the great value that Chinchillas has is its proximity to infrastructure that exists and the fact that we have a tentative agreement with an option for joining the infrastructure of Pirquitas. Which is one of the most significant producers in the world and Chinchillas will have the benefit of starting exploitation of its deposit within one year instead of waiting the six or seven years. This is the significance of Chinchillas. The price of silver it's going positively higher and there is a great deal that I can add on silver values. Silver is a precious metal, like gold, with a notable difference in that there is a huge demand for silver to be used in industries.

It has a double function. I hope I've answered your question why Chinchillas’ Silver Project is a significant silver deposit. It's the location and its proximity to going into production with an existing proven producer and an established production facility.

Dr. Allen Alper: That was excellent! It really distinguishes Chinchillas from other projects. Could you tell me a bit more about your plans for this year?

Joseph Grosso: We have an extensive portfolio of properties, which are extremely well-located and deserve to be explored. We have also acquired one project recently. We will be continuing our search for a fourth discovery in predominantly silver-gold projects. We have two things going. One which is a recognized value and the stock is reflecting that and two, that we will take advantage of our proximity. The Company will be geared up to continue our negotiation and feasibility study underway with Silver Standard. Simultaneously, our very experienced technical team will continue our quest for new discoveries.

We have an extensive work program already taking place on other properties and we feel very positive that we will come up with some success in the near future.

Dr. Allen Alper: That sounds great. Could you tell me a bit about the political climate in Argentina?

Joseph Grosso: Well I think there's been a great change. For 11 years the left-wing government in power in Argentina chose to tax the new mining companies that were spending money in Argentina very heavily. They made it very slow and very costly to mine in Argentina. They had no intention of developing anything. These taxes have been cancelled or are proposed to be canceled. The new government is extremely favorable towards mining.

Also they're well-educated in the United States. They're financial people who see the benefit that Chile has had in developing natural resources and mining specifically. They definitely want to emulate other countries who profited from developing mining. They are offering major incentives to companies that want to come to Argentina and spend their money in developing the resources. We have already been there for 23 years. We are well-structured with our relationship with the communities and relationship with the various levels of government. We will be taking great advantage of that. These are the changes which are very beneficial to new investors in Argentina at the moment.

Argentina is one of the most prominent and sought after mining destinations in the world. The change in government will facilitate mining and we're going to be benefiting from these new changes.

Dr. Allen Alper: Well that sounds excellent. It's really great that the new government is in favor of, and promoting mining. It's a smart thing for them to do, they'll get money from it and enrich Argentina.

Joseph Grosso: Exactly correct.

Dr. Allen Alper: Could you tell me a little more about yourself Joe?

Joseph Grosso: Well, if you've got two days, I'll tell you. I was born in Italy to a fashion producer since 1782. I came to Canada in '59 following the footsteps of my ancestors and my grandfather, who actually went to New Jersey in 1912. I was very happy to be in Canada and I was quite successful. I developed a market due to our name and quality. We needed four production lines. One in Vancouver, Canada, one is Bucharest, Romania, one in Hong Kong and the other one in Busan, Korea for the total number of 900 employees that we carried all the way to 1980/82. You might be too young to remember the brutal interest rate that had climbed up to 22/23% and we had to actually undo what we had done.

Who am I? A guy with a vision of expanding into four countries with approximately 250 employees in each country? I had the fortitude to integrate with their customs, with their way of doing business and also keep the same fortitude when I had to roll it all back in 1982, rolling it back to the Vancouver operation alone. That was the time when I said enough is enough. I went to Argentina and voila! Somebody up there was guiding me to a new opportunity, which I recognized. Here I am 22 years later still in Argentina. I learned the language. They ask me which province I come from, not which country.

I went to a destitute community very far from Buenos Aires at an altitude of 5,000/4,000 meters in 1993. I made them understand that we would assist them, help them conquer their fear and poverty. That has been usually successful. It has not produced a single anti-mining stoppage or problem that other companies have experienced. For 23 years we've been in Argentina. We have a great relationship based on our reputation that we have established by being partners.

We are not arrogant. It takes a lot of tenacity and continuity, which we have. With that attitude we definitely work well with government officials. They're very helpful. I'm going to continue with the friendship and the reputation that we have created in Argentina. I am not a young guy, who wants to venture out and pioneer in other countries. I think I am in the best place and Golden Arrow has major benefits being located in Argentina.

Dr. Allen Alper: That sounds great. Could you tell me a bit about your share structure and your finances?

Joseph Grosso: We have been very stingy in penalizing our treasury. We have mostly used funds that we created from a royalty, which we sold bringing in about $23 million. I'm saying, with a certain amount of melancholy, the fact that we only had 40 million shares outstanding. The long six years of economic downtrend we had to raise money at 20 cents and 27 cents that obliterated a little bit the advantage of using cash. Nevertheless, right now we feel that we have a great value behind each share that we have. We have approximately 77 million shares outstanding and we're in the process right now of completing a new announced financial financing at 75 cents with a half warrant which is definitely oversubscribed and we're quite lucky.

With funds already on hand and the funds we're going to be raising, we’ll have from $8 to $10 million, which will suffice to continue development of other projects for the time being. Obviously we have a great opportunity to finance at a higher level once Silver Standard and Chinchillas combine efforts to benefit each other. Our project and their infrastructure will profit both. The plan at the moment is to integrate next year to subsidize Pirquitas with the Chinchillas project.

We have a synergy, they need what we have pretty badly because otherwise they would lose a lot of value with a mine shut down. We on the other hand have a great project from surface down that can be instantly put to use and so its synergy it's incredible. This is really what is driving the investors in the market. On the marketing side we're making sure that we expose what we're doing and our project to the market. We have recently listed our company on OTC in the United States, which will permit the brokers to advise and buy in the United States rather than having to come to Canada. The result of this can be seen in increased trades.

We're very proud of it and we need people like you Dr. Alper to continue telling our story. We're working hard, we're committed and we're passionate.

Dr. Allen Alper: You have a great story.

Joseph Grosso: We want to make our shareholders richer.

Dr. Allen Alper: That's a great objective to have and you're in a position to do it. So that's fantastic! That's great synergy!

Joseph Grosso: We have created something that we have a lot of confidence in and we have become one of the major shareholders in the Company. At one point we had over 52% of the shares outstanding and I think now that is substantially lower. We put in our dollars. I will participate in the current financing, leaving space for other investors.

Dr. Allen Alper: Sounds very good. Could you tell me the primary reasons other high-net-worth investors should invest in your company, Joe?

Joseph Grosso: Because we have a larger variety of very well-recognized institutions that are buying. We're still a junior and a lot of the major investment institutions have rules. Nevertheless we probably have about 8 or 10 highly recognizable institutions investing in our project. I'm sure they’ll come back for more.

Dr. Allen Alper: That sounds good.

Joseph Grosso: Since we're summarizing our discussion, I'll be glad to send you a list of our main investors, who are recognized easily in the marketplace.

Dr. Allen Alper: That sounds good, I appreciate it. Is there anything else you'd like to add?

Joseph Grosso: I am passionate about what I'm doing and very proud of our accomplishments at Golden Arrow Resources Corporation. I’m grateful for the opportunity to share this with you and your readers. I want to thank you very, very much, Dr. Alper.

Dr. Allen Alper: I enjoyed talking with you and learning more about what you're doing. I’m very impressed with what you’ve been able to build in Argentina and not only build, but grow consistently for 23 years, even during hard times with governments unfriendly to mining. I think it shows that good people, such as yourself, who care about the welfare of the community where they are working, who help the people get what they need and should have to rise out of grinding poverty, who give back to the community and treat their workers fairly, reap what they sow and prosper. You deserve your good relationship with the communities and with the various levels of government. Now, with a mining- friendly government, including people well-educated in business and finance, I’m sure they will choose to support your efforts to continue to grow your projects for the benefit of your entire company, including shareholders, including your workers, the communities where you are located and Argentina as a whole.

http://www.goldenarrowresources.com/

Golden Arrow Resources Corporation
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Telephone: 604.687.1828
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Email: info@goldenarrowresources.com