Mr. Joseph Grosso of Golden Arrow reports

SILVER STANDARD EXERCISES OPTION TO FORM JOINT VENTURE WITH GOLDEN ARROW FOR THE CHINCHILLAS-PIRQUITAS PROJECT

Golden Arrow Resources Corp. has received the required notice from Silver Standard Resources Inc. to exercise its option on the Chinchillas project and form a joint venture to combine the Chinchillas project with the producing Pirquitas mine into a single new operation. The joint venture will be owned on a 75-per-cent/25-per-cent basis by each company, respectively. Silver Standard will be the operator.

"This is a landmark achievement for our company," stated Joseph Grosso, executive chairman, president and chief executive officer of Golden Arrow. "As Golden Arrow transitions an exploration discovery into a mining operation, our shareholders stand to benefit from this profile and strengthened financial position.

"I wish to thank management, the board of directors and our shareholders for their patience and support during this 18-month wait. In particular, thanks go to our [vice-president of] exploration and development, Brian McEwen, and his technical team for developing Chinchillas to the current permitting stage. We look forward to working with Silver Standard's proven and skilled operational team. We thank all levels of federal and provincial authorities, as well as the communities and their leaders in Argentina, for their support. We can all benefit with this outcome."

Transaction highlights

The full details of the company's business combination agreement with Silver Standard dated Sept. 30, 2015, setting out the terms and conditions for the formation of the joint venture, were set out in the company's news release dated Oct. 1, 2015. The following is a summary of the key provisions and benefits of the transaction:

• Creates a joint venture comprising the Pirquitas operation and the Chinchillas property with Silver Standard and Golden Arrow holding 75-per-cent/25-per-cent interest, respectively, with Silver Standard being the operator;
• Provides Golden Arrow an opportunity to fast-track development of the Chinchillas property, in a capital-efficient manner, through use of the existing production facilities at the Pirquitas mine and establishment of common infrastructure;
• Near-term production from Chinchillas based on construction beginning in the third quarter of 2017, followed by ore delivery to the mill in the second half of 2018;
• Immediately benefits from existing infrastructure, operating capabilities and cash flow generated by the currently producing Pirquitas mine;
• Option exercise payment by Silver Standard to Golden Arrow of 25 per cent of Pirquitas mine earnings, less certain expenditures incurred since Oct. 1, 2015, until closing, currently estimated at approximately $15-million (U.S.), payable on closing, which is expected on or before May 30, 2017;
• A prefeasibility study (PFS) has been completed for the development of Chinchillas, as detailed in Golden Arrow's news release dated March 31, 2017; the PFS contemplates a joint venture project requiring an initial investment of $81-million (U.S.) to develop a mine to deliver ore to the existing Pirquitas mill that has an operating life of eight years, producing an annual average of 8.4 million silver equivalent ounces; the supported National Instrument 43-101 technical report will be filed on SEDAR within 45 days;
• The combined operation will be managed and overseen by Silver Standard's proven operational management team with extensive mine construction and operational expertise.

Production decision and next steps

Subject to permitting and closing of the transaction, Silver Standard has approved the development decision on the Chinchillas project. The permitting process continues to advance with positive support from the local communities and government authorities. The Chinchillas environmental and social impact assessment has been prepared and submitted to the Argentine regulatory authorities, and is in the consultation process. Work is in progress with local communities on social programs and understanding of the Chinchillas project as it advances to production.

Based on and subject to the permitting process, construction at Chinchillas is anticipated to begin during the third quarter of 2017, with ore delivery to the Pirquitas mill expected in the second half of 2018.

Golden Arrow will ensure that its representative for the joint venture will have extensive experience in mining and production.

Qualified persons

Except as otherwise set out herein, the scientific and technical information contained in this news release relating has been reviewed and approved by Brian McEwen, PGeol, a qualified person under National Instrument 43-101, standards of disclosure for mineral projects. Mr. McEwen is vice-president of exploration and development to the company.

About Golden Arrow Resources Inc.

Golden Arrow Resources is an exploration company focused on creating value by making precious and base metal discoveries and advancing them into exceptional deposits at its more than 200,000 hectares of properties in Argentina. The company's prefeasibility-level Chinchillas silver-lead-zinc project is moving toward production through a joint venture with Silver Standard Resources. Golden Arrow is now actively exploring the new Antofalla silver-gold-base-metal project, an exciting new exploration opportunity with similarities to Chinchillas.

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