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Golden Arrow Resources options Indiana project in Chile

2018-10-31 14:20 ET - News Release

Mr. Joseph Grosso reports

GOLDEN ARROW OPTIONS ADVANCED-STAGE INDIANA GOLD-COPPER PROJECT, CHILE

Golden Arrow Resources Corp. has entered into a definitive agreement to acquire up to 100 per cent of the Indiana gold-copper project in Chile's III region. Indiana is located approximately 35 kilometres from the company's new Atlantida copper-gold project (see news release dated Oct. 11, 2018). The project features a near-surface deposit of high-grade gold and copper vein-hosted mineralization, with a historical resource estimate. The deposit area is permitted for mining, and there are currently two ramps allowing underground access for exploration and development.

Highlights of the Indiana project include:

  • A historical inferred mineral resource estimate of over 600,000 ounces of gold equivalent consisting of 3,093,700 tonnes averaging 2.8 grams per tonne gold and 1.6 per cent copper, at a cut-off of four grams per tonne gold equivalent, supported by a National Instrument 43-101 technical report (see attached table; a qualified person has not done sufficient work to classify this estimate a current mineral resource and Golden Arrow is not treating this as a current mineral resource estimate);
  • 13,000 metres of diamond drilling completed in over 40 holes and 2,000 chip and trench samples;
  • Metallurgical testing -- flotation tests indicate recoveries of 90 per cent for gold and 92 per cent for copper for sulphide mineralization;
  • Significant potential to increase the size and grade of the deposit -- access ramps into the deposit have allowed for more detailed exploration; recent work returned channel samples averaging 1.6 metres width and nine grams per tonne gold equivalent, over 150 metres in ramp A, and an average of 1.5 metres width and 7.4 grams per tonne gold equivalent, over 100 metres in ramp B, approximately 70 metres lower; new mineralized vein splays have also been identified;
  • High potential for additional mineralization and new resources throughout the property;
  • Potential to fast-track the project to production, with existing mining permits and access drifts completed;
  • Easy access to water and energy; no environmental or community concerns.

"With the addition of the advanced-stage Indiana project to the recently acquired Atlantida project, we solidify our presence in Chile, emphasizing our commitment to the rapid identification of new resources and value growth for our shareholders," commented Joseph Grosso, executive chairman, chief executive officer and president. "Indiana has the added benefit of two growth paths -- a fast track to production thanks to the existing mining permit and historical resources and exploration upside both within the known vein system and throughout the property."

Golden Arrow has completed legal and technical due diligence on the project. The Indiana project represents a near-term production target. The deposit area is permitted for mining, and there are currently two completed ramps allowing access for exploration and development. The company is planning a program to complete a resource estimate at the measured and indicated level in the existing deposit area, as well as an economic assessment, and an aggressive program to delineate and drill test targets throughout the project area to delineate other resources. The Indiana project will be managed under New Golden Explorations Inc., a 100-per-cent-owned subsidiary of Golden Arrow. Both the Indiana and Atlantida projects will be managed out of a new exploration camp proximal to both projects.

About the Indiana gold-copper project

Golden Arrow has executed a definitive agreement with Mineria Activa SpA, a Chilean private equity investment management firm focused on exploration to production-stage assets in the mining sector. Terms for the definitive agreement are a $100,000 (U.S.) payment on signing, followed by $15-million (U.S.) in payments staged over 48 months. Prior to Golden Arrow making the last payment of $7-million (U.S.) at the end of year 4, Mineria Activa has the option of retaining 25 per cent of the project, which will then move forward on a pro rata basis.

The 2,300-hectare, road-accessible Indiana project is located approximately 40 kilometres north of the city of Copiapo in the III region of Chile at 1,470 metres above sea level. Indiana is situated within an iron-oxide-copper-gold (IOCG) belt that includes deposits such as Manto Verde, Candelaria and Cerro Negro Norte. The property hosts historical mineral resources in a high-grade gold-copper vein system, with a permit for mining over the area of the historical resource. Golden Arrow believes there is excellent potential to expand the known deposit as well to delineate additional mineralization regionally on the project.

Work by previous operators of the project includes 13,000 metres of diamond drilling in 40 holes, 2,000 chip and trench samples, and detailed geology and structural modelling. Eight major approximately one-metre-wide veins ranging up to 1.5 kilometres in length and down to 400 metres depth have been delineated. In 2013, a mineral resource estimate was completed for Mineria Activa, including a supporting technical report following the guidelines of National Instrument 43-101, titled "Technical Report Indiana Gold and Copper Project Region III Chile." The qualified person for the technical report is Dr. Eduardo Magri, who, at the time of the report, was a registered and active fellow of the South African Institute of Mining and Metallurgy. Dr. Magri is a mining engineer with a master's degree from the Colorado School of Mines and a PhD from the University of Witwatersrand with over 30 years of experience as a project engineer and expert consultant for several mining and engineering companies. In 2010, he was awarded the Alexander Sutulov National Mining Award in Chile. In addition to consulting, he has served as an associate professor in the mining engineering department at the Universidad de Chile.

The historical resource estimate for the veins averaging over four grams per tonne gold equivalent is summarized in the attached table.

            INFERRED RESOURCE ESTIMATE AT CUT-OFF OF FOUR G/T AUEQ
  
Vein               Tonnage        Au       Cu       Mo      AuEq     AuEq ounces  
                     (000s)     (g/t)      (%)      (%)     (g/t)          (000s) 

Bondadosa          910,400       3.4      1.0    0.019       5.5         160,900      
Rucas              750,200       2.1      1.7    0.006       5.6         133,800      
Flor de Espino     638,100       3.5      1.3    0.002       6.3         128,300      
Indian III         351,400       1.9      1.4    0.009       4.9          55,200      
Rosario            443,600       2.7      3.1    0.010       9.0          128,00      
Total            3,093,700       2.8      1.6    0.010       6.1         607,000  

Notes: The following parameters were used in the calculation of equivalent 
grade: gold equivalency based on the following prices: $1,100 (U.S.) per 
ounce for gold, $2.80 (U.S.) per pound for copper, $12 (U.S.) per pound for 
molybdenum; and adjusted for the following recovery rates: 75 per cent for 
gold, 88 per cent for copper and 60 per cent for molybdenum. Areas, 
tonnages and metal content are rounded to the nearest hundred square metres, 
tonnes and ounces, respectively; vein thickness is rounded to the nearest 
centimetre; and grades are rounded to two decimal places. Rounding may 
result in apparent differences between tonnes, grade and metal content.    

Readers are cautioned that Golden Arrow's qualified person has reviewed the NI 43-101 for this historical resource estimate and believes it to have been a reliable estimate of inferred resources at the time of its publication; however, a qualified person has not done sufficient work to classify this estimate a current mineral resource and Golden Arrow is not treating this as a current mineral resource estimate. Golden Arrow plans to proceed with a program to delineate current mineral resources by an independent qualified person using CIM (Canadian Institute of Mining, Metallurgy and Petroleum) best practices and current long-term pricing.

The report by Dr. Magri also summarized the metallurgical test work that has been completed, reporting rougher cleaner (flotation) gold recoveries in sulphide mineralization of over 85 per cent, with a maximum of 97 per cent, and copper recoveries ranging from 90 per cent to 96 per cent, indicating the potential to develop a gold-copper flotation circuit to process sulphide mineralization. Potential to recover gold and copper in mixed and oxide material requires further testing.

More recently, Mineria Activa has developed two ramps that access the Bondadosa vein area. The due diligence review of the data disclosed that ramp A is approximately 90 metres in length and channel samples over 150 metres in the tunnel returned an average of 1.6 metres width with 9.0 grams per tonne gold equivalent (4.6 grams per tonne gold, 2.5 per cent copper, 222 parts per million cobalt and 125 parts per million molybdenum). In ramp B, 70 metres below ramp A, channel samples over 100 metres returned an average of 1.5 metres width with 7.4 grams per tonne gold equivalent (3.5 grams per tonne gold, 2.4 per cent copper, 84 parts per million cobalt and 39 parts per million molybdenum). Additionally, ramp A detected two new vein splays from the main structure. One of the splays returned 1.5 metres of 5.92 grams per tonne gold and 2.39 per cent copper.

Qualified persons

Brian McEwen, PGeol, vice-president of exploration and development to the company and a qualified person as defined in NI 43-101, has reviewed and approved the contents of the news release.

About Golden Arrow Resources Corp.

Golden Arrow is an exploration company earning production income. Golden Arrow owns a 25-per-cent share of Puna Operations Inc., a joint venture operated by SSR Mining, with more than eight years of forecast production and upside potential at the Pirquitas-Chinchillas silver mining project. Golden Arrow is actively exploring a new portfolio of advanced projects in Chile as well as other targets within its portfolio of more than 200,000 hectares of properties in Argentina.

We seek Safe Harbor.

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