Golden Arrow Resources VP of Exploration, Brian McEwan

[00:09] Thank you everybody for coming out and listening to our talk. I believe we have a very interesting, a little bit different story to tell than what a lot of the other explorers and junior explorers have. If you buy into what Bo was saying in this story, you should even pay more attention to.

[00:26] What you’re looking at here on this slide is a picture of the Pirquitas operating mill on the left and our project, Chinchilles, on the right. We signed a deal with them at the end of 2015. That deal was consummated at the end of March of this year and should be signed off by the end of this week. What that does is it changes us from a strictly an exploration company to an exploration company with production and cash flow. What this slide shows is actually very accurate. We’re going to get our value from production and our growth in discovery.

[01:04] A standard disclaimer so you’ve been warned that there will be some forward-looking statements.

[01:09] I like to bring this slide right to the front, because I get a lot of questions about this and it describes where we’re at when people want to value the company. Because, I think it’s important when you evaluate a junior explorer as to where they’re starting-if they’ve got money in the bank, do they have any other assets, or where they’re going to go. Generally, those people are starting from zero. If you look at the case of Golden Arrow, this is the value on the left here.

[01:37] We currently have about $8 million in the treasury. We’ve accrued earnings since we signed our deal with Silver Standard of another $20 million. We’re currently talking in 25% of their free cash flow from processing their stockpiles right now. If you look at the PFS study that was completed, we got 25% of that. That’s another $60 million. Our company, right now, is valued around $100 million Canadian. That’s just what we have right now, as far as describing this joint venture deal. There’s still a lot of upside potential there that I’d like to go through.

[02:19] Looking at the project, we’re up in Northern Argentina. We’re about 30 kilometers from the Pirquitas mine. It’s on a well-traveled road. All of the infrastructure’s in place. As an explorer, we’re going in and we’ve made a deal with experienced miners- people that have been doing this for a lot of years and have been very successful. If you follow any of the Silver Standard information, you’ll see year after year, month after month, quarter after quarter they’re beating their guidance and doing better. They’re very, very good operators and we’re happy to have them as partners.

[02:49] This is kind of a little bit behind us now, but just to say that the deal that we made was a 75% joint venture, where they were going to be the operator and then we’re the 25%. They’ve invested $15 million into the ground to prove that this works. As I mentioned, at the end of March that was all signed off. Now, we go ahead as partners.

[03:11] That means we’re going to be supplying, at least initially, the ore to feed the mill and then we’ll be taking 25% of the cash flow. Right now, the plan that’s been laid out in the PFS, the Pre-Feasibility Study shows eight-year mine plans. We’re guaranteed ten years anyways of income, but when you look at how this plan was put together, we’re going to go on a lot longer that in those ten years. That’s money coming in every year as we move forward with what we do best, and that’s exploration.

[03:41] The benefits of this, I think, are pretty obvious. It takes us from being explorer to having cash flow. We’ll be getting a check for about $15 million US this week, which will be nice. Then, we start to build Chinchilles and we put that in production. By the middle of next year, we’ll be hauling ore from Chinhilles to Pirquitas, and we’re off to the races.

[04:03] I guess one way of looking at this is that I think on that bottom slide- long-term cash flow, GRG owns two million ounces equivalent production annually for the next, minimum, eight years. That means that we’re going to be taking anywhere from $10-$15 million a year. That money we can put into further exploration. When you’ve got that money coming in, as an exploration company, it opens up all kinds of doors. You’ve got money and you can start look at more advanced projects. You can start looking at projects that are in production. I think it’s really important to look at this as you’ve got to have money to make money, and we’re in that enviable position, right now, as a junior explorer.

[04:40] Looking at some of the numbers on here, this is the metrics of what are going to come out. The plant, we’re running at 4,000 tons a day, we’ll run it for eight years. We’re going to produce 51 million ounces of silver. A couple of interesting things on here, when you look as the cash costs- $7.40 an ounce. That’s actually less then Pirquitas is running now, at just over $8.00. They’re all-in, sustaining cast costs, that’s with the credits of the lead and the zinc running at $9.75. That’s incredible.

[05:09] Right now, Pirquitas, they’re running at $10, $15, something like that. That’s what’s going to cost to make it. When the silver is going down, we’re still going to be making money all the way down. If you believe in, and I strongly believe in, what Bo says, silver goes up and this just keeps getting better.

[05:28] When you look at the Pre-Feasibility Study, with Silver Standard, looked at the Pre-Feasibility Study, they wanted to make sure they’re making the best decision to go ahead with the deals. I believe in their approach to this, they were extremely conservative. We’ve got 140 million ounces of measured & indicated, and another 80 million in inferred in the ground. We’re actually only going to be taking out 58 million ounces.

[05:53] I think that once we get this plant and mine up and running, we’ll go back as a team and say, “How can we optimize this? How can we make it better? Where are we going to be looking at how we can expand this even more?”

[06:05] This is a proven improbably reserves on this side and that’s what we’ve taken out from the other side. It’s just a little graphic to show what’s left.

[06:13] Again, where you’ve got the green dots on the left, that’s the area that we’re mining. We’ve still got resources on the right that we haven’t talked about. Then, all this area to the south, some very, very good numbers to the south. I think what’s really key, when you start looking at the stuff on the east and in the south, is the zinc numbers. If you’re a believer in the zinc, and very bullish on zinc like I see in a lot of people in the last little while, you can see we’ve got 104 meters of 1% zinc, 47 meters of 1.2% zinc, 1.9% zinc. We’ve got a hole of over 4% zinc.

[06:47] I think our chances of maybe developing something along the zinc lines down there, but the future is really wide open. I think it looks very positive for us, and we’ve only still just touched the property.

[07:00] Down in the bottom right-hand corner, you can see around the red outline there. That’s a private property that we hold. So, we’ve still got another 2,000 hectares that we will explore as a group.

[07:13] Again, beyond the deal that we’ve talked about, in the 8-10 years that we’re talking about, Silver Standard at Pirquitas has still got an underground mine with high-grade ore. You can see, three meters over 1500 grams, that kind of stuff. Again, now that we’ve passed that line, we’ve made a decision to do the joint venture, we’ve got money coming in, we can look at how we’re going to optimize that. That will include the property around us. That will include the property under Pirquitas. Around there, the future looks extremely rosy.

[07:43] And then, beyond that, even belong that. This we can take on the shelf and say, “That’s a success. It can only get better.” Silver prices goes up, we find more, it’s done.

[07:54] We’ve been concentrating, lately, on some new areas, some very exciting areas. I believe that some like Antofalla will be the 4th discovery of the Grosso group. Our initial numbers back from Antofalla are very, very encouraging. They’re not listed up here, some of the ones I wanted to talk about. But, we have some grab samples over five kilos of silver, some good gold numbers as well. This is an area that’s probably three or four times the size of Chinchilles. So, chances of Antofalla holding a world-class deposit are very, very good.

[08:30] So, what’s coming for us? In the next week, we’re going to get a big check. That means a lot to us that have been working on this for a while. We well cashed up beyond our $6 million in the bank. We’re going to continue to work on Antofalla. We’ll be announcing another deal here that we’re going to start, hopefully, within the coming weeks.

[08:49] As I mentioned, we’ve got opportunities to look at new things. It’s very good. With the money, again to reiterate, we’ve opened up some new windows where we are looking at some events, some producing assets, other areas where we could generate more cash flow.

[09:11] This is what the company looks like. We’ve got about 97 million shares outstanding right now. Fully diluted around 110. 50% of it is owned by family and insiders, 5% stilled owned by Silver Standard.

[09:29] One of the really important things to Golden Arrow is that we keep a handle on dilution. I think we’ve done that very effectively with this deal. Because, we’ll be able to go out and explore and find new deals and not have to go back and dilute our shareholders. We believe we’re in a very good position. And, as I said at the onset, a different story than most junior exploration companies can talk about.

[09:53] Okay. Thank you.