NEWS RELEASE - 245 million Ag Eq & GROWING
Golden Arrow increases Chinchillas NI 43-101 indicated
2016-04-12 16:40 ET - News Release
Mr. Joseph Grosso reports
GOLDEN ARROW ANNOUNCES UPGRADED RESOURCE ESTIMATE FOR CHINCHILLAS SILVER PROJECT, ARGENTINA
Golden Arrow Resources Corp. has provided an updated mineral resource estimate prepared in accordance with Canadian National Instrument 43-101 for the company's 100-per-cent-owned Chinchillas silver deposit in Jujuy province, Argentina.
The recently completed phase 5 drill program converted more than 50 million ounces of silver equivalent (AgEq) resources to the measured and indicated (M+I) categories, at the base cut-off grade. This includes 17 million ounces of AgEq as measured resources in the central part of the Silver Mantos zone, and the expansion of measured plus indicated to the north, south and at depth. In addition, the average grade of M+I increased from 125 grams per tonne to 142 grams per tonne AgEq.
The updated resource estimate is part of the Chinchillas project predevelopment activities, financed by Silver Standard, which are being undertaken to evaluate the feasibility of creating a combined mining business with Silver Standard's Pirquitas mine, as announced Oct. 1, 2015. Between October, 2015, and February, 2016, approximately 15,000 metres of diamond drilling was completed at the deposit in the phase 5 program. The main objective of the program was to infill the Silver Mantos area of the deposit with sufficient density to convert a significant portion of the resource estimate reported July 31, 2015, to M+I, as required for the studies being completed by Silver Standard.
Highlights of the mineral resource estimate:
- New measured resource of 17 million ounces of AgEq at a 149 g/t AgEq grade (3.6 million tonnes grading 115 g/t silver, 0.56 per cent lead and 0.38 per cent zinc at a 45 g/t AgEq cut-off);
- Increase in indicated resources by 34 million ounces to 138 million ounces AgEq (30.6 million tonnes grading 88 g/t silver, 0.85 per cent lead and 0.60 per cent zinc at a 45 g/t AgEq cut-off);
- Average grade increased from 125 g/t AgEq to 142 g/t AgEq in measured and indicated;
- Inferred mineral resource of 90 million ounces of AgEq at 85 g/t AgEq grade (32.9 million tonnes grading 42 g/t silver, 0.44 per cent lead and 0.76 per cent zinc at a 45 g/t AgEq cut-off);
- Deposit continues to remain open to expansion.
Details of the mineral resource estimate methodology, including metals pricing and equivalency calculations, a comparison with the previous estimate, sensitivity analysis to cut-off grades, and sampling quality assurance/quality control, can be found herein.
An NI 43-101 technical report supporting disclosure of this mineral resource and containing addition details will be filed by Golden Arrow on SEDAR within 45 days of this press release.
Mineral resource estimate details
Mineral resources, which are not mineral reserves, do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues. The quantity and grade of reported inferred resources are uncertain in nature, and there has been insufficient exploration to classify these inferred resources as indicated or measured, and it is uncertain if further exploration will result in upgrading them to an indicated or measured category.
MINERAL RESOURCE STATEMENT FOR THE CHINCHILLAS PROJECT, APRIL 12, 2016 Tonnes AgEq Ag Pb Zn AgEq Ag Pb Zn Type (m) (g/t) (g/t) (%) (%) (Moz) (Moz) (Mlb) (Mlb) Measured Silver Mantos 3.6 149 115 0.56 0.38 17 13 44 30 Indicated Silver Mantos 11.9 118 72 0.63 0.64 45 28 166 168 Mantos Basement 13.6 176 125 1.16 0.27 77 55 347 81 Socavon 5.0 97 29 0.54 1.37 16 5 59 152 All 30.6 141 88 0.85 0.60 138 87 574 401 Measured and indicated Silver Mantos 15.5 125 82 0.62 0.58 62 41 210 198 Mantos Basement 13.6 176 125 1.16 0.27 77 55 347 81 Socavon 5.0 97 29 0.54 1.37 16 5 59 152 All 34.2 142 91 0.82 0.57 155 100 618 431 Inferred Silver Mantos 4.1 115 58 0.78 0.83 15 8 71 76 Mantos Basement 1.5 107 78 0.64 0.14 5 4 22 5 Socavon 7.3 79 33 0.37 0.91 18 8 59 146 Socavon Basement 20.0 79 39 0.39 0.73 51 25 170 321 All 32.9 85 42 0.44 0.76 90 44 322 548 Totals may not add correctly due to rounding. Mineral resources are contained within a pit shell generated using a silver equivalent price of $25 per ounce. Silver equivalent calculated using the formula: AgEq equals silver grams per tonne plus (lead percentage (i) 36.09) plus (zinc percentage (i) 36.09). Silver equivalent grades, and the base-case cut-off grade of 45 g/t AgEq, are based on metal prices of $19 per ounce silver and $1 per pound for lead and zinc. Recovery is assumed as 90 per cent silver equivalent. Mineral resources, which are not mineral reserves, do not have demonstrated economic viability. The quantity and grade of reported inferred resources are uncertain in nature, and there has been insufficient exploration to classify these inferred resources as indicated or measured, and it is uncertain if further exploration will result in upgrading them to an indicated or measured category.
COMPARISON OF THE NEW MINERAL RESOURCE ESTIMATE WITH THE JULY 31, 2015, ESTIMATE Tonnes AgEq Ag Pb Zn AgEq Ag Pb Zn Date (m) (g/t) (g/t) (%) (%) (Moz) (Moz) (Mlb) (Mlb) Measured and indicated April, 2016 34.2 142 91 0.82 0.57 155 100 618 431 July, 2015 25.9 125 77 0.66 0.66 104 64 379 379 Inferred April, 2016 32.9 85 42 0.44 0.76 90 44 322 548 July, 2015 47.2 92 50 0.52 0.64 140 76 544 661 Totals may not add correctly due to rounding. Mineral resources are contained within a pit shell generated using a silver equivalent price of $25 per ounce. Silver equivalent calculated using the formula: AgEq equals silver grams per tonne plus (lead percentage (i) 36.09) plus (zinc percentage (i) 36.09). Silver equivalent grades, and the base-case cut-off grade of 45 g/t AgEq, are based on metal prices of $19 per ounce silver and $1 per pound for lead and zinc. Recovery is assumed as 90 per cent silver equivalent. Mineral resources, which are not mineral reserves, do not have demonstrated economic viability. The quantity and grade of reported inferred resources are uncertain in nature, and there has been insufficient exploration to classify these inferred resources as indicated or measured, and it is uncertain if further exploration will result in upgrading them to an indicated or measured category.
SENSITIVITY OF RESOURCES TO CUT-OFF GRADE Cut-off AgEq Tonnes AgEq Ag Pb Zn AgEq Ag Pb Zn (g/t) (m) (g/t) (g/t) (%) (%) (Moz) (Moz) (Mlb) (Mlb) Measured and indicated 30 38.5 130 83 0.75 0.53 161 103 640 453 40 35.5 138 89 0.80 0.56 157 101 625 439 45 34.2 142 91 0.82 0.57 155 100 618 431 50 32.6 146 94 0.85 0.58 153 99 608 420 60 29.7 155 101 0.90 0.60 148 96 587 394 70 27.0 164 107 0.95 0.61 142 93 564 365 80 24.4 173 115 1.00 0.62 136 90 538 334 90 21.9 183 123 1.06 0.62 129 86 510 301 100 19.6 194 131 1.12 0.62 122 83 482 270 110 17.5 204 139 1.17 0.62 115 79 453 241 120 15.6 215 148 1.23 0.62 108 75 423 213 130 13.9 226 158 1.29 0.61 101 71 394 187 140 12.4 238 167 1.34 0.60 95 67 367 165 150 11.0 249 177 1.40 0.59 88 63 341 143 160 9.8 260 187 1.46 0.58 82 59 316 126 170 8.8 272 197 1.51 0.57 77 55 293 111 Inferred 30 40.6 76 37 0.40 0.67 99 49 355 602 40 35.5 82 40 0.43 0.73 94 46 335 572 45 32.9 85 42 0.44 0.76 90 44 322 548 50 30.1 89 44 0.46 0.78 86 42 307 517 60 24.1 97 49 0.51 0.83 75 38 271 440 70 18.4 107 54 0.57 0.88 63 32 230 359 80 13.6 118 61 0.63 0.94 52 27 190 282 90 10.2 129 69 0.71 0.98 42 22 158 219 100 7.6 141 76 0.79 1.01 34 19 132 170 110 5.8 153 83 0.87 1.05 28 15 111 133 120 4.4 164 91 0.98 1.05 23 13 95 102 130 3.5 175 98 1.08 1.05 19 11 82 80 140 2.7 186 105 1.18 1.07 16 9 71 65 150 2.2 195 110 1.29 1.08 14 8 63 53 160 1.8 205 116 1.40 1.08 12 7 55 42 170 1.4 216 122 1.53 1.09 10 6 47 34 Totals may not add correctly due to rounding. Mineral resources are contained within a pit shell generated using a silver equivalent price of $25 per ounce. Silver equivalent calculated using the formula: AgEq equals silver grams per tonne plus (lead percentage (i) 36.09) plus (zinc percentage (i) 36.09). Silver equivalent grades, and the base-case cut-off grade of 45 g/t AgEq, are based on metal prices of $19 per ounce silver and $1 per pound for lead and zinc. Recovery is assumed as 90 per cent silver equivalent. Mineral resources, which are not mineral reserves, do not have demonstrated economic viability. The quantity and grade of reported inferred resources are uncertain in nature, and there has been insufficient exploration to classify these inferred resources as indicated or measured, and it is uncertain if further exploration will result in upgrading them to an indicated or measured category.
Chinchillas geology overview
Golden Arrow holds a 100-per-cent interest in the Chinchillas project, located in the prolific Bolivian silver-zinc-tin belt, which extends into northern Argentina.
Chinchillas is a Tertiary-aged volcanic complex that has erupted through the Paleozoic basement schists. The resulting depression or basin is filled with volcanic tuffs and tuff breccias. Shallow disseminated silver, lead and zinc mineralization occurs in thick layers or mantos within the tuffs and breccias. A second style of silver, lead and zinc mineralization occurs within the fractures of the brecciated Ordivician basement pelite and sandstone schists beneath.
Silver-lead-zinc mineralization included within the resource model occurs in four units, which are differentiated based on host rock and geometry. Mineralization occurs in four main zones: to the west, the Silver Mantos area includes the Silver Mantos tuff-hosted zone and the Mantos Basement zone; to the east, the Socavon del Diablo area includes the Socavon tuff-hosted zone and the Socavon Basement zone, with the Socavon also including some mineralization hosted in dacite intrusions.
Methodology
The resource estimate was based on data from 276 diamond drill (core) holes containing 34,510 sample assays, with sample data dating to 2007. The majority of drilling on the property has been conducted by Golden Arrow since 2012. A total of 115 new drill holes were added to the database since the previous resource estimate was generated in August, 2014.
The mineral resource has been estimated in conformity with generally accepted CIM (Canadian Institute of Mining, Metallurgy and Petroleum) estimation of mineral resource and mineral reserve best practice guidelines (November, 2003) and reported according to the CIM definition standards for mineral resources and mineral reserves (May, 2014) in accordance with the Canadian Securities Administrators' (CSA) National Instrument 43-101 (NI 43-101).
Estimations are made from 3-D block models based on geostatistical applications using commercial mine-planning software (MineSight Version 10.6). The model uses a nominal block size of eight by eight by four metres (length by width by height).
The resource estimate has been generated from drill hole sample assay results and the interpretation of a geologic model, which relates to the spatial distribution of silver, lead and zinc. Interpolation characteristics were defined based on the geology, drill hole spacing and geostatistical analysis of the data. The resources were classified according to their proximity to sample data locations related to drill hole spacing.
Due to the polymetallic nature of the deposit, mineral resources were calculated on a silver equivalent basis (AgEq) using the formula: AgEq equals silver grams per tonne plus (lead percentage (i) 36.09) plus (zinc percentage (i) 36.09). Silver equivalents (AgEq) are calculated in model blocks, for use in the floating-cone algorithm, using the contributions of silver, lead and zinc and include adjustments for metallurgical recoveries. There are no adjustments for mining losses or dilution. Since this is a resource-limiting pit shell, and the fact that mineral resources must show reasonable prospects for eventual economic extraction, an elevated silver price of $25 per ounce is used to generate the pit shell.
The following technical and economic standards were used (all prices are in U.S. dollars):
- Metal prices for silver equivalent calculation: silver: $19 per ounce, lead: $1 per pound and zinc: $1 per pound;
- Metal price used to generate resource-limiting pit shell: silver equivalent $25 per ounce;
- Recoveries: 90 per cent silver equivalent;
- Mining cost: $2.45 per tonne;
- Process cost: $16 per tonne;
- General and administrative: $8.30 per tonne;
- Pit slope: 45 degrees.
Based on a $19-per-ounce silver price, the base cut-off grade for the resource is estimated to be 45 grams per tonne silver equivalent.
Quality assurance and quality control
The samples were collected and analyzed in accordance with industry standard practice. The majority of sample analyses was completed by Alex Stewart Assayers, in Mendoza, Argentina, an ISO 9001: 2008 and ISO 14001: 2004 certified laboratory. All samples were analyzed by method ICP-MA-39 (inductively coupled plasma mass spectrometry) that consists of a four-acid digestion followed by ICP-OES (inductively coupled plasma optical emission spectrometry) detection. Silver results greater than 200 grams per tonne silver were reanalyzed by fire assay with a gravimetric finish on 50-gram samples. Lead and zinc results greater than 10,000 parts per million were reanalyzed by a three-acid digestion and ICP-OES detection. A small percentage of samples was analyzed by ALS Minerals in Mendoza, Argentina. All samples were analyzed by method ME-ICP61 (modified multielement inductively coupled plasma) that consists of a four-acid digestion followed by ICP-OES detection. Silver results greater than 100 grams per tonne Ag were reanalyzed by fire assay with a gravimetric finish on 50-gram samples. Lead and zinc results greater than 10,000 ppm were reanalyzed by method OG62 (ore grade) that consists of a four-acid digestion and ICP-OES or AAS (atomic absorption spectroscopy) detection. A quality assurance/quality control (QA/QC) program following industry standard practices was incorporated with the assay program. It consisted of blank, duplicate and standard samples inserted into the drill core sample sequence sent to the laboratory for analysis.
Qualified persons
The mineral resource estimate and associated information in this news release were prepared under the direction of Robert Sim, PGeo, SIM Geological Inc. (SGI), with the assistance of Bruce Davis, FAusIMM, BD Resource Consulting Inc., and input from Brian McEwen, PGeol, vice-president, exploration and development, to the company. Based on education, work experience relevant to this style of mineralization and deposit type, and membership in a recognized professional organization, both Mr. Sim and Mr. Davis are independent qualified persons (QP), and Mr. McEwen is a non-independent QP, within the requirements of NI 43-101, for the purpose of the mineral resource estimate contained in this release.
The contents of the news release have been reviewed and approved by Mr. McEwen.