Golden Arrow Resources (GARWF: OTCBB)(GRG.v)
Maintain Buy up to: $0.85 USD $1.10 CAN
Position sizing: 3%
Golden Arrow shares traded down last week and down over the past month.
Golden Arrow is now firmly allied in a joint venture with Silver Standard Resources. The new entity is owned on a 75%/25% basis by Silver Standard and Golden Arrow, respectively. Silver Standard will be the operator, and both companies are pushing development. At current silver prices, the operation is profitable for Golden Arrow. At higher silver prices, which we expect to see, this deal is a “gold mine” (so to speak).
Golden Arrow management estimates that net revenue could reach over $1 billion with post-tax cash flow of $267 million, a 29.1% internal rate of return and a 3½-year payback period. These are compelling economics for a company that's valued at $40 million market cap. Moreover, that valuation assigns no value to the company's Antofalla project that could have equally promising results and long-term potential.
Golden Arrow’s share price is down from our entry point, but the company has passed a significant milestone with the Silver Standard deal. Looking ahead, I believe that we’ll begin to see a major turnaround as gold-silver prices move upward as Jim forecasts.
Golden Arrow offers significant upside in a rising environment for gold-silver. Maintain buy on GARWF up to $0.85 UDS, $1.10 CAN per share.
Shawn Perger
Communications
Grosso Group Member Companies
BLUE SKY URANIUM- BSK.V
ARGENTINA LITHIUM AND ENERGY- LIT.V
GOLDEN ARROW RESOURCES CORPORATION - GRG.V
Office: . . . . .604-687-1828
Mobile: . . .. 778-686-0135
Toll Free: . .1-800-901-0058
Skype: . . . . . perger10
