Golden Arrow: The best way to speculate in Silver

Golden Arrow (GARWF) is a precious metals exploration company, focused in Argentina. Their primary asset is the Chincillas deposit, which is held in partnership with Silver Standard Resources (SSRI) and is expected to begin milling ore in Q2 2018. Golden Arrow's stock was up signifiantly in 2016, but has since declined by over 50%. Now is the time to purchase the stock before it's next leg up. It appears the stock may have bottomed in the last week or two and has begun an uptrend (tracking the fate of silver, which is an excellent investment at this time), time to get on board.

Joseph Grosso is the man behind Golden Arrow. He has a long track record of discovery in the natural resource sector and a long history in Argentina and has retained a presence in Argentina through very difficult times. If an investor wishes to participate in mineral exploration and in the new frontier of investment in Argentina, Golden Arrow is an ideal vehicle to participate. The election of Macri, a more pro-business politician, has ushered in a new era of foreign investment into Argentina. All countries pose unique risks, but Argentina has long been discounted by foreign investors due to the socialist tendencies of the Argentina politicians, thus the election of Macri presents a renewed opportunity to invest in Argentina.

The agreement with Silver Standard regarding the Chincillas deposit gives Golden Arrow a retained 25% interest in the deposit. There is very little funding required by Golden Arrow and their focus at this time will be to expand the exploration footprint in the region to find more deposits similar to Chincillas. The silver production next year will provide Golden Arrow a healthy stream of revenue to grow their business from a simple explorer to a silver mining company with multiple prospective exploration projects throughout Argentina. Some of these prospects will be explored and developed in partnership with Silver Standard, others will be owned solely by Golden Arrow. The future is bright for Golden Arrow Resources!

Golden Arrow has plenty of money to pay for their portion of the development project. According to recent statements published on Sedar.com 'Golden Arrow’s 25% share of average annual production will therefore be equal to 2.1M ozs of silver equivalent, representing total attributable after tax undiscounted cash flow of US$66.75 million, according to the recently published prefeasibility study' and 'In fact, Golden Arrow has already received an option exercise payment of C$17.8 million from Silver Standard, which represented 25% of the mine earnings generated by Pirquitas less certain expenditures incurred for the period from October 1, 2015 to May 30, 2017. The Company is in a favourable financial position to fund our 25% share of the projected capital expenditures for POI to develop the Chinchillas project.'

This demonstrates the company has a healthy balance sheet and limited downside risk as the Pirquitas portion of the project is already generating income. The valuation of Golden Arrow is phenomenal when you consider their undiscounted cash flow will be US$66.75 million and their current market capitalization is $62m Canadian. Silver Standard is an experienced mine operator and has been mining in the area for years and Golden Arrow is now included in the income flow and will have a significant re-valuation upwards as the market accepts the massive amount of profits Golden Arrow will soon be generating. Pirquitas ore is currently being processed and Chincillas ore will be mined in the coming year of 2018. The catalyst that will boost Golden Arrow will be the combination of earnings from these ore bodies and an increase in the silver price, which is already underway and will gain traction over the coming 6-18 months.

The final component that encourages me to invest in Golden Arrow at this time is the significant ownership position held by the management and insiders. In their presentation, Golden Arrow claims that insiders/family/friends own ~50% of the company. This is the type of position insiders will retain when they believe the company has significant upside potential. If insiders own less than 10% of a company, I begin to question their commitment to the future of the company. At ~50% insider ownership, the commitment is clear, and I'm getting on board!

In summary, now is a good time to invest in silver and an interesting time to invest in Argentina. Golden Arrow has a silver deposit in development (with a experienced mining company, Silver Standard) in Argentina. The stock has sold off significantly over the last year and appears to have recently hit a 'low', providing a good entry point. Insiders of Golden Arrow own a significant portion of the company, indicating their belief that share prices will increase over the foreseeable future. It's a good time to own shares of Golden Arrow.