Silver Standard Resources has formed the Puna Operations joint venture (JV) with Golden Arrow Resources Corp. to develop the Chinchillas project. The JV will be comprised of Silver Standard’s Pirquitas property and Golden Arrow’s Chinchillas property. Silver Standard owns 75% and Golden Arrow owns 25% of the venture. Silver Standard is the joint venture operator and has made an option exercise payment of $13 million to Golden Arrow. This transaction was previously announced in March 31.
“Forming the joint venture is another important step toward extending the life of the Pirquitas operation,” said Paul Benson, president and CEO, Silver Standard. “By leveraging the assets of the two companies, the Chinchillas prefeasibility study outlines a project with a short pay-back period for a modest capital investment. We have also begun to evaluate the potential for a small tonnage Pirquitas underground operation to provide an additional, high-grade ore stream to the Pirquitas plant. Final permitting for Chinchillas is expected shortly, which will enable site development to commence. In addition to extending the life of Pirquitas and maximizing the value of our investment, the project will benefit the people and governments of Argentina through job creation, increased tax base and export revenues.”
The Chinchillas project is a silver-lead-zinc deposit, located in the Puna region of northwestern Argentina, in Jujuy province. Chinchillas is approximately 42 kilometers (km) by road from the Silver Standard’s Pirquitas property. The project is composed of three contiguous claims, totaling more than 2,000 hectares. A prefeasibility study evaluated the development and construction of an open-pit mine and supporting infrastructure, which will supply ore to the Pirquitas processing facilities over an eight-year active mining period.
The total capital required to construct the Chinchillas mine and associated infrastructure is $81 million. Subject to permitting, Silver Standard has approved a development decision on the project and expects construction at Chinchillas to begin during the third quarter of 2017, with ore delivery to the Pirquitas mill expected in the second half of 2018.