GRG Surpasses Key Breakout Point
One week ago, NIA announced Golden Arrow Resources (TSXV: GRG) at $0.91 per share as its new #1 favorite silver stock suggestion. Late Friday afternoon, GRG surpassed its key breakout point of $1.20 per share and finished last week at a new all-time high of $1.23 per share! GRG currently has a 14-day relative strength index (RSI) of 69.64 and probably won't face any major resistance until its RSI rises into the 80-92 range.
Later this year, Silver Standard Resources (SSRI) will announce if they are proceeding with a major joint venture agreement that will combine SSRI's Pirquitas silver mine with GRG's Chinchillas silver project. SSRI's Pirquitas is Argentina's #1 producing silver mine with over 10 million oz of silver produced annually, but it has a limited mine life. SSRI is currently focused on expanding the mine life of Pirquitas – and GRG's nearby Chinchillas silver project contains 155 million measured/indicated silver equivalent oz!
If SSRI elects to proceed, GRG will receive a 25% stake in the Pirquitas/Chinchillas combination – and SSRI will use GRG's Chinchillas to supply feed to their Pirquitas plant. SSRI finished last week with an enterprise value of $1.03 billion vs. GRG's current market cap at $1.23 of only $94.71 million. NIA estimates that half of SSRI's enterprise value is for Pirquitas – valuing it at USD$515 million or CAD$672.18 million. This gives GRG's Chinchillas an implied valuation of CAD$224.06 million, which divided by GRG's 77 million shares outstanding – would value GRG at $2.91 per share, without giving GRG any additional value for its other silver projects in Argentina.
NIA strongly believes that SSRI is very likely to proceed. SSRI recently acquired 4.285 million shares of GRG – giving them a 5.6% stake in the company. SSRI's CEO recently said that outside of Chinchillas, they have found no other opportunities that would expand the mine life of Pirquitas.
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. NIA has been compensated by GRG $50,000 cash for a two-month investor relations contract. Never make investment decisions based on anything NIA says. This message is meant for informational and educational purposes only and does not provide investment advice.