Joseph Grosso is Executive Chairman, CEO & President of a leading junior mining firm in Argentina, Golden Arrow Resources. He has successfully formed strategic alliances and negotiated with mining industry majors such as Barrick, Teck, Newmont, Viceroy (now Yamana Gold) and Vale S.A., and government officials at all levels. Mr. Grosso’s specialty is financing, negotiations, corporate and marketing strategy, and he was an early and passionate adopter of best practices in environmental protection and socio-economic development through mineral exploration. He is the founder and president of Grosso Group Management Ltd.
The Daily Bell: Give us some background on your company, Golden Arrow Resources.
Joseph Grosso: Golden Arrow is a Vancouver-based explorer and prospect generator focused on identifying, acquiring and advancing precious and base metal discoveries with the goal of defining world class deposits. I believe strongly in the mineral potential of Argentina and have focused our exploration efforts there since 1993 when the country opened to foreign investment. The Group’s success at mineral discovery, as well as its achievements in community and government relations has made it a highly regarded and trusted explorer throughout Argentina.
Golden Arrow’s current focus is on advancing its flagship Chinchillas Silver Project located in Jujuy moving rapidly towards production with our partner Silver Standard. The Chinchillas discovery is our third major discovery.
The Daily Bell: Tell us more about Chinchillas Silver.
Joseph Grosso: Golden Arrow holds a 100% interest in the Chinchillas project which hosts a resource of 100 million ounces of silver/155 million ounces silver equivalent (AgEq) in the Measured & Indicated categories and 44 million ounces silver /90 million ounces (AgEq) in the Inferred category. The resource estimate is part of the Chinchillas Project prefeasibility study, funded by Silver Standard, which is being undertaken to evaluate the combination of Silver Standard’s producing Pirquitas mine and our Chinchillas deposit, as announced October 1st, 2015.
The Daily Bell: Your project is increasingly well known throughout the industry, certainly in the Americas. Is being in Argentina an advantage these days?
Joseph Grosso: In terms of developing its natural resources sector, Argentina has a great deal of untapped potential. Argentina is vastly underexplored and remains on of the world’s last frontiers for making mining discoveries. The country is blessed with deposits of gold, silver, molybdenum, cadmium, lead, zinc, copper, lithium, iron ore, manganese, uranium and petroleum.
The Daily Bell: Has the political situation improved?
Joseph Grosso: The newly elected government of President Mauricio Macri, has announced very pro-business and mining friendly policies making investment in Argentina quite positive.
Macri, who took office in December has moved quickly to liberalize market conditions and normalize the country’s economy. In only months, the Argentine government has relaxed exchange controls and let the peso float, eliminated export taxes on mining products and lifted restrictions on the repatriation on earnings and dividends.
The Daily Bell: Sounds like Argentina is moving in the right direction. Tell us more about the background of Golden Arrow.
Joseph Grosso: During a family visit to Argentina in 1993, Argentina’s undeveloped geology east of Chile was the great motivator for me to make a career change into the mining industry. I became a mining pioneer in Argentina and thereafter discovered the world‑class Gualcamayo project, now in production by Yamana Gold. With my team we made additional discoveries including the world‑class Navidad silver deposit now held by Pan American Silver and now another important discovery with the Chinchillas silver project.
The Daily Bell: You received Argentina’s ‘Mining Man of the Year’ award in 2005 for the Group’s second discovery? Tell us about that.
Joseph Grosso: I received “Argentina’s Mining Man of the Year” award in 2005; in 2013 I received an “Award of Distinction” for the Grosso Group’s long track record, conviction and support of the mining industry in Argentina. In 2014 I received, during the Argentina Mining conference, the “Prominent International Businessman” award.
The Company has received an award naming it “Exploration Company of the Year” in Argentina. The award was presented to Golden Arrow on December 1, 2015 by Fundamin and the Panorama Minero publication.
“I am very proud to have our Company be the recipient of this distinguished award.” stated Joseph Grosso, President & CEO. “This award is a testament to our talented team and Company success achieved through diligence and long term perseverance. We have an uninterrupted 23 year presence in Argentina, as we are firm believers that this country is heading on a new course to quickly becoming a preferred mining destination for new mineral discoveries.”
The Daily Bell: Back to Silver Standard. Please give us more insights into your agreement.
Joseph Grosso: Silver Standard has a minimum commitment of total pre-development expenditures estimated at $12.6 million. Silver Standard will also make payments in cash, of up to C$2 million to Golden Arrow upon completion of certain milestones during the Preliminary Period.
The Daily Bell: And there’s a partnership involved ….
Joseph Grosso: Silver Standard and Golden Arrow will combine the Pirquitas Mine and Chinchillas deposit into a new company that will be owned on a 75%:25% basis. GRG will also accrue a 25% interest in Pirquitas mine’s earnings, backdated to October 1, 2015.
The Daily Bell: And Silver Standard itself?
Joseph Grosso: The company is big business. The Pirquitas mine in Argentina is one of the largest primary silver mines in the world. However, in 2016 the mine is nearing the end of its lifecycle and will have to close if they do not sign an agreement with us.
The Daily Bell: This is why it’s seen as such a significant partnership.
Joseph Grosso: Silver Standard is generally seen as a world-class operation. It owns and operates the Marigold mine in Nevada, U.S., the Pirquitas mine in Argentina and the Seabee Gold Operation in Saskatchewan, Canada. Its reputation has been built over a long time and with considerable success. It has an enviable balance sheet with a strong cash position and investments in marketable securities.
The Daily Bell: How are the pre-development studies working out regarding Chinchillas?
Joseph Grosso: We don’t foresee any complications as the project is simple and straight forward. Quit frankly they seem excited to have this opportunity to continue and extend the life of their mine into the next decade and beyond. The business combination is a win-win for all shareholders on both sides.
[Ed. Note: Here is a WEBCAST that explains their position.]
Also, there is a sense of urgency on Silver Standard’s part. They want a smooth transition without stoppages. They just renegotiated labor contracts as well.
The Daily Bell: Does the open pit mining program at Pirquitas fit into the larger deal?
Joseph Grosso: Yes. Once the deal is completed, as a 25% owner of the merged Pirquitas-Chinchillas operation, Golden Arrow will receive 25% of cash flow from Pirquitas for the remainder of its mine life. This is retroactive to October 1, 2015. .
The Daily Bell: Would you just be mining silver? Zinc too?
Joseph Grosso: From Chinchillas there would be a lead and silver concentrate and a zinc concentrate.
The Daily Bell: Your near-term objective is to become cash flow positive. Is that feasible if the Chinchillas project takes place?
Joseph Grosso: Yes, as stated, Golden Arrow’s 25% participation in the Chinchillas/Pirquitas combined operation will results in a 25% participation in Pirquitas’ current cash flow upon signing, retroactive to October 1, 2015, and then 25% of cash flow for the life of the combined mine.
The Daily Bell: Tell us about some of your other discoveries.
Joseph Grosso: The Gualcamayo Gold deposit, located in San Juan province, was discovered by our team. It is now owned by Yamana, and they are operating an open pit, and underground, heap leach operation encompassing three substantial zones of gold mineralization. In 2015 Yamana reported production of over 180,000 ounces of gold from Gualcamayo, with nearly a million ounces remaining in proven and probable reserves and four and a half million ounces of gold in measured and indicated resources.
The Navidad deposit, now owned by Pan American Silver is one of largest silver discoveries in the world and is currently in the development stage.
The Daily Bell: Let’s discuss silver more generally. Obviously you must be hopeful about the demand for silver moving forward? What is special about silver as compared to gold?
Joseph Grosso: We’ve all heard it said, there are over 10,000 uses of silver in industrial applications. That beats gold by a wide margin. With silver’s unique features of high thermal and electrical conductivity, it will continue to remain king in industrial and electrical applications.
Solar panels often contain up to 20g of silver each. Additionally, silver is also used as a store of value such as in coins & investment Here’s a good list of uses for silver. With the growing demand and mine production slowing down, the fundamentals for silver are intact for higher silver prices.
The Daily Bell: Give our readers some insight into the famous ratio of the value of silver versus gold. Why is that important?
Joseph Grosso: Keith Neumeyer, CEO of First Majestic Silver and Chairman First Mining Finance, has stated the gold/silver ratio is so far out balance that when it begins to correct that it will be breathtaking in the way it unfolds. Imagine a 8:1 gold/silver ratio price? Currently, the ratio is 75:1. Meaning the price of gold is 75 times higher than silver even though silver is mined at a 10:1 ratio to gold. Keith has been calling for $100 and he says $1000 silver is not out of the questions.
The Daily Bell: As the head of a silver company do you have strong feelings about silver as a form of money? Do you see silver – and gold, too – as important from a philosophical standpoint?
Joseph Grosso: Silver has the six aspects of money in a classical sense. It is divisible, durable, convenient, and consistent, has utility value, and cannot be created by fiat. Silver is used as a medium of exchange and as a store of value. Silver has been used in more places and for longer periods of time for money than gold or paper notes. It was Milton Friedman who stated, “The major monetary metal in history is silver, not gold.” Yes silver is a currency. Silver has always been a currency and it still a currency.
The Daily Bell: Do you differentiate between fiat paper money and precious metals? Would you like to see a return to private money?
Joseph Grosso: Yes I have more confidence in gold and silver as money. In fact, not long ago the true foundation for U.S. circulating currency was not gold but silver. The dollar value of gold coins was ultimately pegged to silver, and one ounce of gold was therefore valued at about 16 ounces of silver, or $20.
Given the current environment of stagnant growth and monetary expansion, there could be a monitory break down and a move back to a gold and silver backed paper currency. Some feel China is going in that direction.
The Daily Bell: Would you suggest that people purchase some silver and gold in physical forms to keep nearby in case of economic emergencies?
Joseph Grosso: Yes. It’s obvious the debt-based economy is not working and central banks that created the current disaster are at loss, their tool box is empty.
The Daily Bell: Do you have any feelings about derivatives? It turns out the nominal derivatives market is over one thousand trillion. Doesn’t this put the world’s fiat economy as risk? How does silver fit into this larger picture?
Joseph Grosso: That is an incomprehensible number and following a catastrophic breakdown, the aftermath is incomprehensible as well. Silver, meanwhile, will continue to be a dependable store of value and insurance like gold.
The Daily Bell: From a purely investment standpoint, does it make sense to invest in some junior miners based on the idea that at this point in the business cycle they will inevitably accrue in value?
Joseph Grosso: Investing in the best of breed in the mining sector is the key. Historically, quality juniors are a hedge against economic downturns. Both gold and silver generally trade inversely to the dollar so if you feel the USD is overvalued than yes gold and silver is your bet.
The Daily Bell: Is this like the 1970s all over again, when gold went all the way to $800 and silver to $50?
Joseph Grosso: It feels that way. Silver and gold never really lose value but in a fiat economy, certain times are better than others to buy or sell. George Soros just started buying gold and gold miners for the same reasons that people are buying silver. Carl Icahn, too. And others. These individuals are savvy and wealthy. They’re afraid of a significant dollar breakdown and stock market collapses. Soros has begun shorting stocks.
The Daily Bell: Yes, we’ve heard about that. The smart money is moving into metals. Wasn’t silver known as the people’s money at one time?
Joseph Grosso: Poor man’s gold is the term.
The Daily Bell: Well, you’ve explained a lot. What’s your biggest concern looking ahead for your company and its projects?
Joseph Grosso: We are in an excellent position where Silver Standard needs us and could even move forward without them. One way or another Golden Arrow Resources is becoming a producing silver company. That’s very exciting for us and our shareholders.
The Daily Bell: What is a viable – if optimistic – outcome?
Joseph Grosso: We do the deal with Silver Standard, which is a quick way to becoming a self-sustained mining and exploration company with a vast portfolio and in country with vast potential and a team to find more “Chinchillas”.
The Daily Bell: So someone who wants to invest with you is betting on a continued market interest in silver?
Joseph Grosso: They’re betting along with George Soros and others that the business cycle has turned and that metals are only going to increase in value relative to the dollar. And remember, there are a great many more gold companies out there than silver miners, but some would argue because of the silver-to-gold ratio that silver has a larger upside.
The Daily Bell: In other words, a truly diversified investment portfolio might include silver miners as well as gold.
Joseph Grosso: Yes, it depends on what you want to accomplish. The safest way to own metals is to take physical delivery. But in the 1970s and before, investors who were willing to stretch the risk-reward boundaries may have received extraordinary payouts. In a hot market, metals stocks can be bid up to dizzying heights. We’ve had to wait about 30 years to get to this point in the metals markets. But now is the time to take a chance if you see things the way Soros does.
The Daily Bell: By a chance, you mean moving into stocks as well as physical.
Joseph Grosso: When it comes to miners, even now, a little goes a long way. You don’t have to bet the farm.
The Daily Bell: They say part of what makes a junior valuable is its promotion. Its profile -whether the market knows it or not.
Joseph Grosso: That’s absolutely true. I’d like to think we have both qualities inherently. We have a terrific opportunity and we have a very high profile, certainly in Argentina.
The Daily Bell: the risk-reward profile seems favorable as well.
Joseph Grosso: I don’t know if it’s favorable. However, the bet our newer shareholders are making is on the progress of the agreement with Silver Standard. That may give the stock a considerable upside. It’s a little bit like having built-in leverage, certainly if it works out.
The Daily Bell: Any other comments or thoughts?
Joseph Grosso: Please give Shawn Perger a call with your questions and he will insure your readers get everything they need to make an informed decision if they’re considering expanding their portfolio to include silver and silver miners.
Shawn: 1-800-901-0058 or 778-686-0135.
The Daily Bell: Thanks for your time.
Joseph Grosso: Thank you for your interest.
GOLDEN ARROW RESOURCES has recently become a sponsor of The Daily Bell under a new marketing program. The company welcomes your interest and support. Over time, we will be presenting further coverage of Golden Arrow and its promising developments. Please consult DB’s disclaimer before making investment decisions. This is not an endorsement.
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