Golden Arrow holds an option to earn a 100% interest in the 5,000ha Purulla copper-moly project in Catamarca Province. The project is located within a prominent NW-SE trending structural corridor that includes the Bajo de la Alumbrera porphyry copper-gold-moly mine 150km to the southeast and the El Salvador porphyry copper-moly mine in Chile 160km to the northwest.

Option Agreement

The Company recently announced (see September 9, 2010 News Release) it has entered into an option agreement Vale Exploracion Argentina, S.A. ("VEASA"), a wholly-owned subsidiary of Vale S.A. ("Vale"), on its Purulla copper-moly porphyry project in Catamarca Province and its Mogote copper-gold-silver porphyry/epithermal project in Argentina, and whereby Vale can earn an initial 70% interest in the projects by completing $US 6.8 million in exploration expenditures and making $US 2.3 million in cash payments to Golden Arrow over 3 years, in addition to making underlying vendor payments of $US 1.025 million with regard to the Purulla project. Vale has the option to increase its interest to 85% by funding and delivering a Feasibility Study within a further 3 year period. Subsequently Vale will have the option for a further 2 years to purchase Golden Arrow's remaining 15% interest in the project for fair market value. Golden Arrow will retain a 1.5% Net Smelter Royalty (NSR) of which Vale will have the option to purchase 0.5% for $US 7.0 million. Vale will be the operator during the term of the option.

Geology

The Company believes that a significant untested porphyry Cu-Mo target has been identified at Purulla which covers a 1,000m by 300m zone of leached quartz-iron oxide stockwork with intense argillic alteration and anomalous Mo-Cu within a broader zone of alteration. This alteration zonation, along with IP chargeability anomalies identified at depth, are consistent with the presence of a porphyry Cu-Mo system with potential for a significant high-grade supergene-enriched Cu zone at depth. The property is drill-ready with permits in place.

Exploration History

• 2007 - 2009. Third party completes sampling, geological mapping and geophysical surveying. Property returned to vendor under an option agreement during 2009 financial crisis.
• 2009 Golden Arrow acquires the rights of Purulla.
• 2010 Golden Arrow options the project to Vale S.A.

For further details check the project technical summary.

Exploration Plans

Upon conclusion of the Mogote 2010 - 2011 program, the crew will rotate to the Purulla project which can be worked on a year-round basis. Vale plans to carry out a continuous exploration program on Mogote that commenced in November 2010 and will carry on until approximately May 2011. The scheduled work will include an evaluation of geological mapping carried out to date on the project, mapping of areas not currently mapped and detailed mapping of primary zones of interest, expanded surface geochemical sampling, bulldozer trenching and road construction, ground magnetic and IP geophysical surveying of target areas and potentially 1,200-1,500m of diamond drilling in 3-5 holes prior to the end of the Andean exploration season. A geological team from Vale is currently on site at Mogote working on geological mapping and sampling.

Please see the December 15, 2010 News Release for more information.