Talk:Dragonarms, Winchisker/@comment-14586397-20161005221340/@comment-25004901-20161005221833

As the card says "When your Neodragon deals damage...", and not "When your Neodragon attacks and deals damage...", it will proc from any damage from the Neodragon, so long as it is FROM the Neodragon itself, and not from effects such as Dragonarms, Edge Shooter. Meaning cards such as Star Dragon of Bonds, Jackknife, will proc it's ability just from it's effect. This also means penetrate will proc it, as it is still considered damage from the Neodragon, regardless of it being effect damage.

Short answer: Yes, it will work with penetrate.