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Re: Press Releases - Thursday, May 28, 2009
ARIAN SILVER'S MD&A AND FINANCIAL RESULTS
FOR THE THREE MONTHS
ENDED 31 MARCH 2009
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London, England - Arian Silver Corporation ('Arian' or the 'Company')
(TSX VENTURE:AGQ) (AIM:AGQ) (PLUS:AGQ) (FRANKFURT:I3A) today announced
the release of its Management's Discussion and Analysis ("MD&A")
and
unaudited Financial Statements for the three months ended 31 March,
2009 ("Financials"). Extracts from the MD&A and unaudited results
are
reported below.
Arian's Chief Executive Officer, Jim Williams, commented today, "During
the period under review we have continued to defer all significant
exploration activities in Mexico pending the receipt of new funding. We
currently anticipate that funding from the transaction with Grafton
will be forthcoming in the near future which should enable us to
implement our planned work programmes at our San Jose project."
The MD&A and Financials are available at SEDAR at www.sedar.com or on
the Company's website at www.ariansilver.com. These documents can also
be obtained on application to the Company. The following information
has been extracted from the MD&A and Financials. All amounts are
expressed in US dollars unless otherwise stated. The financial
information in this announcement does not constitute full statutory
accounts.
HIGHLIGHTS
Financial
.. As at 31 March, 2009, the Company had total assets of $8.2 million,
including intangible assets of $6.2 million, available for sales assets
of $972,000, receivables of $646,000 and cash of $247,000.
.. Expenditure on projects in Mexico and on other assets in Q1 was
$449,000.
.. The consolidated pre-tax loss for Q1 was $481,000.
Post 31 March, 2009
.. The Company completed the share exchange transaction with Grafton
Resource Investments Ltd ("Grafton") pursuant to which the Company
received in total 128,591 Grafton shares.
.. Placing of the Grafton shares to raise new funding for the Company
anticipated to take place in the near future.
.. Grafton made a further advance of $250,000 for working capital
purposes pending the receipt of funding from the placing of the Grafton
shares.
Operations
.. Dewatering of the San Jose mine workings continued.
.. A.C.A Howe International Limited was commissioned to carry out a
Canadian National Instrument 43-101 ("NI 43-101") independent
evaluation of the economics for contract mining and milling at San
Jose.
.. Option agreement renegotiated in respect of San Jose to give Arian a
66.67% controlling interest in the project, subject to completion of
legal and registration formalities. Arian has the right to take 100%
ownership interest on payment of final instalment of $500,000 due in
December 2009.
OVERALL FINANCIAL PERFORMANCE
For the quarter ended 31 March, 2009, the Company incurred a loss of
$0.5 million (2008 - $0.9 million) which loss includes expensing the
fair value of options vesting of $16,000 (2008 - $60,000), and other
administrative expenses of $0.5 million (2008 - $0.8 million). There
was no income other than interest of $1,000 (2008 - $18,000) from short
term cash deposits. The Company continued to incur costs in relation to
its Mexican operations and in respect of corporate overheads.
As at 31 March, 2009, intangible assets amounted to $6.2 million (31
December, 2008 - $6.0 million). These costs arise in respect of
deferred exploration and evaluation costs related to the Mexican
projects.
During the quarter the Company issued 26,097,230 common shares to
Grafton in exchange for 26,322 participating shares in Grafton. The
value of the Grafton shares is shown as an available for sale asset of
$972,000 as it is intended to dispose of this investment to generate
funding for the Company.
LIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN
The Company's management is continuing to work with the principals of
Grafton and their associates on the planned disposal of the 128,591
Grafton participating shares (the "Grafton Shares"). The proposal is
to
place the Grafton Shares for cash with third parties in order to raise
working capital finance for the Company. It is anticipated that the
placing of the Grafton Shares will take place in the near future
following the listing of Grafton on the Dublin Stock Exchange. The
principals of Grafton and their associates have experience in providing
funding for junior mining and exploration companies using this type of
transaction. The Company is, however, reliant on Grafton being able to
replicate this experience to provide the significant new funding sought
by the Company by this transaction and on a timely basis.
In May Grafton provided a further advance of $250,000 to the Company
for working capital purposes. This brought the total advanced to the
Company by Grafton to $550,000. These advances are interest free and
are intended to be repaid from the proceeds of sale of the Grafton
Shares.
The Company has accumulated IVA (sales tax) on past exploration
expenditure in Mexico which amounted to $556,000 at 31 March, 2009. IVA
is generally repaid in instalments by the Mexican tax authorities.
However, there is no certainty as to the timing of future repayments of
this IVA receivable.
REVIEW OF OPERATIONS
The Company owns, or has options to purchase, 39 mineral concessions in
Mexico totaling 21,691 hectares. The Company's main projects are the
Calicanto Group and San Jose, in Zacatecas State, and the Tepal project
in Michoac�n State.
During the period under review exploration operations in respect of its
three principal projects in Mexico were largely deferred in order to
preserve the Company's cash resources pending receipt of new financing
planned from the transaction with Grafton.
Qualified Person
Mr. Jim Williams. Eur Ing, Eur Geol, BSc, MSc, D.I.C., FIMMM, the Chief
Executive Officer of Arian, a "Qualified Person" as defined in the
AIM
guidelines of the London Stock Exchange, and a "Qualified Person" as
such term is defined in NI 43-101 has reviewed and approved the
technical information in this document other than the mineral resource
estimates.
San Jose Project, Ojocaliente District, Zacatecas State
During the period under review the dewatering of the San Jose mine
workings was ongoing and some of the previously inaccessible workings
have been made safe to enter. Within these recently accessible workings
it is planned to initiate a sampling programme together with a
continuation of the surface drilling programme, subject to financing.
In addition, the Company recommenced the submission of its stockpiled
drill and channel samples for assay.
A.C.A. Howe International Limited has been commissioned to carry out an
NI 43-101 independent evaluation of the economics for contract mining
and custom milling following an in-house scoping study which confirmed
the potential for near term contract mining of certain near surface
resource blocks.
The current NI 43-101 Resources at San Jose are set out below:
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Resource
Grade
Contained Metal
Category Tonnes
Ag Pb
Zn Ag
Pb Zn
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g/t %
% (Moz)
(t) (t)
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Indicated 2,196,000 127.7 0.51
0.88 9.02 11,200 19,200
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Inferred 11,190,000 93.8 0.39
0.83 33.76 43,400 93,200
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1. Geological characteristics and +30 ppm grade envelopes used to
define resource volumes
2. The mineral resource estimates are in accordance with CIM and JORC
standards
3. The effective date of the mineral resource estimates is August 15,
2008
4. The estimates are based on geostatistical data assessment and
computerised IDW3, Ag grade wireframe restricted, linear block
modeling.
Tepal Project; Michoac�n State
The current NI 43-101 Resources at Tepal are set out below:
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Grade
Contained Metal
Tonnes
Au Cu
AuEq
Au Cu
Au Eq
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('000) g/t
% g/t (oz x 000's) (Mlbs) (oz x
000's)
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Indicated 24,995 0.54
0.27
1.2 440
147.1
938
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Inferred 54,964 0.41
0.22
0.9 720
265.4
1,612
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1 Au = Gold. Cu = Copper. AuEq = Gold Equivalent
2 Arian has an exclusive option agreement to purchase 100% of the
Tepal properties
3 Gold Equivalent Grades (g/t) were calculated using metal prices of
US$600/oz Au, US$2/lb Cu and assuming 100% recoveries
4 The mineral resource estimates are in accordance with CIM and JORC
standards
5 The effective date of the mineral resource estimates is September 24,
2008
6 The estimates are based on geostatistical data assessment and
computerised IDW3, 0.18 g/t Au grade wireframe envelope restricted,
linear block modeling
The "Qualified Person", as such term is defined in NI 43-101, who
prepared the above mineral resource estimates in respect of the San
Jose Project and the Tepal Project, is Mr. Galen White. Mr. White was
at the time these estimates were prepared an employee of A.C.A. Howe
International Limited.
For further information please contact:
Arian Silver Corporation
Carlyle House
235-237 Vauxhall Bridge Road
London SW1V 1EJ
England
Jim Williams - CEO
(London) +44 (0)20 7963 8670 / email: jwilliams@ariansilver.com
Graham Potts -- CFO & Corporate Secretary
(London) +44 (0)20 7963 8670 / email: gpotts@ariansilver.com
Bishopsgate Communications Limited
Nick Rome
(London) +44 (0)20 7562 3350 / email:
nick.rome@bishopsgatecommunications.com
Vicarage Capital Limited
Martin Wood
(London) +44 (0)20 7060 1303 / email: martin@vicaragecapital.com
Grant Thornton UK LLP
Gerry Beaney
(London) +44 (0)20 7385 5100 / email: gerry.d.beaney@gtuk.com
CHF Investor Relations
Alison Tullis
(Canada) +1 416 868 1079 Ext. 233 / email: alison@chfir.com
About the Company
Arian Silver Corporation is a silver exploration and development
company and is listed on London's AIM; trades on London's "PLUS"
market; is listed on Toronto's TSX Venture Exchange and on the
Frankfurt Stock Exchange. Arian Silver is active in Mexico, the world's
second largest silver producing country. The Company's main projects
are the Calicanto and San Jose projects in Zacatecas State and the
Tepal project in Michoac�n State. Part of Arian Silver's
forward-looking strategy lies in the envisaged use of large scale
mechanized mining techniques over wider mineralized structures, which
reduces the overall unit operating cost of metals, and to build up NI
43-101 compliant resources.
Further information can be found by visiting Arian's website:
www.ariansilver.com or the Company's publicly available records at
www.sedar.com.
No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained in this release.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE
SERVICES NOR FOR DISSEMINATION IN THE UNITED STATES
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities of the Company in
the United Sates. The securities of the Company have not been and will
not be registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act") or any state securities laws and
may not be offered or sold within the United States or to U.S. persons
unless registered under the U.S. Securities Act and applicable state
securities laws or an exemption from such registration is available.
Forward Looking Statements
This press release contains certain "forward-looking
statements". All
statements, other than statements of historical fact, that address
activities, events or developments that the Company believes, expects
or anticipates will or may occur in the future (including, without
limitation, funding from the disposal of the Grafton shares or from
other sources, the mineral resource estimates contained in this press
release, statements regarding exploration results, potential
mineralisation, potential mineral resources, future production and the
Company's exploration and development plans and objectives) are
forward-looking statements. These forward-looking statements reflect
the current expectations or beliefs of the Company based on information
currently available to the Company. Forward-looking statements are
subject to a number of risks and uncertainties that may cause the
actual results of the Company to differ materially from those discussed
in the forward-looking statements, and even if such actual results are
realised or substantially realised, there can be no assurance that they
will have the expected consequences to, or effects on the Company.
Factors that could cause actual results or events to differ materially
from current expectations include, among other things, failure to
establish estimated mineral reserves, the possibility that future
exploration results will not be consistent with the Company's
expectations, uncertainties relating to the availability and costs of
financing needed in the future, the possibility that the placing of the
Grafton shares held by the Company will not be sold on a timely basis
and/or that such placement will not generate sufficient funds for the
Company to meet its ongoing obligations, changes in commodity prices,
changes in equity markets, political developments in Mexico, changes to
regulations affecting the Company's activities, delays in obtaining or
failures to obtain required regulatory approvals, the uncertainties
involved in interpreting exploration results and other geological data,
and the other risks involved in the mineral exploration and development
industry. Any forward-looking statement speaks only as of the date on
which it is made and, except as may be required by applicable
securities laws, the Company disclaims any intent or obligation to
update any forward-looking statement, whether as a result of new
information, future events or results or otherwise. Although the
Company believes that the assumptions inherent in the forward-looking
statements are reasonable, forward-looking statements are not
guarantees of future performance and accordingly undue reliance should
not be put on such statements due to the inherent uncertainty therein.
The mineral resource figures disclosed in this press release are
estimates and no assurances can be given that the indicated levels of
minerals will be produced. Such estimates are expressions of judgment
based on knowledge, mining experience, analysis of drilling results and
industry practices. Valid estimates made at a given time may
significantly change when new information becomes available. While the
Company believes that the resource estimates included in this press
release are well established, by their nature resource estimates are
imprecise and depend, to a certain extent, upon statistical inferences,
which may ultimately prove unreliable. If such estimates are
inaccurate or are reduced in the future, this could have a material
adverse impact on the Company.
Mineral resources are not mineral reserves and do not have demonstrated
economic viability. There is no certainty that mineral resources can
be upgraded to mineral reserves through continued exploration.
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Copyright (c) 2009 ARIAN SILVER CORPORATION (AGQ) All rights reserved.
For more information visit our website at http://www.ariansilver.com/
or send mailto:info@ariansilver.com
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