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 Tue Nov 27, 2012
Arian Silver Signs Definitive Contract for New 500 tpd Processing Plant

 London, England, Arian Silver Corporation ("Arian" or the "Company") (TSXV: AGQ) (AIM: AGQ) (FRANKFURT: I3A), a silver exploration, development and production company with a focus on projects in the silver belt of Mexico, is pleased to announce the signing of a definitive contract for exclusive use of a newly refurbished processing plant located close to the City of Zacatecas ("the Plant"). The Plant has a rated capacity of 500 tonnes per day ("tpd") and is expected to become operational during December.

Key points:
  • Definitive contract for exclusive use of a newly refurbished 500 tpd Plant;
  • Anticipates significantly improved recoveries of silver, as well as revenue from lead and zinc;
  • Initial milling contract for 90,000 tonnes of Run Of Mine ("ROM") ore at a fixed cost of US$38 per tonne;
  • Well placed to resume full scale contract mining to feed the new mill; and
  • Arian remains focussed on developing the resources outlined at San Josť for a larger scale and more efficient silver, lead and zinc operation.
Once the mill is operational, Arian will recommence delivery of the ROM ore from its 100% owned San José mine located approximately 50 kilometres away. Initially ROM ore will be sourced from surface stockpiles built up since the suspension of the previous toll milling operation; and thereafter from the ongoing contract mining.

The initial milling contract is for 90,000 tonnes of ROM ore at a fixed processing cost of US$38 per tonne which includes all maintenance and repair costs. This equates to approximately six months of production at 500 tpd and the contract is renewable. Arian will provide full-time supervisory staff and a 2% net smelter royalty on concentrate value is payable under the terms of the San José concession purchase.

Arian's Chief Executive Officer, Jim Williams, commented: "We expect to achieve significantly improved recoveries of silver from this new toll milling operation as well as the potential for additional recoveries from lead and zinc previously not available to us. It will also provide a useful stepping stone towards the construction of a Company-owned processing plant on site at San José. While working to finalise the toll milling agreement, our mining and geological teams have continued to develop the mine and update the mining plan thus ensuring we are well placed to resume full scale contract mining to feed the new mill."

As previously stated, Arian remains focussed on developing the resources outlined at San José for a larger scale and more efficient silver, lead and zinc operation. Preliminary metallurgical results announced in October were encouraging and discussions have commenced on the possible acquisition of a Company-owned processing plant to support the flow sheet indicated by this metallurgical testing together with a financing method to best serve shareholders' interests. Currently, financial models for an expanded operation indicate positive returns on investment over relatively short time frames with silver prices significantly discounted from current values.

For further information please contact:

Arian Silver Corporation
Berkeley Square House
Berkeley Square
London
W1J 6BD
England

OR

Arian Silver Corporation
Jim Williams
CEO
(London) +44 (0)20 7887 6599
jwilliams@ariansilver.com

OR

Arian Silver Corporation
David Taylor
Company Secretary
(London) +44 (0)20 7887 6599
dtaylor@ariansilver.com

OR

Grant Thornton Corporate Finance
Gerry Beaney / David Hignell
(London) +44 (0)20 7383 5100
gerry.d.beaney@uk.gt.com

OR

Hawkwood Capital LLP
John Grant / Edmund Glover
(London) +44 (0)20 3195 6500
john.grant@hawkwoodllp.com
edmund.glover@hawkwoodllp.com

OR

XCAP Securities PLC
Jon Belliss
(London) +44 (0)20 7101 7070
jon.belliss@xcapgroup.com

OR

Yellow Jersey PR Limited
Dominic Barretto
(London) +44 (0)7768537739
dominic@yellowjerseypr.com

OR

CHF Investor Relations
Juliet Heading
(Canada) +1 416 868 1079 x 239
juliet@chfir.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) and no stock exchange, securities commission or other regulatory authority accepts responsibility for the adequacy or accuracy of this release nor approved or disapproved of the information contained herein.
 
 

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