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 Tue Feb 19, 2013
Operations Update

 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 Zacatecas silver belt of Mexico, announces that toll milling fully resumed on 16 February 2013.

The toll mill is located 50 km from the Company's San José mine in Zacatecas State in Mexico and is privately owned and operated by Beneficiadora de Jales y Minerales Juan Reyes SA de CV ("Juan Reyes").

The Juan Reyes mill is newly refurbished, has a maximum capacity of 500 tonnes per day, and benefits from two separate flotation streams to extract zinc in addition to lead and silver concentrate. The contract with Juan Reyes gives exclusive use of the mill to Arian, is renewable by mutual consent and is initially for the processing of 90,000 tonnes of Run-of-Mine material from the San José mine; this should take approximately six months once the maximum daily throughput rate is achieved and maintained.

The Juan Reyes mill commenced processing on 16 February 2013 with supervisory assistance from Arian personnel to help optimise processing to maximise material throughput and silver, lead and zinc recoveries.

MRI Trading AG, who previously provided partial off-take services while Arian was using a previous toll mill ("Contracuña Mill"), will now provide 100% off-take services.

The dispute with the owners of the Contracuña Mill caused toll milling operations to be suspended in July 2012. Although all amounts owed to Arian by the owner of the Contracuña Mill have now been repaid, Arian has submitted a claim for damages, which has been met by a counter-claim by Contracuña, which Arian believes, has been submitted solely to frustrate the legal process and is without merit.

Separately, Arian has identified a second-hand processing plant which appears to be suitable for treating the San José ore. The Company will provide an update on these discussions as they progress.

As previously reported (27 September 2012), the Standby Equity Distribution Agreement ("SEDA") was agreed for a maximum of £5 million over a 3 year period. To date, approximately 18% of this facility has been utilised for continued development and mining work at the San José mine and as a contribution to working capital.

Arian's Chief Executive Officer, Jim Williams, commented today, "The commencement of processing at the Juan Reyes toll mill once again puts Arian back into the ranks of silver producers after frustrating delays since mid 2012. However, as we have previously stated, this new toll mill arrangement, while providing useful cash flow, should be regarded as only a stepping-stone towards acquiring our own processing plant. We have now identified such a plant and are currently in discussions regarding its acquisition, which if successful will eventually allow greater daily ore throughput from the San José mine with increased efficiencies all round.

We have already established very significant resources of silver, lead and zinc at San José and the proposed acquisition of our own plant will accelerate our aim of becoming a significant silver producer in the medium term."

For further information please contact:

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

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

OR

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

OR

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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