Arian Silver Corporation - QwikReport

ARIAN SILVER CORPORATION : http://www.ariansilver.com/ : QwikReport

San Jose Project

San Jose

San Jose Aerial Fly-Over Video: High Res | Low Res

Property

The San José Project, covering some 6,500 ha and 100% owned by Arian, is located some 55 km from Zacatecas City. A past producing silver, lead and zinc mine, San José is set to re-enter production, on three of the currently seven demarcated mining blocks. Production will initially utilize contract mining and milling, producing up to 500 tonnes per day (tpd).

Through further exploration activities, San José has the potential for >200 M oz Ag plus Pb and Zn. Arian will use the cash flow to further explore in detail the western strike (~12 km) of the San José Vein (SJV), including infill drilling within the current resource blocks. This will ultimately prepare the Company to complete a feasibility study for larger scale commercial mining of circa 2,500+ tpd within 36 months.

The mine has one main vertical shaft extending nearly 400 m and three smaller vertical shafts, all located on the SJV. There is also as a large underground haulage ramp extending over 3 km strategically positioned in the footwall of the main structure of the SJV. The Preliminary Economic Assessment (PEA) or Scoping Study, completed by ACA Howe, reports a CAPEX requirement of ~$1M including a 30% contingency factor giving an undiscounted cumulative cash flow of $17M based on US$14/oz Ag on only the three selected resource blocks.

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Production

Preliminary Economic Assessment provides robust economics
In June, 2009 ACA Howe carried out a Preliminary Economic Assessment on the economic viability of contract mining and toll milling on three of the seven currently demarcated resource blocks on the San José property. The conclusion stated that to enter a period of contract mining, is an achievable and realistic strategy, based on US$14 Ag/oz.

Highlights of the study include
• Mining and milling of approximately 500,000 tonnes of resources estimated to exploit approximately 2.15 million oz of silver, 1,800 tonnes of lead and 3,100 tonnes of zinc
• Assuming US$14/oz Ag
• NPV -- Undiscounted: US$17 million, assuming US$14/oz Ag
• NPV -- 8% Discount Rate US$ 13.4 and US$14 per ounce Silver price
• Payback period less than one year
• Pre-Tax Internal Rate of Return (IRR) estimated at 160%.
• Up to four years of contracted mechanized mining, with concurrent exploration and development on the rest of the property (sublevel open stoping)

Excellent infrastructure in place:
• Power (upgradeable 3-Ph off main Grid with step-down transformer)
• Transportation
• Access to water
• Access to mining and milling equipment
• Access to workers
• A pro-mining region.

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Technical Reports

Preliminary Economic Assessment Report (Pear) on the San José Silverlead-Zinc Deposit, Zacatecas, Mexico
Technical Report
(PDF, 1.84 Mb)

Resource Estimation Update for the San Jose Silver-Lead-Zinc Deposit, Zacatecas, Mexico
(PDF, 9.91 Mb)

San Jose
Technical Report
(PDF, 4.57 Mb)

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Pictures / Maps

First drill rig at San Jose Click to enlarge	San Jose drilling map plan Click to enlarge
San Jose mine	San Jose vein structure up to 20 metres wide Click to enlarge
Ramp maintenance at San Jose Click to enlarge	Exploration Targets Map

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This page was created on Thu Sep 9, 2010 at 2:48:43 AM Pacific Time.