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Arian Silver Corporation (Arian) is a silver exploration, development and production company operating in one of the richest silver-bearing districts in the world, Zacatecas State, Mexico. Arian’s current flagship project is their 100% owned San José property which lies 55km to the southeast of Zacatecas City and covers 11 mining concessions totalling approximately 6,300 hectares. The Company is committed to increasing its resource at San José concurrent with, initially contract mining and milling operations, and then, subject to positive milling and metallurgical studies, to build its own bespoke mill, as well as exploring new opportunities. The Company is listed with the ticker symbol AGQ on London’s AIM and Canada’s TSX-V Exchanges and the Frankfurt Stock Exchange with the ticker 13A.
Arian Silver aims to increase recoveries and revenues at San Jose
Arian Silver (LON:AGQ, CVE:AGQ) said today that it will work on upgrades at the San Jose property in Mexico after the operation posted a quarterly loss. "These have been largely responsible for the small loss for the San Jose mining operation in the first quarter.” Arian is currently working on upgrading the custom mill, which it said should lead to much improved recoveries and increased revenues from production.
On the financial side, Arian’s pre-tax losses for the quarter to 31 March reached US$8.4 million including a non-cash share options expense of US$7.3 million. Revenues from the San Jose mining operation stood at US$1.1 million with a gross loss of US$213,000.
The San Jose mine produced 46,136 ounces of silver from 146 tonnes of concentrate, or 316 ounces of silver per concentrate tonne, down from 439 grammes per tonne in the final quarter of 2010.
“With the transition from an explorer to a producer we have faced a number of challenges particularly with the custom mill and plant which was not specifically designed for the San Jose ore," said chief executive Jim Williams.
In addition to that, Arian is expecting to release an updated resource estimate for the San Jose property in the coming months and begin a drilling programme to drill the whole San Jose vein within its concession.
Working capital at the end of the quarter stood at US$10.5 million; Arian plans to fund operations with working capital and cash flow from production.
Arian said that the current results from the drilling programme continue to confirm the presence of significant silver mineralisation and the San Jose vein remains completely open along strike and to depth.
An independent update of resource estimates is planned for the near future and will follow the completion of the current drill programme. Mining expectations remained unchanged at 500 tonnes per day (tpd) for the contract mining operation. Mining was planned to operate 20 days per month. Total costs to mine and deliver ore to the mill were estimated at approximately US$26/tonne.
Arian’s drill programmes from 2006 along the vein produced a JORC resource estimate of 33.8 million ounces (Moz) of silver, 95.5 million pounds (Mlbs) of lead and 205 Mlbs of zinc in the inferred resource category and 9 Moz of silver, 24.6 Mlbs of lead and 42.2 Mlbs of zinc in the indicated category.
Shares in Arian Silver dropped 13.5 percent to trade at 28 pence in reaction to the quarterly report.
