Arian Silver Corporation
TSX VENTURE : AGQ
AIM : AGQ
FRANKFURT : I3A
PLUS : AGQ

Arian Silver Corporation

September 22, 2010 02:00 ET

Arian Silver Commences Silver Production

LONDON, ENGLAND--(Marketwire - Sept. 22, 2010) -

THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES NOR FOR DISSEMINATION IN THE UNITED STATES

Arian Silver Corporation ("Arian" or the "Company") (TSX VENTURE:AGQ)(AIM:AGQ)(PLUS:AGQ)(FRANKFURT:I3A), a silver exploration and development company with a focus on projects in the silver belt of Mexico, is today pleased to announce that all necessary contracts are now in place for the proposed silver production operation at its 100%-owned San José mine, Zacatecas, Mexico. The Company is now moving into production and will benefit from cash flow generated from its San José mining operation.

KEY POINTS

  • A 500 tons per day ("tpd") contract mining operation at the San José Project has been mobilized to commence production;
  • Mining is planned to operate 20 days per month. Total costs to mine and deliver ore to the mill are estimated at approximately US$26/t;
  • The milling operation will initially handle up to 400 tpd with plans to increase the throughput with an upgraded crusher. Mill hire is a fixed cost at MXP3.7 million (approximately US$290,000) per month, subject to adjustment for any operating downtime. This includes all operating costs, maintenance and repair costs and consumables;
  • At a milling rate of 400 tpd, 125t of concentrate should be produced per month with an anticipated silver content of between 370 and 440 ozs per ton ("opt");
  • Based on a contained silver content of 405 opt at US$18/oz silver, a concentrate value of US$6,500/t should be achieved;
  • A 2% NSR on concentrate value payable to the vendor of the San José property;
  • Initial mill feed will be taken from surface dump material at Arian's Los Campos property whilst underground development to reach the Santa Ana resource block at San José is advanced; 
  • There is potential to increase contract mining production at San José from 500 tpd up to 1,500 tpd subject to available mill capacity;
  • Cash flow expected in Q4 of 2010; and
  • Production cash flow will fund the planned drilling program on the San José Vein ("SJV") system.

Arian's Chief Executive Officer, Jim Williams, commented: "It is with great pleasure that I report that all contracts are now in place that enable us to move into production at San José. As all preparatory work on-site is complete, we anticipate cash flows commencing during Q4 of 2010 from our initial 500 tpd mining operation. As we enter into production we are encouraged by the current fundamentals for silver.

I would like to thank all shareholders for their continued patience and support while we were negotiating the best terms available for the respective contracts for our San José production."

The Los Campos property, 100% owned by Arian, is located near Zacatecas and the surface dumps from previous mining operations are estimated to contain material with an average reported grade of 250 g/t silver sufficient to source the initial mill feed.

Past drilling programs have so far only tested some 10% of the known strike length of the SJV system within the property's boundaries. Going forward, the Company intends to use cash flow from the mining operation to explore and develop the remaining 90% of the known SJV, including infill drilling and further studies to assess the economic options of larger-scale independent mining.

The resources identified to date at San José only cover approximately 10% of the total known strike length of the SJV alone; these indicated and inferred resources contain some 43 million ounces of silver, 120 million pounds of lead and 248 million pounds of zinc. The Company is optimistic that additional significant resources can be identified over the remaining 90% of the SJV in due course plus other known zones of mineralization within the concession area. 

Arian's overall objective is to develop additional resources on the SJV system concurrently with the initial contract mining operation with a view to becoming a larger-scale independent producer.

Qualified Person

Mr. Jim Williams, Eur Ing, Eur Geol, BSc, MSc, D.I.C., FIMMM, the Chief Executive Officer of Arian, is a "Qualified Person" as defined in the AIM guidelines of the London Stock Exchange, and a "Qualified Person" as such term is defined in Canadian National Instrument 43-101 ("NI 43-101"). This press release has been prepared under Mr. Williams' supervision. Mr. Williams has verified the data disclosed by this release.

About the Company

Arian 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 is active in Mexico, the world's second largest silver producing country. The Company's main projects are the Calicanto and San José projects in Zacatecas State. Arian's Tepal project in Michoacán State is subject to an exclusive purchase option to Geologix Explorations Inc. Part of Arian'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.

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, statements contained in this press release relating to the mineral resource estimates, statements regarding the planned contract mining and milling operation at the San José Project (the "SJ Mining Operation"), the ability of the Company to achieve, maintain and possibly increase planned levels of production from the SJ Mining Operation, the ability of the Company to generate positive cash flow from the SJ Mining Operation during Q4 of 2010 and to fund a drilling program on the SJV system 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, the performance of the contractors and plant engaged in relation to the SJ Mining Operation, failure to achieve anticipated production levels and mineral grades for ore from the SJ Mining Operation, failure to establish estimated mineral reserves, the possibility that future exploration results will not be consistent with the Company's expectations, 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, uncertainties relating to the availability and costs of financing needed in the future and the other risks disclosed in the Company's most recent annual management's discussion and analysis filed on SEDAR at www.sedar.com. 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.

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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