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Trading Symbols
AIM: AGQ
TSX-V: AGQ
FWB: I3A
28 May 2015
ARIAN SILVER’S
MD&A AND FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED 31 MARCH
2015
Arian Silver Corporation ("Arian
Silver" or the "Company"), a silver exploration, development
and production company with a focus on projects in the silver belt
of Zacatecas, Mexico, announces
today the release of its Management’s Discussion and Analysis
(“MD&A”) and unaudited Financial Statements (“Financials”) for
the three months ended 31 March
2015.
The MD&A and audited Financials will be available at SEDAR
at www.sedar.com and on the Company’s website at
www.ariansilver.com. These documents can also be obtained on
application to the Company. The following information has been
extracted from the MD&A and Financials. The financial
information in this announcement does not constitute full statutory
accounts.
Arian Silver’s Chief Executive Officer, Jim Williams, commented today, “Arian Silver has continued to deliver on its
objectives during 2015. The refurbishment of our processing plant
was completed successfully and it is now in a commissioning phase
with first silver-lead concentrates having been produced. Looking
ahead, I expect to report on exploration results and slightly
longer-term, on the ramp-up of production throughout the rest of
the year and into 2016. I especially look forward to Arian Silver being recognised by investors as a
producing mining company in due course.”
The Strategy
The Company’s strategy is to:
- establish a silver mining business capable of sustaining more
than two million ounces per annum, and
- build shareholder value by expanding silver resources on the
Company’s mining concessions in Zacatecas, Mexico.
Overview of first quarter 2015
During the quarter, the Company commenced the phased
commissioning programme of La
Tesorera processing plant (the “Plant”), which saw first
concentrate produced from the first of two flotation circuits.
Highlights
-
Mechanical completion of the Plant
-
Plant commissioning commenced
-
First concentrate was produced from the Plant
-
5,000 metre exploration programme at Guanajuatillo section of
the San José mine
Overview of financial performance
|
Three months ended
31 March 2015 |
Three months ended
31 March 2014 |
Change |
|
$000s |
$000s |
$000s |
Gross
loss |
- |
(13) |
13 |
Net profit/(loss)
for the period |
1,898 |
(1,053) |
2,951 |
|
As
at
31 March 2015 |
As
at
31 Dec
2014 |
Change |
|
$000s |
$000s |
$000s |
Cash
and cash equivalents |
2,416 |
2,846 |
(430) |
Total
assets |
39,360 |
35,865 |
3,495 |
During the period the Company drew
down $4.1 million in accordance with
the terms of the Base Metals Purchase Agreement (“BMPA”) with
Quintana San Jose Streaming Co. LLC (“Quintana Streaming”).
The production and revenue received from first concentrate will
be recognised in the Company’s second quarter results.
Total assets increased since 31 December
2014 as a result of the continued investment in the mine and
Plant and the capitalisation of interest for the period. The
movement in the Company’s cash balance reflects the drawdown under
the BMPA, the continued investment in the mine and Plant together
with general corporate and administrative expenditures.
The increased net profit was primarily due to the fair value
adjustment relating to the derivative liability (this is explained
further in note 7 to the Financial Statements).
Overview of operational
performance
|
Q1
2015 |
Q4
2014 |
Q3
2014 |
Q2
2014 |
Head grade - Ag
grams per tonne (g/t) |
- |
- |
- |
- |
Tonnes mined |
5,719 |
(695) |
- |
1,588 |
Tonnes milled |
- |
- |
- |
- |
|
|
|
|
|
Silver concentrate
tonnes produced |
- |
- |
- |
- |
Recovery % |
- |
- |
- |
- |
Silver ounces
produced |
- |
- |
- |
- |
Silver ounces per
concentrate tonne produced |
- |
- |
- |
- |
|
|
|
|
|
Silver ounces
sold |
- |
- |
- |
- |
Silver concentrate
tonnes sold |
- |
- |
- |
- |
|
|
|
|
|
Quarter end
inventory balances |
|
|
|
|
Mined tonnes
stockpile |
39,366 |
33,647 |
34,342 |
34,342 |
Silver concentrate
inventory tonnes |
- |
- |
- |
- |
Silver ounces
included in concentrate inventory |
- |
- |
- |
- |
|
Q1
2014 |
Q4
2013 |
Q3
2013 |
Q2
2013 |
Head grade - Ag
grams per tonne (g/t) |
- |
- |
- |
191 |
Tonnes mined |
5,739 |
8,057 |
1,816 |
4,628 |
Tonnes milled |
- |
- |
- |
3,221 |
|
|
|
|
|
Silver concentrate
tonnes produced |
- |
- |
- |
43 |
Recovery % |
- |
- |
- |
41.42 |
Silver ounces
produced |
- |
- |
- |
8,180 |
Silver ounces per
concentrate tonne produced |
- |
- |
- |
190 |
|
|
|
|
|
Silver ounces
sold |
- |
- |
- |
9,058 |
Silver concentrate
tonnes sold |
- |
- |
- |
37 |
|
|
|
|
|
Quarter end
inventory balances |
|
|
|
|
Mined tonnes
stockpile |
32,754 |
27,015 |
18,958 |
17,142 |
Silver concentrate
inventory tonnes |
- |
- |
- |
4 |
Silver ounces
included in concentrate inventory |
- |
- |
- |
1,204 |
The refurbishment and installation of the Plant was completed
during Q1 2015, at which time the commissioning phase commenced,
which was continuing at period end.
An exploration drilling programme was undertaken within the
Guanajuatillo section of the San José vein. Guanajuatillo is
located in the middle of the 2km long vein structure with evidence
of the vein to either side. The intention of the drilling programme
was to upgrade the inferred resource within that area to measured
or indicated, with a view to upgrading the Company’s NI 43-101
compliant mineral resource estimate.
In preparation for increased mining rates in future, the
construction of an additional decline ramp close to Guanajuatillo
commenced.
Comparison of quarter year-on-year
|
|
Q1
2015 |
Q1
2014 |
Change |
Head grade - Ag
grams per tonne |
|
- |
- |
- |
Tonnes mined |
|
5,719 |
5,739 |
- |
Tonnes milled |
|
- |
- |
- |
Silver concentrate
tonnes produced |
|
- |
- |
- |
Silver ounces
produced |
|
- |
- |
- |
Silver ounces per
concentrate tonne produced |
|
- |
- |
- |
Subsequent events
Funding
Cash of $1.8 million was received
in April 2015 pursuant to the terms
of the BMPA. The Company has now received $13.6 million of the $15.6
million committed by Quintana Streaming.
Review of financial performance
Summary of quarterly results
The Company’s focus during the quarter was the completion of
refurbishment and installation of the Plant, and the commencement
of its commissioning. During the quarter, two significant
milestones were achieved, being the mechanical completion of the
Plant and the production of first silver-lead concentrate.
Revenues in respect of the first concentrate sales will be
reported in Q2 2015.
Unaudited |
Q1
2015
$’000 |
Q4
2014
$’000 |
Q3
2014
$’000 |
Q2
2014
$’000 |
Revenue |
- |
- |
- |
- |
Cost of sales |
- |
(65) |
(223) |
(140) |
Gross loss |
- |
(65) |
(223) |
(140) |
Net investment
(loss)/income |
(6) |
2 |
7 |
(2) |
Net profit/(loss)
for the period |
1,898 |
(2,951) |
(1,211) |
(699) |
|
|
|
|
|
Basic and diluted
profit/(loss) per share |
$0.06 |
($0.09) |
($0.04) |
($0.02) |
|
|
|
|
|
Total assets |
39,360 |
35,865 |
30,352 |
30,687 |
Total current
liabilities |
(6,398) |
(6,789) |
(17,606) |
(16,127) |
Total non-current
liabilities |
(20,471) |
(17,718) |
(195) |
(192) |
Shareholders’
equity |
(12,491) |
(11,358) |
(12,551) |
(14,368) |
Unaudited |
Q1
2014
$’000 |
Q4
2013
$’000 |
Q3
2013
$’000 |
Q2
2013
$’000 |
Revenue |
- |
- |
- |
129 |
Cost of sales |
(13) |
(49) |
(25) |
(413) |
Gross loss |
(13) |
(49) |
(25) |
(284) |
Net investment
income/(loss) |
2 |
1 |
44 |
(68) |
Net profit/(loss)
for the period |
(1,053) |
(583) |
875 |
(947) |
Basic and diluted
profit/(loss) per share |
($0.03) |
($0.02) |
$0.03 |
($0.03) |
|
|
|
|
|
Total assets |
29,454 |
28,366 |
27,361 |
14,582 |
Total current
liabilities |
(14,422) |
(12,395) |
(11,459) |
(986) |
Total non-current
liabilities |
(190) |
(187) |
(185) |
(182) |
Shareholders’
equity |
(14,842) |
(15,784) |
(15,717) |
(13,414) |
Future outlook
The Company is currently commissioning its recently refurbished
processing plant. This, together with the planned ramp-up to
maximum processing capacity of 1,500 tonnes per day over the coming
months, and achievement of consistent production thereafter sees
the Company firmly on the path to achieving its long-term
strategy.
The Plant is projected to deliver substantial cost savings
against the Company’s previous toll milling operations. With
reduced operating costs, the Company should enjoy significantly
higher operating margins than would have been achieved in the past
under the same conditions.
For further
information please contact:
Arian Silver
Corporation
Jim Williams, CEO
David Taylor, Company Secretary
Fuad Sillem, Head of Corporate Development
(London) +44 (0)20 7887 6599
fsillem@ariansilver.com |
Northland Capital
Partners Limited
Gerry Beaney / John Howes
(London) +44 (0)20 7382 1100 |
OR |
OR |
Grant Thornton UK
LLP
Philip Secrett / Richard Tonthat
(London) +44 (0)20 7383 5100
philip.j.secrett@uk.gt.com |
Yellow Jersey PR
Limited
Dominic Barretto
(London) +44 (0)7768 537 739
dominic@yellowjerseypr.com |
Forward-Looking
Information:
Certain information contained herein constitutes forward-looking
statements. Forward-looking statements are frequently characterised
by words such as “planned”, “expected”, “forecast”, “projected”,
“intended”, “believe”, “anticipate”, “budget”, “scheduled”,
“outlook” and other similar words or statements that certain events
or conditions may or will occur.
Forward-looking statements are based on the opinions and
estimates of management at the dates the statements are made, and
are subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ
materially from those projected in the forward-looking
statements.
These factors include the inherent risks involved in exploration
and development, and mining of mineral properties, the
uncertainties involved in interpreting drilling results and other
geological data, fluctuating metal prices, the possibility of
project cost overruns or unanticipated operating costs and
expenses, uncertainties related to the necessity of financing, the
availability of and costs of financing needed in the future, and
other factors described in the Company’s MD&A under the heading
“Risk Factors and Uncertainties”.
The Company undertakes no obligation to update forward-looking
statements if circumstances or management’s estimates or opinions
should change, other than as required by securities laws. The
reader is cautioned not to place undue reliance on forward-looking
statements (including, without limitation, statements relating to
the mineral resource estimates, statements regarding the San José
Project, the ability of the Company to achieve, maintain and
possibly increase planned levels of production, and the ability of
the Company to generate positive cash flow from the San José
Project, the ability to continue or implement proposed drilling
programmes on the San José vein system and the Company's
exploration, development and production plans and objectives), or
the ability of the Company to raise additional funds should they be
required.
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 contractors and plant and
equipment, and failure to achieve anticipated production levels and
mineral grades for ore from the San José Project, failure to
establish estimated mineral reserves, the possibility that future
exploration results will not be consistent with the Company’s
expectations, uncertainties relating to the availability and costs
of financing needed in the future, changes in the silver commodity
price, 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, and
the other risks involved in the mineral exploration and development
industry.
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.
Any mineral resource figures disclosed are estimates and no
assurances can be given that the indicated levels of minerals will
be produced. Such estimates are expressions of judgement 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 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.
This press 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.
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.