One supposes that early testing of the mill is taking place already. It is unlikely though that we will be informed until January, which would seem logical.
We most likely have a decent above ground ore stockpile (probably 2-3 months production worth) at initial 500t/day, this means of course we can start milling immediately with no delays for mining. Albeit we will ramp up to 1500t/day over a period of a year or so.
It seems unlikely that the lower costs of Oil will affect the economics much, so one supposes we are still looking at a $14 break even cost.
Hopefully funding drawdowns continue on schedule and our back office team has been built ready for our expansion into full scale production.
Things ought to be rosier in 2015, notwithstanding the POS.
This is not a criticism, more observation, but all the blogs over the last three years have been very bullish, and PMs have dropped off a cliff, now we get the blogs predicting carnage, perhaps this may be a good time to accumulate. I'm not saying we are at the bottom with Gold and Silver but a suggestive very close. Nobody times the bottom perfectly.
Thanks for the analysis FG, but I disagree with conclusions. Main focus of this company is silver. Zinc and Lead are just byproducts whose sales help bring the average cost of producing an ounce of silver down-this was explained by Mr Williams himself in one of their meetings. Silver won't be the icing in the cake- Silver will be the whole cake, a massive one from which all of us patient shareholders during this longer than expected bear market of the market will be able to indulge massively.
Does it matter what price Silver is? We will be producing Lead & Zinc. On a hedged basis. The Silver will be the icing on the cake should it go up. We should be called ARIAN LEAD & ZINC.
Base Metal Purchase Agreement
Arian Silver further announces that a subsidiary of Arian Silver, Arian Silver (Barbados) Corporation, (the "Seller") has entered into a US$15,635,750 base metal purchase agreement ("BMPA") with an affiliate of Quintana, Quintana Streaming, as detailed below, to advance the San Jose Project to full-scale commercial production.
Under the BMPA, the Seller has agreed to sell Quintana Streaming a proportion of the lead and zinc finished metal ("Finished Metal") produced from the San Jose Project as follows:
-- In the case of zinc, 78.2% of the zinc produced from the San Jose Project until 32,057,308 pounds of zinc are delivered to Quintana Streaming as Finished Metal in accordance with the terms of the BMPA (the "Zinc Delivery Hurdle"), and 27.4% thereafter; and -- In the case of lead, 78.2% of the lead produced from the San Jose Project until 37,783,112 pounds of lead are delivered to Quintana Streaming as Finished Metal in accordance with the terms of the BMPA (the "Lead Delivery Hurdle"), and 27.4% thereafter.
Pursuant to the BMPA, the Seller will receive an upfront deposit payment of US$15,635,750 against the purchase price for the Finished Metals (the "Upfront Payment"), payable in instalments in accordance with the terms of the BMPA. The initial portion of the Upfront Payment which is equal to US$3,360,000 will be payable to the Seller on the effective date of the BMPA. The remainder of the Upfront Payment will be payable by Quintana Streaming to the Seller in five instalments, payable on the achievement of specific milestones relating to the development of the San Jose Project and subject to the satisfaction of three separate completion tests during the period from May 1, 2015 to March 1, 2016 pertaining to the levels of production, processing and grade at the San Jose Project. Further announcements relating to the achievement of each milestone will be made in due course.
Quintana Streaming will pay to the Seller a purchase price for the Finished Metal sold and delivered under the BMPA, calculated as follows and subject to adjustment in accordance with the terms of the BMPA:
-- In the case of zinc, the lesser of market price and the fixed price of US$0.25 per pound until the Zinc Delivery Hurdle is met, and then US$0.375 per pound thereafter; and -- In the case of lead, the lesser of market price and the fixed price of US$0.25 per pound until the Lead Delivery Hurdle is met, and then US$0.375 per pound thereafter.
Once the Upfront Payment has been fully reimbursed through the delivery and sale of Finished Metal to Quintana Streaming, the purchase price for both zinc and lead will be the sum of (A) th
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