LONDON (Alliance News) - Arian Silver Corp on Monday said it has completed the acquisition of a 2% net smelter return royalty on the San Jose project in Mexico.
Arian entered into an earn-in agreement to acquire the San Jose project through a number of staged payments between 2006 and 2010, when the final payment was made. The previous owner retained a 2% net smelter return royalty on the project, which under the terms of and during the period covered by the earn-in agreement, Arian Silver had the option to buy, for USD1 million. That right expired in January 2010.
Arian has now come to an agreement with the previous owner of the San Jose project to purchase the 2% net smelter return royalty for USD750,000, which it will pay in staged instalments over the next six months, it said.
"This enhances the overall economics of the San Jose project, allowing the company to retain the very significant cash flows that would otherwise be paid out," said Arian Chief Executive Officer Jim Williams.
"The timing of this acquisition is especially pertinent given the imminence of first concentrate production at the company's La Tesorera processing plant," Williams added.
Shares in Arian were down 4% to 30.25 pence on Monday morning.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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