Last checked at 27 Jun 2017 07:00
Arian Silver Corporation - Final ResultsArian Silver Corporation - Final Results
PR Newswire
London, June 26
ARIAN SILVER
Trading SymbolsAIM: AGQFWB: I3A
27 June 2017
Financial Results for the Year Ended 31 December 2016
Arian Silver Corporation ("Arian Silver" or the “Company”) announces the release of its financial results for the year ended 31 December 2016.
Chairman’s and Chief Executive’s statement
We are pleased to take this opportunity to reflect on the period from January 2016 and to consider the progress Arian has made across the period, during which time we positioned the Company to strengthen the balance sheet and extinguished all loans. We also de-listed from the TSX Venture stock exchange to reduce our regulatory overheads and better reflect the UK-centricity of our shareholder base.
Following a full review of our portfolio of silver projects, we were able to take advantage of an opportunity to divest one of our non-core projects, Calicanto and realise funds to develop the business. The interest in the project and successful completion of the disposal illustrates the ability of the group to realise value from its assets.
Over the period, we undertook a low cost exploration programme over the Company’s silver projects and that work will shape our future exploration plans for those concessions.
In April 2017, we announced that we have begun to position ourselves to take on a portfolio of lithium assets, through the acquisition of an option over three exploration projects in Zacatecas State, Mexico that we believe to have potential to host lithium. This is an exciting prospect for the Company.
Our preliminary sampling of these projects has evidenced the presence of lithium deposits and we look ahead to the future exploration and development of these assets. This move into lithium marks the path for diversification away from a single commodity, which should make the Company more robust and capable of withstanding the natural pricing volatility of the markets.
We would like to thank all our shareholders for their continued support look forward to updating you on our further progress during the second half of 2017.
| A J Williams Executive Chairman | J T Williams Chief Executive Officer |
Strategy and business model
Arian’s objective is to create a portfolio of primarily lithium, silver and gold exploration projects, principally in Mexico.
The group has operated in Mexico for over ten years during which time it has established long-term relationships with local government, communities, and key stakeholders. Arian’s geological experts assess and identify projects for potential mineralisation. Where-ever possible, the projects are acquired on a low-cost option basis whilst preliminary exploration is undertaken to assess the merits of further work.
Where preliminary studies evidence sufficient mineralisation, increasingly comprehensive studies will be undertaken with a view to delineating a compliant mineral resource estimate in readiness of potential sale of the asset to a producing mining company, at which time a significant premium over its acquisition and development cost may be justified.
Financial highlights
As at 31 December 2016, the Company had total assets of US$1.3 million (2015: US$1.6 million) of which US$0.4 million (2015: US$0.5 million) was cash. The Company had total liabilities of US$0.1 million (2015: US$0.5 million) of which US$0.1 million were current liabilities (2015: US$0.5 million).
In the year ended 2016 the Company made an operating loss of US$1.6 million (2015: US$2.9 million) and a loss per share of US$0.01 (2015: US$0.46).
Overview of operations
In February 2016, the Company entered into a memorandum of understanding with Tierra Nueva Mining Ltd (“TNM”) in relation to the Noche Buena gold and silver tailings project to evaluate its portfolio of mineral properties in Zacatecas State, Mexico and in May 2016 the Company negotiated an exclusive option whilst it undertook due diligence on TNM’s tailings project. The metallurgical testwork undertaken by Resource Development Inc (RDi) of Denver, Colorado, in the USA, demonstrated that the tailings were highly refractory and included various gangue minerals that would not only inhibit extraction of the silver and gold, but also lead to significant penalties levied by any purchasers of any concentrate produced. Accordingly, the Company did not advance this project.
During the course of 2016 and into 2017, the Company carried out a high level exploration programme over its portfolio of silver mining concessions covering an area of over approximately 1,500 hectares, to develop and direct future exploration work.
Silver properties
As at 31 December 2016, the Company had 12 fully owned mining concessions split between four distinct project areas:
San Celso project
The 88 hectare San Celso project is located in the historic mining district of Pánfilo Natera-Ojocaliente and is surrounded by other concessions to the south and west. It encompasses two veins: the San Celso and Las Cristinitas veins. Work carried out during 2016 resulted in the surface extension of these veins of 800 metres. Samples taken to date have evidenced grades of up to 395g/t Ag, 13,700ppm Pb, and 13,900ppm Zn.
Los Campos project
The Los Campos project comprises four concessions covering an area of approximately 500 hectares and is located on the south side of the city of Zacatecas. The property encompasses at least two known veins: the Los Campos vein and the San Rafael vein, and is easily accessible 15-minutes’ drive from the centre of the City of Zacatecas.
The Los Campos vein system has been developed along a strike distance of 3.3km and to depths exceeding 100m. Our geological mapping and sampling discovered additional veins running either parallel or nearly parallel to the Los Campos vein.
La Africana project
The La Africana project is a strategically located project covering approximately 15 hectares, 3 kilometres south west of Pánfilo Natera. The project encompasses a past-producing mine and work carried out on the project evidences significant zones of high-grade silver mineralisation over respectable widths.
Calicanto project
On 1 August 2016 the Company announced its Mexican subsidiary, Compañía Minera Estrella De Plata SA de CV, had executed a binding agreement with Minera Oro Silver de Mexico SA de CV (“Minera Oro Silver”), a subsidiary of Endeavour Silver Corporation, to sell the Company’s 75 hectare Calicanto Project for USUS$400,000. The amount due from the sale is shown in the consolidated statement of financial position as an asset held for sale.
The transaction was completed in 2017, upon execution and ratification of the assignment agreement in respect of the relevant mineral concessions.
Other silver mining concessions
Arian Silver holds three additional concessions not otherwise grouped into project groupings, covering almost 900 hectares. These concessions were acquired in 2006 because of their strategic position to the San Celso project. These concessions too require further exploratory work to fully assess their economic potential.
Lithium properties
In early 2017, the Company acquired options over three potential lithium projects and carried out preliminary exploration which evidenced the presence of lithium at each of the project areas. Further exploration work is planned to ascertain the full extent and grade of mineralisation.
Pozo Hondo project
The Pozo Hondo project is the largest of the projects at almost 1,100 hectares in size and encompasses one salar, the Laguna El Salado.
Columpio project
The Columpio project is almost 400 hectares in size, encompassing two salars, Laguna Tenango and Laguna La Virgen, approximately 24km from the town of Villa de Cos.
Abundancia project
The Abundancia project is 150 hectares in size and encompasses the Laguna Noria del Burro salar, approximately 40km from the town of Villa de Cos.
Future outlook
Confidence was markedly stronger at the end of 2016 than it was at the start of that year as a result of a successful and well-supported financing. This financing allowed for the exploration programme over its existing portfolio of silver projects and initial payment in respect of the option over lithium assets.
We remain positive about the long term outlook for the silver price and are committed to ensuring our silver assets are well placed to benefit from any further increase in the silver price, which has already risen by approximately 10% during the course of 2017.
Our recent move to include lithium within our portfolio of exploration assets provides our shareholders with exposure to the fast paced growth in demand for this commodity.
Our immediate focus is on the integration of the lithium assets into our exploration programme and as we advance that work, we will also continue to seek out opportunities to expand our portfolio, creating a strong pipeline of projects ready for sale or exploitation.
Consolidated statement of comprehensive incomeFor the year ended 31 December 2016
(Tabulated amounts expressed in thousands of US dollars unless otherwise stated)
| 2016 | As restated 2015 | |
| Continuing operations | ||
| Other administrative expenses | (1,366) | (2,889) |
| Impairment charge | (202) | - |
| Total administrative expenditure | (1,568) | (2,889) |
| Operating loss | (1,568) | (2,889) |
| Net investment income | 20 | 21 |
| Loss from continuing operations | (1,548) | (2,868) |
| Discontinued operations | ||
| Loss from discontinued operations | - | (12,740) |
| Loss for the year before taxation | (1,548) | (15,608) |
| Tax | - | - |
| Loss for the year attributable to equity shareholders of the parent | (1,548) | (15,608) |
| Other comprehensive income that may be recycled to profit or loss | ||
| Foreign exchange translation differences recognised directly in equity | (263) | 5,306 |
| Other comprehensive income for the year | (263) | 5,306 |
| Total comprehensive income for the year attributable to equity shareholders of the parent | (1,811) | (10,302) |
| Basic and diluted loss per share (US$/share) | (0.01) | (0.46) |
| Basic and diluted loss per share from continuing operations (US$/share) | (0.01) | (0.09) |
| Basic and diluted loss per share from discontinued operations (US$/share) | - | (0.37) |
Consolidated statement of financial positionAs at 31 December 2016
(Tabulated amounts expressed in thousands of US dollars unless otherwise stated)
| 2016 | As restated 2015 | |
| Assets | ||
| Intangible assets | 173 | 812 |
| Property, plant and equipment | 7 | 5 |
| Total non-current assets | 180 | 817 |
| Trade and other receivables | 309 | 311 |
| Cash and cash equivalents | 416 | 474 |
| Total current assets | 725 | 785 |
| Assets held for sale | 400 | - |
| Total assets | 1,305 | 1,602 |
| Equity attributable to equity shareholders of the parent | ||
| Share capital | 52,396 | 51,781 |
| Warrant reserve | 1,333 | 3,455 |
| Share-based payment reserve | 1,417 | 7,701 |
| Foreign exchange translation reserve | 1,828 | 2,092 |
| Accumulated losses | (55,764) | (63,955) |
| Total equity | 1,210 | 1,074 |
| Liabilities | ||
| Trade and other payables | 95 | 528 |
| Total current liabilities | 95 | 528 |
| Total liabilities | 95 | 528 |
| Total equity and liabilities | 1,305 | 1,602 |
The financial statements were approved and authorised for issue by the Board of Directors on 26 June 2017 and were signed on its behalf by:
| A J Williams Executive Chairman | J T Williams Chief Executive Officer |
Consolidated statement of cash flowsFor the year ended 31 December 2016
(Tabulated amounts expressed in thousands of US dollars unless otherwise stated)
| 2016 | As restated 2015 | |
| Cash flows from operating activities | ||
| Loss before tax from continuing operations | (1,548) | (2,868) |
| Loss before tax from discontinued operations | - | (12,740) |
| Adjustments for non-cash items: | ||
| Depreciation | 3 | 164 |
| Exchange difference | (69) | 6,797 |
| Net interest receivable | (20) | (21) |
| Change in fair value of derivative liability | - | (7,038) |
| Proceeds from Quintana for working capital | - | (650) |
| Impairment of intangible assets | 202 | - |
| Loss on discontinuing operations | - | 10,563 |
| Equity-settled share-based payment transactions | - | 18 |
| Decrease/(increase) in trade and other receivables | (48) | (1,027) |
| (Decrease)/Increase in trade and other payables | (433) | 2,227 |
| Increase in inventories | - | (211) |
| Cash used in operating activities * | (1,913) | (4,786) |
| Cash flows from investing activities | ||
| Interest received | 1 | 21 |
| Proceeds from Quintana for working capital | 50 | 650 |
| Cash from discontinued operations | - | (47) |
| Purchase of intangible assets | (84) | |
| Acquisition of property, plant and equipment | (7) | (5,726) |
| Cash used in investing activities | (40) | (5,102) |
| Cash flows from financing activities | ||
| Proceeds from issue of share capital and warrants | 2,157 | - |
| Issue costs | (209) | - |
| Proceeds from Base Metal Purchase Agreement | - | 7,576 |
| Repayment of Base Metal Purchase Agreement | - | (45) |
| Cash from financing activities | 1,948 | 7,531 |
| Net increase / (decrease) in cash and cash equivalents | (5) | (2,357) |
| Cash and cash equivalents at 1 January | 474 | 2,846 |
| Effect of exchange rate fluctuations on cash held | (53) | (15) |
| Cash and cash equivalents at 31 December | 416 | 474 |
* Discontinued operations contributed US$NIL (2015: (US$4,798,000)) to cash flows from operating activities.
Consolidated statement of changes in equityFor the year ended 31 December 2016
(Tabulated amounts expressed in thousands of US dollars unless otherwise stated)
| Share capital | Warrant reserve | Share based payment reserve | Foreign exchange translation reserve | As restated Accumulated losses | As restated Total | |
| Balance: 31 December 2014 | 51,781 | 3,455 | 7,683 | (3,214) | (48,347) | 11,358 |
| Loss for the year | - | - | - | - | (15,608) | (15,608) |
| Foreign exchange | - | - | - | (3,917) | - | (3,917) |
| Foreign exchange reclassified to discontinued operations | - | - | - | 9,222 | - | 9,222 |
| Total comprehensive income | - | - | - | 5,305 | (15,608) | (10,303) |
| Fair value of share options | - | - | 18 | - | - | 18 |
| Balance: 31 December 2015 | 51,781 | 3,455 | 7,701 | 2,091 | (63,955) | 1,073 |
| Loss for the year | - | - | - | - | (1,548) | (1,548) |
| Foreign exchange | - | - | - | (263) | - | (263) |
| Total comprehensive income | - | - | - | (263) | (1,548) | (1,811) |
| Shares issued for cash | 824 | - | - | - | - | 824 |
| Share issue costs | (209) | - | - | - | - | (209) |
| Fair value of warrants issued | - | 1,333 | - | - | - | 1,333 |
| Lapse of share options | - | - | (6,284) | - | 6,284 | - |
| Cancellation of warrants | - | (3,455) | - | - | 3,455 | - |
| Balance: 31 December 2016 | 52,396 | 1,333 | 1,417 | 1,828 | (55,764) | 1,210 |
For further information please contact:
| Arian Silver Corporation Jim Williams, CEO David Taylor, Company Secretary Tel: +44 (0)20 7887 6599 | Northland Capital Partners Limited Gerry Beaney / David Hignell Tel: +44 (0)203 861 6625 |
| OR | OR |
| Beaufort Securities Limited Jon Belliss Tel: +44 (0)20 7382 8300 | Yellow Jersey PR Limited Charles Goodwin / Harriet Jackson Tel: +44 (0)7747 788 221 |
Forward-Looking Information
This press release contains certain “forward-looking information”. 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 are deemed forward-looking information.
This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company as well as certain assumptions. Forward-looking information is subject to a number of significant risks and uncertainties and other factors that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, 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.
Any forward-looking information 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 information, 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 information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.