Alien Metals Regulatory News (UFO)

Trading Symbols AIM: AGQ TSX-V: AGQ FWB: I3A 31 March 2015 Arian Silver's MD&A and Results for the Financial Year Ended 31 December 2014 Arian Silver Corporation ("Arian Silver" or the "Company"), (AIM:AGQ,TSXV:AGQ), a silver mining company focussed on projects in the silver belt ofZacatecas, Mexico, is pleased to announce the release of its Management'sDiscussion and Analysis ("MD&A") and Financial Statements ("Financials") forthe year ended 31 December 2014. Jim Williams, Chief Executive Officer of Arian Silver, commented: "ArianSilver made tremendous progress in 2014, advancing towards its goal ofbecoming a mid-cap silver producer. Despite the challenging environment in thejunior mining sector, we successfully concluded a significant financing, whichhas enabled us to complete the refurbishment and construction of ourprocessing plant, and which will take the San José project into production. I look forward to reporting on our progress throughout 2015 as we ramp uptowards full scale production, growing the resource base through explorationactivities, and creating significant value for our shareholders." Overall performance This past year has seen Arian take great strides towards becoming a silverproducer. In August 2013, the Company purchased the El Bote processing plant(subsequently renamed "La Tesorera") (the "Plant") comprising a crushingcircuit with a reported throughput of 150 tonnes per hour, a grinding circuitof four ball mills, two flotation circuits, thickening tanks and filters.Following the acquisition of the Plant in 2013 and during the year, the Plantwas disassembled, refurbished, and transported to the Company's 100%-ownedsite adjacent to the San José mine, where during 2014, site preparations andcivil works had been completed, and where the Plant was then reassembled. In addition to the construction of the Plant, the Company developed the siteinfrastructure, including the installation of a 4km dedicated 35kV power lineconnecting the Plant to the grid. Site offices were constructed and haul roadsbuilt. Furthermore, Arian commenced construction of the water reservoirs,water management systems and the tailings facility which is nearingcompletion. Development of the San José and Santa Ana mine blocks continued and a newdecline ramp commenced in the Soledad area. In total, over 1,700 metres ofmine development work were completed since October 2014, when the Companyentered into a new financing agreement. This development work will supportproduction at levels up to the Plant's design rate of 1,500 tonnes per day("tpd"). In October 2014the Company entered into a US$32 million financing arrangement("Quintana Financing"), restructuring its convertible loan note and fundingthe future development of the San José project. Summary financial information Full Year Full Year 2014 2013 Change $000s $000s $000sRevenue - 129 (129)Gross loss (441) (564) 123Net loss for the period (5,914) (1,611) (4,303)Cash and cash equivalents 2,846 7,241 (4,395)Total assets 35,865 28,366 7,499 The absence of revenue in 2014 results reflects the termination of tollmilling operations in June 2013. The net loss for the period increased year-on-year primarily on account of again of $3.7 million in 2013 in respect of the reported fair value of thederivative liability of the $15.6million convertible loan note issued toPlatinum Long Term Growth VIII, LLC in August 2013 ("Platinum Note")andtransaction costs relating to the Quintana Financing. Cash and cash equivalents decreased primarily as a result of the offset ofproceeds from the Base Metal Purchase Agreement ("BMPA") and the issue ofshare capital against the cost of operating activities and investment in thepurchase and refurbishment of the Plant. Total assets increased during 2014 primarily on account of the investment inthe Plant and the development of the San José mine. Review of operations San José Project, Zacatecas State Overview The 100%-owned San José property lies 55 kilometres to the southeast of thecity of Zacatecas and covers eight mining concessions totalling approximately6,134hectares. The property has significant infrastructure, including a 4x5metre main haulage ramp extending more than8.5kilometres along the footwall ofthe San Josévein system, and a 350metres deep, 500 tpd vertical shaft with anoperational hoist. In addition, a number of shallower vertical shafts arelocated along the vein. Production information summary for San José mine Full Year Q4 Q3 Q2 Q1 2014 2014 2014 2014 2014 Head grade (mill): Ag grams per tonne (g/t) - - - - -Tonnes mined 6,632 (695) - 1,588 5,739Tonnes milled - - - - -Ag concentrate tonnes produced - - - - -Recovery % - - - - -Ag ounces produced - - - - -Ag ounces per concentrate tonne produced - - - - -Ag ounces sold - - - - -Ag concentrate tonnes sold - - - - - Quarter end inventory balancesMined tonnes stockpile 33,647 33,647 34,342 34,342 32,754Ag concentrate inventory tonnes - - - - -Ag ounces included in concentrate inventory - - - - - Production information summary for San José mine Full Year Q4 Q3 Q2 Q1 2013 2013 2013 2013 2013 Head grade (mill): Ag grams per tonne (g/t) 189 - - 191 174Tonnes mined 14,501 8,057 1,816 4,628 -Tonnes milled 3,479 - - 3,221 258Ag concentrate tonnes produced 47 - - 43 4Recovery % 42.74 - - 41.42 60.90Ag ounces produced 9,058 - - 8,180 878Ag ounces per concentrate tonne produced 194 - - 190 251Ag ounces sold 9,058 - - 9,058 -Ag concentrate tonnes sold 37 - - 37 - Quarter end inventory balancesMined tonnes stockpile 27,015 27,015 18,958 17,142 17,935Ag concentrate inventory tonnes - - - 4 4Ag ounces included in concentrate inventory - - - 1,204 878 Three Three Twelve Twelve months months months months ended ended ended ended 31 Dec 31 Dec 31 Dec 1 Dec Change 2014 2013 2014 2013 (%) Head grade - Ag grams per tonne - - - 189 (100)Tonnes mined (695) 8,057 6,632 14,501 (54)Tonnes milled - - - 3,479 (100) Silver concentrate tonnes produced - - - 47 (100)Silver ounces produced - - - 9,058 (100)Silver ounces per concentrate tonne produced - - - 194 (100) Silver ounces sold - - - 9,058 (100)Silver concentrate tonnes sold - - - 37 (100) Mining & milling Mining activities continued at the San José mine during Q4 2014 in preparationfor the resumption of milling activities at the refurbished La Tesorera plant. In August 2013, the Company purchased the El Bote processing plant(subsequently renamed "La Tesorera")comprising a crushing circuit with areported throughput of 150 tonnes per hour, a grinding circuit of four ballmills, two flotation circuits, thickening tanks and filters. Following theacquisition of the Plant in 2013 and during the year, the Plant wasdisassembled, refurbished, and transported to the Company's 100%-owned siteadjacent to the San José mine, where during 2014, site preparations and civilworks had been completed, and where the Plant was then reassembled. The Company has built a strong local operating team that has lead therefurbishment and construction of the Plant, and continues to strengthen itsteam with experienced plant operators as it transitions from being adevelopment to a producing mining company. Arian encourages its contractors,that wherever practicable, workers are hired from local communities;90% of thepersonnel employed at the San José project are from the surroundingejido-based communities. The Company also employed a number of specialisedcontractors for the development of the necessary site works, tailings dam andelectrical infrastructure for the plant. Arian negotiated the buyback of a 2% Net Smelter Return ("NSR") royalty on theSan José project from the previous owners, for $750,000 (including all amountsowed in respect of production from the Company's earlier toll millingoperations, paid in instalments over a six month period; the purchase includesany amounts owing for NSR payments due under the former toll millingoperations. By the end of 2014, the Plant was almost fully constructed, as scheduled.Commercial production is expected to commence at an initial rate ofup to 500tpd, increasing to a maximum of 1,500 tpd over the following 18 months. Exploration assets The Company holds 28 mineral concessions in Zacatecas totalling 7,822hectares, including the San José Project. During the year, the Company applied fora drilling permit in the town ofGuanajuatillo which lies on the San José vein in between the Soledad and WestEnd areas. Following several consultations with the local community, in thesecond half of 2014, the permit was granted and the Company commenced a 5,000metre drilling programme in Q1 2015 to delineate the resources blocks beneaththe town. Information on Arian's exploration assets are contained in a technical reportprepared by A.C.A. Howe International Limited dated 20 March 2006 and entitled"Technical Report on the Calicanto and San Celso Projects, Zacatecas, Mexico".Additional information on Arian's San José Project is contained in a technicalreport prepared by CSA Global Pty Ltd dated 23 May 2013. Copies of thesereports are available on the Company's website www.ariansilver.comand on SEDARat www.sedar.com. Subsequent events Operations In January 2015, mechanical completion of the Plant was achieved and theCompany commenced a phased commissioning programme, starting with thesilver-lead circuit and then moving onto the zinc circuit. In February 2015, the company commenced a 5,000 metre exploration programmewithin the town of Guanajuatillo, which lies on the San José vein in betweenthe Soledad and the West End area and which the Company had not previouslyexplored, even though historic workings together with recent geologicalinterpretation indicate that the vein continues underneath the town. Thisfifth phase of exploration is underway and scheduled to be completed within Q1of 2015. Concurrently, the Company commenced construction of a third haulageramp in the Guanajuatillo area to develop the western boundary of the Soledadresource blocks as well as to open up the Guanajuatillo area. This ramp ispart of the mine development programme to ensure a sustainable operation forlife-of-mine at 1,500 tpd. In March 2015 the first lead-silver concentrate was produced at La Tesoreraprocessing plant. Share options On 7 January 2015 the Company granted 50,000 share options under the Company'sshare option plan. These share options are exercisable at £0.44 or C$0.79 pershare up to 5 January 2020, subject to a four months hold period from date ofgrant. Funding Cash of $4.1 million was received in January 2015 pursuant to the terms of theBMPA. The Company has now received $11.8 million of the $15.4 millioncommitted by Quintana Streaming. Forward-looking statements Certain information contained herein constitutes forward-looking statements.Forward-looking statements are frequently characterised by words such as"plan", "expect", "forecast", "project", "intend", "believe", "anticipate","expect", "budget", "scheduled", "outlook" and other similar words orstatements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates ofmanagement at the dates the statements are made, and are subject to a varietyof risks and uncertainties and other factors that could cause actual events orresults to differ materially from those projected in the forward-lookingstatements. These factors include the inherent risks involved in exploration anddevelopment, and mining of mineral properties, the uncertainties involved ininterpreting drilling results and other geological data, fluctuating metalprices, the possibility of project cost overruns or unanticipated operatingcosts and expenses, uncertainties related to the necessity of financing, theavailability of and costs of financing needed in the future, and other factorsdescribed in the Company's MD&A under the heading "Risk Factors andUncertainties". The Company undertakes no obligation to update forward-looking statements ifcircumstances or management's estimates or opinions should change, other thanas required by securities laws. The reader is cautioned not to place unduereliance on forward-looking statements (including, without limitation,statements relating to the mineral resource estimates, statements regardingthe San José Project, the ability of the Company to achieve, maintain andpossibly increase planned levels of production, and the ability of the Companyto generate positive cash flow from the San José Project, the ability tocontinue or implement proposed drilling programmes on the San José vein systemand the Company's exploration, development and production plans andobjectives). These forward-looking statements reflect the current expectations or beliefsof the Company based on information currently available to the Company.Forward-looking statements are subject to a number of risks and uncertaintiesthat may cause the actual results of the Company to differ materially fromthose discussed in the forward-looking statements, and even if such actualresults are realised or substantially realised, there can be no assurance thatthey will have the expected consequences to, or effects on the Company.Factors that could cause actual results or events to differ materially fromcurrent expectations include, among other things, the performance ofcontractors and plant and equipment, and failure to achieve anticipatedproduction levels and mineral grades for ore from the San José Project,failure to establish estimated mineral reserves, the possibility that futureexploration results will not be consistent with the Company's expectations,uncertainties relating to the availability and costs of financing needed inthe future, changes in the silver commodity price, changes in equity markets,political developments in Mexico, changes to regulations affecting theCompany's activities, delays in obtaining or failures to obtain requiredregulatory approvals, the uncertainties involved in interpreting explorationresults and other geological data, and the other risks involved in the mineralexploration and development industry. Any forward-looking statement speaksonly as of the date on which it is made and, except as may be required byapplicable securities laws, the Company disclaims any intent or obligation toupdate any forward-looking statement, whether as a result of new information,future events or results or otherwise. Although the Company believes that theassumptions inherent in the forward-looking statements are reasonable,forward-looking statements are not guarantees of future performance andaccordingly undue reliance should not be put on such statements due to theinherent uncertainty therein. Any mineral resource figures disclosed in the MD&A are estimates and noassurances can be given that the indicated levels of minerals will beproduced. Such estimates are expressions of judgement based on knowledge,mining experience, analysis of drilling results and industry practices. Validestimates made at a given time may significantly change when new informationbecomes available. While the Company believes that the resource estimatesincluded in the MD&A are well established, by their nature resource estimatesare imprecise and depend, to a certain extent, upon statistical inferences,which may ultimately prove unreliable. If such estimates are inaccurate or arereduced in the future, this could have a material adverse impact on theCompany. Mineral resources are not mineral reserves and do not have demonstratedeconomic viability. There is no certainty that mineral resources can beupgraded to mineral reserves through continued exploration. Availability of documents on SEDAR Additional information relating to the Company may be accessed throughSEDAR on the internet at www.sedar.com or the Company's website onwww.ariansilver.com. This press release does not constitute an offer to sell or a solicitation ofan offer to buy any of the securities of the Company in the United Sates. Thesecurities of the Company have not been and will not be registered under theUnited 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 UnitedStates or to U.S. persons unless registered under the U.S. Securities Act andapplicable state securities laws or an exemption from such registration isavailable. Neither the TSX Venture Exchange nor its Regulation Services Provider (as thatterm is defined in the policies of the TSX Venture Exchange) and no stockexchange, securities commission or other regulatory authority acceptsresponsibility for the adequacy or accuracy of this release nor approved ordisapproved of the information contained herein.