ARIAN
SILVER
Trading Symbols
AIM: AGQ
FWB: 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 income
For 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 position
As 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 flows
For 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 equity
For 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.