Arian Silver's MD&A and Results for the Three and Nine Months Ended 30 September 2013

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES NOT FOR DISTRIBUTION IN THE UNITED STATES

LONDON, ENGLAND -- (Marketwired - Nov. 28, 2013) - Arian Silver Corporation ("Arian" or the "Company") (TSX VENTURE:AGQ)(AIM:AGQ)(FRANKFURT:I3A), a silver exploration, development and production company with a focus on projects in the silver belt of Mexico, today announced the release of its Management's Discussion and Analysis ("MD&A") and unaudited Financial Statements ("Financials") for the three months and nine months ended 30 September 2013.

The MD&A and Financials are available at SEDAR at www.sedar.com and on the Company's website at www.ariansilver.com. These documents can also be obtained on application to the Company. The following information has been extracted from the MD&A and Financials. The financial information in this announcement does not constitute full statutory accounts.

Arian's Chief Executive Officer, Jim Williams, commented today, "This past reporting quarter has been one of substantial progress for the Company. We have successfully raised finance, and with it acquired our own custom processing plant that will have capacity to treat up to 1,500 tonnes per day of San José ore. We have already commenced the refurbishment of the plant and are looking forwards to the reassembly of the plant, the installation of its associated infrastructure at the San José mine, and the expansion of the mine capacity to furnish the plant to its maximum sustainable throughput. In addition, we are actively exploring both replacement and additional forms of financing as well as other corporate transactions, and we will update shareholders on the progress of all these events in due course."


OVERVIEW OF THIRD QUARTER 2013

Financial

Three months ended
30 Sep 2013 Three months ended 30 Sep 2012 Change Nine months ended
30 Sep 2013 Nine months ended
30 Sep 2012


Change
$000s $000s $000s $000s $000s $000s
Revenue - 136 (136 ) 129 4,554 (4,425 )
Gross loss (25 ) (339 ) 314 (515 ) (542 ) 27
Net profit/(loss) for the period 874 (968 ) 1,843 (1,029 ) (2,875 ) 1,846
As at
30 Sep 2013 As at
31 Dec 2012 Change
$000s $000s $000s
Cash and cash equivalents 9,253 491 8,762
Total assets 27,361 14,119 13,242

- On 29 August 2013, the Company issued a convertible note instrument raising $15.6m before transaction costs ("Convertible Note"), with Platinum Long Term Growth VIII LLC ("Platinum"). The instrument is convertible in whole or in part at the option of the note holder at a conversion price of C$1.10.

- Upon the issuance of the Convertible Note, the Company acquired the El Bote Processing Plant for $3.12m.

- Cash reserves increased during Q3 2013 as a result of the proceeds from the Convertible Note, as well as further drawdowns on the Company's Standby Equity Distribution Agreement ("SEDA") facility.

- Total assets have increased since 31 December 2012 due to the cash proceeds from the Convertible Note and SEDA issuances as well as the investment in the El Bote Processing Plant.

- The net profit recognised in Q3 2013 comes as a result of a $2.5m gain recognised in relation to the fair value adjustment of the derivative liability relating to the Convertible Note.


Operations

Third Quarter 2013 Third Quarter 2012 Change
Head grade - Ag grams per tonne - - 0%
Tonnes mined 708 4,072 (83%)
Tonnes milled - - 0%
Silver concentrate tonnes produced - - 0%
Silver ounces produced - - 0%
Silver ounces per concentrate tonne produced - - 0%
Silver ounces sold - - 0%
Silver concentrate tonnes sold - - 0%

- The Company completed the purchase and commenced the refurbishment of the El Bote Processing Plant in the period. The Plant will be refurbished, dismantled, transported and installed in a modular manner at the Company's 100%-owned site adjacent to the San José mine.

- Small scale mining and preparation work was performed during Q3 2013.


Subsequent Events

None


THE STRATEGY

- Obtain advanced and low-cost (acquisition cost) silver projects and rapidly build up resources in the ground. Arian is focusing its exploration efforts in one of the richest known silver-bearing districts in the world - the Zacatecas State of Mexico.

- Focus on projects with prior exploration and production history, thereby reducing risks and capital costs.

- Develop projects towards production through a combination of company development and/or Joint Venture (JV) and acquisition opportunities.

- Build shareholder value by expanding silver resources and reserves, and increasingly efficient production.


REVIEW OF OPERATING PERFORMANCE

Q3 Q2 Q1
2013 2013 2013
Head grade - Ag grams per tonne (g/t) - 191 174
Tonnes mined 708 4,628 -
Tonnes milled - 3,221 258
Silver concentrate tonnes produced - 43 4
Recovery % - 47.05 60.90
Silver ounces produced - 9,294 878
Silver ounces per concentrate tonne produced - 216 251
Silver ounces sold - 9,058 -
Silver concentrate tonnes sold - 37 -
Quarter end inventory balances
Mined tonnes stockpile 17,850 17,142 17,935
Silver concentrate inventory tonnes 4 4 4
Silver ounces included in concentrate inventory 1,114
1,114 878
Q4 Q3 Q2 Q1
2012 2012 2012 2012
Head grade - Ag grams per tonne (g/t) - - 181 173
Tonnes mined - 4,072 26,268 21,553
Tonnes milled - - 28,903 24,394
Silver concentrate tonnes produced - - 298 302
Recovery % - - 58.74 49.01
Silver ounces produced - - 98,616 66,688
Silver ounces per concentrate tonne produced - - 331 221
Silver ounces sold - 8,937 93,112 75,911
Silver concentrate tonnes sold - 32 286 330
Quarter end inventory balances
Mined tonnes stockpile 18,192 18,204 15,003 17,637
Silver concentrate inventory tonnes - - 36 24
Silver ounces included in concentrate inventory - - 11,276 5,772

Following the acquisition of the El Bote Processing Plant in August 2013, the Company commenced the refurbishment of the Plant in-situ. Upon completion of the refurbishment, the Plant will be dismantled, transported and installed in a modular manner at the Company's 100%-owned site adjacent to the San José mine. An internal team is leading the refurbishment of the Plant to ensure the Company has the control necessary to ensure the project is performed to a suitable standard and in the most cost-efficient manner. Third parties will, in due course, commence the development of the necessary site works, tailings dam and electrical infrastructure for the plant.

The Plant is currently located approximately 50 kilometres ("km") from the site of the San José mine and is comprised of a crushing circuit with a reported throughput of 150 tonnes per hour, a grinding circuit of four ball mills, two flotation circuits, thickening tanks and filters.

It is anticipated that the Plant will be commissioned towards the end of 2014 with a capacity of 750 tonnes per day "tpd". The plant will be expanded to 1,500 tpd shortly afterwards.

Mining and development at the San José mine were minimised during Q3 2013 following the decision in Q2 2013 to terminate the Company's pilot mining and processing program at the Juan Reyes plant. Mining and development activities will be accelerated alongside the refurbishment and relocation of the El Bote Plant to ensure readiness for the resumption of processing operations in 2014.