Arian silver corp looks to life after san jose

Arian Silver Corp ( LON:AGQ) has it all to play for as it starts the journey to rebuild itself after losing its flagship Mexico mine project.

The firm is now debt free and has cash in the bank as it considers options for its remaining assets and carries out due diligence on an exciting option deal, also in Mexico, which includes a former mine, and which could lead to small-scale, low-cost production.

It all comes as the price of silver recovers, rising from US$13.86 per troy ounces at the end of last year to around US$16 now. Invest in gold royalties The fundamentals of the metal look good, with the gold-to silver ratio hitting a five-year high of 83.68 in March of this year, though it had dipped to around 70 by the end of the year, versus 55 at the start of 2016.

After a long and arduous road in the first place to get its flagship San Jose silver project up and running and after many processing plant issues, the wheels started to come off after a deal to extend a loan with US group Quintana, with whom Arian already had a financing deal, was terminated in October last year.

To cut a long story short, Arian settled all debts with Quintana by handing over the San Jose silver mine, after the latter exercised a foreclosure right.

These liabilities included US$17.8mln debt and US$15.2mln in a metal arrangement, from which Arian was released, and Quintana paid US$750,000 to Arian to make the unwinding process smoother.

Talking to Proactive, Jim Williams, chief executive, put the San Jose loss down to metals prices and said it had needed US$22 an ounce silver to work, which just wasn’t possible.

Arian Silver possesses almost 1,500 hectares of mineral concessions within central Zacatecas, Mexico, which includes brown-field sites and past-producing mines.

Preliminary exploration work recently found evidence of the presence of two major vein systems at its Los Campos project: The Los Campos vein and the San Rafael vein.

Arian Silver’s recent geological mapping and sampling has discovered previously unknown veins running either parallel or nearly parallel to the Los Campos vein.

Arian has several concessions in the south of Zacatecas near the towns of Ojocaliente and General Pánfilo Nateras. Invest in gold online india Access to these properties is by paved road to nearby villages and then unimproved dirt roads to the respective properties. Why should i buy gold All properties are within 50 kilometres of Zacatecas.

The San Celso property covers a number of colonial era mines that have mined a number of veins to a depth of about 100 metres, which is the depth of the local water table.

Each of the accessible mines has numerous stopes indicating the presence of high grade shoots within the San Celso and Las Cristinitas veins.

Elsewhere and significantly, in February this year, Arian signed a memorandum of understanding with private company TNM over the latter’s mining portfolio, which includes the former Noche Buena mine and associated tailings.

It has been taking its time over the due diligence, however, and it has until 27 December to make up its mind on whether to pull the trigger.

The projects have a good post code; Noche Buena is partly alongside Toronto-listed producer Goldcorp’s Penasquito site, which is projected to produce up to 580,000 ounces of the yellow metal in 2016.

The Noche Buena tailings already have a NI 43-101 compliant resource of one million tonnes containing 3 g/t gold, 55 g/t silver, and 0.8% zinc and Williams has suggested this could lead to a simple, low cost small leaching operation.

Meanwhile, the company has been looking outside of Mexico, and has been in discussions on potentially acquiring advanced stage exploration projects – one is in southern USA and has a non-compliant mineral resource reported to have been in excess of 100 million ounces of silver.