ARIAN SILVER RELEASES INDEPENDENT PRELIMINARY ECONOMIC ASSESSMENT REPORT; MINING OF MORE THAN 2 MILLION OUNCES OF SILVER PROPOSED

Arian Silver Corp. has released the results of a preliminary economic assessment (PEA) for its San Jose project in Zacatecas state, Mexico. The PEA, undertaken by A.C.A. Howe International Ltd., reviewed the economics of entering into contract mining and toll milling on three silver blocks with lead and zinc credits that were previously reported in the technical report referred to below.

Arian´s chief executive officer, Jim Williams, commented today: "We are very encouraged by the robust economics to support contract mining and milling, illustrated by this report, at our San Jose project. The results of the PEA validate our plans to move forward in the near term with underground mechanized mining using contract mining and toll milling, subject to funding. Utilizing the underground workings developed by the former operators and the infrastructure on site, we plan to advance development to the relatively easily accessible mining blocks on the San Jose vein in a very cost-effective way. The cash flow generated from initial mining will be used towards building further infrastructure onsite to support larger commercial silver production and to conduct further detailed exploration, including drilling, along the extensive known strike length at San Jose.

Highlights:

Howe concluded that Arian´s approach and mining plan is achievable and realistic;
Up to four years of contracted mechanized mining, with concurrent exploration and development on the rest of the property;
Operating 250 days per year at 500 tonnes per day will produce an average of approximately 125,000 tonnes per year using three selected mining blocks;
Sublevel open stoping and full mechanization, accessible via either the San Jose West or East ramp;
Mining and milling of approximately 500,000 tonnes of resources estimated to recover approximately 2.15 million ounces of silver, 1,800 tonnes of lead and 3,100 tonnes of zinc;
Operating cash costs of $32.00 (U.S.) per tonne;
Project net present value of $13.44-million (U.S.) based on an 8-per-cent discount rate;
Project internal rate of return (IRR) of 159 per cent.

Based upon the assumptions contained within the PEA, the exploitation of three identified remnant mining blocks using contract mining and toll milling is projected to be viable at production rates of 500 tonnes per day, and returning undiscounted cumulative cash flows of approximately $17.0-million (U.S.).

Arian is in further discussions with contract miners and toll millers to seek improvement on the costs used in the PEA and are planning on undertaking additional metallurgical testwork to better define the process technology route.