AGQ

Arian Silver Corporation (the "Company" or "Arian") (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, is
pleased to report that the Company has signed a letter of intent, which reflects
the Company's intention to sign a definitive contract for exclusive use of a
newly refurbished and soon to be re-commissioned 500 ton per day ("tpd") toll
mill. This mill, which is located on the outskirts of the City of Zacatecas, is
currently expected to be operational within ten to twelve weeks.


The refurbished mill is expected to have two significant advantages over the
previous mill. Firstly, the rated capacity is 25% higher than the previous mill;
secondly, it will have two separate concentrate streams, unlike the previous
mill which had only one bulk concentrate stream. These improvements should allow
Arian to profit from increased recoveries in addition to realising better terms
on the contained base metals.


Furthermore, one of the joint owners of the re-commissioned mill was also the
vendor of the San Jose concessions to Arian in 2006. As the agreement for the
sale and purchase of the San Jose concessions included a net smelter royalty, it
is implicit that the owners of the re-commissioned mill under consideration
would be additionally incentivised to maximise recoveries for the benefit of
Arian.


Jim Williams, Chief Executive Officer of Arian, commented: "We are encouraged
because the new toll mill, once completed and the contract signed, should lead
to increased recoveries of silver, and also of lead and zinc. As previously
reported, the best achievable recovery of silver at the previous toll mill was
circa 60% in trial milling, indicating some 40% of value was going to waste."


Further to the Company's announcement of 16 July 2012, Arian reports it has been
unable to reach a mutually acceptable resolution to the dispute with the owner
of the toll mill, Contracuna I SA de CV ("Contracuna"). Accordingly, Arian's
100% owned subsidiary in Mexico is taking the necessary steps against Contracuna
to recover all losses and damages resulting from an alleged illegal termination,
and breaches, of contract, which caused the suspension of milling. The Company
will provide progress updates on this matter in due course.


The swift potential availability of an alternative toll mill, and Arian's
ability to respond swiftly to these circumstances, reflects the benefits of
operating in the heart of the silver belt of Mexico, the world's largest silver
producer.


Although the interruption to milling is likely to be reflected by reduced cash
flow and operational profitability in the Company's results throughout the
remainder of 2012, a cash benefit should be expected upon resumption of milling,
as a result of being able to mill stockpiled ore.

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