ARIAN SILVER
CORPORATION
Trading Symbols
AIM: AGQ
FWB: I3A
26 June
2018
Financial Results
for the Year Ended 31 December 2017
and Board Changes
Arian Silver Corporation ("Arian" or the “Company”) announces
the release of its financial results for the year ended
31 December 2017. The Company’s full
annual report including all notes to the accounts, is available
from
www.ariansilver.com/assets/docs/fs/180626-arian-annual-report-web.pdf.
The Company also announces the decision by two of its
non-executive directors, Thomas
Bailey and James Crombie, to
retire from the Board of the Company with effect from 30 June 2018. Dennis
Edmonds, Executive Chairman of Arian, commented, “Tom Bailey
and Jim Crombie have served this
Company loyally since 2006 and I would like to thank them for their
contributions over that time, and wish them the very best for the
future.”
Chairman’s statement
Those of you who read the Company’s announcement on 10 May 2018 will be aware that I was invited to
join the Board as its Chairman upon the retirement of both
Tony Williams and Jim Williams.
Although I was not incumbent during the year on which we are
reporting, it is always helpful to look back at the past year to
provide context for my thoughts as to the Company’s future
direction, which I am sure will be of interest to all shareholders,
and also to those who might be considering investing.
During the early part of 2017, the Company undertook an
evaluation of its existing portfolio of silver projects in
Mexico, from which respectable
grades of silver, lead and zinc were reported.
Towards the middle and end of last year, the Company invested
its time in examining the Noche
Buena gold and silver tailings project and several lithium
projects in the state of Zacatecas,
Mexico. These projects were judged to be uneconomic at that
time, and thus were not advanced; no suitable projects have been
identified since then and the Company has been considering its
options as a result.
Upon my appointment to the Board, we raised approximately
£600,000 to secure the Company’s immediate financial future. These
funds are backed by some experienced and highly successful mining
professionals who see a future for Arian
Silver, which I see as encouraging.
Looking to the present, I have two clear agendas. Firstly, we
need to minimise expenditure wherever practicable to sustain the
Company’s resources. Secondly, we need to embark on an exploration
programme to restore the Company to a position of possessing
delineated mineral resources. At this moment in time, and providing
the economics support this ambition, I am open to the advancement
of one or more of the Company’s existing silver projects, whilst
simultaneously looking for suitable acquisition targets either in
Mexico or other jurisdictions with
an established mining community, stable political background, and
where we can be assured of strong operational control.
We are fortunate to be able to add the support of a strong
network within the mining community, which I believe will stand us
in very good stead for advancing the prospects of this Company.
I look forward to reporting our progress to you during the
remainder of this year, and into 2019.
Business overview
Strategy and business model
Arian’s objective is to create a portfolio of mining projects in
jurisdictions with an established mining community, stable
political background, and where strong operational controls can be
assured.
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. Wherever
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
All dollar amounts in this annual report and financial
statements are US dollars, unless stated otherwise.
As at 31 December 2017, the Group
had total assets of $1.5 million
(2016: $1.3 million) of which
$0.9 million (2016: $0.4 million) was cash. The Group had total
liabilities of $0.1 million (2016:
$0.1 million) of which $0.1 million were current liabilities (2016:
$0.1 million).
In the year ended 2017 the Group made an operating loss of
$1.4 million (2016: $1.6 million) and a loss per share of
$0.01 (2016: $0.01).
Overview of operations
During 2017, the Group completed its initial 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 2017, the
Company held 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
2017 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 Group’s 75 hectare Calicanto
Project for US$400,000. The amount
due from the sale was shown in the consolidated statement of
financial position as an asset held for sale in the year ended
31 December 2016.
The transaction was completed in 2017, including receipt of
funds 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.
However, the directors concluded the projects were unlikely to be
commercially viable and their value has been expensed.
Future outlook
Following the retirement of the Company’s executive directors,
Jim Williams and Tony Williams in May
2018, and the appointment of Dennis
Edmonds as Executive Chairman, the Company has benefited
from fresh leadership, a new perspective, and the financial support
of experienced mining professionals through the injection of
additional cash resources in May
2018.
The directors are taking action to reduce the Company’s
expenditures and to identify and acquire small but scalable
projects in jurisdictions with stable governments, and in
commodities considered to have strong futures, both in the
short-to-medium, and long term.
Subject to any decision to further explore the existing silver
projects or to acquire any additional projects, the Company will
seek to delineate compliant mineral resources.
Consolidated statement of comprehensive income
For the year ended 31 December
2017
(Tabulated amounts expressed in thousands of US dollars unless
otherwise stated)
|
Note |
2017 |
2016 |
Continuing operations |
|
|
|
Other administrative expenses |
|
(1,423) |
(1,366) |
Impairment of available for sale
investments |
18 |
(129) |
- |
Impairment of exploration
assets |
9 |
- |
(202) |
Total administrative
expenditure |
|
(1,552) |
(1,568) |
Operating loss |
4 |
(1,552) |
(1,568) |
|
|
|
|
Net investment income |
6 |
4 |
20 |
Loss for the year before
taxation |
|
(1,548) |
(1,548) |
Tax |
7 |
- |
- |
Loss for the year attributable to
equity shareholders of the parent |
|
(1,548) |
(1,548) |
|
|
|
|
Other comprehensive
income
that may be recycled to profit or loss |
|
|
|
Foreign exchange translation
differences recognised directly in equity |
|
113 |
(263) |
Other comprehensive income for
the year |
|
113 |
(263) |
Total comprehensive income for
the year attributable to equity shareholders of the parent |
|
(1,435) |
(1,811) |
Basic and diluted loss per share
($/share) |
8 |
(0.01) |
(0.01) |
Consolidated statement of financial position
As at 31 December 2017
(Tabulated amounts expressed in thousands of US dollars unless
otherwise stated)
|
Note |
2017 |
2016 |
Assets |
|
|
|
Available-for-sale financial
assets |
18 |
143 |
- |
Intangible assets |
9 |
236 |
173 |
Property, plant and equipment |
10 |
6 |
7 |
Total non-current assets |
|
385 |
180 |
|
|
|
|
Trade and other receivables |
12 |
57 |
309 |
Cash and cash equivalents |
13 |
876 |
416 |
Total current assets |
|
933 |
725 |
Assets held for sale |
11 |
- |
400 |
Total assets |
|
1,318 |
1,305 |
|
|
|
|
Equity attributable to equity
shareholders of the parent |
|
|
|
Share capital |
14 |
52,965 |
52,396 |
Warrant reserve |
14 |
2,166 |
1,333 |
Share-based payment reserve |
14 |
1,389 |
1,417 |
Foreign exchange translation
reserve |
14 |
1,941 |
1,828 |
Retained earnings |
|
(57,228) |
(55,764) |
Total equity |
|
1,233 |
1,210 |
Liabilities |
|
|
|
Trade and other payables |
16 |
85 |
95 |
Total current
liabilities |
|
85 |
95 |
Total liabilities |
|
85 |
95 |
Total equity and
liabilities |
|
1,318 |
1,305 |
The financial statements were approved and authorised for issue
by the Board of Directors on 25 June
2018 and were signed on its behalf by:
Dennis V. Edmonds
Executive Chairman
Consolidated statement of cash flows
For the year ended 31 December
2017
(Tabulated amounts expressed in thousands of US dollars unless
otherwise stated)
|
Note |
2017 |
2016 |
Cash flows from
operating activities |
|
|
|
Loss before tax from
continuing operations |
|
(1,548) |
(1,548) |
Adjustments for
non-cash items: |
|
|
|
Depreciation |
10 |
4 |
3 |
Exchange
difference |
|
47 |
(69) |
Net interest
receivable |
6 |
(6) |
(20) |
Impairment of
intangible assets |
9 |
- |
202 |
Impairment of
available for sale investments |
18 |
129 |
- |
Loss on
discontinuing operations |
|
- |
- |
Equity-settled
share-based payment transactions |
|
56 |
- |
Decrease/(increase) in
trade and other receivables |
12 |
22 |
(48) |
(Decrease)/Increase in
trade and other payables |
16 |
(20) |
(433) |
Cash used in
operating activities |
|
(1,316) |
(1,913) |
|
|
|
|
Cash flows from
investing activities |
|
|
|
Interest received |
|
1 |
1 |
Proceeds from Quintana
for working capital |
|
- |
50 |
Proceeds from sale of
asset held for sale |
11 |
400 |
- |
Purchase of intangible
assets |
9 |
(22) |
(84) |
Acquisition of
property, plant and equipment |
10 |
(2) |
(7) |
Cash used in
investing activities |
|
377 |
(40) |
|
|
|
|
Cash flows from
financing activities |
|
|
|
Proceeds from issue of
share capital and warrants |
14 |
1,558 |
2,157 |
Issue costs |
14 |
(156) |
(209) |
Cash from financing
activities |
|
1,402 |
1,948 |
|
|
|
|
Net increase /
(decrease) in cash and cash equivalents |
|
463 |
(5) |
Cash and cash
equivalents at 1 January |
|
416 |
474 |
Effect of exchange rate
fluctuations on cash held |
|
(3) |
(53) |
Cash and cash
equivalents at 31 December |
13 |
876 |
416 |
Consolidated statement of changes in equity
For the year ended 31 December
2017
(Tabulated amounts expressed in thousands of US dollars unless
otherwise stated)
|
Share capital |
Warrant reserve |
Share based payment
reserve |
Foreign exchange
translation reserve |
Retained earnings |
Total |
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 |
1,333 |
- |
- |
- |
2,157 |
Share issue costs |
(209) |
- |
- |
- |
- |
(209) |
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 |
Loss for the year |
- |
- |
- |
- |
(1,548) |
(1,548) |
Foreign exchange |
- |
- |
- |
113 |
- |
113 |
Total comprehensive
income |
- |
- |
- |
113 |
(1,548) |
(1,435) |
Shares and warrants
issued for cash |
725 |
833 |
- |
- |
- |
1,558 |
Share issue costs |
(156) |
- |
- |
- |
- |
(156) |
Lapse of share
options |
- |
- |
(84) |
- |
84 |
- |
Share options
issued |
- |
- |
56 |
- |
- |
56 |
Balance: 31 December
2017 |
52,965 |
2,166 |
1,389 |
1,941 |
(57,228) |
1,233 |
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
For further
information please contact:
Arian Silver
Corporation
Dennis Edmonds, Executive Chairman
David Taylor, Company Secretary
Tel: +44 (0)20 7887 6599 |
Northland Capital
Partners Limited
David Hignell / John Howes /
Dugald J. Carlean / Jamie Spotswood
Tel: +44 (0)203 861 6625 |
OR |
|
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.