Arian Silver reports annual loss as dispute halts production

Arian Silver Corp.'s shares fell Friday after the company posted an annual loss as revenues and production were hit by suspended mining operations.

Arian Silver Corp.'s shares fell Friday after the company posted an annual loss as revenues and production were hit by suspended mining operations.

The Mexico-focused silver miner reported a gross loss of $0.76m for 2012, compared to a profit of $0.81m the previous year, while revenues plunged to $4.5m from $7.4m in 2011.

A dispute with mill owner Contracuna SA de CV halted production last July and drove down output.

"Although all amounts owed to Arian by Contracuna have now been repaid, Arian has submitted a claim for damages, which has been met by a counter-claim by Contracuna, which Arian believes, has been submitted solely to frustrate the legal process and is without merit," the company said in a statement.

Tonnes of silver mined dropped 48% year-on-year to 0.51m and ounces of silver sold dropped 25% to 0.17m.

During the year, Arian conducted further metallurgical testing, achieving recoveries of 80%.

In November, Arian agreed terms for toll milling of a minimum of 0.90m tonnes of run of mine ore at a cost of $38 per tonne with a newly refurbished plant in Zacatecas, which has a capacity of 500 tonnes per day. The plant is owned and controlled by independent third party, Juan Reyes, and toll milling began in February.

Arian's flagship property San Jose was upgraded by 32% to more than 117m ounces and the company acquired land to accommodate a proposed custom mill.

"In addition, we concluded independent studies on mining, plant design and metallurgy, as well as a technical audit combining the results of these studies," Chief Executive Officer, Jim Williams, said.

"These have been important steps for the company's growth plans, and coupled with the intended acquisition of a custom mill, can be expected to result in significantly improved efficiencies through better metal recoveries, higher throughput and lower overall production costs."

Shares tumbled 5.66% to 12.50p at 15:22 Friday.

RD

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Will a second wave of Covid lead to another stockmarket crash?
Stockmarkets

Will a second wave of Covid lead to another stockmarket crash?

Can we expect to see another lockdown like in March, and what will that mean for your money? John Stepek explains.
18 Sep 2020
Here’s why you really should own at least some bitcoin
Bitcoin

Here’s why you really should own at least some bitcoin

While bitcoin is having a quiet year – at least in relative terms – its potential to become the default cash system for the internet is undiminished, …
16 Sep 2020
James Ferguson: How bad data is driving fear of a second wave of Covid-19
UK Economy

James Ferguson: How bad data is driving fear of a second wave of Covid-19

Merryn and John talk to MoneyWeek regular James Ferguson about the rise in infections in coronavirus and what the data is really telling us.
17 Sep 2020