Arian Silver Corporation ("Arian" or the "Company"), a silver exploration, development and production company with a focus on projects in the Zacatecas silver belt of Mexico, is pleased to announce that further to the Company's news release of 23 August 2013, the Company has successfully completed its private placement debt financing (the "Private Placement") in the principal amount of US$15,585,000 consisting of a senior secured convertible note (the "Note") and has, upon completion of the financing, completed the purchase of a processing plant with a capacity to treat up to 1,500 tonnes per day of silver-lead-zinc ore at a cost of US $3.12 million, as previously reported.
Jim Williams, Chief Executive Officer of Arian, commented today: "To have successfully closed this private placement during such challenging times for capital markets and the junior mining sector as a whole, is a testament to the quality of the Company's mineral resource and confidence in management's ability to put the mill into operation and resume operations.
The acquisition of this mill is a long-awaited development for the Company which is expected to enable Arian to increase production in a modular manner up to a maximum capacity of 1,500 tonnes per day. This, together with increased mine production and the elimination of Arian's reliance upon third-party toll millers, is expected to provide significantly increased operational control and efficiency, which should therefore translate into significantly reduced operational costs."
The Company will now proceed with refurbishment and transportation of the plant, reassembling it at the Company's San José project where the necessary land is being prepared for both the plant and the associated tailings. In addition, the Company will continue to progress mine development to increase capacity to coincide with the modular construction of the mill.
The Note will mature at a premium of 5% if not otherwise converted before 29 August 2014 and is convertible, in whole or in part, at the option of the holder, Platinum Long Term Growth VIII, LLC, at any time up to that time, into fully paid and non-assessable common shares ("Common Shares") in the capital of the Company (collectively the "Note Shares") at pre-consolidation price of C$0.11 per Note Share (the "Conversion Price"), or C$1.10 post-consolidation. If, however, at the time of sending a conversion notice the Common Shares are then listed on the TSX Venture Exchange ("TSXV"), not more than 96% in aggregate (including prior conversions, if any) of the principal amount may be converted at the Conversion Price, and in the event that all or any part of the remaining 4% is to be converted, it shall be converted based on the closing price of the Common Shares on the TSXV immediately prior to the date of sending the applicable conversion notice. The Note is secured on all or substantially all of the Company's and its subsidiaries' assets.
On closing, the Company prepaid the full interest of 14%.
The TSXV has conditionally accepted the Private Placement and application for admission to trading on London's AIM would be sought following receipt of a conversion notice from the subscriber. The Note is subject to a four month hold period that will expire on 30 December 2013.
In connection with the Private Placement, the agent, Fairfax Securities Corporation DBA Jett Capital Advisors LLC, received a placement fee of 5% and the subscriber received an arrangement fee of 4% from the gross proceeds of the Offering.