Arian Silver signs MOU over Noche Buena project

25th Feb 2016 14:12

(ShareCast News) - Arian Silver Corporation pressed on with its turnaround plan on Thursday, signing a memorandum of understanding (MOU) with private company Tierra Nueva Mining (TNM), to evaluate its portfolio of mineral properties in Zacatecas State, Mexico.The AIM-traded company said the MOU provided Arian with the right, for a period of 90 days, to conduct due diligence on TNM's portfolio of interests, which included the option on the Noche Buena hard rock project and 100% ownership of the associated tailings project.No fees were payable by Arian in repsect of the MOU, the company's board confirmed, and the MOU did not grant exclusivity to Arian regarding TMN."We are pleased to be making progress in rebuilding Arian, whilst remaining cognizant of the current low metal prices and the fact that investor sentiment towards the mining sector remains negative," said chief executive officer Jim Williams."With this in mind, we are initially concentrating our efforts on near-term and low-cost production opportunities, possibly through the leaching of tailings. Mining and metals markets operate in cycles and the current sentiment will change in time, as such we are also looking at projects with longer-term potential," he added.Williams was a minority shareholder of TNM, and thus was precluded from voting on any matter relating to any potential transaction with TNM, including the execution of the MOU.The Noche Buena project was partly contiguous with Goldcorp's Penasquito project in the northern part of the Zacatecas. Ariana's board said the projects were primarily gold, with silver and base metals of lead and zinc as biproducts.Noche Buena operated from 1926 to 1993, closing due to the low metal prices at the time.Historical production records indicate approximately one million tonnes were mined, with up to 20 grams of gold per tonne, 800 grams of silver per tonne and 8% lead and zinc.The tailings were reported to have a NI 43-101 compliant resource of one million tonnes, containing three grams per tonne of gold, 55 grams per tonne of silver and 0.8% zinc.Arian was treating the resource and production data as historical, with thorough analysis and review forming part of the due diligence exercise.