Investment summary

Further to the release of drilling results last October, this week Arian released the assay results of an additional 15 holes and an IP survey that we estimate is consistent with the potential for an additional 55.6Moz of silver – a 63% increase on its current JORC-compliant resource. Assuming the 55.6Moz are categorised in the same proportion as existing resources, we estimate their value (at sector average valuations) to be c US$148m, or US$0.49/£0.32 per share. At Arian’s currently discounted valuation of US$0.733 per ounce, a resource increase of 55.6Moz would equate to a valuation uplift of US$41m, or US$0.14/£0.09 per share.

Last updated on 18/01/2012

Industry outlook

At a long-term silver price of US$24.63/oz, we estimate mining operations at the San José mine are worth 29.6p over the next four years. There is potential to add an extra US$0.28-3.11 (£0.18-1.94) per share depending on the degree of exploration success achieved in the future.

Last updated on 09/12/2011