Arian Silver's MD&A and Results for the Three Months Ended 31 March 2013

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES NOT FOR DISTRIBUTION IN THE
UNITED STATES. 


Arian Silver Corporation ("Arian" or the "Company") (TSX VENTURE:AGQ) (AIM:AGQ)
(FRANKFURT:I3A), a silver exploration, development and production company with a
focus on projects in the silver belt of Mexico, today announced the release of
its Management's Discussion and Analysis ("MD&A") and unaudited Financial
Statements ("Financials") for the three months ended 31 March 2013.


The MD&A and Financials are available at SEDAR at www.sedar.com and on the
Company's website at www.ariansilver.com. These documents can also be obtained
on application to the Company. The following information has been extracted from
the MD&A and Financials. The financial information in this announcement does not
constitute full statutory accounts.


Arian's Chief Executive Officer, Jim Williams, commented today, "Today's results
reflect the resumption of milling at the third-party-owned, Juan Reyes toll
mill. Whilst initial recovery rates are encouraging, the Board is mindful of the
current silver price and is keeping this under close review.


Progress continues to be made in respect of the intended acquisition of a
company-owned, custom processing plant, which has a crushing and milling
capacity of up to 1,500 tonnes per day, and I look forward to providing an
update in the coming weeks."


OVERVIEW OF FIRST QUARTER 2013 

Financial



                                    First Quarter   First Quarter           
                                             2013            2012    Change 
                                            $000s           $000s     $000s 
Revenue                                         -           2,314    (2,314)
Gross (loss)/profit                          (206)            (65)     (141)
Net (loss)/ profit for the period            (935)            866    (1,801)
Cash and cash equivalents                     497             491         6 
Total assets                               15,154          14,119     1,035 



The decrease in revenues and increase in the gross loss and the net loss of Q1
2013 was a result of the suspension of milling operations following a dispute
with the owner of the former processing plant. Trial production resumed in
February 2013 at the Beneficiadora de Jales y Minerales Juan Reyes SA de CV
("Juan Reyes") processing plant on a small scale.


Cash remained in-line with the previous quarter. Further drawdowns on the
Standby Equity Distribution Agreement ("SEDA") facility funded working capital
requirements. 


Operations



                                    First Quarter   First Quarter           
                                             2013            2012   Change  
Head grade - Ag grams per tonne               174             173        1% 
Tonnes mined                                    0          21,553     (100%)
Tonnes milled                                 258          24,394      (99%)
Silver concentrate tonnes produced              4             302      (99%)
Silver ounces produced                        878          66,688      (99%)
Silver ounces per concentrate                                               
 tonne produced                               251             221       14% 
Silver ounces sold                              0          75,911     (100%)
Silver concentrate tonnes sold                  0             330     (100%)



Trial production resumed during the quarter at the Juan Reyes plant. 

Exploration 

The preparation and exploring of mining blocks continued in order to verify the
continuity of mineralisation. Level 150 was dewatered and rehabilitated, and
sampling took place obtaining new accessible mining blocks that were included in
the resource estimate. The preparation and exploring of mining blocks continued
in order to verify the continuity of mineralisation. 


Subsequent Events 

The Company is currently evaluating a number of indicative financing packages,
which, if successful, could enable, subject to satisfactory due diligence,
significant investment in the purchase and re-commissioning of a custom-built
processing plant, and additional required mine development.


This investment should allow the Company to realise a significant increase in
production concurrent with a significant decrease in operating costs.


Since 31 March 2013, the Company has issued 2,493,212 common shares at GBP
0.1050805 and a further 4,403,160 common shares at a price of GBP 0.068133 in
relation to the drawdown of the SEDA, generating funding of GBP 262,000 and GBP
300,000 respectively.


Following this share issue the Company has in issue 318,491,926 common shares
with voting rights.


THE STRATEGY



--  Obtain advanced and low-cost (acquisition cost) silver projects and
    rapidly build up resources in the ground. Arian is focusing its
    exploration efforts in one of the richest known silver-bearing districts
    in the world - the Zacatecas State of Mexico. 
--  Focus on projects with prior exploration and production history, thereby
    reducing risks and capital costs. 
--  Develop projects towards production through a combination of company
    development and/or Joint Venture (JV) and acquisition opportunities. 
--  Build shareholder value by expanding silver resources and reserves, and
    increasingly efficient production.



REVIEW OF OPERATING PERFORMANCE



----------------------------------------------------------------------------
                                          Q1      Q4      Q3      Q2      Q1
                                        2013    2012    2012    2012    2012
----------------------------------------------------------------------------
Head grade - Ag grams per tonne                                             
 (g/t)                                   174       -       -     181     173
Tonnes mined                               -       -   4,072  26,268  21,553
Tonnes milled                            258       -       -  28,903  24,394
                                                                            
Silver concentrate tonnes produced         4       -       -     298     302
Recovery %                             60.90       -       -   58.74   49.01
Silver ounces produced                   878       -       -  98,616  66,688
Silver ounces per concentrate tonne                                         
 produced                                251       -       -     331     221
                                                                            
Silver ounces sold                         -       -   8,937  93,112  75,911
Silver concentrate tonnes sold             -       -      32     286     330
                                                                            
Quarter end inventory balances                                              
Mined tonnes stockpile                17,935  18,192  18,204  15,003  17,637
Silver concentrate inventory tonnes        4       -       -      36      24
Silver ounces included in                                                   
 concentrate inventory                   878       -       -  11,276   5,772
----------------------------------------------------------------------------



Head Grade 

The head grade of 174 is in-line with previous quarters.

Tonnes mined 

No ore was mined in the quarter.

Tonnes milled 

258 tonnes of stockpiled ore were milled in the quarter as processing commenced
at the Juan Reyes mill.


Silver concentrate produced 

The silver concentrate inventory balance at the end of Q1 2013 was 4 tonnes
compared to nil tonnes at the end of Q4 2012. This follows the suspension of
processing at the plant owned by Contracuna SA de CV ("Contracuna") and the
subsequent commencement of production at the Juan Reyes plant. 


% Recovery 

The initial recovery rate of 60.9% is significantly higher than at the former
third-party processing plant owned by Contracuna, and was obtained by processing
only a small amount of ore.


Mined tonnes stockpile 

The stockpile of mined ore was 17,935 tonnes at the end of Q1 2013 compared to
18,192 tonnes at the end of Q4 2012. 


Mining Operations



----------------------------------------------------------------------------
All figures in this table are                                               
 quoted in metres                       2013              2012              
                                          Q1      Q4      Q3      Q2      Q1
Exploration Drilling                       -       -      12     121     120
Ramp development                         107      81      68     242      98
Preparation                                0       -       8     151     179
Raises                                     0       -      33      31      32
----------------------------------------------------------------------------



Mining focussed on the Ramal Norte/Sur, San Jose 75 m Level Central Zone and
Santa Ana resource blocks. These were selected from several delineated resource
blocks to support an initial pilot scale mining operation with the potential to
increase the mining rate to circa 1,500 tpd subject to milling capacity
availability.


The preparation and exploring of mining blocks continued in order to verify the
continuity of mineralisation. Level 150 was dewatered and rehabilitated, and
sampling took place obtaining new accessible mining blocks that were included in
the resource estimate. During this sampling, 46.9 m of ramp was developed and
60.1m of exploration drifts. Development continues at the mine, but on a reduced
scale to meet obligations to keep the mine operational until mining is resumed. 


Milling Operations 

The construction of the Juan Reyes processing plant continued during Q1 2013.
The Company played an important role in managing and completing this process.
This included the identification of milestones, critical paths, task management,
supervision and the completion of the Lead circuit and testing of the crushing
section. We are confident that further improvements will be achieved during the
next quarter. 


Water is scarce owing to low levels of rainfall in Zacatecas state. Efforts are
being made to ensure a reliable source of water for the Juan Reyes processing
plant. Water is now being sourced from the Calicanto mine, less than 1km away.
This has the advantage of reducing the water levels in the mine, which will
improve access to mining blocks. 


Processing at Juan Reyes has continued into Q2 2013, albeit on a small scale. A
total of 1,823 tonnes have been processed during the first seven weeks of Q2,
2013. This is more conservative than initial estimates, and reflects the
on-going adjustments to refine the operations and processes, as well as the
volatility of the silver price and management's future expectations.


An agreement was reached for the acquisition of a processing plant currently
located close to Zacatecas City, with a capacity to treat up to 1,500 tonnes per
day of silver-lead-zinc ore ("El Bote Mill").


Title for the land purchased was completed and the application for an
environmental permit submitted for the processing plant construction, including
a proposed tailings dam. 


Exploration Drilling 

The phase 5 exploration drilling program has been prepared and it is anticipated
that it will begin once additional funding has been secured. 


Laboratory 

The independent on-site laboratory operated by the Stewart Group (a subsidiary
of the ALS Chemex Group) continues to operate. This is a valuable service which
provides timely analysis of samples and critical information to improve the
decision making process of mining and milling staff. In addition the laboratory
provides an invaluable tool during drilling programmes which has significantly
decreased the turnaround times for analysis of Arian's sampled drill cores. 


Calicanto Project, Zacatecas State 

Arian owns 100% of the Calicanto Project which consists of seven adjacent mining
concessions totalling 75.5ha, namely: Calicanto, Vicochea I, Vicochea II, Misie
1 and Misie 2, and Missie 1 and Missie 2 properties, collectively known as the
"Calicanto Group". The concessions are located in the historic mining district
of Zacatecas. The Calicanto Group of concessions comprises at least four main
mineralised vein systems. 


Further underground evaluation of the deeper levels of the Calicanto Vein can
begin once the water has receded to the appropriate level. This will include
mapping and underground sampling and subsequent analyses. There has been no
significant expenditure on the Calicanto Project during the past two years.


Additional information in respect of the Calicanto Project is contained in a
technical report prepared by A.C.A. Howe International Limited dated 20 March
2006 and entitled "Technical Report on the Calicanto and San Celso Projects,
Zacatecas, Mexico". A copy of this report is available on the Company's website
www.ariansilver.com or on SEDAR at www.sedar.com.


MINERAL RESOURCE 

The Company currently owns 31 mineral concessions in Mexico totalling 7,900
hectares as set out below.




----------------------------------------------------------------------------
Project Name                  No. of Concessions     Area in hectares ("ha")
----------------------------------------------------------------------------
San Jose                                      11                     6,279.5
----------------------------------------------------------------------------
Calicanto                                      7                        84.0
----------------------------------------------------------------------------
Others                                        13                     1,536.5
----------------------------------------------------------------------------



Qualified Person 

Mr. Jim Williams, Eur Ing, Eur Geol, BSc, MSc, DIC, FIMMM, the Chief Executive
Officer of Arian, a "Qualified Person" as defined in the AIM guidelines of the
London Stock Exchange, and a "Qualified Person" as such term is defined in
Canadian National Instrument 43-101 ("NI 43-101"), has reviewed and approved the
technical information in this Review of Operations other than the mineral
resource estimates referred to below. 


San Jose Project, Zacatecas State 

The 100%-owned San Jose property is located approximately 55 kilometres ("km")
to the southeast of Zacatecas City and comprises 11 mining concessions totalling
approximately 6,300ha. The property has significant infrastructure, including a
4.5 x 5 metre ("m") main haulage ramp extending more than 4.0km along the San
Jose vein ("SJV") system, and a 350m deep, 500 tonne per day ("tpd") vertical
shaft with operational hoist. In addition, a number of shallower vertical shafts
are located along the SJV.


A 2% NSR (net smelter royalty) on SJV revenue is payable to the vendor of the
San Jose property.


Mineral Resource 

Arian's resource estimate includes all drilling programmes from 2006 along the
SJV which has a delineated NI 43-101 and a JORC-compliant resource estimate of
approximately 30.61 million ounces of silver, 67.02 million pounds of lead and
149.91 million pounds of zinc in the "indicated" mineral resource category, and
88.65 million ounces of silver, 205.25 million pounds of lead and 410.50 million
pounds of zinc in the "inferred" mineral resource category. These NI 43-101 and
JORC-compliant mineral resources are summarised in the table below: 




----------------------------------------------------------------------------
Resource Category                 Average Grade          Contained Metal    
                            ------------------------------------------------
                      Tonnes      Ag      Pb      Zn      Ag      Pb      Zn
----------------------------------------------------------------------------
                         (t)   (g/t)       %       %   (Moz)   (Mlb)   (Mlb)
----------------------------------------------------------------------------
Indicated          8,000,000     119    0.38    0.85   30.61   67.02  149.91
----------------------------------------------------------------------------
Inferred          24,500,000     110    0.38    0.76   86.65  205.25  410.50
----------------------------------------------------------------------------

1.  Geological characteristics and +30 ppm grade envelopes used to define
    resource volumes. 
2.  Each mineral resource estimate is in accordance with CIM standards. 
3.  The effective date of each mineral resource estimate is 12 March 2012. 
4.  The estimates are based on geological, statistical and geostatistical
    data assessment and computerised IDW3, Ag grade wireframe restricted,
    linear block modelling. 
5.  The resource was estimated using 188 drill holes and more than 38,000
    metres. 
6.  Resource figures were prepared under the supervision of Malcolm Titley
    who is a Qualified Person (as defined in Canadian National Instrument
    43-101). 
7.  Tonnage figures have been rounded to reflect this as an estimate. 
8.  Ag (silver) ounces have been calculated using 31.1035 g = 1 oz. 
9.  Pb (lead) and Zn (zinc) tonnes have been calculated using 2204.622 lbs =
    1 tonne. 
10. The mineral resource is 100% owned by Arian.



The following reports prepared by A.C.A. Howe International Limited relating to
the San Jose project are available on the Company's website www.ariansilver.com
or on SEDAR at www.sedar.com : 




a) Report dated 22 September 2009 and entitled "Preliminary Economic        
   Assessment Report (PEAR) on the San Jose Silver-Lead-Zinc Deposit,       
   Zacatecas, Mexico"; and                                                  
                                                                            
b) Report dated 15 August 2008 and entitled "Resource Estimation Update for 
   the San Jose Silver-Lead-Zinc Deposit, Zacatecas, Mexico".               



Readers are reminded that mineral "resources" are not mineral "reserves" as they
have not yet demonstrated economic viability. There is no certainty that mineral
resources can be upgraded to mineral reserves through continued exploration.


REVIEW OF FINANCIAL PERFORMANCE

SUMMARY OF QUARTERLY RESULTS

Mining and milling continued to be interrupted by the suspension of milling
since July 2012. Milling re-commenced in February 2013. These factors have had a
significant impact on the comparability of quarter-on-quarter figures set out
below:




Unaudited                      2013                   2012                  
                                 Q1        Q4        Q3        Q2        Q1 
                              $'000     $'000     $'000     $'000     $'000 
                           -------------------------------------------------
Revenue                           -        34       136     2,104     2,314 
Cost of sales                   206       256       475     2,242     2,379 
Gross (loss) / profit          (206)     (222)     (339)     (138)      (65)
Operating (loss) / profit      (935)   (1,072)   (1,025)   (1,006)     (855)
Net investment                                                              
 (loss)/profit                  (21)      (84)       57      (127)       81 
Net (loss)/profit for the                                                   
 period                        (956)   (1,156)     (968)   (1,133)     (774)
Basic and diluted loss per                                                  
 share                     $   0.00  $   0.00  $   0.00  $   0.00  $   0.00 
                                                                            
Total assets                 15,154    14,119    14,409    15,021    16,732 
Total non-current                                                           
 financial liabilities          186       177       175       172       171 
Shareholders' equity         13,971    13,003    13,464    13,647    15,370 

Unaudited                                        2011                       
                                       Q4               Q3               Q2 
                                    $'000            $'000            $'000 
                          --------------------------------------------------
Revenue                             2,314            2,367            2,434 
Cost of sales                       2,379            1,921            1,914 
Gross (loss) / profit                 (65)             446              520 
Operating (loss) / profit            (855)            (393)            (486)
Net investment                                                              
 (loss)/profit                         81              (50)            (116)
Net (loss)/profit for the                                                   
 period                              (774)            (443)            (602)
Basic and diluted loss per                                                  
 share                     $         0.00  $          0.00  $          0.00 
                                                                            
Total assets                       16,732           16,250           16,894 
Total non-current                                                           
 financial liabilities                171              170              168 
Shareholders' equity               15,370           14,909           15,806 



REVIEW OF Q1 2013 RESULTS 

Revenue 

There were no revenues on account of the suspension of production since July 2012. 

Cost of sales 

Cost of sales related to mining costs to keep the mine operational and milling
costs to oversee the commissioning of the new mill. 


Gross (loss)/profit 

A gross loss of $0.2m (2012: $0.2m) was incurred primarily on account of no
revenue. 


Operating loss 

The operating loss of $0.9m was primarily on account the gross loss of $0.2m,
and administrative expenses of $0.7m, which remained in line with previous
periods. 


Loss for the period 

Net loss of $1m comprised the operating loss of $0.9m and a loss on the
investment in Geologix Explorations, Inc. ("Geologix") shares, which were
received as part payment for the final instalment for the sale of the Tepal
concession. 


Total assets 

Total assets of $15.2m increased by $1.1 compared with Q4's $14.1m, primarily
due to mine development in the San Jose mine and favourable foreign exchange
movements on the value of mining assets. 


Total non-current financial liabilities 

Total non-current financial liabilities were $186,000 This amount would only be
payable if the mine were closed; it covers decommissioning, reclamation and
rehabilitation at the end of the initial mining period of approximately 4 years
and is based on an estimated cost of $206,000 and discount rate of 5%. 


Shareholders' equity 

Shareholders' equity increased by $1m compared to Q4 2012. This increase was a
result of share capital issued of $1.3m and favourable gains in foreign exchange
reserves of $0.6m, offset by the quarterly loss of $0.9m. 


As at 31 March 2013 the Company had working capital of $1.7m (31 December 2012:
$1.6m). 


See Liquidity, Capital Resources and Working Capital for the items of working
capital. 


Intangible assets amounted to $1.2m (31 December 2012: $1.2m) which relate to
deferred exploration and evaluation costs in respect of the Company's Mexican
projects. Property, plant and equipment amounted to $11.2m (31 December 2012:
$10.4m); $11.0m of this relates to the San Jose mine development costs. Share
capital increased by $1.3m to $49.5m (31 December 2012: $48.2m) as a result of
the issue of common shares in connection with the drawdown of the standby equity
distribution agreement ("SEDA"), see Liquidity, capital resources and working
capital.


First quarter 2013 vs. first quarter 2012 

The loss for the quarter was $1.0m (2012: $0.9m profit). This included a gross
loss of $0.2m (2012: $0.1m) generated by the San Jose mining operation, the
expensing of the fair value of share purchase options vesting of $nil (2012:
expense of $0.1m, and credit of $1.7m for the reversal of a charge made to
earlier periods in respect of the fair value of share purchase options vesting
that lapsed in the period), and other administrative expenses of $0.7m (2012:
$0.9m), and a net investment loss of $22,000 (2012: net investment income of
$0.1m).


First quarter 2013 vs. fourth quarter 2012 

The Q1 2013 gross loss of $0.2m was in line with the gross loss reported in the
previous quarter, Q4, 2012. The net loss for Q1 2103 of $1m was $0.2m lower than
that for Q4 2012 due to administrative expenses being $0.1m lower and the
investment loss being $0.1m lower. Cash available at the end of the Q1 2013 of
$0.5m remained in line with the previous quarter. The increase in shareholders'
equity of $1m was attributable to the increase of $1.3m in share capital
resulting from the SEDA drawdown, an increase of $0.6m in the value of the
foreign exchange reserve, offset by the net loss of $0.9m for the. 


LIQUIDITY, CAPITAL RESOURCES AND WORKING CAPITAL 

As announced on 27 September 2012, the Company entered into a 3 year GBP 5
million SEDA with YA Global Master SPV Ltd ("Yorkville"), an investment fund
managed by YA Global LP. The SEDA allows the company to draw down funds in
exchange for the issue of shares in the Company.


Under the terms of the SEDA, any equity issued shall be priced at 95 per cent of
the prevailing market price over a pricing period of between 5 and 20 days, in
accordance with the agreement. The amount of each advance may not exceed, an
amount not more than 400 per cent of the average daily trading volume of shares
multiplied by the volume weighted average price on AIM for the five trading days
prior to the drawdown request.


Use of the facility is entirely at the discretion of the Company and there are
no penalties for not drawing down on the facility. 


The following share purchase options were outstanding as of May 21, 2013, each
entitling the holder to acquire one common share of the Company: 15,360,000
share purchase options with exercise prices ranging from GBP 0.055 to GBP 0.4925
(Cdn$0.10 to Cdn$0.79) and expiring on various dates up to May 2017.


Working Capital - 31 March 2013 

As at 31 March 2013, the Company had working capital of approximately $1.7m (31
December, 2012: $1.6m). The items of working capital and changes compared to 31
December 2012 are as follows: 


Current assets



--  cash and cash equivalents of $0.5m (31 December 2012: $0.5m); 
--  trade and other receivables of $1.3m (31 December 2012: $1.2m) - the
    outstanding balance relates to the IVA (government sales tax) debtor
    owed to Arian which is in the process of being recouped; 
--  inventories of $0.7m (31 December 2012: $0.6m) - relates to stockpile
    held at cost relating to production at the San Jose mine; and 
--  financial assets held at fair value through profit or loss of $0.2m (31
    December 2012: $0.2m) - relates to the Geologix shares received as part
    consideration for the final instalment for the sale of the Tepal
    project. 



Current liabilities



--  trade payables of $1.0 million (31 December 2012: $0.9 million). 



Off-balance sheet arrangements 

The Company has no off-balance sheet arrangements.

TRANSACTIONS WITH RELATED PARTIES 

During the three months ended 31 March 2013 the group entered into the following
transactions involving related parties:


Transactions with key management personnel 

The Dragon Group Ltd charged the Company a total of $30,161 (31 March 2012:
$30,495) which relates to the reimbursement of Tony Williams' remuneration paid
on behalf of the Company. Tony Williams, Chairman and a director of the Company,
beneficially owns the Dragon Group. At 31 March 2012 $9,831 (31 December 2012:
$20,910) was outstanding.


Key management personnel participate in the Company's share option programme. 

FUTURE OUTLOOK 

The commencement of processing at the Juan Reyes toll mill puts Arian back into
the ranks of silver producers. However, this new toll mill arrangement should be
regarded as only a stepping-stone towards the Company acquiring its own
processing plant. A plant has been identified and the Company is in discussions
regarding its acquisition, which, if successful should eventually allow the
Company to realise economies of scale in both mining and milling operations,
resulting in greater production and increased operating efficiencies.


CRITICAL ACCOUNTING ESTIMATES 

The preparation of financial statements in conformity with IFRS requires the
Company to select from possible alternative accounting principles and to make
estimates and assumptions that determine the reported amount of assets and
liabilities at the balance sheet date and reported costs and expenditures during
the reporting period. Estimates and assumptions may be revised as new
information is obtained and are subject to change. The Company's accounting
policies are considered appropriate in the circumstances, but are subject to
judgements and uncertainties inherent in the financial reporting process.


The following section discusses the critical accounting estimates and
assumptions that management has made and how they affect the amounts reported in
the consolidated financial statements. We consider these estimates to be an
important part of understanding our consolidated financial statements.


Going Concern 

The directors regularly review cash flow forecasts to determine whether the
Company and its subsidiaries (together referred to as the "Group") have
sufficient cash reserves to meet future working capital requirements and
commitments, and to fund future exploration projects and business opportunities.
Exchange rates and the price of silver have a significant impact on the Group's
cash flow. 


Toll milling fully resumed on 16 February 2013 at a mill operated by
Beneficiadora de Jales y Minerales Juan Reyes SA de CV. Under present market
conditions and volatile prices for silver, the Company is closely monitoring
production and its associated impact on profit and cash resources. 


In September 2012, the Group entered into a GBP 5 million Standby Equity
Distribution Agreement ("SEDA") with YA Global Master SPV Ltd ("Yorkville").
This facility was to provide working capital funding to initiate the P5 drilling
programme, milling and mining studies. The SEDA entitles the Group to drawdown
funds in exchange for the issue of shares at a price based on the Company's
market price over the previous 5 to 20 days period. At 31 March 2013, the Group
had drawn down an amount of GBP 1,371,800 against this facility.


This facility has been utilised to meet working capital requirements and for
continued development and mining work at the San Jose mine.


The Group is also considering a number of funding options including the issue of
new equity, project and debt finance to provide additional funding for future
growth and expansion.


In the past the Group has been successful at raising equity funds, however there
can be no assurance that the Group will be able to raise funds for future
development. 


The directors currently believe that the Group has adequate financial resources
or access to such resources in order to continue to prepare the Company's
financial statements on a going concern basis. However if the Company is
unsuccessful in raising future funding it may not be able to meet its on-going
working capital and project expenditure requirements. If these circumstances
arose then there would be significant doubt on the Company's ability to continue
as a going concern and the carrying value of the Group's exploration and other
assets would be required to be reviewed.


Resource Properties, Deferred Exploration and Development Costs 

All costs related to the exploration of mineral properties are capitalised until
either the properties are brought into production, at which time they are
amortised over the estimated life of the project, or until the properties are
sold, or title rights allowed to lapse, or are abandoned or determined not to be
commercially viable, at which time they are charged to the income statement.


The amounts capitalised at any time represent costs to be charged to operations
in future and do not necessarily reflect the present or future values of
particular properties. The recoverability of the carrying values of exploration
properties is dependent upon the discovery of economically recoverable reserves,
the ability of the Company to obtain necessary financing to complete development
and future profitable production therefrom, or alternatively, upon the Company's
ability to dispose of its interests on an advantageous basis.


Management is of the view that the current policy is appropriate for the Company
at this time and is consistent with many other public mineral exploration and
development companies in the UK and Canada. Shareholders are advised that
carrying values are not necessarily indicative of present or future values. The
Company assesses whether impairment exists in any of its exploration projects
and writes down that project to its estimated recoverable value when such
impairment is found to exist. Any write-down is recorded as an expense in the
Company's income statement in the financial statements for the relevant period.


Share-based Payments 

The share option programme allows group directors, officers, employees and
consultants to acquire shares of the Company. The fair value of share purchase
options granted is recognised as an expense with a corresponding increase in
equity. The fair value is measured at the grant date and spread over the period
until the share purchase options vest unconditionally. The fair value of the
share purchase options granted is measured using the Black-Scholes model, taking
into account the terms and conditions upon which the share purchase options were
granted. The amount recognised as an expense is adjusted to reflect the actual
number of share purchase options that vest, except if the change is due to
market based conditions not being satisfied.


Revenue Recognition 

Revenue from sales of metal concentrate is recognised when title transfers and
the rights and obligations of ownership pass to the customer. The Company's
sales of concentrate are made under pricing arrangements where final sales
prices are determined by quoted market prices in a period subsequent to the date
of sale. In these circumstances, revenue from sales is recorded at the time of
the sale based on forward prices for the expected date of final settlement.
Subsequent variations in prices are recognised as revenue adjustments as they
occur.


In a period of extreme and unusual price volatility, the effect of
mark-to-market price adjustments related to the quantity of metal which remains
to be settled with independent smelters could be significant.


Inventories 

Concentrates and stockpile ore are valued at the lower of the average production
costs or net realisable value. The assumptions used in the valuation of those
inventories included estimates of metal contained in stockpiled ore, assumptions
of the amount of metal that is expected to be recovered, assumptions of the
smelting terms as well as assumptions of the metal prices and exchange rates
expected to be realised when the metals are recovered. If these estimates or
assumptions prove to be inaccurate the Company could be required to write-down
the recorded value of its inventories, which would reduce the Company's earnings
and working capital. Net realisable value is determined with reference to market
prices.


FINANCIAL RISK FACTORS

Market Risk 

Market risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market prices. Market risk for
Arian comprises two types of risk: currency risk and price risk.


Price Risk 

The price risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market prices, whether
those changes are caused by factors specific to the individual financial
instrument or its issuer, or factors affecting all similar financial instruments
in the market. 


Currency Risk 

The Company's exploration expenditure is made in Mexico in Mexican Peso and head
office expenses are predominantly made in the UK in Pounds Sterling, United
States Dollars and Canadian dollars. The Company is therefore exposed to the
movement in exchange rates for these currencies. 


The Company does not currently hedge foreign exchange risk.

The majority of the Company's cash resources were held in US Dollars. The
Company therefore also has downside exposure to any strengthening of Pound
Sterling, the Mexican Peso, or the Canadian Dollar against the US dollar as this
would increase expenses in US Dollar terms and accelerate the depletion of the
Company's cash resources. Any weakening of Pound Sterling, the Mexican Peso, or
the Canadian Dollar against the US Dollar would, however, result in a reduction
in expenses in US Dollar terms and preserve the Company's cash resources.


In addition, any movements in Pound Sterling or Mexican Peso would affect the
presentation of the consolidated statement of financial position when the net
assets of the Mexican subsidiary and parent company in the UK are translated
from their functional currencies into United States Dollars.


Liquidity Risk 

The Company's approach to managing liquidity risk is to ensure that it will have
sufficient liquidity to meet liabilities when due. As at 31 March 2013, the
Company had cash of $497,000, financial assets of $172,000, and receivables of
$1,342,000 to settle accounts payable of $997,000. The Company's accounts
payable have contractual maturities of less than 30 days and are subject to
normal trade terms.


Credit Risk 

Credit risk is the risk of loss associated with a counterparty's inability to
fulfil its payment obligations. The Company's credit risk is attributable to
cash and trade receivables. The credit risk on cash is limited because the
Company invests its cash in deposits with well capitalised financial
institutions with strong credit ratings. 


OTHER RISK FACTORS 

The financing, exploration, development and exploitation of the Company's
properties and the operations of the Company' business are subject to a number
of factors, including metal prices, laws and regulations, political conditions,
currency fluctuations, hiring qualified people and obtaining necessary services
in jurisdictions where the Company operates.


The Company is subject to a number of risk factors due to the nature of the
mining business in which it is engaged, not least are adverse movements in
commodity prices, which are impossible to forecast. The Company seeks to counter
this risk, as far as possible, by selecting exploration areas on the basis of
their recognised geological potential to host economic deposits. 


The following is a brief discussion of those distinctive or special
characteristics of the Company's operations and industry that may have a
material impact on, or constitute risk factors in respect of the Company's
future financial performance.


Requirement of Additional Financing 

The exploration and development of the Company's concessions, including
continuing exploration projects, and the construction of larger scale mining
facilities and commencement of larger scale mining operations, will require
substantial additional financing. However, if the required funding is not
forthcoming on a timely basis the Company may not be able to meet its on-going
working capital and project expenditure requirements. No assurance can be given
that the Company will be able to raise the additional financing necessary to
continue its production activities or to explore and/or develop its concessions.
Failure to obtain sufficient financing for any projects will result in a delay
or indefinite postponement of exploration, development or production on
properties covered by the Company's concessions or even the loss of a
concession. The only sources of funds currently available to the Company are
through the sale of product from production activities, the issue of equity
capital, the sale of concessions or other assets, royalty interests or the
entering into of joint ventures. In addition, the Company's ability to obtain
further financing will depend in part on the price of silver and the industry's
perception of its future price and other factors outside the Company's control.
Additional financing may not be available when needed, or if available, the
terms of such financing might not be favourable to the Company and might involve
substantial dilution to shareholders. In the absence of adequate funding the
Company may not be able to continue as a going concern in which event the
carrying value of the Company's projects would be required to be reviewed.


Volatility of Metal Prices 

The value of the Company's resources and financial results of operations will be
affected by fluctuations in metal prices over which the Company has no control.
A reduction in the metal prices may prevent the Company's properties from being
economically mined or result in curtailment of existing production activities or
result in the impairment and write-off of assets.


The price of silver, which is affected by numerous factors including inflation
levels, fluctuations in the US Dollar and other currencies, supply and demand
and political and economic conditions, may have a significant influence on the
market price of the Company's common shares.


Mining concessions and Title 

In relation to mining concessions over which the Company holds legal rights, if
the Company fails to fulfil the specific terms of any of its concessions or
operates in the concession areas in a manner that violates Mexican law,
regulators may impose fines, suspend or revoke the concessions, any of which
could have a material adverse effect on the Company's operations and proposed
operations.


Whilst the Company has received legal opinions in respect of title to its
properties there is no guarantee that title to such properties will not be
challenged or impugned by third parties. The Company's concessions may be
subject to prior unregistered agreements, transfers or other claims and title
may be affected by unidentified or unknown defects or government actions. 


Nature of Mineral Exploration and Mining 

Any exploration programme entails risks relating to the location of economic ore
bodies, the development of appropriate metallurgical processes, the receipt of
necessary governmental permits and the construction of mining and processing
facilities. Save in respect of the San Jose project, the Company's projects are
not in production and no assurance can be given that any exploration programme
will result in any new commercial mining operation or in the discovery of new
resources.


The exploration and development of mineral deposits involves significant
financial risks over a prolonged period of time, which even a combination of
careful evaluation, experience and knowledge may not eliminate. While discovery
of a mineral structure may result in substantial rewards, few concessions which
are explored are ultimately developed into producing mines. Major expenditures
may be required to establish reserves by drilling and to construct mining and
processing facilities at a site. It is impossible to ensure that preliminary
feasibility studies or full feasibility studies on the Company's projects or the
current or proposed exploration programmes on any of the concessions in which
the Company has rights or is negotiating rights will result in a profitable
commercial mining operation.


The Company's operations are subject to all of the hazards and risks normally
incidental to exploration, development and the production of minerals. These
could result in damage to or destruction of the Company's facilities, damage to
life or property, environmental damage or pollution and possibly legal liability
for any or all damage which could have a material adverse impact on the
business, operations and financial performance of the Company. The Company's
activities may be subject to prolonged disruptions due to weather conditions
depending on the location of operations in which the Company has interests.
Hazards, such as unusual or unexpected geological formations, rock falls,
flooding or other climatic conditions may be encountered in the drilling and
removal of material. Although precautions to minimise risk will be taken, even a
combination of careful evaluation, experience and knowledge may not eliminate
all of the hazards and risks.


Whether a mineral deposit will be or will continue to be commercially viable
depends on a number of factors, some of which are the particular attributes of
the deposit, such as its size and grade, proximity to infrastructure, financing
costs and governmental regulations, including regulations relating to prices,
taxes, royalties, infrastructure, land use, importing and exporting of silver,
changes in the silver price, and environmental protection. The effect of these
factors cannot be accurately predicted, but the combination of these factors may
result in the Company not receiving an adequate return on invested capital.


The Company is transitioning from an exploration company to a producer. In the
mining industry such a transition is sometimes a difficult and challenging
exercise due to operational issues and risks.


Limited Operating History 

The Company has a limited history of producing revenue and its ultimate success
will depend on its ability to generate cash flow from its concessions in the
future. The Company has not earned any material profits to date and there is no
assurance that it will do so in the future. A major portion of the Company's
activities will be directed to the development of the SJV as well as the search
for and the development of new silver deposits. Significant capital investment
will be required for exploration at the concessions and to achieve commercial
production from the Company's existing projects and from successful exploration
efforts. There is no assurance that the Company will be able to raise the
required funds to continue these activities.


Mineral Resource Estimates 

The mineral resource figures disclosed in this MD&A are estimates and no
assurances can be given that the indicated levels of minerals will be produced.
Such estimates are expressions of judgment based on knowledge, mining
experience, analysis of drilling results and industry practices. Valid estimates
made at a given time may significantly change when new information becomes
available. While the Company believes that the resource estimates included in
this MD&A are well established, by their nature resource estimates are imprecise
and depend, to a certain extent, upon statistical inferences, which may
ultimately prove unreliable. If such estimates are inaccurate or are reduced in
the future, this could have a material adverse impact on the Company.


Mineral resources are not mineral reserves and do not have demonstrated economic
viability. There is no certainty that mineral resources can be upgraded to
mineral reserves through continued exploration.


No Reserves 

The Company does not hold any concessions in respect of which mineral reserves
estimates have been established that comply with CIM Standards and Guidelines or
other similar recognised industry standards.


Insurance and Uninsured Risks 

The mining industry is subject to significant risks that could result in damage
to, or destruction of, mineral properties or producing facilities, personal
injury or death, environmental damage, delays in mining or monetary losses and
possible legal liability.


The Company's insurance policies may not provide adequate coverage for losses
related to these or other risks. The Company's insurance policies do not cover
all possible risks that may arise in relation to the Company's exploration
activities and production facilities and as a result the Company may incur
losses or damages that could have a material and adverse effect on the Company's
operations and finances. 


In the course of the Company's activities certain risks or unexpected or unusual
geological conditions both underground and on surface may occur. It is not
always possible to insure against such risks due to the absence of available
cover or the Company may decide not to insure due to costs considerations of
available cover. As a result the Company could incur losses or damages that
could have a material and adverse effect on the Company's operations and
finances.


Reliance on Contractors in Mexico 

The Company relies on contractors to implement the Company's exploration and
development programmes as well as its current mining operation at the San Jose
project. The failure of a contractor to perform properly its services to the
Company could delay or inconvenience the Company's operations, and have a
materially adverse effect on the Company.


Key Personnel 

The Company's business is dependent on retaining the services of a small number
of key personnel of the appropriate calibre as the business develops. The
Company has entered into employment agreements with certain key managers. The
success of the Company is, and will continue to be to a significant extent,
dependent on the expertise and experience of the directors and senior
management. The loss of one or more of these individuals could have a materially
adverse effect on the Company. The Company does not currently have any insurance
in place with respect to key personnel.


Environmental Factors 

The Company's operations are subject to environmental regulation in the
jurisdictions in which the Company operates. Such regulation covers a wide
variety of matters, including, without limitation, prevention of waste,
pollution and protection of the environment, labour regulations and health and
safety. The Company may also be subject under such regulations to clean-up costs
and liability for toxic or hazardous substances, which may exist on or under any
of the properties covered by its concessions, or which may be produced as a
result of its operations.


If the Company does not comply with environmental regulations or does not file
environmental impact statements in relation to each of its concessions, it may
be subject to penalties, its operations may be suspended, closed and/or its
concessions may be revoked. 


Environmental legislation and permit requirements are likely to evolve in a
manner which will require stricter standards and enforcement, increased fines
and penalties for non-compliance, more stringent environmental assessments of
proposed projects and a heightened degree of responsibility for companies and
their directors and employees.


Political Risk 

The Company is conducting its exploration activities in the Republic of Mexico.
The Company may be adversely affected by changes in economic, political,
judicial, administrative or other regulatory factors such as taxation in the
Republic of Mexico, where the Company will operate and holds its major assets.
The Republic of Mexico may have a more volatile political environment and/or
more challenging trading conditions than in some other parts of the world. The
Directors believe the government of Mexico supports the development of natural
resources by foreign operators. There is no assurance that future political and
economic conditions in Mexico will not result in the government of Mexico
adopting different policies in respect of foreign development and ownership of
mineral resources. Any such changes in policy may result in changes in laws
affecting ownership of assets, taxation, rates of exchange, environmental
protection, labour relations, and repatriation of income and return of capital.
These changes may affect both the Company's ability to undertake exploration and
development activities in respect of future properties in the manner currently
contemplated, as well as its ability to continue to explore and develop those
properties, in respect of which it has obtained exploration and development
rights to date.


Payment Obligations 

Under the mineral property concessions and certain other contractual agreements
to which a member of the Company is, or may in the future become, a party, any
such company is, or may become, subject to payment and other obligations. If
such obligations are not complied with when due, in addition to any other
remedies which may be available to other parties, this could result in dilution
or forfeiture of interests held by such companies. The Company may not have, or
be able to obtain, financing for all such obligations as they arise.


Regulatory Approvals 

The operations of the Company require approvals, licenses and permits from
various regulatory authorities, governmental and otherwise. The Board believes
that the Company holds or will obtain all necessary approvals, licenses and
permits under applicable laws and regulations in respect of its current
projects. There can be no guarantee that the Company will be able to obtain or
maintain all necessary approvals, licenses and permits that may be required to
explore and develop its various projects and/or commence construction or
operation of mining facilities that economically justify the cost.


Competition 

The Company competes with numerous other companies and individuals in the search
for and acquisition of mineral claims, leases and other mineral interests, as
well as for the recruitment and retention of qualified employees. There is
significant competition for the silver opportunities available and, as a result,
the Company may be unable to acquire further silver concessions on terms it
considers acceptable.


Conflicts of Interest 

Certain directors and officers of the Company also serve as directors and/or
officers of other companies involved in mineral exploration and development and
consequently there is the potential for conflicts of interest. The Company
expects that any such director or officer shall disclose such interest in
accordance with its articles of association or his contractual obligations to
the Company and any decision made by any of such directors and officers
involving the Company will be made in accordance with their duties and
obligations to deal fairly and in good faith with a view to the best interests
of the Company and its shareholders.


Other risks and uncertainties have been detailed in the Company's 2012 Annual
MD&A which can be accessed on SEDAR at www.sedar.com or the Company's website at
www.ariansilver.com. 


Forward-Looking Statements 

This MD&A contains certain "forward-looking statements". 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 (including, without limitation, statements relating to the mineral
resource estimates, statements regarding the contract mining and milling
operation at the San Jose Project (the "SJ Mining Operation"), the ability of
the Company to achieve, maintain and possibly increase planned levels of
production from the SJ Mining Operation, the ability of the Company to generate
positive cash flow from the SJ Mining Operation, the ability to continue or
implement proposed drilling programmes on the SJV system and the Company's
exploration, development and production plans and objectives) are
forward-looking statements. These forward-looking statements reflect the current
expectations or beliefs of the Company based on information currently available
to the Company. Forward-looking statements are subject to a number of risks and
uncertainties that may cause the actual results of the Company to differ
materially from those discussed in the forward-looking statements, 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. Factors that could cause actual results or events to differ materially
from current expectations include, among other things, the performance of the
contractors and plant and equipment engaged in relation to the SJ Mining
Operation, failure to achieve anticipated production levels and mineral grades
for ore from the SJ Mining Operation, failure to establish estimated mineral
reserves, the possibility that future exploration results will not be consistent
with the Company's expectations, uncertainties relating to the availability and
costs of financing needed in the future, changes in the silver commodity price,
changes in equity markets, political developments in Mexico, changes to
regulations affecting the Company's activities, delays in obtaining or failures
to obtain required regulatory approvals, the uncertainties involved in
interpreting exploration results and other geological data, and the other risks
involved in the mineral exploration and development industry. Any
forward-looking statement 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 statement, 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 statements
are reasonable, forward-looking statements are not guarantees of future
performance and accordingly undue reliance should not be put on such statements
due to the inherent uncertainty therein.


The mineral resource figures disclosed in this MD&A are estimates and no
assurances can be given that the indicated levels of minerals will be produced.
Such estimates are expressions of judgment based on knowledge, mining
experience, analysis of drilling results and industry practices. Valid estimates
made at a given time may significantly change when new information becomes
available. While the Company believes that the resource estimates included in
this MD&A are well established, by their nature resource estimates are imprecise
and depend, to a certain extent, upon statistical inferences, which may
ultimately prove unreliable. If such estimates are inaccurate or are reduced in
the future, this could have a material adverse impact on the Company.


OTHER INFORMATION 

Additional Information

Additional information relating to the Company may be accessed through SEDAR on
the internet at www.sedar.com or the Company's website, www.ariansilver.com.


Disclosure of Outstanding Share Data 

The following table sets out the outstanding securities of the Company as at 21
May, 2013:-




                                                             Number in issue
                                                                            
Common shares of no par value                                    318,491,926
Share purchase options                                            15,360,000



Each share option and share purchase warrant entitles the holder thereof to
purchase one common share of the Company.


This press release does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities of the Company in the United Sates. The
securities of the Company have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "U.S. Securities Act") or
any state securities laws and may not be offered or sold within the United
States or to U.S. persons unless registered under the U.S. Securities Act and
applicable state securities laws or an exemption from such registration is
available.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Arian Silver Corporation
Jim Williams
CEO
(London) [phone]
[e-mail]


Arian Silver Corporation
David Taylor
Company Secretary
(London) [phone]
[e-mail]
www.ariansilver.com


Grant Thornton Corporate Finance
Gerry Beaney / Philip Secrett / David Hignell
(London) [phone]
[e-mail]


Yellow Jersey PR Limited
Dominic Barretto
(London) [phone]
[e-mail]


XCAP Securities PLC
Jon Belliss
(London) [phone]
[e-mail]


CHF Investor Relations
Juliet Heading
(Canada) [phone] x 239
[e-mail]