4 April 2011

Mining & Metals

XCAP Securities UK Equity Research

Arian Silver (AIM:AGQ)
Share Price 40p

Absolute Stunners: Drill Hole Update
Arian Silver Corporation (“Arian Silver”) release a further set of impressive drill hole results at its concession on the San José Vein, in Zacatecas State Mexico. Arian Silver is creating intrinsic value through resource development as they move towards its 200 million ounces Silver target in one year’s time. The eleven assayed drill holes produced intercepts of high grade silver mineralisation well into three figures, including an assay of Silver over 0.46 metres of 940 Ag g/t in borehole GW-11-017. To date approximately 76% or 32 boreholes of the third phase of drilling has been completed for 7,626 metres drilled out of the planned 10,000 metres, with the mineralisation remaining open along strike and depth. Drilling has now reached west of the village of Guanajuatillo having extended along the strike length of the San José Vein west of Solidad and Santa Ana. At the San José Mine, development stoping is contributing to the generation of early cashflow from delivery of silver-in concentrate. The semi-mobile analytical laboratory, sourced by Stewart Group’s Geochemical & Assay Division, is now on site and is currently being analytically calibrated which will lead to an increase the turn-around time on assay results. On the completion of the Phase 3 drilling programme, Arian Silver intend to update its current NI 43-101 resource estimate, incorporating previously completed Phase 2 drill results. Selected highlights from the eleven holes include:

Arian Silver Corporation is a Mexican focused silver exploration and development company. Arian is currently developing its flagship project, the 100% owned San José Mine, in Zacatecas State. In November 2010 the company embarked on a third 10,000 metre resource development drilling programme. ............................................................. Ticker ......................... AIM/TSX.V:AGQ Issued Shares ........................... 301.0 m Fully Diluted ............................ 319.4 m M.Cap (GBPm) ........................... 121.15 Cash (US$m) .................................... 9.5
Source: Arian Silver Corp

0.60 0.50 0.40 0.30 0.20 0.10 0.00 Jul 10 Source: FactSet

Oct 10

Jan 11

Apr 11

Hole GW-11-007 comprising 1.10m with 265.2 g/t Ag Hole GW-11-009 comprising 1.65m with 167.0 g/t Ag

Analyst
Austin McKelvie
+ 44 20 32 16 26 34 austin.mckelvie@xcapgroup.com

Hole GW-11-010 comprising 1.22m with 97.5 g/t Ag Hole GW-11-012 comprising 1.22m with 201.5 g/t Ag Hole GW-11-014 comprising 3.99m with 201.7 g/t Ag and 1.36% Zn Hole GW-11-016 comprising 1.99m with 167.2 g/t Ag
This research in non-independent and is classified as a Marketing Communication under FSA rules. As such it has not been prepared in accordance with legal requirements designed to promote independence of investment research and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. Further important disclosures are contained in the disclaimer at the end of this document.

Sales
Tim Burge
+ 44 20 32 16 26 29 tim.burge@xcapgroup.com

John Grant
+ 44 20 32 16 26 60 john.grant@xcapgroup.com

Drilling Update 16 14 12 10 8 6 4 2 0 GW-11-007 GW-11-008 GW-11-009 GW-11-010 GW-11-011 GW-11-012 GW-11-014 GW-11-015 GW-11-016 GW-11-017 San Jose Vein Width Ag Grade g/t Linear (Ag Grade g/t) 400 350 300 250 200 150 100 50 0 (Grade .60 Ag g/t over 1.10 metres and 294.Width metres Arian Silver Corporation.70 Ag g/t over 0. The average grade of Silver over the completed set of assayed holes graded 167. Hole GW-11-017 returned a bonanza Silver grade of 940 Ag g/t over a 0. 213.03 metres. XCAP Securities UK Equity Research 2 . and three separate assay intervals yielded 355.79 Ag g/t.93 metres.46 metre interval. The holes were drilled using two Longyear 44’ drill rigs and were positioned west of the village of Guanajuatillo tested the San José Vein to a maximum inclined depth of 244 metres. XCAP Securities PLC Of the twelve drill hole results only one drill hole GW-11-013 did not intersect the target San José Vein.40 Ag g/t over 2.Ag (g/t) Source: San Jose Vein .4 April 2011 Arian Silver (AIM:AGQ) Figure 1: San José Vein – Aggregated Vein Width and Silver Grades detailing upward trend west of Guanajuatillo Arian Silver Corp .

80 167.99 0.95 162.67 GW-11-008 86.10 125. GW-11-014 GW-11-014 GW-11-014 188.28 156.10 217.63 158.06 3.64 201.10 2.53 149.21 79.58 209.70 71.05 GW-11-016 GW-11-016 GW-11-016 GW-11-016 206.67 186.30 104.60 0.55 1.13 165.80 42.96 Intercept To Metres 129.78 219.00 61.95 160.68 1.87 115.81 0.73 0.15 200.62 0.36 1.63 154.74 177.75 1.65 186.80 116.68 0.55 202.37 134.02 202.23 97.66 0.20 179.60 97.43 1.62 3.39 GW-11-013 This drill hole did not find mineralised structure.05 122.91 Silver Grade Ag g/t 265.48 164.48 GW-11-015 GW-11-015 140.46 GW-11-010 GW-11-010 GW-11-010 GW-11-010 114.55 GW-11-012 GW-11-012 161.97 76.40 44.22 0.65 132.60 143.63 91.4 April 2011 Arian Silver (AIM:AGQ) Table 1: San José Vein Drilling Results Borehole Intercept From metres GW-11-007 GW-11-007 GW-11-007 126.00 1.58 XCAP Securities UK Equity Research 3 .48 212.76 GW-11-009 GW-11-009 GW-11-009 176.54 173.16 64.44 146.50 35.63 1.60 1.80 143.97 Lead * Grade Pb % Zinc * Grade Zn (%) True Length m 1.45 0.18 178.39 208.84 201.43 223.03 1.36 406.05 2.22 GW-11-011 GW-11-011 107.65 154.92 145.03 187.47 201.53 55.97 225.00 0.36 200.70 52.70 216.49 208.15 167.64 94.14 166.99 0.65 0.

39 Average 168.21 172.30 201.54 163.93 GW-11-018 144.99 0. XCAP Securities PLC XCAP Securities UK Equity Research 4 .05 GW-11-017 GW-11-017 GW-11-017 GW-11-017 GW-11-017 137.64 244.88 164. Source: Arian Silver Corporation.79 1.00 940.53 161.40 3.05 86.96 242.39 Note: * Where assayed.23 139.4 April 2011 Arian Silver (AIM:AGQ) Borehole Intercept From metres Intercept To Metres 244.40 294.55 164.13 Max Min 231.10 69.15 199.70 0.03 2.00 35.67 True Length m 3.39 GW-11-016 231.83 151.64 167.60 213.00 355.46 1.10 0.13 94.60 3.15 Lead * Grade Pb % Zinc * Grade Zn (%) 0.70 940.88 196.69 0.88 190.13 Silver Grade Ag g/t 107.

0 GW-11-002 GW-11-002 GW-11-006 GW-11-006 GW-11-007 GW-11-007 GW-11-007 GW-11-008 GW-11-009 GW-11-009 GW-11-009 GW-11-010 GW-11-010 GW-11-010 GW-11-010 GW-11-011 GW-11-011 GW-11-012 GW-11-012 GW-11-013 GW-11-014 GW-11-014 GW-11-014 GW-11-015 GW-11-015 GW-11-016 GW-11-016 GW-11-016 GW-11-016 GW-11-016 GW-11-017 GW-11-017 GW-11-017 GW-11-017 GW-11-017 GW-11-018 1.0 1.5 0. Bonanza grades produced more volatile grade pattern than the results of eight prior hole results issued earlier this year in January.metres 4.0 0.5 metres. XCAP Securities UK Equity Research 5 .000 900 800 700 600 500 400 300 200 100 0 Silver Grade .5 3.5 1.0 – 2.5 San Jose Vein .0 4.4 April 2011 Arian Silver (AIM:AGQ) Figure 2: Assay Results over Selected Intervals Arian Silver Corp .0 3.5 2. the aggregate Silver grade remained well into three figures.Ag (g/t) San Jose Vein Width Source: Arian Silver Corporation Ag Grade g/t Linear (Ag Grade g/t) Over a mechanised mining width of 2.Sampling Width .San Jose Vein Sampling Results 5.0 2.

4 April 2011 XCAP Securities UK Equity Research 6 Figure 3: Drill plan west of the village of Juanajuatillo Arian Silver (AIM:AGQ) Source: Arian Silver Corporation .

4 April 2011 XCAP Securities UK Equity Research 7 Figure 4: Arian Sliver’ current drilling area highlighted on the San José Vein Arian Silver (AIM:AGQ) Source: Arian Silver Corporation .

0 1.5 3.000 900 800 700 600 500 400 300 200 100 0 Silver Grade .0 0.0 2.Sampling Width .5 2.0 SJ-10-110 SJ-10-111 SJ-10-111 SJ-10-111 SJ-10-113 SJ-10-113 SJ-10-113 SJ-10-113 SJ-10-114 SJ-10-114 SJ-10-114 SJ-10-114 SJ-10-114 SJ-10-114 SJ-10-114 SJ-10-114 SJ-10-114 SJ-10-115 SJ-10-115 SJ-10-115 SJ-10-115 SJ-10-115 SJ-10-115 SJ-10-116 SJ-10-116 SJ-10-116 SJ-10-116 SJ-10-116 SJ-10-116 SJ-10-116 SJ-10-117 SJ-10-117 SJ-10-117 1.5 0.5 1.San Jose Vein Sampling Results 5.5 San Jose Vein .0 4.0 3.Ag (g/t) San Jose Vein Width Source: Arian Silver Corporation Ag Grade g/t Linear (Ag Grade g/t) The results from January 2011 detail a more consistent Silver grade but lack the bonus of surprise bonanza grades from the current drilling west of the village of Guanajuatillo. XCAP Securities UK Equity Research 8 .4 April 2011 Arian Silver (AIM:AGQ) Figure 5: San Jose Drilling Sampling Results – January 2011 Arian Silver Corp .metres 4.

past the San José Mine head frame.000 metre drilling programme. through Santa Ana and Solidad to the current locality west of the village of Guanajuatillo. Drilling has progressed from Block 450. Arian Silver has made impressive progress in step out resource drilling along the San José Vein. From an initial set of results in January. Arian Silver has now completed approximately 76% of the exploration programme with 32 holes completed.4 April 2011 XCAP Securities UK Equity Research 9 Figure 6: Arian Silver’s Source: Arian Silver Corporation Since the announcement of the Phase 3. Arian Silver (AIM:AGQ) . 10.

This strategy justifies a share price target far higher than the current share price which we will substantiate in full with a research note. At the same time generation of early cash flow from mining at the San José Mine contributes to funding a new resource statement and a fourth chapter of exploration.4 April 2011 Arian Silver (AIM:AGQ) Comment Once again Arian Silver produces another set of stunning holes from their third phase of exploration over San José Vein. Table 2: Major Shareholders Ownership 16. Arian Silver are creating shareholder value as its moves into the final phase of the third programme.71% Arian Silver Corporation Sprott Asset Management LLP Source: Arian Silver Corporation XCAP Securities UK Equity Research 10 . and investors ecstatic with excitement. With grades which would make a geologist dizzy.

Underperform Expected to underperform the FTSE All Share by 5/15% or more over the next 12 months. As a new company XCAP Securities plc will produce a table of its Research Recommendations for the relevant quarter when it has established a material record. As such it has not been prepared in accordance with legal requirements designed to promote independence of investment research and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. Outperform Expected to outperform the FTSE All Share by 5/15% over the next 12 months. XCAP Securities plc acts as broker to this company. Furthermore. Meanings of XCAP Recommendations Buy Expected to outperform the FTSE All Share by 15% or more over the next 12 months. XCAP Securities plc is a Market Maker to this company. XCAP Securities plc may have acted as manager in the underwriting or placement of securities and/or may have received compensation for investment banking for this company within the last 12 months. Analyst The research analyst attests that the views expressed in this research report accurately reflect his personal views about the subject security and issuer. related to the specific recommendation or views expressed in this research report. XCAP Securities UK Equity Research 11 .4 April 2011 Arian Silver (AIM:AGQ) Disclosures This research is non-independent and is classified as a Marketing Communication under FSA rules. Market Perform Expected to perform in line with the FTSE All Share over the next 12 months. no part of his compensation was. Sell Expected to underperform the FTSE All Share by 15% or more over the next 12 months Speculative Buy The stock has considerable level of upside but there is a higher than average degree of risk.

except for legitimate market making and fulfilling clients’ unsolicited orders as part of its Conflicts of Interest Policy. Opinions included in this report reflect the Company’s judgement at the date of publication and are subject to change without notice. The information contained in this document has been obtained from sources which XCAP believes to be reliable. Whilst this Research is not subject to the prohibition on dealing ahead of the dissemination of investment research. XCAP Securities UK Equity Research 12 .xcapgroup. This document is produced in accordance with UK laws and regulations and is not intended for any person whose nationality or residential circumstances may render its receipt unlawful. and is therefore not to be distributed to other classes of investors.com This document is provided solely for your information and does not constitute an offer or solicitation to buy or sell securities or instruments of any kind.4 April 2011 Arian Silver (AIM:AGQ) Disclaimer This Research is intended only for investors who are Professional Clients or Eligible Counterparties as defined by FSA. XCAP Conflicts of Interest Policy is available at www. All estimates and prospective figures quoted in this report are forecasts and not guaranteed. The Company does not warrant that such information is accurate or complete. XCAP Securities plc (XCAP) has adopted internal procedures which prohibit analysts and other relevant persons from dealing ahead of non-independent research.

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