Arian Silver Reports Operational Results for Nine-Month Period

Arian Silver Corporation (TSX VENTURE:AGQ)(AIM:AGQ)(PLUS:AGQ)(FRANKFURT:I3A), a silver exploration, development and production company with a focus on projects in the Zacatecas Silver Belt of Mexico, today announced the release of its Management's Discussion and Analysis and unaudited Financial Statements for the nine months ended 30 September 2010.

HIGHLIGHTS

• Total assets of $12.4 million, including intangible assets of $6 million, other financial assets of $0.3 million, non-current assets held for sale of $2.8 million and cash of $2.4 million (as at 30 September 2010);

• Consolidated loss for the period was $911,000;

• Working capital was $4.0 million (as at 30 September 2010);

• Exercise of share purchase warrants, share options and disposals of Geologix Shares generated £35,750 and Cdn$1.3 million; and

• During the period the Company repaid all current borrowings from new funds received.

• Completion of a brokered and non-brokered private placement raised gross proceeds of approximately £3.9 million; and

• Further exercise of share purchase warrants, share options and disposals of Geologix Shares generated £17,875 and Cdn$1.4 million.

• Arian's key project is the San José property which lies 55km to the South-East of Zacatecas City and covers 11 mining concessions totalling approximately 6,300 hectares. The property has significant infrastructure, including a 4 x 4 metre main haulage ramp, which extends for nearly 3km along the footwall of the San José Vein system and a 350m deep, 500 tonne per day ("tpd"), vertical shaft with hoist.

• During the period Arian paid the final instalment of $500,000, to acquire the remaining 33.33% interest in the San José property mineral concessions, to give it 100% control of the San José Project;

• Contracts signed for the planned 500tpd contract mining and milling operation at the San José Project and the mining contractor mobilized to commence production;

• Milling operation will initially handle up to 400 tpd with plans to increase the throughput with an upgraded crusher;

• Cash flow from the San José mining operation is expected during Q4 of 2010; and

• Potential to increase production at San José from 500tpd up to 1,500tpd.

• Production commenced at San José with payable ore being stockpiled for delivery to the mill;

• Underground development work focused on the Santa Ana block, the initial target block to be mined;

• New 10,000m drilling programme commenced at San José; and

• Contract signed for purchase of new laboratory facility for San José.

Arian's Chief Executive Officer, Jim Williams, commented today: "Thanks to the ongoing support of our shareholders, we have been able to significantly increase the Company's value to date during the current financial year. Mining has now commenced on the San Jose Vein ("SJV") and we are currently stockpiling run-of mine ("ROM") material for delivery to the mill. Milling of ROM will commence shortly.

We now own 100% of the 6,300 hectare San Jose property and associated infrastructure and have started a new 10,000 metre drilling programme with a view to upgrading and increasing the existing resources within the known area of mineralisation and to start to drill along the western strike extension of the SJV, 90% of which remains largely untested.

The commissioning of an independently-run but 100% Arian-owned fully equipped laboratory on site at San Jose will help us report all exploration results in a timely fashion thus allowing more rapid evaluation of the potential for expansion.

Your Company has now joined the ranks of silver producers and we believe it will demonstrate the development and expansion potential along the SJV at a time of buoyant silver prices over the foreseeable future.

My thanks again go to our shareholders for their support over the period and to management, staff and advisors who have all contributed to the move into production".

MD&A AND FINANCIALS

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

REVIEW OF FINANCIAL PERFORMANCE

In the nine months ended 30 September 2010, the Company incurred an operating loss of approximately $1.2 million (2009 - $1.5 million). The Company does not yet generate any income from its operations. Interest income from cash resources was $4,000 (2009 - $nil). Investment income was $0.2 million (2009 - $nil), of which $0.1 million relates to the profit on disposal of part of the Company's holding of Geologix Shares, received in connection with the grant of the Tepal Option and $0.1 million relates to a fair value adjustment gain in respect of the balance of Geologix Shares held as at 30 September 2010 (see Liquidity, Capital Resources and Working Capital). The loss for the period was $0.9 million (2009 - $1.5 million).

As at 30 September 2010 the Company had working capital of approximately $4.0 million (31 December 2009 - $4.0 million). See Liquidity, Capital Resources and Working Capital for the principal items of working capital. Intangible assets amounted to $6.0 million (31 December 2009 - $7.7 million) which relate to deferred exploration and evaluation costs in respect of the Company's Mexican projects, excluding the Tepal project. The carrying value of the Tepal project has been transferred from intangible assets and is accounted for in current assets as non-current assets held for sale valued at $2.8 million (31 December, 2009 - $nil) as a result of the grant of the Tepal Option. The first instalment of the Tepal Option consideration from Geologix Explorations Inc ("Geologix"), which is non-refundable, is accounted for as a deferred income item of $1.5 million (31 December, 2009 - $nil) in current liabilities pending exercise or termination of the Tepal Option. Share capital reduced by $0.3 million to $37.9 million (31 December, 2009 - $38.2 million) largely as a result of the redemption and cancellation of the common shares issued in 2009 to Grafton Resource Investments Ltd ("Grafton"), the issue to Grafton of common shares for debt offset by the issue of common shares in connection with a share placement and the exercise of share purchase warrants and share options. During the period the Company repaid all current borrowings from new funds received.

REVIEW OF OPERATIONS

The Company currently owns, or has rights or options to purchase, 32 mineral concessions in Mexico totalling approximately 8,038 hectares ("Ha"), which excludes the mineral concessions relating to the Tepal project which are under option to Geologix.

San José Project, Zacatecas State

The San José property lies 55km to the South-East of Zacatecas City and covers 11 mining concessions totalling approximately 6,300Ha. The property has significant infrastructure, including a 4 x 4 metre ("m") main haulage ramp, which extends for nearly 3km along the footwall of the San José Vein ("SJV") system, and a 350m deep, 500 tonnes per day ("tpd"), vertical shaft with hoist.

During the period Arian paid the final instalment of $500,000, to acquire the remaining 33.33% interest in the San José mineral concessions, to give it 100% control of the San José Project.

In September 2010, the Company announced that all necessary contracts were in place for the proposed silver production operation at the San José mine and that it was moving into production (see the Company's press release dated 22 September 2010 entitled "Arian Silver Commences Silver Production"). Key points from that release are as follows:

• A 500tpd contract mining operation at the San José Project has been mobilized to commence production;

• Mining is planned to operate 20 days per month. Total costs to mine and deliver ore to the mill are estimated at approximately US$26/tonne;

• The milling operation will initially handle up to 400tpd with plans to increase the throughput with an upgraded crusher. Mill hire is a fixed cost at MXP3.7 million (approximately US$290,000) per month, subject to adjustment for any operating downtime. This includes all operating costs, maintenance and repair costs and consumables;

• At a milling rate of 400tpd, 125 tonnes of concentrate should be produced per month with an anticipated silver content of between 370 and 440 ozs per tonne ("opt");

• Based on a contained silver content of 405opt at US$18/oz silver, a concentrate value of US$6,500/tonne, after deductions, should be achieved;

• A 2% NSR on concentrate value payable to the vendor of the San José property; and

• Cash flow expected in Q4 of 2010.

The 500tpd mining operation is limited to just three mining blocks, Ramal Norte, San José 75m Level Central Zone and Santa Ana, selected by Arian to support a four-year mine life with the potential to increase the mining rate to 1,500tpd subject to milling capacity being available.

In October 2010, production at the San José mine commenced with ore being stockpiled for delivery to the mill. New underground development to reach the Santa Ana block, the first of the three target blocks to be mined, has progressed well and according to the mining plan. The development work is extracting a combination of payable and non-payable material. Payable Run-of-Mine ("ROM") material is being deposited on the stockpile pad outside the main San José mine ramp. The accumulation of this ROM material on the stockpile pad is designed to ensure a smooth and constant supply of material to the mill. It is anticipated that the first transportation of the Santa Ana ROM material to the mill will take place in the near future. Minor improvements to the mill are also progressing well with a view to increasing the mill efficiency.

Arian's previous two drill programmes along the SJV delineated both a JORC and NI 43-101 compliant resource estimates of approximately 43 million ounces of silver, 120 million pounds of lead and 250 million pounds of zinc within only approximately 10% of the known strike length of the SJV within the concession area. Arian's management considers the upside for material additional resources along the SJV system to be significant.

In November 2010, a new 10,000 metre drill programme was commenced which is aimed initially to delineate additional areas of high grade mineralisation and to upgrade existing resources, between the Santa Ana and Guanajuatillo resource areas along the SJV. The drill programme will also start to explore in detail the SJV system that lies to the west of the village of Guanajuatillo, which collectively accounts for approximately 90% of the known strike length of the SJV system. One drill rig has commenced drilling at San José and a second drill rig will be mobilised and operational shortly.

Also in November 2010, Arian contracted to purchase a semi-mobile laboratory, which is being sourced by Stewart Group's Geochemical & Assay Division (the "Stewart Group"). The laboratory comprises a comprehensive sample preparation facility, a fire assay laboratory and a wet chemistry laboratory that has facilities for Atomic Absorption Spectrometry ("AAS"). The laboratory will be under the sole control and operational management of professional personnel from the Stewart Group in order that results are fully compliant with Arian's quality assurance and quality control (QA/QC) programme. It is anticipated that the laboratory will be fully set up within approximately 6-8 weeks in a secure area on the mine compound at San José. Prior to the laboratory becoming operational, Arian will utilise the analytical services of the Stewart Group's sample preparation facility in Zacatecas. The Stewart Group, headquartered in the United Kingdom, provides a network of accredited laboratories and metallurgical services to mining and exploration companies.

Arian's overall objective is to develop additional resources on the San José property concurrently with the initial mining operation, complete a full feasibility study and move to large-scale independent commercial production.

The "Qualified Person" as such term is defined in NI 43-101 who prepared the above mineral resource estimates is Mr. Galen R White. Mr White was at the time these estimates were prepared an employee of A.C.A. Howe International Limited.

LIQUIDITY, CAPITAL RESOURCES AND WORKING CAPITAL

In management's view, the most meaningful information concerning the Group relates to its current liquidity and solvency since it is not currently generating any income from its mineral projects.

• a private placement financing of units ("Units") each consisting of one common share of the Company and one-half of a common share purchase warrant (the "Placement"). The Placement raised Cdn$3,499,857 through the issue of 69,997,139 Units at Cdn$0.05 per Unit. In addition 600,000 Units were issued in satisfaction of Cdn$30,000 of finder's fees payable in connection with the Placement. As part of the Placement, 35,298,569 "F" share purchase warrants were issued.

• the first instalment of $1.45 million under the Tepal Option granted to Geologix. Settlement was effected by way of a cash payment of $725,000 and the balance of $725,000 through the issue of 3,434,193 Geologix shares (the "Geologix Shares") at a price of Cdn$0.22 per share. The Geologix Shares are listed on the Toronto Stock Exchange.

• the sale of 2,442,193 Geologix Shares at prices varying between Cdn$0.23 and Cdn$0.40, which generated Cdn$674,035.

• the exercise of 650,000 share purchase options and 6,528,116 "F" share purchase warrants which generated £35,750 and Cdn$652,812 respectively.

• the sale of the balance of 992,000 Geologix Shares at prices varying between Cdn$0.40 and Cdn$0.57 raising proceeds of Cdn$487,221.

• the exercise of 325,000 share purchase options and 8,729,083 "F" share purchase warrants which generated £17,875 and Cdn$872,908 respectively.

• 20,041,370 "F" share purchase warrants at an exercise price of Cdn$0.10 per common share expiring 22 January 2011.

• 11,225,000 share purchase options with exercise prices of £0.12/Cdn$0.25 and £0.055/Cdn$0.10 and expiry dates of June 2013 and July 2014.

It is anticipated that additional funding will be generated by cash flow from the contract mining operation at the San José Project. In addition, on full exercise of the Tepal Option, a second instalment amounting to $1.55 million is due from Geologix in February 2011, which, at Geologix's election, may be made in cash, or up to 50% in Geologix's shares valued at the 10-day average closing price immediately prior to the time of payment.

Working Capital – 30 September, 2010

As at 30 September, 2010, the Company had working capital of approximately $4.0 million (31 December, 2009 – $4.0 million). The principal items of working capital and changes compared to the 31 December 2009 (amounts) are as follows:-

• cash and cash equivalents $2.4 million ($0.1 million) – increase has largely arisen through funds from the Placement, sale of Geologix Shares and the exercise of share purchase warrants and options.
• investments - available for sale assets $nil ($5.6 million) – decrease due to the redemption of the Grafton Shares.
• other financial assets at fair value through profit and loss $0.3 million ($nil) – relates to the fair value of the balance of Geologix Shares.
• non-current assets held for sale $2.8 million ($nil) – relates to the carrying value of the Tepal project reclassified from intangible assets as a result of the grant of the Tepal Option.

• current borrowings $nil ($1.6 million) – decrease arises from repayment of loans from Grafton and Geologix.
• deferred income $1.5 million ($nil) – relates to the value of the non-refundable first instalment of the Tepal Option consideration pending exercise of the Tepal Option.

Qualified Person

Mr. Jim Williams, Eur Ing, Eur Geol, BSc, MSc, D.I.C., 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 the Review of Operations other than the mineral resource estimates.