Arian Silver (LON:AGQ CVE:AGQ) reported an increased net loss in its first quarter due to the suspension of milling at a former plant, but is making progress on buying its own plant.
It came as the Mexico-focused firm issued figures for its first quarter to March 31 this year, numbers, which it said reflected, the resumption of milling at a "third-party-owned, Juan Reyes toll mill".
Processing has now began at Juan Reyes - albeit on a small scale. No ore was mined in the quarter but 258 tonnes of material were milled.
In the three months, 878 ounces of silver were produced, compared to 66,688 ounces in the first quarter of 2012.
The firm posted a net loss of US$935,000 for the period, compared to a profit of US$866 in the first three months of 2012.
Arian also said it continues to make progress on buying its own custom processing plant, which has a crushing and milling capacity of up to 1,500 tonnes per day, and plans to update investors in coming weeks.
It is now assessing financing packages, which, if successful could enable significant investment in the purchase and re-commissioning of such a plant.
Chief executive officer Jim Williams said of today's figures: "Whilst initial recovery rates are encouraging, the board is mindful of the current silver price and is keeping this under close review."
In March this year, Arian agreed terms to buy its own plant for its San Jose mine in Zacatecas, Mexico called the El Bote Mill, which has capacity to treat up to 1,500 tonnes per day of silver-lead-zinc ore.
Processing at Juan Reyes has continued into the second quarter, albeit on a small scale, and a total of 1,823 tonnes have been processed during the first seven weeks of the second quarer.
"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," Arian said.
"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," it added.
Shares dipped to stand at 5.50p.
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