THE CANADIAN PRESS

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LONDON - Arian Silver Corp. (TSXV:AGQ) plans to swap C$1.4 million worth of its shares for shares of equivalent value from Grafton Resource Investments Ltd., a company headquartered in the Cayman Islands.

The company said Tuesday that Grafton will hold 14.9 per cent of Arian's outstanding common shares after the transaction and will nominate a representative on Arian's board.

Arian will also issue a convertible debenture to Grafton, with principle of $4.56 million that, under specified circumstances, could increase Grafton's stake in Arian to 42.2 per cent.

The debenture will mature two years after it is issued.

Arian said the money raised from Grafton will go towards its San Jose mineral project in Mexico, and for general working capital purposes.

"The principals of Grafton and its associates have experience in using this type of share exchange and disposal mechanism to provide investee companies with new funding," Arian said in a release.

"It is also planned that Grafton and its associates will work closely with Arian's Board to further develop Arian."

Grafton is a closed-end fund managed by Newland Fund Management LLP of London, England

The agreement is subject to TSX Venture Exchange approval.

The transaction gives a deemed value for Arian's share at 5.5 cents. They traded Tuesday at six cents, down half a cent from the previous close.