Toronto, October 18, 2011 – Scorpio Mining Corporation (TSX:SPM) (“Scorpio Mining” or the “Corporation”) reports that production in the third quarter ended September 30, 2011 (“Q3 2011”) from the Nuestra Señora operation totalled 604,975 silver equivalent ounces*, representing a 13% increase over Q3 2010.
Third Quarter 2011 Production Highlights:
| Quarter Ended | Quarter Ended | % |
Total plant throughput (tonnes) | 126,975 | 106,636 | 19% |
Total silver ounces produced | 308,211 | 252,450 | 22% |
Total pounds zinc produced | 4,028,925 | 3,628,163 | 11% |
Total pounds copper produced | 451,017 | 385,082 | 17% |
Total pounds lead produced | 1,410,286 | 1,767,900 | -20% |
Total silver equivalent ounces* produced | 604,975 | 537,698 | 13% |
* For comparative purposes the metal prices used to calculate silver equivalent ounces recovered are based upon the following: lead at US$1.02 per lb.; zinc at US$1.01 per lb.; copper at US$3.58 per lb. and silver at US$24 per oz.
At the end of Q3 2011, year-to-date zinc and silver production were 10% and 1% ahead of forecast respectively, whereas the lower value credit metals, lead and copper, were 20% and 34% behind forecast respectively. While realized silver and zinc grades are in line with geological models, copper and lead grades have been lower than expected. As a result, it is anticipated that silver and zinc production for 2011 will meet forecast, whereas copper and lead will be lower than forecast. Scorpio Mining is evaluating contingencies to reduce the deficit of lead and copper; however, the overall objective of the Corporation is to maximize silver production.
During Q3 2011, continued problems with mobile mining equipment disrupted production from higher grade mining areas; however, the operation was able to maintain a high processing rate with the introduction of profitable lower grade ore from contingent sources. The Corporation is currently advancing mining equipment purchases to replace all of its aging fleet and correct these production deficiencies in the affected areas. Most of the new equipment will be available in 2012, until which time the Corporation will use outside resources as required to mitigate the impact of unreliable equipment.
Other Developments:
During the quarter, the Corporation conducted production-scale processing tests of ore from the La Verde Mine through the Nuestra Señora plant and commenced the latest phase of in-fill drilling at the San Rafael deposit. The extraction and processing of ore from the Candelaria Mine is also underway with the best mining method under evaluation.
The Corporation has retained Mine Development Associates of Reno, Nevada to update mineral reserve and resource estimates for the San Rafael, El Cajón, La Verde and Nuestra Señora deposits. Golder Associates has been retained to perform geomechanical aspects of Cosalá Norte feasibility study and discussions are ongoing with several other engineering companies interested in participating in the feasibility study and the Nuestra Señora plant expansion project.
Scorpio Mining has further strengthened its management team in Mexico with the recent addition of Marcos Hernandez, B.S. (Metallurgical Engineering), M.S. (Minerals Processing), as Process Manager. Mr Hernandez has a wealth of processing experience in the Mexican mining industry in technical, operational and managerial roles, having worked at several operations for Peñoles Mexico, Mexichem Fluor and Farrallon Minera Mexicana.
Scorpio Mining’s President and CEO, Parviz Farsangi, MEng, MBA, PhD, PEng, is a Qualified Person for the Corporation’s Mexico projects and has reviewed the content of this release.
ON BEHALF OF SCORPIO MINING CORPORATION
Parviz Farsangi
President & CEO
