Toronto, January 27, 2012 – Scorpio Mining Corporation (TSX:SPM) (“Scorpio Mining” or the “Corporation”) is pleased to report that the 2011 production results for the Nuestra Señora mine in Mexico confirm a second successive year of silver production growth for the Corporation. Production of all key metals increased substantially over 2010, as mine metal output, plant throughput and recoveries improved.

Parviz Farsangi, President and CEO comments, “I wish to thank the board, the management team and staff for their contributions to Scorpio mining’s success over the past two years. 2011 was another record production year for Scorpio Mining, resulting from a number of key improvements to both mining and plant operations. This strong performance allowed Scorpio Mining to reach a debt-free status in the second quarter. We continue to focus our efforts on our strategic projects: La Verde, San Rafael and El Cajón; and on increasing the mineral reserves at our current operating mine. These resources are integral to our next step up in production, which will come with the expansion of our existing plant, and to our decision on an additional plant in future. Also, to take advantage of our significant exploration potential, we have increased our budget accordingly to approximately $9.3 million for 2012.”

2011 Production Highlights:

* For consistency, silver equivalent ounces have been calculated using 2011 budgeted prices as follows: US$24 per oz. for silver; US$3.58 per lb. for copper; US$1.01 per lb. for zinc; and US$1.02 per lb. for lead.

Mineral reserve and resource development remains a high priority for the Corporation. Presently five drill rigs are operating on a permanent basis: two rigs at San Rafael, one at La Verde, one at Nuestra Señora and one in the Parral District.

Fourth Quarter 2011 Production Highlights:

* For consistency, silver equivalent ounces have been calculated using 2011 budgeted prices as follows: US$24 per oz. for silver; US$3.58 per lb. for copper; US$1.01 per lb. for zinc; and US$1.02 per lb. for lead.

2011 Achievements:

In summary, some of the production improvements and advances made during the year include:

• Reduced Lost Time and Severity frequencies by 91% and 89% respectively.


• Zero environmental exceedance.


• Improved community relations and formalized land access agreements.


• Attained debt-free status through the payment of CDN $20 million to retire fully all issued and outstanding 7% unsecured subordinated convertible debentures.


• Increased production of AgEq ounces by 41% in comparison to 2010.


• Connected the Nuestra Señora mine to the federal electrical grid in early 2011.


• Significant changes to key operations personnel to improve efficiency at Nuestra Señora.


• Improved mining practices to enhance grade control, reduce dilution and increase recovery.


• Several processing improvements implemented, including the installation of a second zinc filter press to manage the incidence of multiple days with high head grade.


• Commenced development of the Candelaria deposit in preparation for test mining.


• Assumed control of mining operations at La Verde and commenced refurbishment for improved safety and future production. Initial metallurgical testing performed at the Nuestra Señora plant.


• Appointed experienced process manager to oversee the optimization of existing process operations and advance developmental projects.


• Initiated replacement of aging mining fleet.


• Closed agreement with Grupo Mexico to obtain its district concessions.

2012 Production Forecast:

Key Elements of the 2012 Operating Plan:

• The 2012 budgeted production is based upon underground mining at Nuestra Señora using predominantly long hole stoping methods.

The Corporation continues to mitigate the impact resulting from a divergence between the Nuestra Señora mineral reserve estimate and actual mineralization encountered in certain production areas. Development of resource areas within and adjacent to the Nuestra Señora Deposit is advancing while work continues to finalize the review of the reserve estimate.

Sustaining capital and exploration spending for 2012 budget are as follows:

• Capital expenditures of $5.2 million allocated for maintaining and improving existing operations.


• $9.3 million allocated for exploration purposes including exploration drilling at Nuestra Señora and its adjacent deposits; infill and exploration drilling at San Rafael, El Cajón and La Verde; exploration drilling of multiple prospects in the Cosalá District; and drill testing of the Tepozán and La Revancha projects in the Parral District.

Outlook for 2012:

• Continue improving our safety and environmental systems.


• Continue improving both operational and maintenance practices and systems.


• Silver and silver equivalent production expected to approximate the record set in 2011.


• Cost control initiatives and operating efficiencies will continue across all operations.


• Increased ore resources and enhanced delineation of identified targets are expected as a result of the significant exploration budget.

An update on the Nuestra Señora processing plant expansion will be provided shortly.

About Us

Scorpio Mining Corporation is a silver producer operating in Mexico with significant base metal by-product credits. The 100%-owned Nuestra Señora Mine and plant located in the Cosalá district of Sinaloa State, Mexico, has proven to be a low-cost operation with the benefit of flexible mining methods and diversified metal production. It boasts a fully mechanized underground operation and a processing facility built for expansion to 4,000 tonnes per day. The plant produces zinc, copper and lead concentrates; with a significant silver component in the copper and lead concentrates. In addition, the company has over 40 exploration targets mostly in the vicinity of its current operations. The Corporation also holds a 100% interest in the La Revancha silver and Tepozán silver-gold exploration properties in the Parral District of Chihuahua State, Mexico.The Corporation’s strategy focuses on exploring and developing its existing mineral properties.

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

For further information contact:
Victoria Vargas, Vice President Investor Relations and Corporate Communications +1 416-585-2200
Email: [email protected]
Rich Kaiser, YES International: 1-800-631-8127; 001-757-306-6090 (outside North America)
Email: [email protected]

Website: www.scorpiomining.com

This news release includes certain statements that may be deemed “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to production, objectives, strategy, mine operations, exploration, future performance and forecasts, our management team, and plans. Generally, these forward-looking statements can be identified by the forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “projects”, “intends”, “anticipates”, or “does not anticipate”, or “believes”, or “variations of such words and phrases or state that certain actions, events or results “may”, “can”, “could”, “would”, “might”, or “will” be taken”, “occur” or “be achieved”. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Scorpio Mining Corporation to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the exploration and development and operation of the Nuestra Señora and La Verde projects, risks related to international operations, construction delays and cost overruns, equipment breakdowns, the actual results of current exploration, development and construction activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, future prices of silver, zinc, copper, lead and gold, risks relating to completing acquisition transactions as well as those factors discussed in the sections relating to risk factors of our business filed in Scorpio Mining Corporation’s required securities filings on SEDAR, including its Annual Information Form dated March 30, 2011. Although Scorpio Mining Corporation has attempted to identify important factors that could cause results to differ materially from those contained in forward-looking statements, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended.

There can be no assurance that any forward-looking statements will prove accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Scorpio Mining Corporation does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.