Toronto, July 18, 2013 – Scorpio Mining Corporation (TSX: SPM) (“Scorpio” or the “Company”) reports that production from the Nuestra Señora Operations in the second quarter ended June 30, 2013 (“Q2”) totalled 439,567 silver equivalent ounces.
Key Operating Statistics
| Q2 2013 | Q1 2013 | % Change | |
| Total plant throughput (tonnes) | 126,868 | 136,128 | -6.8% |
| Head grade silver g/t | 66 | 70 | -5.7% |
| Head grade zinc % | 1.55% | 1.44% | 7.6% |
| Head grade copper % | 0.25% | 0.28% | -10.7% |
| Head grade lead % | 0.77% | 0.84% | -8.3% |
| Recovery silver % | 80.0% | 81.7% | -2.1% |
| Recovery zinc % | 73.6% | 73.8% | -0.3% |
| Recovery copper % | 48.2% | 51.6% | -6.6% |
| Recovery lead % | 68.7% | 72.0% | -4.6% |
| Total silver ounces produced | 214,926 | 251,220 | -14.4% |
| Total pounds zinc produced | 3,198,082 | 3,193,744 | 0.1% |
| Total pounds copper produced | 338,862 | 439,954 | -23.0% |
| Total pounds lead produced | 1,474,544 | 1,807,703 | -18.4% |
| Total silver equivalent ounces* produced | 439,567 | 502,934 | -12.6% |
* For comparative purposes the metal prices used to calculate silver equivalent ounces recovered are based upon the following: silver at US$24 per oz.; zinc at US$0.90 per lb.; copper at US$3.50 per lb. and lead at US$0.90 per lb.
- Production from the Nuestra Señora Mine in Q2 encountered lower silver, copper and lead grades compared to Q1 2013; however, the on-going placement of backfill, where higher-grading secondary stopes could readily be developed, will allow for safely mining of higher ore grades during H2 2013.
- Reduced plant throughput in Q2 primarily resulted from the scheduled relining of the two plant ball mills and accumulated downtime of one of these mills, which required replacement of a worn pinion and subsequent modification and corrective maintenance to overcome an elevated vibration issue.
- Reduced metal recoveries in Q2 were a consequence of the lower silver, copper and lead feed grades to the plant, coupled with the repeated stoppages for making mechanical adjustments on the repaired ball mill.
Other Developments:
- During Q2, the Company released the latest reserve estimate for the Nuestra Señora Mine and the Preliminary Economic Assessment (“PEA”) for the advanced Cosalá District mineral resources. On the PEA, President and CEO, Pierre Lacombe, comments, “The PEA case outlines positive economics for the set of assumptions used. The PEA provides a base from which further optimization studies will be performed, regarding alternate development scenarios seeking to maximize net present value.”
- During Q2, the Company received approval from the federal environmental authority (SEMARNAT) for its Environmental Impact Statement (MIA) pertaining to underground mining at the El Cajón and San Rafael deposits. The Company continues to work with the state offices of SEMARNAT to obtain the Change of Land Use Permit (CUS) related to El Cajón, which is also required prior to project commencement. After receiving a denial of the original application in May, the Company has been in liaison with the authorities and is advancing a revised submittal that is anticipated to be filed in early Q3. Receipt of the CUS may accordingly be expected in Q4, and once in hand, the Company is ready to break ground and advance the development work required to put the El Cajón deposit into production in Q1 of 2014.
- Sales negotiations for the concentrates produced at the Nuestra Señora plant were completed late in Q2, with delivery to the account of the retained buyers initiated as of July 1, 2013.
- A contract mining arrangement has been finalized that will allow for provision of silver-copper ore from the Company’s wholly-owned La Verde Mine to the Nuestra Señora plant. La Verde entered production in the mid-1980’s and was operated continuously until Scorpio assumed control of the operation in early 2011, to perform refurbishment for improved safety, exploration drilling and metallurgical testing. By Q4 2013, La Verde may contribute up to 15,000 tonnes per month of relatively high-grade, silver-copper material (per historical records; no NI 43-101 compliant resource estimate is available for this deposit) from a series of parallel, near-vertical mineralized shear zones. The first ore stream is expected to be made available by the end of Q3.
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 in the Cosalá District of Sinaloa State, Mexico, has flexible mining methods and diversified metal production. It has a fully mechanized underground operation and a processing facility with permitted capacity for expansion to 4,000 tonnes per day. The plant produces zinc, copper and lead concentrates, with a significant payable silver component in the copper and lead concentrates.
In addition, the Company has numerous exploration targets in the vicinity of its current operations as well as the advanced El Cajón and San Rafael development projects. The Company’s strategy for near-term growth is currently focused on mine development of the El Cajón deposit upon receipt of permitting.
Scorpio Mining’s President and CEO, Mr. Pierre Lacombe, Eng, is a Qualified Person as defined under National Instrument 43-101 and has reviewed and approved the content of this release.
ON BEHALF OF SCORPIO MINING CORPORATION
Pierre Lacombe
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 the Company’s operations, exploration and development plans, expansion plans, estimates, expectations, forecasts, objectives, predictions and projections of the future. 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 Company’s projects in Mexico, risks related to international operations, construction delays and cost overruns, 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 14, 2013. 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.
