Oct 18, 2011
Scorpio Mining Reports Third Quarter Production Results
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:
* 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.
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
President & CEO
For further information contact:
Rich Kaiser, YES International: 1-800-631-8127; 001-757-306-6090 (outside North America)
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.