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Mar 18, 2013
Scorpio Mining Reports Fourth Quarter and Year-End Financial Results for 2012

Toronto, March 18, 2013 - Scorpio Mining Corporation (TSX: SPM) ("Scorpio Mining" or the "Corporation") reports its financial and operating results for the year and fourth quarter ("Q4") ended December 31, 2012. This press release should be read in conjunction with the Corporation's audited Financial Statements and Management's Discussion and Analysis for the year ended December 31, 2012, available on the Corporation's website at and on SEDAR at All monetary figures are expressed in Canadian dollars unless otherwise specified.


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  Three  Months  Ended Year  Ended
  Dec 31,
Sep 30,
Dec 31,
Dec 31,
Dec 31,
Mine operating earnings ($000's) $3,884 $3,398 $3,613 $15,202 $33,231
Net earnings (loss) ($000's) $1,429 $1,073 $(1,040) $7,090 $12,577
Earnings per share (basic) $0.01 $0.01 $0.00 $0.04 $0.07
Adjusted EBITDA ($000's)(1) $5,319 $2,706 $3,574 $15,543 $35,002
Adjusted EBITDA per share (basic)(1) $0.03 $0.01 $0.01 $0.08 $0.18
Cash flows from operating activities before movements in working capital ($000's) $5,347 $2,750 $3,626 $15,615 $34,759
Underground ore production (tonnes) 130,006 126,603 135,084 517,788 511,605
Plant throughput (tonnes) 129,115 127,478 131,581 521,557 509,292
Surface stockpile (tonnes) 36,679 13,040 8,947 36,679 8,947
Head Grades:
   Silver Grade (g/t) 91 89 91 90 101
   Zinc Grade (%) 1.60 1.98 2.05 1.85 2.16
   Copper Grade (%) 0.27 0.21 0.34 0.28 0.33
   Lead Grade (%) 0.72 0.94 1.03 0.87 0.92
Recovered metals in concentrates:
   Silver ounces 296,243 282,036  320,448 1,184,964 1,363,217
   Zinc pounds (000's) 3,322 4,109 4,923 16,463 20,396
   Copper pounds (000's) 347 234 522 1,608 2,143
   Lead pounds (000's) 1,330 1,702 2,094 6,550 7,211
Recovered silver equivalent ounces(2) 521,295 534,075 659,765 2,282,512 2,711,009
Total cash cost per silver payable ounce (US$)(1) $10.56 $14.74 $10.35 $11.93 $1.49
Silver payable ounces 247,877 252,624 246,114 999,462 1,155,412
Zinc payable pounds (000's) 2,879 3,915 4,104 14,105 16,820
Copper payable pounds (000's) 338 221 464 1,543 1,953
Lead payable pounds (000's) 1,168 1,757 1,647 5,965 6,366
Revenue from metals payable ($000's) $12,546 $14,287 $13,776 $54,966 $70,323
   Silver 61% 58% 53% 58% 57%
   Zinc 21% 24% 25% 22% 23%
   Copper 9% 7% 12% 10% 11%
   Lead 9% 11% 10% 10% 9%



  • Revenue from metals payable was $55.0 million in 2012, down from $70.3 million in 2011 due to lower recorded metal prices and lower head grades for all metals.
  • Cash cost per silver payable ounce, net of by-product credits(1), increased to $11.93 in 2012 compared to $1.49 in 2011 due to increased costs, lower production of contained metals as a result of lower head grades for all metals, and lower credits due to a decrease in base metal prices.
  • Net earnings in 2012 decreased to $7.1 million or $0.04 per share (basic) compared to net earnings of $12.6 million or $0.07 per share (basic) in 2011.
  • Adjusted EBITDA(1) of $15.5 million in 2012 decreased from $35.0 million in 2011 as a result of lower revenues and higher costs described above.
  • Cash flow from operating activities before movements in working capital of $15.6 million in 2012 decreased from $34.8 million in 2011.

  • Focused on decreasing costs and increasing efficiencies to reduce overall cost per tonne of material mined and processed.
  • Increased annual ore processing throughput to a record 521.6 kilotonnes, representing increases of 2% and 37% from 2011 and 2010 throughput, respectively.
  • Recovered silver equivalent ounces(2) decreased 16% from 2011 mainly due to a reduction in head grades.
  • Implemented a number of changes in the Nuestra Señora processing plant to increase overall quality and value of concentrates produced.
  • Operations have been strengthened with the addition of a Mine Manager, Chief Mine Geologist, Mine Maintenance Superintendent, Safety Manager and emergency response contractors; and, as of March 2013, the hiring of a Chief Operating Officer based in Cosalá.

Project Development
  • Completed Phase I of the Nuestra Señora plant expansion in preparation to increase capacity by up to 80% to 2,750 tonnes per day ("tpd").
  • Received environmental approval from Mexico's Secretary of Environment and Natural Resources ("SEMARNAT") to operate the existing processing plant up to a maximum throughput of 4,000 tpd if required by the Corporation in the future.
  • Completed preliminary mine design and production planning for the El Cajón deposit.
  • Engaged Canadian-based JDS Energy and Mining to perform the definitive engineering for the development of the El Cajón deposit.
  • Land lease agreements concluded with Ejidos for properties located in the Cosalá Norte District.
  • Received archaeological clearance for the first phase of the Cosalá Norte development.
  • Successfully negotiated land right usage for a proposed new 10.8 kilometer route from the El Cajón Project to the Nuestra Señora processing facility.
  • Submitted the Environmental Impact Statement for exploitation of the El Cajón and San Rafael deposits with SEMARNAT.
  • Nuestra Señora mineral reserve estimate and Cosalá Norte District preliminary economic assessment ("PEA") slated for completion in Q2 2013 by Reno-based Mine Development Associates ("MDA").



  • Revenue from mining operations totalled $10.5 million in Q4 2012 compared to $11.8 million for Q3 2012 and $11.5 million for Q4 2011. The decrease in revenue was due to lower head grades for all metals which resulted in lower recovered metal in all concentrates during Q4 2012 compared to the same period in 2011. This decrease was partially offset by higher metal prices for all metals in Q4 2012 than Q4 2011. The decrease in revenue in Q4 2012 compared to Q3 2012 was due to lower zinc and lead head grades which resulted in lower metal payable.
  • Cash cost per silver payable ounce, net of by-product credits(1), was $10.56 in Q4 2012 compared to $14.74 in Q3 2012 and $10.35 in Q4 2011. The decrease in Q4 2012 cash cost relative to Q3 2012 was due to reduced operating costs as a result of the Corporation's focus on the rationalization and reduction of mining costs. The increase in Q4 2012 cash cost relative to Q4 2011 resulted from lower base metal credits due to lower head grades in Q4 2012 compared to Q4 2011.
  • Mine operating earnings were $3.9 million in Q4 2012 compared to $3.4 million for Q3 2012 and $3.6 million for Q4 2011. The increase in mine operating earnings in Q4 2012 compared to Q3 2012 and Q4 2011 was due to reduced operating costs as a result of the Corporation's focus on the rationalization and reduction of mining costs.
  • Adjusted EBITDA(1) was $5.3 million for Q4 2012 compared to $2.7 million for Q3 2012 and $3.6 million for Q4 2011.
  • Net earnings in Q4 2012 were $1.4 million or $0.01 per share (basic) compared to net earnings of $1.1 million or $0.01 per share (basic) in Q3 2012 and a net loss of $1.0 million or $0.00 per share (basic) in Q4 2011.
  • Cash flow from operating activities before movements in working capital in Q4 2012 increased to $5.3 million compared to $2.7 million in Q3 2012 and $3.6 million in Q4 2011.

(1) This is a non-IFRS performance measure; see Non-IFRS Performance Measures section.
(2) Silver equivalent ounces were calculated using the following metal prices: silver US$24/oz.; zinc US$0.90/lb.; copper US$3.50/ lb.; and lead US$0.90/ lb.

  • The Nuestra Señora operation continues on its path to improvement with the processing plant operating at full capacity. Cost reduction programs are ongoing and meeting with success.
  • Mining and processing rates anticipated to continue at 1,500 tpd.
  • The updated mineral reserve estimate for the Nuestra Señora Mine, undertaken by MDA, is now expected, following repeated delays, in Q2 2013. Once the updated reserve estimate and associated mine plan are received, additional controls are envisaged to enable the stabilization of head grades. In addition, there are significant ongoing efforts to upgrade areas containing Inferred Resources as well as to define ore sources currently outside of the existing resource model.
  • A small trial column flotation cell installed in the Nuestra Señora plant has been successful, resulting in higher lead recovery to the lead concentrate and reduced penalty incurred for high lead content in the copper concentrate. Further testing will be performed in H1 2013 to determine whether a commercial column cleaner cell should be purchased to replace the site-fabricated unit on a permanent basis.
  • A PEA study incorporating the eventual exploitation of the El Cajón and San Rafael deposits is due for completion in Q2 2013.
  • Mine development of the El Cajón deposit is scheduled to commence following receipt of permitting. The Corporation made the required applications and received and has or is in the process of replying to a first round of comments and interrogations provided by the SEMARNAT offices involved in the process.
  • The decision to proceed with the final (Phase II) of the Nuestra Señora plant expansion, targeting an increase of the plant capacity by 80%, from 1,500 tpd to 2,750 tpd, is on hold pending receipt of the PEA, completion of internal trade-off and optimization studies, and permitting of the El Cajón and San Rafael projects.
  • Scorpio Mining's 2013 exploration drilling program will concentrate on developing new resources within and around the Nuestra Señora Mine (11,500 meters) as well as testing of priority targets within the Cosalá District (5,000 meters). To enhance targeting, the Corporation has commissioned a 1,100 line kilometer heli-borne magnetic, radiometric and EM-VLF survey as well as a property-wide ASTER alteration survey. Additional drilling in 2013 will be success-driven.
  • As at December 31, 2012 Scorpio Mining had $23.6 million in its treasury and the cash flow generated from its Nuestra Señora operation continues to allow the Corporation to finance its immediate capital, development and exploration plans, as well as look for growth opportunities.

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 capacity 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 Corporation has numerous exploration targets in the vicinity of its current operations and has recently updated its NI 43-101 compliant mineral resource estimates for the San Rafael and El Cajón development projects. The El Cajón deposit is scheduled for mine development upon receipt of permitting. Scorpio Mining also holds a 100% interest in the advanced, high-grade La Revancha silver and Tepozán silver-gold projects, both located in the productive Parral District within the respective states of Chihuahua and Durango, Mexico. The Company's strategy for near-term growth is currently focused on development and production of the El Cajón deposit.

Scorpio Mining's Interim President and CEO, Peter J. Hawley P. Geo., is a Qualified Person for the Corporation's Mexico projects and has reviewed and approved the content of this release.


Peter J. Hawley
Interim 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]


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.
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