Jun 03, 2013
Scorpio Mining Updates El Cajón Project Status and Signs Letter of Intent for Contract Mining at La Verde
Toronto, June 3, 2013 - Scorpio Mining Corporation (TSX: SPM) ("Scorpio" or the "Company") reports that the Secretariat of Environment and Natural Resources (SEMARNAT) of the state of Sinaloa has declined the Company's initial submissions for Change of Land Use permits pertaining to the development of underground mining operations at the El Cajón and San Rafael projects and continued exploration drilling at El Cajón. As previously disclosed, Scorpio requires two independent permits in order to commence mine construction at El Cajón: the Environmental Permit, which was delivered to the Company on April 30, 2013, and the Change of Land of Use Permit.
Scorpio's wholly-owned subsidiary, Minera Platte River Gold, S. de R.L. de C.V., will resubmit its application for the Change of Land Use permit related to the development of underground mining operations at the El Cajón and San Rafael projects.
In meeting with the Sinaloan delegate of SEMARNAT on May 24, 2013, the Company and its consultants were given directives towards filing a new submittal that would receive a more streamlined review than what was afforded to the original submittal filed in December 2012. A follow-up meeting with the technical reviewers of SEMARNAT to finalize the draft submittal is scheduled for June 5, 2013. The Company is encouraged by SEMARNAT's assistance in preparing a new document and willingness to review the application in an expedited timeline, and is confident that the revised submittal will be accepted given that no major deficiencies were identified in SEMARNAT's earlier assessment.
The re-submission is likely to postpone the onset of surface works at El Cajón by a few months, from early to late in Q3 2013. Likewise, delivery of plant feed from the initial stope production to the Nuestra Señora plant is now expected in early 2014. In the meantime, the Company is continuing with metallurgical testwork, mine design engineering and upgrading of the geological database as recommended in the Preliminary Economic Assessment to increase confidence levels in the mineral resources at El Cajón, providing the basis for conversion of resources into reserves early in 2014.
On June 1, 2013, Scorpio signed a letter of intent ("LOI") with a Mexican mining contractor interested in establishing a mining services venture to provide plant feed to Scorpio's Nuestra Señora processing facility from the former producing La Verde Mine. The LOI is providing the basis for finalizing contractual terms for a formal agreement. Production could be resumed as early as within one to two months following signature of the contract.
Pierre Lacombe, President and CEO comments, "This agreement will provide flexibility to our current operations, with La Verde having been shown as a steady source of copper and silver for the former operators of this mine. With the mining contractor identified to restart production having been involved during the last operating period, there is no learning curve involved and a fast ramp-up of production to past levels, in the order of 400-500 tonnes per day, can be expected."
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 the content of this release.
ON BEHALF OF SCORPIO MINING CORPORATION
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.