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Nov 11, 2013
Scorpio Mining Reports Financial Results for its Third Quarter 2013

Toronto, November 11, 2013 - Scorpio Mining Corporation (TSX: SPM) ("Scorpio Mining" or the "Company") today reported its financial and operating results for the third quarter ("Q3") ended September 30, 2013. This press release should be read in conjunction with the Company's unaudited Financial Statements and Management's Discussion and Analysis ("MD&A") for the corresponding period, available on the Company's website at and on SEDAR at All monetary figures are expressed in Canadian dollars unless otherwise specified.

  Three  Months  Ended
Sep 30, 2013 Jun 30, 2013 Sep 30, 2012
Mine operating earnings ($000's) $803 $(1,975) $3,398
Net (loss) earnings ($000's) $(5,381) $(3,188) $1,073
(Loss) Earnings per share (basic) $(0.03) $(0.02) $0.01
Adjusted EBITDA ($000's)(1) $2,012 $(1,559) $2,706
Adjusted EBITDA per share (basic)(1) $0.01 $(0.01) $0.01
Cash flows from operating activities before movements in working capital ($000's) $2,050 $(1,516) $2,750
Underground ore production (tonnes) 123,807 128,165 126,603
Plant throughput (tonnes) 136,610 126,868 127,478
Surface stockpile (tonnes) 19,580 29,836 13,040
Head Grades:
   Silver Grade (g/t) 67 66 89
   Zinc Grade (%) 2.09 1.55 1.98
   Copper Grade (%) 0.16 0.25 0.21
   Lead Grade (%) 0.95 0.77 0.94
Recovered metals in concentrates:
   Silver ounces 240,499 214,926 282,036
   Zinc pounds (000's) 4,738 3,198 4,109
   Copper pounds (000's) 201 339 234
   Lead pounds (000's) 2,036 1,475 1,702
Recovered silver equivalent ounces(2) 523,780 439,567 534,075
Total cash cost per silver payable ounce (US$)(1) $11.16 $20.29 $14.74
Payable metals in concentrates:      
    Silver ounces 207,316 180,073 252,624
    Zinc pounds (000's) 3,698 2,895 3,915
    Copper pounds (000's) 194 294 221
    Lead pounds (000's) 1,919 1,318 1,757
Revenue from metals payable ($000's) $10,823 $7,600 $14,287
Revenue distribution:
   Silver 46% 45% 58%
   Zinc 30% 28% 24%
   Copper 6% 11% 7%
   Lead 18% 16% 11%

(1) This is a non-IFRS performance measure; see Non-IFRS Performance Measures section in the MD&A.;
(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.


  • Revenue from metals payable of $10.8 million in Q3 2013, increased from $7.6 million in Q2 2013 due to higher metal prices and head grades for silver, zinc and lead; and higher plant throughput;
  • Cash cost per silver payable ounce, net of by-product credits(1), decreased to $11.16 in Q3 2013 compared to $20.29 in Q2 2013 due to an increase in silver payable ounces; an increase in by-product credits as a result of higher metal production and prices for lead and zinc; increased throughput due to high processing plant availability and utilization; and improved efficiency;
  • Net loss in Q3 2013 was $(5.4) million or $(0.03) per share (basic) compared to net loss of $(3.2) million, or $(0.02) per share (basic) in Q2 2013. The Q3 2013 net loss includes an impairment charge of $(5.5) million related to the Company's investment in the common shares of Scorpio Gold Corporation;
  • Adjusted EBITDA(1) of $2.0 million in Q3 2013 increased from $(1.6) million in Q2 2013 as a result of higher revenues and lower costs described above;
  • Cash flow from (used in) operating activities before movements in working capital of $2.1 million in Q3 2013 increased from $(1.5) million in Q2 2013; and
  • Working capital was $36.0 million at the end of Q3 2013 consistent with the end of Q2 2013.
(1) This is a non-IFRS performance measure; please see Non-IFRS Performance Measures section in the MD&A.;

  • Record quarterly throughput of 136,610 tonnes was attained in Q3 2013 due to high processing plant availability and utilization of 94.9% and 99.8%, respectively, in a period with limited planned maintenance requirements;
  • Production from the Nuestra Señora Mine in Q3 2013 encountered higher zinc, lead and silver head grades compared to Q2 2013, while copper head grade was lower;
  • Changes in quarter-on-quarter metal recoveries were in line with relative head grade changes;
  • Recovered silver equivalent ounces(2), at 523,780 ounces in Q3 2013, increased by 19% from 439,567 ounces in Q2 2013 mainly due to the higher plant throughput and head grades during the quarter; and
  • At the end of Q3 2013, a 14% cut in the Company's workforce was implemented across operations and exploration departments.
(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.

Project Development
  • During Q3 2013, the Mexican Secretariat of Environment and Natural Resources ("SEMARNAT") requested additional information from the Company related to its Change of Land Use Permit (Spanish acronym "CUS") application for the development of the El Cajón underground mine. That information was submitted at the end of Q3 2013 and liaison with SEMARNAT continues to advance this final pending permit application review. Once in hand, the Company will immediately commence the development work required to put the El Cajón deposit into production. The related Environmental Impact Statement (Spanish acronym "MIA") had been accepted in April 2013;
  • Contract mining has commenced at the Company's wholly-owned silver-copper La Verde Mine. During Q3 2013, La Verde provided 6kt of ore. Initial process optimization trials will commence during Q4 2013 and production should ramp-up soon after, approaching 15,000 tonnes per month by year-end; and
  • During Q3 2013, JDS Energy and Mining Inc. was engaged to perform a prefeasibility study ("PFS") for underground mining of the El Cajón deposit. The completion of the PFS, expected in Q1 2014, will result in the publication of NI 43-101-compliant mineral reserves.

  • The majority of efforts have been directed at following up geophysical and ASTER studies performed earlier in the year. Over 2,000 geochemical samples have been taken in grids covering areas identified by radiometric and aeromagnetic surveys. Mapping of these areas has been performed as well;
  • A mapping and sampling program on surface at Nuestra Señora has led to defining material which can be recovered from within the Nuestra Señora Mine. This material is currently being developed;
  • An initial program was completed around outlying properties within the Cosalá District, namely Venado, San Ramón and Los Cristos. All encountered mineralization but not with significant continuity. Follow-up programs however appear to be warranted at all three properties; and
  • Resources have been devoted to a re-evaluation of the La Verde Mine and surroundings. New mapping has defined previously unrecognized ore controls. A program of re-logging holes previously drilled at La Verde is underway and a program to combine this effort with new mapping in the mine workings should lead to better production controls and definition of exploration targets.


The Company is focused on maintaining plant throughput at current levels. The increase in plant throughput in Q3 2013 was attained due to high processing plant availability and utilization of 94.9% and 99.8%, respectively, in a period with limited planned maintenance requirements.

A program based on a continued thorough review of previously mined sections of the Nuestra Senora orebody, including the Candelaria Zone, the on-going placement of backfill, which enabled mining of secondary stopes, and other initiatives provided higher plant feed grades in Q3 2013. These same sources, coupled with the incremental non-resource material from La Verde are expected to be available through Q4 2013.

Access to the high grade glory hole above the Candelaria workings has been completed. An additional entry point, above the one recently established, is sought to speed up the withdrawal rate of the broken material inventory. The Company expects that this program should maintain or improve head grades. Mining of the resources at Nuestra Señora will continue with additional ore as defined by short-term definition drilling.

In addition, ore production from La Verde will soon contribute to plant feed. Initial process optimization trials will commence during Q4 2013 and fresh ore supply from La Verde is expected to ramp-up soon after, towards approximately 15,000 tonnes per month by year-end.

The CUS for the El Cajón deposit is in its final stage of the approval process. With the substantive aspects of the CUS review process having been completed; the Company is in regular contact with SEMARNAT and SEDECO (the Secretariat of Economic Development for the State of Sinaloa) and anticipates that a decision will be received in Q4 2013.

The Company's main focus is to commence development and obtain production at El Cajón to feed its ore to the processing plant, initially in conjunction with Nuestra Señora's output. A window of six months would be required, from receipt of the CUS, to complete sufficient development work underground at El Cajón to start supplying material at the plant. An additional quarter will be needed to ramp the mining activities to a regular production regime at an expected potential of up to 1,500 tpd using design assumptions based solely on surface drilling data. A level of sustainable output will be better determined once underground operations are underway and access to the orebody is achieved.

The Company ended Q3 2013 with approximately $19.4 million in its treasury, over $36 million in working capital and no debt. Despite reduced cash flows brought by the difficult metal pricing environment, reduction in the operating and exploration expenditures, coupled with improved head grades and commencement of mining at La Verde, provide the Company with the confidence that its treasury and future cash flows will be adequate to finance the development of El Cajón, define resources at the La Verde Mine, de-risk the San Rafael Project and sustain regional exploration during the year to come.

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.


Pierre Lacombe
President & CEO

For further information contact:
Victoria Vargas, Vice President Investor Relations and Corporate Communications +1 416-585-2200


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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