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 www.scorpiomining.com and on SEDAR at www.sedar.com. All monetary figures are expressed in Canadian dollars unless otherwise specified.
HIGHLIGHTS FOR THE THREE MONTHS ENDED SEPTEMBER, 2013
(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.
THIRD QUARTER 2013 HIGHLIGHTS & SUBSEQUENT EVENTS
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.
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
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.