May 13, 2014
Scorpio Mining Reports First Quarter 2014
Toronto, May 13, 2014 - Scorpio Mining Corporation (TSX: SPM) ("Scorpio Mining" or the "Company") reports its financial and operating results for the first quarter ("Q1") ended March 31, 2014. This press release should be read in conjunction with the Company's unaudited Financial Statements and Management's Discussion and Analysis for the first quarter ended March 31, 2014, 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 MARCH 31, 2014
FIRST QUARTER 2014 HIGHLIGHTS
(2) Silver equivalent ounces were calculated using the following 2014 budget metal prices: silver US$19/oz.; zinc US$0.95/lb.; copper US$2.97/lb.; and lead US$0.99/lb.
The Company is focused on maintaining ore production at current levels, to meet the nominal plant capacity of 1,600 tpd throughout 2014, first through providing the plant with material mined from the Nuestra Señora Mine and complemented with output from the La Verde Mine and then, towards the end of the second half of the year, through the El Cajón Project which will then become the primary source of plant feed once it is fully ramped up. At this point, it is envisioned that mining lower NSR per tonne material at Nuestra Señora than available from El Cajón would not justify maintaining a production team and related equipment within this mine. These assets would then be redeployed within the El Cajón Mine, to minimize mine mobile equipment purchases.
A program based on a continued thorough review of previously mined sections of the Nuestra Señora 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 H2 2013. These same sources are expected to be available through Q4 2014. Mining of the reserves and resources at Nuestra Señora will continue, with additional plant feed likely provided as defined by short-term definition.
The Company commenced development of the El Cajón Project during Q1 2014, with the first blast taken in the access ramp taken on March 29, 2014 following completion of the surface contouring of the area to be used for surface infrastructures. This underground development work at El Cajón is expected to be sufficiently advanced by the end of Q3 2014 to provide regular mill feed from production stopes. 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 multiple accesses to the orebody are achieved.
JDS is working on a PFS which is expected in Q3 2014.
As at March 31, 2014, the Company had $17.2 million in its treasury, over $35 million in working capital and no debt. The Company is expending significant efforts to maintain positive cash flow from its existing operations and continues to believe that its treasury and future cash flows will be adequate to finance the development of the El Cajón Project, define resources at the La Verde Mine, de-risk the San Rafael Project and sustain minimal regional exploration during 2014.
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.