Scorpio Announces Third Quarter 2010
Financial Results
� Scorpio Mining Corporation �is
pleased to announce its unaudited interim financial and operating results for
the third quarter ended September 30, 2010.
|
Three months
ended
September 30, 2010
|
Three months
ended
September 30, 2009
|
Nine months
ended
September 30, 2010
|
Nine months
ended
September 30, 2009
|
|
$
|
$
|
$
|
$
|
Revenue
|
8,515,531
|
5,413,071
|
21,001,736
|
12,317,106
|
Mine operating earnings
|
1,186,255
|
1,800,936
|
3,475,512
|
3,796,961
|
Gain (loss) on dilution and
deconsolidation of Scorpio Gold Corporation
|
-
|
(31,663)
|
20,164,101
|
1,205,738
|
Net earnings (loss)
|
(1,342,211)
|
652,652
|
15,983,163
|
689,442
|
Earnings per share (loss)
|
(0.01)
|
0.01
|
0.10
|
0.01
|
Adjusted EBITDA(1)
|
2,568,856
|
2,010,441
|
6,078,646
|
4,283,693
|
Cash operating cost per tonne(2) USD
|
43.74
|
43.94
|
43.44
|
41.62
|
Peter J. Hawley, CEO
reports, �With normal processing back at near full capacity, and the strong
metal prices, the Company believes the fourth quarter will be a record for tonnes processed and it is anticipated the Company will
reach its produced metal forecast for 2010�.
This earnings release
should be read in conjunction with the Corporation's MD&A, Financial
Statements and Notes to Financial Statements for the period ended September 30,
2010, which are available on the Corporation's website at www.scorpiomining.com
and have been posted on SEDAR at www.sedar..com.
HIGHLIGHTS FOR THE
THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2010
THIRD QUARTER
�
Net
loss was $1,342,211 compared to net earnings of $652,652 for the same period of
2009.
�
Nuestra Se�ora mine
operating earnings were $1,186,255 compared to $1,800,936 for the same period
of 2009.
�
Cash
flow generated from operations totals $2,216,277, a 91% increase compared to
the same period of 2009.
�
Adjusted
EBITDA(1) was $2,568,856
compared to $2,010,441 for the same period of 2009.
�
The
average monthly mill throughput increased from 18,975 tonnes
in Q3 2009 to 35,545 tonnes in Q3 2010, an increase
of 87%. During Q3 of 2010, the Nuestra Se�ora mill processed 106,636 tonnes
in 87 days of production, at an average grade of 1.05% lead, 1.91% zinc, 0.28%
copper and 96 g/t silver.
�
Contained
metals produced in concentrates consisted of 1.768 million pounds of lead,
385,082 pounds of copper, 3.628 million pounds of zinc
and 252,450 ounces of silver for the quarter.
�
Revenue
from metal payable for the period totalled
$10,547,495 (2009, $6,865,196) and was distributed as follows: silver 43%
(2009, 45%); zinc 30% (2009, 25%); lead 15% (2009, 16%); copper 12% (2009,
13%).
NINE MONTHS
�
Due
to the gain on dilution and deconsolidation of Scorpio Gold Corporation of
$20,164,101, net earnings were $15,983,163 compared to net earnings of $689,442
for the same period of 2009.
�
Nuestra Se�ora mine
operating earnings were $3,475,512 for the nine-month period ended September
30, 2010 compared to $3,796,961 for the same period of 2009.
�
Cash
flow generated from operations totals $3,948,307, a 30% increase compared to
the same period of 2009.
�
Adjusted
EBITDA(1) was $6,078,646
compared to $4,283,693 for the same period of 2009.
�
The
Nuestra Se�ora mine
increased its production from 138,946 tonnes in 2009
to 268,432 tonnes in 2010 at an average grade of
1.07% lead, 2.05%, zinc, 0.29% copper and 94 g/t silver..
�
Contained
metals produced in concentrates consisted of 4.496 million pounds of lead,
1.019 million pounds of copper, 10.124 million pounds
of zinc and 614,031 ounces of silver.
�
Revenue
from metal payable for the period totalled
$26,535,135 (2009, $16,510,640) and was distributed as follows: silver 43%
(2009, 46%); zinc 30% (2009, 27%); lead 15% (2009, 16%); copper 11% (2009,
12%); gold 1% (2009, 0%).
(1) This
is a non-GAAP performance measure. The following table provides a
reconciliation of cash operation costs per tonne:
|
Three months
ended
September 30, 2010
|
Three months
ended
September 30, 2009
|
Nine months
ended
September 30, 2010
|
Nine months
ended
September 30, 2009
|
Tonnes of ore milled
|
106,636
|
56,925
|
268,432
|
138,946
|
Cost of sales per
consolidated interim financial statements expressed in CAD
|
5,271,310
|
2,848,519
|
12,356,037
|
6,504,625
|
Cost of sales expressed in US$
|
5,070,859
|
2,598,076
|
11,927,035
|
5,701,816
|
Adjustments:
|
|
|
|
|
Concentrate inventory write-down
|
(39,843)
|
-
|
(39,843)
|
-
|
Variation in inventory
|
(280,706)
|
(87,799)
|
3,279
|
549,210
|
Stock-based compensation
|
(86,199)
|
-
|
(228,739)
|
(48,361)
|
Stockpile inventory write-up
|
-
|
(8,838)
|
-
|
(419,921)
|
Cash operating costs US$
|
4,664,111
|
2,501,439
|
11,661,732
|
5,782,744
|
Cash operating costs per ton
US$
|
43.74
|
43.94
|
43.44
|
41.62
|
(2) This is a non-GAAP performance measure. The following table
provides a reconciliation of adjusted and standardized EBITDA to the financial
statements:
|
Three months
ended
September 30, 2010
|
Three months
ended
September 30, 2009
|
Nine months
ended
September 30, 2010
|
Nine months
ended
September 30, 2009
|
|
$
|
$
|
$
|
$
|
Net earnings (loss) for the
period
|
(1,342,211)
|
652,652
|
15,983,163
|
689,442
|
Income taxes
|
668,720
|
-
|
1,514,264
|
51,658
|
Interest expense
|
521,810
|
514,009
|
1,534,341
|
1,475,342
|
Depletion and amortization
of mineral properties, plant and equipment
|
2,065,913
|
779,758
|
5,218,413
|
2,064,239
|
Standardized EBITDA
|
1,914,232
|
1,946,419
|
24,250,181
|
4,280,681
|
Stock-based compensation
|
654,624
|
32,359
|
1,992,566
|
1,208,750
|
Gain (loss) on dilution and
deconsolidation of Scorpio Gold Corporation
|
-
|
31,663
|
(20,164,101)
|
(1,205,738)
|
Adjusted EBITDA
|
2,568,856
|
2,010,441
|
6,078,646
|
4,283,693
|
Further information is
available on the Corporation�s web site at: www.scorpiomining.com.
President, Mr. D. Roger Scammell, PGeo,
is the Corporation�s Qualified Person for the Nuestra
Se�ora project and has reviewed the content of this
release.
The Corporation is also
pleased to announce the appointment of Mr. Parviz Farzangi, the Corporation�s newly appointed CEO, as a
member of its Board of Directors.
ON BEHALF OF
SCORPIO MINING CORPORATION
Peter J. Hawley
CEO & Director
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
production and throughput targets, enhancing mine operations, completing
acquisitions and Scorpio Mining Corporation�s commitment to, and plans for
developing the Nuestra Se�ora
Project. 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 Nuestra Se�ora Project, risks related to international operations,
construction delays and cost overruns, equipment breakdowns, 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 29, 2010. 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.