Scorpio Mining Reports Record 2010 and Fourth Quarter Production
Results and Provides 2011 Operating Budget Guidance
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN
THE U.S.
Toronto, January 14, 2011 � Scorpio Mining Corporation (TSX:SPM)
("Scorpio Mining" or the "Corporation") is pleased to
report record production results for the year 2010, and provide 2011 operating
budget guidance for its Nuestra Se�ora mining operation, Sinaloa State, Mexico.
Parviz Farsangi, CEO reports, �2010 was a record production year for Scorpio
Mining, with the fourth quarter presenting a marked turning point in our
operational success. As shown by our forecast estimates, we are expecting
further significant improvements in performance in 2011. Nuestra Se�ora has
proven to be a low-cost operation with the benefit of flexible mining methods
and diversified metal production. With our strong team in place we are
confident in delivering our commitments in 2011.�
Yearly Production � 2010
�
Average daily mill throughput in 2010 was 1,044
tonnes per day (TPD); an increase of ~35% over the 776 TPD daily average
throughput in 2009.
�
Total mill throughput in 2010 was 381,215
tonnes; an increase of ~81% compared to 210,325 tonnes processed in 2009.
�
Total recovered silver for 2010 in all
concentrates was 910,352 ounces; an increase of ~52% compared to 600,375 ounces
recovered in 2009.
�
Total recovered zinc in zinc concentrate in 2010
was 14,103,587 pounds; an increase of ~61% compared to 8,747,075 pounds
recovered in 2009.
�
Total recovered copper in copper concentrate in
2010 was 1,666,377 pounds; an increase of ~41% compared to 1,185,288 pounds
recovered in 2009.
�
Total recovered lead in lead concentrate in 2010
was 6,158,650 pounds; an increase of ~47% compared to 4,187,662 pounds
recovered in 2009.
�
Silver equivalent ounces* recovered in all
concentrates in 2010 totalled 2,166,223 ounces; an increase of ~52% compared to
1,422,742 ounces recovered in 2009.
The effective operating days in 2010 were adversely affected by the loss of
one ball mill during second quarter, due to a failed trunnion. That failure
represented the loss of 50% of processing capacity for a 90-day period..
Fourth Quarter Production � 2010
�
Mill throughput for the fourth quarter (Q4) 2010
was 112,783 tonnes; an increase of ~58% compared to 71,378 tonnes processed in
Q4 2009.
�
Recovered silver for Q4 2010 totalled 274,735
ounces; an increase of ~36% compared to 202,451 ounces recovered in Q4 2009.
�
Recovered zinc for Q4 2010 totalled 4,136,424
pounds; an increase of ~24% compared to 3,330,742 pounds recovered in Q4 of
2009.
�
Recovered copper for Q4 2010 totalled 626,295
pounds; an increase of ~24% compared to 484,621 pounds recovered in Q4 2009.
�
Recovered lead for Q4 2010 totalled 1,663,750
pounds; an increase of ~21% compared to 1,370,526 pounds recovered in Q4 2009.
�
For Q4 2010, silver equivalent ounces* totalled
659,614 ounces; an increase of ~29% compared to 510,497 ounces recovered in Q4
2009.
Production Forecast - 2011
�
The average daily and annual mill throughput for
2011 is estimated at 1,273 TPD and 464,600 tonnes respectively, representing an
increase of 22% from 2010 actual mill throughput.
�
Recovered silver in all concentrates is
estimated to exceed 1,370,000 ounces, representing a 51% increase from 2010
production.
�
Recovered zinc in zinc concentrate is estimated
at 18,749,000 pounds, representing a 33% increase from 2010 production.
�
Recovered copper in copper concentrate is
estimated at 3,102,000 pounds, representing an 86% increase from 2010
production.
�
Recovered lead in lead concentrate is estimated
at 8,563,000 pounds, representing a 39% increase from 2010 production.
�
Silver equivalent ounces* recovered in all
concentrates are estimated to total 3,217,000 ounces; a 48% increase from 2010
silver equivalent ounces recovered.
Key Elements of the 2011 Operating Plan:
The 2011 budgeted production increases are based upon:
�
sustainable mining and processing rates attained
during Q4 2010;
�
improved mining practices which are reducing
dilution and increasing mining recovery;
�
actual metallurgical performance attained during
2010; and,
�
93.5%
of ore being sourced from the Nuestra Se�ora underground reserve and 6.5% to be
trialled from additional high-grade ore sources in the district.
Capital and exploration
spending for 2011 is budgeted at US$8.101 million and allocated as follows:
�
In
order to ensure a sustainable and reliable operation, US$2.519 million has been
assigned to ongoing plant and equipment and an additional US$1.333 million for
improvements to operations..
�
US$1.453
million is assigned to capital development and exploration at the Nuestra
Se�ora mine, including an aggressive underground exploration program.
�
Exploration
and development of acquired assets from the Platte River acquisition, including
further technical studies on the San Rafael deposit, have been allocated a
minimum US$2.796 million.
* Metal
prices used to calculate silver equivalent ounces recovered are based upon the
approximate weighted averages realized throughout 2010 and are as follows: lead
US$0.96 per lb; zinc US$0.96 per lb; copper US$3.40 per lb and silver US$20 per
oz. For direct comparison purposes, these metal prices have been used to
calculate silver equivalent ounces for actual 2009 production and forecasted
2011 estimate.
Further information is available on the Company�s web site at: www.scorpiomining.com. Scorpio Mining�s
Mexico Country Manager, John A. Sadek, B.Eng. (Mining), MAusIMM, is a Qualified
Person for the Corporation�s Mexico projects and has reviewed the content of
this release.
ON BEHALF OF SCORPIO MINING CORPORATION
Parviz Farsangi
CEO & Director
For further information contact:
Rich Kaiser, YES International: 1-800-631-8127; 001-757-306-6090 (outside North
America)
Email: rkaiser@scorpiomining.com
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, objectives, strategy,
mine operations, exploration, future performance, our management team, and
plans. 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 and La Verde projects, 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.