Scorpio Mining to
Advance Feasibility Study of an Additional Plant and
Plans to Increase its Existing Nuestra Se�ora Plant Capacity in the Cosal� District
NOT FOR DISTRIBUTION TO U.S. NEWS
WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.
Toronto, June 27, 2011 - Scorpio
Mining Corporation (TSX: SPM) ("Scorpio" or the "Corporation") is pleased to announce
that as a result of internal strategic evaluations, it is seeking to engage a lead engineering consultant to conduct
a feasibility study for a
second plant facility located
14 km northeast of the town
of Cosal� and 17 km north
of the existing Nuestra
Se�ora plant by existing road.
Parviz Farsangi, President & CEO comments.
"Our recent focus has been optimizing
the performance of our existing
assets, and as results of
the last two quarters clearly show, we are operating at a significantly higher level than
before. The combination of improved performance and strong metal prices enabled
the Corporation to reach a debt-free
status as of May 5, 2011. While
continuing with the improvement of our existing operations and generating significant cash flow, our focus now is to take
advantage of our strong resource base and significant exploration upside to
grow through expansion. We are fast tracking
the required work to enable a decision point on either expanding our existing plant to designed full capacity or constructing a new plant situated
more central to the majority of our
known resource base in the Cosal� district. While this work is
in progress, we have the advantage to increase the capacity of our existing plant by 50% within a relatively short time
frame."
The feasibility study will evaluate the viability of a nominal 4,000 tonnes per day
(tpd), multi-product concentrator situated proximal to
the historical mines of La Verde
and La Estrella, and the San Rafael and El Caj�n deposits where NI 43-101 compliant mineral resources have been defined as follows (Reference:
News Release - October 15, 2009):
Table 1. Mineral Resource Estimate
- San Rafael Deposit (August 12, 2009)
Zone
|
Category
|
Tonnes
|
Ag g/t
|
Zn %
|
Pb %
|
Cu %
|
Au g/t
|
Main &
Upper
|
Measured
|
1,491,000
|
92.1
|
4.07
|
1.79
|
0.07
|
0.094
|
Main &
Upper
|
Indicated
|
3,322,000
|
100.9
|
3.70
|
1.54
|
0.07
|
0.131
|
Main &
Upper
|
Measured & Indicated
|
4,813,000
|
98.2
|
3.82
|
1.62
|
0.07
|
0.119
|
Main &
Upper
|
Inferred
|
4,000
|
93.1
|
1.90
|
1.48
|
0.04
|
0.113
|
120
|
Indicated
|
645,000
|
244.8
|
0.36
|
0.08
|
0.57
|
0.248
|
120
|
Inferred
|
43,000
|
302.6
|
0.13
|
0.01
|
0.43
|
0.207
|
Note: Metal
prices used in the above estimates are US$12/oz silver, US$0.80/lb zinc, US$0.70/lb lead, US$2.00/lb copper and US$750 /oz gold. A 4.5% zinc equivalent
cutoff was applied. The NI 43-101 technical
report to support this estimate
was filed on SEDAR Dec. 4, 2009. Mineral resources that are not reserves do not have demonstrated
economic viability.
Table 2. Mineral Resource Estimate
-- El Caj�n Deposit (October 8, 2009)
Category
|
Tonnes
|
Ag g/t
|
Cu %
|
Au g/t
|
Indicated
|
1,751,000
|
161.7
|
0.54
|
0.25
|
Inferred
|
545,000
|
138.5
|
0.49
|
0.20
|
Note: Metal
prices used in the above estimate are US$12/oz silver, US$2.00/lb copper and
US$750 /oz gold. A 100 g/t silver equivalent
cutoff was applied. The NI 43-101 technical
report to support this estimate
was filed on SEDAR Dec. 4, 2009. Mineral resources that are not reserves do not have demonstrated
economic viability.
Some components of the feasibility
study are actively being advanced; including, an 8,000-metre surface drilling
program currently under
tender that will cover infill, extension and sterilization drilling of the San
Rafael and La Verde mineralization.
One of the key objectives of this study
will be to upgrade mineral resources within the San Rafael, La Verde
and El Caj�n deposits to NI
43-101 compliant mineral reserves. It is anticipated that the feasibility study will be completed
by Q3 2012.
The Corporation's internal strategic evaluation also concluded that notwithstanding the feasibility study for the
addition of a second plant, the existing
Nuestra Se�ora processing facility should be expanded by 50%, taking production from 1,500 tpd to 2,250 tpd. The ore for the
expanded plant would be sourced from
the Nuestra Se�ora mine and supplemented
with high-grade material from the Candelaria deposit and the La Verde mine.
The completion schedule of this expansion will depend upon the sourcing of major processing
components, but is expected
to be completed before second half of 2012.
This expansion does not preclude
additional expansion of the Nuestra
Se�ora processing facility
in the future. This will be
determined pending the results of the feasibility study on the proposed new plant
as well as continued
exploration success in the Cosal�
district. The Corporation has the advantage of
multiple options from which
to select the best cost-benefit growth
scenario.
The La Verde mine, located approximately 20 km by road from
the Nuestra Se�ora processing
plant, is currently being refurbished and small quantities of high-grade
ore are being metallurgically
tested through the plant.
The Candelaria underground deposit
is situated above the Nuestra Se�ora mineralization and is connected to the Nuestra Se�ora
mine via an existing haulage
ramp. The Corporation is currently developing two levels at
Candelaria to assess the viability of mechanized mining techniques. The high-grade nature of the deposit was verified
in 2004-2005, where results from 53 underground drill
holes returned >300 g/t silver and >1,000 g/t silver in 56% and 22% of sampled
intersections respectively (average
sampled core length was 2.2 m). The mineralization is variably enriched in other metals, returning
best assays of 7.69% copper,
23.51% zinc, 15.21% lead and 13.55 g/t gold. Candelaria
exhibits the typical pinch and swell nature of
carbonate replacement deposits and exhibits high variation in widths
and grades of mineralization over short distances
(Reference: News releases dated October
7, 2004 to May 12, 2005).
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
section of the release.
ON BEHALF OF SCORPIO MINING CORPORATION
Parviz Farsangi
President & CEO
For further information contact:
Rich Kaiser, YES International: 1-800-631-8127;
001-757-306-6090 (outside North
America)
Email: rkaiser@scorpiomining.com
Website: www.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 the Corporation's operations, 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 Corporation'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 30, 2011. 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.
Copyright � 2011 SCORPIO MINING
CORPORATION (TSX: SPM) All rights reserved.
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