Scorpio Mining Announces Second Quarter Financial Results

Scorpio Mining Corporation (TSX: SPM) ("Scorpio Mining" or the "Corporation") is pleased to announce its unaudited financial and operating results for the second quarter ("Q2") of 2011. This press release should be read in conjunction with the Corporation's Management Discussion & Analysis, Financial Statements and Notes to Financial Statements for the six month period ended June 30, 2011, available on the Corporation's website at www.scorpiomining.com and on SEDAR at www.sedar.com. All monetary figures are expressed in Canadian dollars unless otherwise specified.

Performance Highlights:

Parviz Farsangi, President and CEO, reports: "We are very pleased to report another solid quarter of production and financial performance from Scorpio Mining's Nuestra Se�ora operations. A robust operating cash flow allowed the Corporation to eliminate its debt during the quarter, placing us in an ideal position to advance our stated growth initiatives, including process expansion and development of our existing assets."

Highlights for the Second Quarter Ended June 30, 2011

Second Quarter

• Mine operating earnings for Q2 2011 were $10,297,681 (Q2 2010: $920,266).
• Net earnings were $3,259,339 or $0.02 per share (basic) for Q2 2011 compared to a net loss of $(1,175,928) or $(0.01) per share (basic) for Q2 2010.
• Adjusted EBITDA(1) for Q2 2011 was $11,644,000 (Q2 2010: $2,005,437).
• Cash flows from operating activities in Q2 2011 were $11,953,854 (Q2 2010: $769,781).
• Underground ore production in Q2 2011 was 135,970 tonnes (Q2 2010: 62,703); representing an increase of 117% from Q2 2010.
• Mill throughput at the Nuestra Senora plant for Q2 2011 was 128,674 tonnes (Q2 2010: 69,138); representing an increase of 86% from Q2 2010.
• Processed head grades during Q2 2011 averaged 106 g/t silver, 2.31% zinc, 0.91% lead and 0.27% copper compared to 114 g/t silver, 2.22% zinc, 0.96% lead and 0.36% copper during Q2 2010. As of June 30, 2011, surface ore stockpiles amounted to 16,915 tonnes compared to 45,444 tonnes as of June 30, 2010.
• In Q2 2011, contained metals produced in concentrates consisted of 365,692 ounces of silver (Q2 2010: 187,496), 5,588,179 pounds of zinc (Q2 2010: 2,859,765), 438,529 pounds of copper (Q2 2010: 374,904) and 1,871,789 pounds of lead (Q2 2010: 923,700); reflecting increases from Q2 2010 of 95%, 95%, 17% and 103%, respectively.
• Recovered silver equivalent ounces(2) for Q2 2011 was 745,826 ounces (Q2 2010: 403,025); an increase of 85% compared to Q2 2010.
• Total cash (recovery)/cost per silver payable ounce in Q2 2011 was US$(0.08) (Q2 2010: $5.39) based on silver payable ounces of 322,776 (Q2 2010: 167,680).
• Revenue from metal payable for Q2 2011 totalled $19,972,125 (Q2 2010: $8,038,897) and was distributed as follows: silver 59% (2010: 48%); zinc 23% (2010: 28%); lead 9% (2010: 10%); copper 9% (2010: 14%).
• As of June 30, 2011, the Corporation had $16,801,384 in cash compared to $27,662,589 as of March 31, 2011. The Corporation used existing cash to repay the $20,000,000 outstanding convertible debenture at maturity on May 5, 2011.
• As of June 15, 2011, the Corporation no longer maintains significant influence over the operations of Scorpio Gold Corporation ("Scorpio Gold"). The Corporation has elected to record its investment in Scorpio Gold as an available-for-sale financial instrument measured at fair value with changes in fair value being recognized in other comprehensive income. Included in the statements of operations for the three-month period ended June 30, 2011 is a loss on adjustment to fair value of Scorpio Gold upon initial recognition as available-for-sale instrument of $738,897. Included in other comprehensive income for the three-month period ended June 30, 2011 is an unrealized loss on these shares of $395,231. As of June 30, 2011, Scorpio Mining still holds approximately 19.8 million shares in Scorpio Gold representing 19.4% of Scorpio Gold's issued and outstanding shares.

While comparisons to the second quarter of 2010 show large production increases, it should be noted that Q2 2010 suffered from a significant throughput reduction due to a ball mill failure.

Six Months

• Mine operating earnings were $22,844,323 for the six-month period ended June 30, 2011 compared to $2,279,549 for the same period of 2010.
• Net earnings were $9,816,780 or $0.05 per share (basic) for the six-month period ended June 30, 2011 compared to $17,468,001 or $0.12 per share (basic) for the same period of 2010. The six-month 2010 results include a $20,162,832 gain on dilution and deconsolidation of Scorpio Gold Corporation.
• Adjusted EBITDA(1) was $23,554,955 (2010: $3,179,773).
• Cash flows from operating activities for the six-month period ended June 30, 2011 were $22,789,718 (Q2 2010: $2,557,617).
• Mill throughput at the Nuestra Senora plant was 250,736 tonnes (2010: 161,706).
• Processed head grades for the six-month period ended June 30, 2011 averaged 111 g/t silver, 2.39% zinc, 0.94% lead and 0.34% copper compared to 99 g/t silver, 2.14% zinc, 1.08% lead and 0.30% copper for the same period in 2010.
• In the six-month period ended June 30, 2011, contained metals produced in concentrates consisted of 734,558 ounces of silver (2010: 383,161), 11,444,526 pounds of zinc (2010: 6,338,765), 1,169,607 pounds of copper (2010: 654,904) and 3,706,483 pounds of lead (2010: 2,726,700); reflecting increases from the same period in 2010 of 92%, 81%, 79% and 36%, respectively.
• Recovered silver equivalent ounces(2) was 1,548,174 ounces (2010: 863,492), representing an increase of 79% from 2010.
• Total cash (recovery)/cost(2) per silver payable ounce for the six-months ended June 30, 2011 was US$(3.51) (2010: $3.89) based on silver payable ounces of 644,489 (2010: 363,219).
• Revenue from metal payable for the six-months ended June 30, 2011 totalled $40,784,273 (Q2 2010: $15,987,640) and was distributed as follows: silver 56% (2010: 43%); zinc 23% (2010: 30%); lead 9% (2010: 16%); copper 12% (2010: 11%).

⁽¹⁾ This is a non-IFRS performance measure; please see Non-IFRS Performance Measures section in the Corporation's Management Discussion and Analysis.
⁽²⁾ Silver equivalent ounces in 2011 were established using budgeted prices as follows: lead US$1.02 per lb; zinc US$1.01 per lb; copper US$3.58 per lb and silver US$24 per oz.

Outlook

As of October 31, 2010, the existing reserves at the Nuestra Se�ora mine provide the equivalent of six years of production at the current processing capacity of the Nuestra Se�ora plant. In the Cosal� district, the Corporation has NI 43-101 compliant mineral resources at the San Rafael and El Caj�n projects, as well as having several advanced exploration projects. The Corporation is aggressively advancing its exploration activities to further increase mineral resources and prove additional reserves.

The Nuestra Se�ora processing plant has an existing capacity of approximately 1,500 tonnes per day ("TPD"), but is expandable up to approximately 4,000 TPD. The Corporation has commenced engineering studies to quantify the investment required for varying expansion scenarios. Other growth alternatives being evaluated include the development of a second processing facility in the Cosal� district. Such expansion would allow for the diversification of process circuits and reduce the distances between multiple ore sources and processing facilities.

The Corporation will advance feasibility studies for the expansion of processing capacity and make development decisions during 2011.

The Corporation continues to seek new projects that would increase its asset base as well as enhance value for its shareholders.

Scorpio Mining's President and CEO, Parviz Farsangi, MEng, MBA, PhD, PEng, 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
President & CEO