TSX:SPM
VANCOUVER, May 13 /CNW/ - Scorpio Mining Corporation (TSX: SPM) is
pleased to announce that a new mineral resource estimate for the 100% owned
Nuestra Senora project in Mexico has been completed by the Company and audited
by independent geological and engineering consultants Watts, Griffis, and
McOuat Limited ("WGM") of Toronto, Canada. The new estimate was undertaken in
order to support an internal mineral reserve estimate and mine plan being
prepared for the first two years of mining, and establish the next priority
areas for definition drilling.
Peter J. Hawley, Chairman, CEO comments, "The new mineral resource
estimate was completed using criteria that are closer to current market
conditions and is based on expected mining methods and costs over the next two
years. Although metal prices were increased in the estimate to be closer to
current prices, new conservative measures include increasing the cut-off grade
to $100 from $80/tonne utilized in the 2007 mineral resource estimate and
allowing for significantly more mining dilution in areas where low cost,
long-hole mining will be undertaken. In addition, this estimate utilizes only
the Company's drill hole data and omits all of the historic Asarco data to
ensure sample integrity and reliability. The Company has also been
conservative in estimating mineral resources from the upper levels of the mine
(e.g. we have used only 50% of the Main Zone resource above Level 8) where
previous Asarco stopes have not yet been surveyed to our satisfaction.
The significant increase in mineral resources in the measured and
indicated categories in less than one year shows that our resource base
remains very strong and confirms the success of the aggressive definition and
exploration drilling program completed in 2007. Our production team will now
focus on establishing a new mineral reserve estimate and mine plan for the
next two years of production. The stringent application of mining and economic
criteria and the associated dilution factors for this mineral resource
estimate supports our expectation that mineral reserves will be substantially
increased and confidence levels enhanced once the mining plan is completed.
The recently reported successes from our definition and exploration drilling
since February 2008 are not included in this mineral resource estimate and are
expected to further increase the mineral resources and ultimately extend the
estimated mine life."Table 1. Estimated Mineral Resources
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Tonnes Silver Gold Zinc Lead Copper
Category (metric) (g/t) (g/t) (%) (%) (%)
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Measured 2,689,369 126 0.12 2.69 1.33 0.36
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Indicated 1,522,232 137 0.16 2.72 1.25 0.36
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Measured +
Indicated 4,211,601 130 0.13 2.70 1.29 0.36
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Inferred Resources 867,799 168 0.22 3.06 1.39 0.27
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Note 1: The cut-off in situ value used to estimate the above mineral
resources was US$100 per tonne.
Note 2: Mining recovery was set at 75% above Level 8 and 85% below
Level 8. Only 50% of the Main Zone mineral resource was used
above Level 8 to account for historic, un-surveyed
Asarco stopes.
Note 3: Historic Asarco drill hole data was removed from the database
to ensure data quality and reliability.
Note 4: Treated Under Dilution Guidelines for Resource Category thus
mining dilution at zero grade of 15% was applied to all zones
located above Level 8 and 10% to all zones below Level 8.
Note 5: The effective date of the mineral resource estimate presented
above is February 24, 2008.
This new mineral resource estimate can be compared to the mineral resource
and reserve estimate in the Pre-feasibility Study dated June 8, 2007 prepared
by Genivar Limited Partnership ("Genivar") in which Genivar reported the
following mineral resources and reserves and from which a preliminary mine
plan was completed:
Table 2. Previously Reported Mineral Reserve and Resource Estimate
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Tonnes Silver Gold Zinc Lead Copper
Category (metric) (g/t) (g/t) (%) (%) (%)
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Probable Reserves 1,886,769 127 - 2.97 1.42 0.42
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Remaining Measured
Resources 369,352 325 - 4.93 2.21 0.90
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Remaining Indicated
Resources 361,441 315 - 5.04 2.33 0.80
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Inferred Resources 816,851 194 - 3.28 1.75 0.49
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Note 1: The cut-off in situ value used to estimate the mineral reserves
and resources above was US$80 per tonne.
Note 2: The mineral reserves were estimated after allowing for the
following factors: Dilution: 10% for the Main Zone and 15% for
the Hoag/Sept 9 Zones; Ore recovery:75% for the Main Zone,
85% for the Hoag and 95% for the Sept 9 Zone and this recovery
takes into account the pillars left in place.
Note 3: Average ore densities were estimated at 3.15 t/m(3).
Note 4: Estimated remaining mineral resources did not include dilution
factors.
Note 5: The effective date of the mineral reserve and resource estimate
described above is April 22, 2007.
Estimation Methodology
In the February 24, 2008 mineral resource estimate, more stringent mining
and economic parameters have been applied than those utilized in previous
estimates in order to facilitate straightforward conversion to mineral
reserves for mine planning purposes. These include:
- Metal values used were US$16.50 per oz. for silver,
US$880 per oz. for gold, US$1.00 per lb. for zinc, US$1.15 for lead,
US$3.25 for copper.
- All calculations were made using Vulcan software and verified with
GEMS software.
- Capping grade factors were applied and a US$100 per tonne cut-off
grade was used.
- A block model with cell sizes of 2 x 2 x 5 metres was interpolated
using the inverse of the square of the distance using samples in the
research ellipsoids. Blocks with composite assay values within a
range of 10 metres were classified as "Measured"; those with the
closest composite within 10 and 20 metres were classified as
"Indicated" and blocks with samples within 20 to 30 metres were
classified as "Inferred".
- A specific gravity was also interpolated for each block based on
measurements taken on drill core for that area. The average specific
gravity for the total mineral resource is 2.99 tonnes per cubic
metre.
- All known underground excavation openings were subtracted from the
gross estimated mineral resource.
- All historic Asarco drill data was removed from the estimation to
ensure sample integrity and reliability.
- Following the mineral resource estimate, an engineering review was
completed in order to demonstrate that the estimated mineral resource
has a reasonable prospect of becoming economically viable. This
included typical mining and internal dilution factors totalling
10% below Level 8 and 15% above Level 8.
- Only 50% of the Main Zone mineral resources were included above
Level 8 in order to account for historic, un-surveyed Asarco stopes
and potential problems with mining around those stopes.
All Santo Domingo zone mineralization was removed from the estimated
mineral resource due to its proximity to surface. A more detailed
study is required to establish economic viability of this
mineralization.The resource estimate was completed by Scorpio's technical team and
audited by WGM qualified person, Kurt Breede, P.Eng. It was prepared using
data available up to February 24, 2008. As of February 24, 2008, a total of
847 drill holes (102,015 metres) had been completed on the property (excluding
all Asarco drilling). Since February 24, 2008, a further 8,387 metres of
diamond drilling has been completed. A new technical report will be available
within 45 days of the current release.
President, Mr. D. Roger Scammell, P.Geo., is the Company's Qualified
Person for the Nuestra Senora project. Mr. Scammell is responsible for the
current exploration and development program and has reviewed the content of
this release.
ON BEHALF OF SCORPIO MINING CORPORATION
Peter J. Hawley
Chairman & CEO
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 future price of silver, zinc, copper, lead and
gold, the timing of construction and production activities, the mine life of
the Nuestra Senora Project, the economic viability and estimated internal rate
of return of the Nuestra Senora Project, the estimation of mineral reserves
and mineral resources, the results of drilling, estimated future capital and
operating costs, projected mineral recovery rates, requirements for additional
financing and Scorpio Mining Corporation's commitment to, and plans for
developing the Nuestra Senora 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
statements 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
potential development and construction of the Nuestra Senora Project, 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, 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
26, 2008. 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.
For further information: Glenn Little, Jackson Little Holdings Ltd,
(604) 930-4375, 1-888-930-4375, Email: jlconsulting@telus.net; Rich Kaiser,
YES International, 1-800-631-8127, 001-757-306-6090 (outside North America),
Email: yes@yesinternational.com
