TSX:SPM
VANCOUVER, Nov. 4 /CNW/ - Scorpio Mining Corporation (TSX:SPM) is pleased
to provide an operations update from its 100% owned Nuestra Senora Mine,
Sinaloa State, Mexico.
Peter J. Hawley, Chairman, CEO reports, "Our Nuestra Senora operation
continues to increase concentrate production and delivery to its various
off-take partners in an aggressive mandate to attain consistent, positive cash
flow. The milling operation has now depleted the low-grade stockpile No.2 ore,
which was excavated during the early mine development and stockpiled for
purposes of bringing the plant on line. High-grade stope ore is currently
being hauled from the mine and blended for processing with ore from stockpile
No.1, which should result in higher head grades and greater concentrate
production. The Company has successfully implemented a number of cost cutting
measures without affecting operating performance. Most recently this includes
the suspension of diamond drilling and related assaying costs and a reduction
in capital expenditures. With the mine extracting higher-grade ore there has
also been a significant reduction in trucking costs. Full commercial
production, based on optimized mine production and mill recoveries, is
anticipated in early 2009."Plant Update
- The current surface stockpile consists of 80,000 tonnes of mill tune-
up development ore grading 69 g/t Ag, 2.55% Zn, 1.42% Pb, 0.25% Cu
and 0.08 g/t Au.
- During the month of October the mill facility processed 21,300 tonnes
of material at an average mill rate for the 29.5 days of operation of
722 tonnes per day (TPD).
- During October the Company produced 340 tonnes of lead concentrate
with an average grade of 54% lead and 2,320 g/t silver (184 contained
tonnes of lead and 25,360 ounces contained silver). This represents a
7% increase in the production of lead concentrate from the reported
September 2008 production level of 318 tonnes.
- During October the Company shipped 278 tonnes of lead concentrate to
the Penoles smelter facility in Torreon, Mexico.
- Current lead concentrate inventory is in excess of 150 tonnes.
- During October, the Company produced 665 tonnes of zinc concentrate
with an average grade of 51% zinc and 165 g/t silver (339 contained
tonnes of zinc and 3,528 ounces contained silver). This represents a
35% increase in the production of zinc concentrate from the reported
September 2008 production level of 490 tonnes.
- Current zinc concentrate inventory in the storage facility in
Manzanillo is in excess of 1,700 tonnes with an additional 300 tonnes
on site ready for shipment.
- The Company has pursued and implemented a number of options for
reducing operating costs without affecting performance, in order to
be more aggressive in attaining positive cash flow. These reductions
are expected to result in monthly savings in excess of $600,000 per
month.Operations Update
In August 2008, in light of weakening metal prices, the mine plan was
modified to focus on developing the readily accessible higher-grade stope
areas for near-term extraction to offset further potential decreases in metal
prices. During the month of September, only minimal ore was produced
underground while the mill continued processing the now depleted stockpile
No.2 material. In October, underground mine development reached two high-grade
silver, copper, lead, and zinc lenses within the Main Zone (M-05 on Level 11
and M-10 on Level 10; see news release of drill results dated September 8,
2008) as well as the lower limit of the Santa Teresa ore body (Level 9.5
ramp). Additional working faces include mining of the high-grade M-03 Zone
from two levels (10 and 11) and a second stope on Level 9 of the Santa Teresa
Zone. Material from these areas is being incorporated into the mill feed
gradually in order for the mill to adjust to the increasing grade. The
proposed schedule includes a continued gradual increase of higher-grade mill
feed to a consistent optimal level that should be reached in the first quarter
of 2009.
The long hole drilling of designated ore blocks in the Hoag zone is
ongoing with Block 13 between levels 10 and 10.5 completed and Block 9 (31,500
metric tonnes) between levels 9 and level 10 in progress. This drilled off
tonnage will provide additional readily available ore to increase mill
throughput when required.
During the months of September and October, repair work was conducted on
some of the major mill components, including reconstruction of the jaw
crusher, reconditioning of the ball mill motors and replacing the liner in
ball mill "A". The final repair to the pinion of ball mill "B" will be
completed by mid-November and at that time all the major components are
expected to be in good working order. In addition, a number of modifications
made to the original design of the plant have successfully improved recoveries
and concentrate grades.
Further information on the Company and the Nuestra Senora project is
available on the Scorpio Mining web site at: www.scorpiomining.com.
President, Mr. D. Roger Scammell, PGeo, is the Company's Qualified Person
for the Nuestra Senora project. Mr. Scammell is responsible for the current
exploration and development programs and has reviewed the content of this
release. The calculation for contained ounces of silver utilizes a conversion
factor of 1 ounce (troy) = 31.1034768 grams.ON BEHALF OF SCORPIO MINING CORPORATION
Peter J. Hawley
Chairman & CEOThis 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 planned shipments of concentrates and planned mine
development and operating cost savings, 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 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,
development, construction and optimization of the Nuestra Senora Project,
risks related to international operations, construction and mill commissioning
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: (800) 631-8127, 001-757-306-6090 (outside North America),
Email: yes@yesinternational.com
