Scorpio Announces 2009 Year-end and Fourth Quarter Financial Results

/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S./

TSX:SPM

VANCOUVER, April 1 /CNW/ - Scorpio Mining Corporation (TSX: SPM) ("Scorpio" or the "Company") is pleased to announce the audited financial and operating results for the fourth quarter and the year ended December 31, 2009.

    
    -------------------------------------------------------------------------
                                          Fourth Quarter            2009
    -------------------------------------------------------------------------
    Revenue                                $7.1 million        $19.4 million
    -------------------------------------------------------------------------
    Mine operating earnings                $3.5 million         $7.3 million
    -------------------------------------------------------------------------
    Income tax recovery                   $10.3 million        $10.3 million
    -------------------------------------------------------------------------
    Net earnings                          $12.5 million        $13.5 million
    -------------------------------------------------------------------------
    Earnings per share                         $0.11               $0.12
    -------------------------------------------------------------------------
    Adjusted earnings(1)                   $2.1 million         $3.1 million
    -------------------------------------------------------------------------
    Cash operating cost per tonne(2)         US$35.47            US$39.47
    -------------------------------------------------------------------------
    

Peter J. Hawley, Chairman, CEO reports, "On behalf of management and the Board of Directors, I am extremely pleased to report that Scorpio Mining has for its first year of commercial production exceeded all mandates given, resulting in 2009 adjusted earnings(1) of $3.1 million, net earnings of $13.5 million and earnings per share of $0.12. This stellar performance could not have been achieved without the continued hard work from the Scorpio team throughout the year, in keeping operating costs low while increasing mine and mill throughput."

"With the pending Platte River Gold acquisition nearing its close, the current planning for mill expansion, and the starting of an open pit for 2011 on the San Rafael Main zone, management is focused on building Scorpio Mining into a leading low-cost intermediate producer. The Company maintains its commitment to enhancing shareholder value through profitability, growth of mineral reserves and resources, and sustainable annual production of metals."

This earnings release should be read in conjunction with the Company's MD&A, Financial Statements and Notes to Financial Statements for the period ended December 31, 2009, which are available on the Company's website at www.scorpiomining.com and have been posted on SEDAR at www.sedar.com.

Highlights for the Year and Fourth Quarter Ended December 31, 2009, and Subsequent Events:

    
    -   Nuestra Senora mine completed its commissioning and commenced
        commercial production in January 2009.

    -   Nuestra Senora mine operating earnings were $7,334,969 for the year
        ended December 31, 2009.

    -   Net earnings were $13,528,437 or $0.12 per share for 2009 compared to
        net loss of $90,699,167 or $0.82 per share in 2008.

    -   Adjusted earnings(1) amounted to $3,137,973 for the year ended
        December 31, 2009 compared to $90,699,167 in 2008.

    -   The Company's Mexican operations generated positive cash flows for
        the year ended December 31, 2009.

    -   Nuestra Senora cash operating costs(1) were 13% lower than budgeted
        at US$39.47 per tonne compared with the forecast cost of US$45.37 per
        tonne.

    -   Underground ore production increased throughout the year from 20,557
        tonnes in the first quarter ("Q1") to 54,860 tonnes in the fourth
        quarter ("Q4"), an increase of 167%.

    -   The average monthly mill throughput increased during the year from
        13,199 tonnes in Q1 to 23,793 tonnes in Q4, an increase of 80%.
        During Q4, the Nuestra Senora mill processed 71,378 tonnes in 81 days
        of production at an average grade of 1.25% lead, 0.43% copper, 2.78%
        zinc and 99 g/t silver. As of December 31, 2009, surface ore
        stockpile amounted to 45,395 tonnes.

    -   For the year ended December 31, 2009, the mill processed 210,324
        tonnes in 271 days of production at an average grade of 1.33% lead,
        0.43% copper, 2.60% zinc and 105 g/t silver.

    -   For the year ended December 31, 2009, contained metals produced in
        concentrates consisted of 4.188 million pounds of lead, 1.186 million
        pounds of copper, 8.747 million pounds of zinc and 600,375 ounces of
        silver.

    -   On July 1, 2009, the Company and Penoles agreed on a new annual
        contract under which the Company agreed to sell 200 to 250 wet metric
        tonnes ("wmt") of lead concentrate per month.

    -   The 2009 six-month offtake contract for the Company's zinc and copper
        concentrates expired on October 31, 2009. In view of the favourable
        metal market prices and offtake terms, the Company has entered into a
        long-term agreement effective November 1, 2009 to December 31, 2010
        where the customer will purchase all of the Company's zinc and copper
        monthly concentrate production estimated between 200-300 wmt of
        copper and 450-750 wmt of zinc. This will ensure treatment and
        refining charge stability over that period.

    -   On October 15, 2009, the Company announced the proposed acquisition
        of Platte River Gold Inc. ("Platte River"), a private company with an
        advanced stage exploration property near the Nuestra Senora mine, in
        consideration for the issuance of approximately 74.8 million shares
        of Scorpio. The transaction has received shareholders approval from
        both companies but remains subject to regulatory approvals and
        customary closing conditions.

    -   On March 10, 2010, Scorpio Gold completed a $12.5 million private
        placement financing, acquired a 70% interest in the Mineral Ridge
        Property in consideration for a cash payment of US$3.75 million and
        issuance of 7,824,750 of its common shares and acquired a net smelter
        return royalty affecting certain areas of the Mineral Ridge Property
        for US$3 million to enhance the economics of the project. Following
        these transactions, Scorpio Mining holds a 38% interest in Scorpio
        Gold.


    1.  This is a non-GAAP performance measure which adjusts the earnings for
        the year for the non-cash future income tax recovery recognized in
        2009; please see Non-GAAP Performance Measures section in the
        Company's MD&A.

    2.  This is a non-GAAP performance measure; please see Non-GAAP
        Performance Measures section in the Company's MD&A.
    

Further information is available on the Company's web site at: www.scorpiomining.com.

President, Mr. D. Roger Scammell, PGeo, is the Company's Qualified Person for the Nuestra Senora project 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 enhancing mine operations, completing acquisitions 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 and development and operation 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, 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.

SOURCE Scorpio Mining Corporation

For further information: For further information: Rich Kaiser, YES International: 1-800-631-8127; 001-757-306-6090 (outside North America), Email: yes@yesinternational.com

Organization Profile

Scorpio Mining Corporation

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890