Scorpio Announces Second Quarter 2010 Financial Results

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

TSX:SPM

VANCOUVER, Aug. 16 /CNW/ - Scorpio Mining Corporation (TSX:SPM) ("Scorpio Mining" or the "Corporation") is pleased to announce its unaudited interim financial and operating results for the second quarter ended June 30, 2010.

    
    -------------------------------------------------------------------------
                         Three months Three months   Six months   Six months
                                ended        ended        ended        ended
                              June 30,     June 30,     June 30,     June 30,
                                 2010         2009         2010         2009
    -------------------------------------------------------------------------
                                    $            $            $            $
    Revenue                 6,464,264    4,650,139   12,486,205    6,904,035
    Mine operating
     earnings                 980,173    1,100,429    2,289,257    1,996,025
    Gain on dilution and
     deconsolidation of
     Scorpio Gold
     Corporation              377,814    1,237,402   20,164,101    1,237,402
    Net earnings (loss)    (1,292,453)     433,910   17,325,374       36,791
    Earnings per share
     (loss)                     (0.01)        0.00         0.12         0.00
    Adjusted EBITDA(1)      1,647,572    1,310,199    3,509,790    2,581,837
    Cash operating cost
     per tonne(2)(3) USD        50.11        44.55        43.25        40.98
    -------------------------------------------------------------------------
    

Peter J. Hawley, CEO reports, "The unexpected failure of one of the two ball mills at Nuestra Senora early in the quarter affected throughput and metal production targets for this quarter. The ball mill was repaired on July 8th, 2010 and the plant came back on line, with the July throughput target of 30,000 tonnes being exceeded, as 34,978 tonnes were processed. The Company expects the third quarter throughput target of 90,000 tonnes will be achieved, and the 2010 annual throughput and produced metals targets to be within reach. The Company congratulates the Mexico operations team on their hard work and the Company will continue to strive to make up the lost time on metal production".

This earnings release should be read in conjunction with the Corporation's MD&A, Financial Statements and Notes to Financial Statements for the period ended June 30, 2010, which are available on the Corporation's website at www.scorpiomining.com and have been posted on SEDAR at www.sedar.com.

HIGHLIGHTS FOR THE SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2010

SECOND QUARTER

    
    -   Net loss was $1,292,453 compared to net earnings of $433,910 for the
        same period of 2009.

    -   Nuestra Senora mine operating earnings were $980,173 compared to
        $1,100,429 for the same period of 2009.

    -   Adjusted EBITDA(1) was $1,647,572 compared to $1,310,199 for the same
        period of 2009.

    -   The average monthly mill throughput increased from 14,142 tonnes in
        Q2 2009 to 23,046 tonnes in Q2 2010, an increase of 163%. During Q2
        of 2010, despite a ball mill failure, the Nuestra Senora mill
        processed 69,138 tonnes in 84 days of production, at an average grade
        of 0.96% lead, 0.36% copper, 2.22% zinc and 114 g/t silver.

    -   Contained metals produced in concentrates consisted of 924,000 pounds
        of lead, 375,000 pounds of copper, 2.860 million pounds of zinc and
        187,496 ounces of silver.

    -   The Corporation acquired 100% of Platte River Gold Inc. through the
        issuance of 74,832,020 common shares. Its assets include three
        polymetallic deposits known as San Rafael, El Cajon and the 120 zone
        located approximately 10 kilometres from the Corporation's Nuestra
        Senora processing facility.

    SIX MONTHS

    -   Due to the gain on dilution and deconsolidation of Scorpio Gold
        Corporation of $20,164,101, net earnings were $17,325,374 compared to
        net earnings of $36,791 for the same period of 2009.

    -   Nuestra Senora mine operating earnings were $2,289,257 for the six-
        month period ended June 30, 2010 compared to $1,996,025 for the same
        period of 2009.

    -   The Nuestra Senora mine processed 161,796 tonnes, compared to 82,021
        tonnes for the same period in 2009.

    -   Adjusted EBITDA(1) was $3,509,790 compared to $2,581,837 for the same
        period of 2009.

    (1) This is a non-GAAP performance measure. The following table provides
        a reconciliation of operation cash costs per tonne:

    -------------------------------------------------------------------------
                                        2010                      2009
                                   Q2           H1         Q2(1)        H1(1)
    -------------------------------------------------------------------------
    Tonnes of ore milled       69,138      161,796       42,425       82,021
    Cost of sales per
     consolidated interim
     financial statements
     expressed in $CAD      4,119,213    7,084,727    2,923,825    3,656,106
    -------------------------------------------------------------------------
    Cost of sales
     expressed in $US       4,010,715    6,856,176    2,501,733    3,103,740
    -------------------------------------------------------------------------
    Adjustments:
    Concentrate inventory
     write-down              (116,293)    (116,293)      (9,415)      (9,415)
    Variation in inventory   (287,443)     400,278     (789,982)    (445,588)
    Stock-based compensation (142,540)    (142,540)           -       48,361
    Stockpile inventory
     write-up                       -            -      187,749      664,354
    -------------------------------------------------------------------------
    Cash operating
     costs $US              3,464,439    6,997,621    1,890,085    3,361,452
    Cash operating costs
     per ton $US                50.11        43.25        44.55        40.98
    -------------------------------------------------------------------------

    (2) This is a non-GAAP performance measure. The following table provides
        a reconciliation of adjusted and standardized EBITDA to the second
        quarter of 2010 and the second quarter of 2009 financial statements:


    -------------------------------------------------------------------------
                         Three months Three months   Six months   Six months
                                ended        ended        ended        ended
                              June 30,     June 30,     June 30,     June 30,
                                 2010         2009         2010         2009
    -------------------------------------------------------------------------
                                    $            $            $            $
    Net earnings (loss)
     for the period        (1,292,453)     433,910   17,325,374       36,791
    Income taxes              141,890            -      845,544       51,658
    Interest expense          504,771      478,994    1,012,531      961,333
    Depletion and
     amortization of
     mineral properties,
     plant and equipment    1,388,794      798,308    3,152,500    1,593,066
    -------------------------------------------------------------------------
    Standardized EBITDA       743,002    1,711,212   22,335,949    2,642,848
    Stock-based
     compensation           1,282,384      836,389    1,337,942    1,176,391
    Gain on dilution and
     deconsolidation of
     Scorpio Gold
     Corporation             (377,814)  (1,237,402) (20,164,101)  (1,237,402)
    -------------------------------------------------------------------------
    Adjusted EBITDA         1,647,572    1,310,199    3,509,790    2,581,837
    -------------------------------------------------------------------------

    (3) Cash operating cost per ton for prior periods has been restated from
        what was previously disclosed by the Corporation. Management found
        errors in the calculation of this information due to the
        miscalculated impact of depreciation included in inventory as well as
        reversal of concentrate inventory write-down within periods.
    

Further information is available on the Corporation's web site at: www.scorpiomining.com. President, Mr. D. Roger Scammell, PGeo, is the Corporation'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
    CEO & Director
    

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 production and throughput targets, 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, equipment breakdowns, 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

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