Scorpio Gold Corporation signs letter of intent with Cincoro Capital Corp. for qualifying transaction



    TSX:SPM

    VANCOUVER, Aug. 6 /CNW/ - Scorpio Mining Corporation ("Scorpio
Mining"),(TSX:SPM) is pleased to announce that Scorpio Gold Corporation
("Scorpio Gold") a 93.5% owned private subsidiary of Scorpio Mining, which
holds certain gold assets in Nova Scotia and Quebec, has signed a Letter of
Intent ("LOI") with Cincoro Capital Corp. ("Cincoro", TSX.V: FIV.P), a capital
pool company listed on the TSXV Venture Exchange, whereby Cincoro has agreed
to purchase (the "Acquisition") all of the issued and outstanding common
shares of Scorpio Gold or otherwise complete a business combination with
Cincoro. The Acquisition, if completed, will constitute Cincoro's "qualifying
transaction" under the policies of the Exchange. The transaction with Cincoro
will see Scorpio Mining become the controlling shareholder in Cincoro.
    Pursuant to the LOI, Cincoro has agreed prior to the completion of the
Transaction, subject to shareholder and regulatory acceptance, to consolidate
its shares on a 3 to 1 basis (three pre-consolidated shares for each one
post-consolidated share). Subject to the execution of a definitive agreement
and regulatory acceptance to the Acquisition, Cincoro will acquire all of the
issued and outstanding common shares of Scorpio Gold in exchange for the
issuance of common shares of Cincoro on the basis of one post-consolidated
common share of Cincoro for each one Scorpio Gold common share outstanding.
Upon completion of the Acquisition, Scorpio Gold will become a wholly-owned
subsidiary of Cincoro. The signing of a definitive agreement will be preceded
by a 25 day due diligence period. The Transaction is expected to close during
October 2008, and is subject to customary conditions, including definitive
documentation, receipt of all requisite regulatory approvals, including the
approval of the Exchange and the Toronto Stock Exchange and approval by the
shareholders of Scorpio Gold.
    The resulting company, to be called Scorpio Gold Corporation, will have a
public trading platform and greater access to financial markets to advance
Scorpio Gold's portfolio of advanced stage development properties in Nova
Scotia and Quebec, and will be able to call on Scorpio Mining's expertise in
Mexico for acquiring, developing, or operating complementary projects in
Mexico.
    Commenting on the proposed Transaction, Peter J. Hawley, Chairman and CEO
of Scorpio Mining Corporation and CEO of Scorpio Gold Corporation said, "With
the strength and experience of the resulting company board of directors, the
strong advanced gold asset base and the exciting gold projects in the pipe
line presently being evaluated we feel that the resulting company will be well
positioned to advance rapidly into a new dynamic gold company with a Board
with vision. We all are very excited about the potential for the resulting
company."

    
    The proposed management of the resulting company is as follows:

    Peter J. Hawley, CEO
    Gilbert Comtois, Chief Financial Officer
    Janet Horbulyk, Corporate Secretary.

    The proposed Board of Directors of the resulting company is as follows:

    Peter J. Hawley
    Andrew Lee Smith
    David Smalley
    Brian Lock
    Luc Pelchat
    

    The Scorpio Assets

    Caribou Gold Property: Located 80 km north of Halifax, Nova Scotia.
Scorpio Gold has the right to earn a 100% interest in this past-producing high
grade gold mine, considered to have potential to expand and upgrade the
current NI 43-101 inferred resources of 350,305 tonnes grading 8.41 g/t gold,
uncut (containing an estimated 94,763 ounces of gold). An exploration and
development plan has begun that includes surface diamond drilling, dewatering
of the old mine shaft, erection of a head frame, a hoist system, supporting
surface infrastructure, underground mapping and diamond drilling. Completion
of this program will require additional financing. Upon completion of the
Acquisition, and completion of the Private Placement, the funds received from
the issuance of the Flow-Through Shares will be spent on the first phase of
the diamond drilling program. A bulk sample decision will be made based on the
results of this program.
    During the summer of 2007 Scorpio Gold, holding a first right of refusal
to acquire the Caribou Gold property from Scorpio Mining, began evaluation
work on the property. The work comprised of brush clearing the main shaft
area, refurbishment of the previous grid base lines, surveying the placement
of buildings - electrical lines - shafts and trenches with respect to the
existing base lines. Work also included the inspection of the existing shaft
collar on the No. 3 shaft and checking the bedrock conditions of a proposed
area for a possible hoist system.
    In addition from July 9 - 26, 2007 Scorpio Gold drilled 8 HQ sized
surface diamond drill holes which comprised a total of 698 meters in length.
The drilling was to target near surface stockwork style quartz veins and to
test exploration models. Three of the 8 holes targeted the North Limb of the
anticline, one was a near vertical hole testing the anticlinal axis which may
have hosted a saddle reef type vein and four targeted the previously
identified B/C Zone on the south limb. Five of the eight holes appear to have
intersected the targets. At the time of the Caribou Report the drill holes had
not been assayed for their mineral content. Results remain pending. No further
exploration work has been conducted on this property to date.
    Four major diamond drill programs have targeted gold mineralization on
the Caribou property. Holes include approximately 165 surface holes and 206
underground holes, which test auriferous zones. Holes have tested the
auriferous zone over a strike length of 800 meters and to an average depth of
240 meters.

    Cochrane Hill Property: 100% owned, located in Guysborough County, Nova
Scotia. Recently, this advanced property was optioned to Atlantic Gold Mines
NL ("Atlantic Gold") of Australia. The current NI 43-101 resource estimate
calculated by Scorpio Mining Corporation in 2004 indicates a total indicated
gold resource estimated at 588,794 tons grading 0.191 oz/ton gold (112,460
contained ounces of gold) and an inferred gold resource estimate of 29,422
tons grading 0.165 oz/ton gold. Atlantic Gold is working to increase this
resource through a planned $4,750,000 exploration program and will also make
$100,000 in cash payments over a four year period to earn a 60% interest in
the project. Atlantic Gold's main focus is examining the economic viability of
an open pit mining operation. Atlantic Gold is the operator of the Cochrane
Hill property.

    Lac Arseneault Property: Located in the Gaspé region of eastern Quebec,
the property is a mid-stage exploration project in which Scorpio Gold has a
100% interest. High-grade gold-silver-zinc-lead mineralization is hosted in an
extensive system of quartz veins and breccia zones. Previous work includes
mapping, geophysics, trenching and diamond drilling.
    The Qualified Person, as defined under National Instrument 43-101 for
Scorpio Gold's projects is Mr. Peter Hawley, the Chairman and Chief Executive
Officer of Scorpio Mining and the President of Scorpio Gold. Mr. Hawley is
responsible for the preparation of all technical information provided in this
news release and has reviewed and approved the contents of this news release.
    Further information on the Company is available on the Scorpio Mining web
site at: www.scorpiomining.com.

    ON BEHALF OF SCORPIO MINING CORPORATION

    Peter J. Hawley
    Chairman & CEO

    This news release includes certain statements that may be deemed
"forward-looking statements". All statements in this news release, other than
statements of historical facts, that address future exploration drilling,
exploration activities and events or developments that the Company expects,
are forward looking statements. Although the Company believes the expectations
expressed in such forward-looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance and
actual results or developments may differ materially from those in
forward-looking statements. Factors that could cause actual results to differ
materially from those in forward-looking statements include metal prices,
exploration success, continued availability of capital and financing, and
general economic, market or business conditions.





For further information:

For further information: contact: 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

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Scorpio Mining Corporation

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