TORONTO, Jan. 30, 2012 /CNW/ - Scorpio Mining Corporation (TSX: SPM)
("Scorpio" or the "Corporation") is pleased to announce that the
proposal to expand its 100% owned Nuestra Señora processing plant,
located in Sinaloa, Mexico has been approved by its Board of Directors.
Parviz Farsangi, President & CEO, comments, "Our continued improvements
and success in the areas of production, processing and financial
strength have allowed us to focus on a major expansion project that is
expected to increase our current production capacity by over 80%.
Scorpio Mining has a strong resource base from which to build on and
significant exploration upside in the Cosalá and Parral districts,
providing excellent opportunity to grow substantially in the near term
through advancing our 100% owned assets."
Over the past four months, the Corporation carried out internal
engineering and scoping studies to determine the optimum size of the
Nuestra Señora plant expansion from its current capacity of 1,500
tonnes per day (tpd). Scorpio is pleased to report that the planned
expansion is expected to result in a daily processing capacity of
approximately 2,750 tpd, reflecting an increase of over 80% from
current processing capacity. Additional tonnage to support the
increased processing capacity may be delivered from several sources,
including additional production from the Nuestra Señora Mine, the
refurbished La Verde Mine, and new production from the San Rafael and
El Cajón deposits. Further evaluation will determine the best feed
combination according to potential production schedules and permitting
The La Verde Mine has been in continuous production since 1988 and is
located 23 km by road from the Nuestra Señora processing facility.
Since being acquired by Minera Platte River Gold in 2008, mine
production was leased to a private contract mining company. Production
at La Verde during 2010 by non-mechanized methods totalled 121,000
tonnes grading 114 g/t silver and 0.44% copper, with silver and copper
recoveries of 78% and 82%, respectively. Scorpio assumed control of the
operation in early 2011 and commenced refurbishment for improved safety
and future production. In addition, over 8,000 tonnes of La Verde ore
were processed at the Nuestra Señora plant during 2011 to determine
Work completed to date and currently in progress to prepare the La Verde
Mine for mechanized mining production includes:
Refurbishment of all services (mostly completed).
Upgrading electrical network in preparation for mechanized mining
Installing roof bolts and developing safer accesses (in progress).
Formalizing access and employment agreements with the local community
Exploration and definition drilling to support a NI 43-101 reserve and
resource estimate (in progress).
Presently, 3,200 metres of the initial drilling program of 4,000 metres
have been completed on the La Verde Phase I Program; results will be
released on a timely basis as received and compiled. Completion of a NI
43-101 compliant mineral reserve and resource estimate for La Verde is
expected by early Q2-2012.
The San Rafael and El Cajón deposits are located approximately 15 km by
road from the Nuestra Señora processing facility. NI 43-101 compliant
mineral resources have been defined for both deposits (see News Release dated October 15, 2009). Diamond drilling to increase the resource base and support an upgrade
to reserve category is in progress. Completion of the drilling program
is expected by the end of Q1-2012; results will be released on a timely
basis as received and compiled. Updated NI 43-101 compliant mineral
reserve and resource estimates for the San Rafael and El Cajón deposits
are expected in Q2-2012.
Key elements included in the Nuestra Señora plant expansion studies were
capital cost and construction schedule estimation supported by
performance guarantees, the identification of major component
requirements, and used equipment sourcing. With the increase in plant
capacity from the original plan of 2,250 tpd (see News Release dated June 27, 2011) to 2,750 tpd, completion of the plant expansion is now scheduled for
the fourth quarter 2012, providing for full operation at 2750 tpd
The cost of expansion is estimated at US$20 million and includes
detailed engineering, procurement and construction, as well as
associated mine capital to support the increased capacity. All required
capital for this expansion project will be funded internally from
operational cash flows.
The plant expansion project is subject to granting of permits by
Mexico's Ministry of Environment and Natural Resources (SEMARNAT).
Reaching a processing rate of 2750 tpd by January 2013 is contingent on
a successful drilling program at La Verde to confirm mineral resources
and a reliable source of ore feed to the plant. La Verde, by virtue of
its recent operating status, is positioned as the earliest source of
ore feed amongst the advanced deposits in the Cosalá District.
Scorpio Mining Corporation is a silver producer operating in Mexico with
significant base metal by-product credits. The 100% owned Nuestra
Señora Mine and plant located in the Cosalá district of Sinaloa State,
Mexico, has proven to be a low-cost operation with the benefit of
flexible mining methods and diversified metal production. It boasts a
fully mechanized underground operation and a processing facility built
for expansion to 4,000 tonnes per day. The plant produces zinc, copper
and lead concentrates; with a significant silver component in the
copper and lead concentrates. In addition, the company has over 40
exploration targets mostly in the vicinity of its current operations.
The Corporation also holds a 100% interest in the La Revancha silver
and Tepozán silver-gold exploration properties in the Parral District
of Chihuahua State, Mexico.The Corporation's strategy focuses on
exploring and developing its existing mineral properties.
Scorpio Mining's President and CEO, Parviz Farsangi, MEng, MBA, PhD,
PEng, is a Qualified Person for the Corporation's Mexico projects and
has reviewed the content of this release.
ON BEHALF OF SCORPIO MINING CORPORATION
President & 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 plant expansion,
production, objectives, strategy, mine operations, exploration, future
performance, our management team, and plans. 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 Señora and La Verde projects, 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 30,
2011. 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:
Victoria Vargas, Vice President Investor Relations and Corporate Communications +1 416-585-2200
Rich Kaiser, YES International: 1-800-631-8127; 001-757-306-6090 (outside North America)