Scorpio Mining Corporation - Scorpio Gold Corporation sign Letter Of Intent with BacTech Mining Corporation for sale of gold assets



    TSX:SPM

    VANCOUVER, Sept. 6 /CNW/ - Scorpio Mining Corporation ("SMC"), (TSX:SPM)
and Scorpio Gold Corporation ("SGC") a 93.5% owned private subsidiary of SMC
are pleased to announce that they have signed a Letter Of Intent ("LOI") with
BacTech Mining Corporation ("BacTech", TSX.V: BM) whereby BacTech will acquire
certain gold assets in Nova Scotia and Quebec (the "Gold Assets"), in exchange
for common shares in BacTech. The transaction with BacTech will see SMC become
the controlling shareholder in BacTech. SMC has recently transferred its
interests in the Caribou, Cochrane Hill and Lac Arsenault gold properties to
SGC for 26,830,763 shares of the company.
    BacTech, subject to shareholder and TSX Venture Exchange approvals, and
certain other customary conditions, will issue to SGC shareholders including
SMC, 2.6 shares of BacTech for each share of SGC held at a deemed value of
$0.18 per share, resulting in SGC shareholders acquiring approximately 56% of
the common shares of BacTech (approximately 50.7% on a fully diluted basis).
The signing of a definitive agreement will be preceded by a 35 day due
diligence period. The transaction is expected to close within 120 days, and is
subject to customary conditions, including definitive documentation, receipt
of all requisite regulatory approvals, including the approval of the TSX
Venture Exchange and the Toronto Stock Exchange, and approval by the
shareholders of BacTech and SGC. BacTech has obtained voting support
agreements supporting the transaction from shareholders representing more than
40% of the outstanding shares of BacTech. SMC has also agreed to support the
transaction as the controlling shareholder of SGC.
    The resulting company, to be called Scorpio Gold Corporation, will
continue to pursue BacTech's strategy of acquiring refractory gold and complex
base metal projects for application of its proprietary bioleaching technology.
The resulting company will also have an excellent portfolio of advanced stage
development properties in Canada, and access to SMC'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 Gold Corporation and Scorpio Mining Corporation said, "This is a
win-win situation for Scorpio shareholders. Not only do the spun-off gold
assets become publicly financeable thereby reducing share dilution for SMC,
the transaction also allows the SMC shareholders to reap the value of the gold
assets which were not previously valued by the market. The transaction also
allows us to open another avenue to develop the gold focus of SGC and to
pursue cost effective, environmentally friendly exploitation of precious and
base metals. We certainly look forward to developing Scorpio Gold Corporation
into a solid metal player within these exciting times. SMC will now focus on
bringing its flagship Nuestra Senora silver-zinc project into production."
    Ross Orr, President and CEO of BacTech comments, "After an extensive
search for a new direction for BacTech, we are pleased to announce this new
initiative for the Company. We will still be able to pursue the four
refractory projects we are currently working on, and, at the same time,
develop near term production gold assets internally. Peter Hawley, Chairman
and CEO of SMC, has over 20 years of experience in Mexico, and he will be
instrumental in assisting us in identifying projects, both refractory and
conventional, for the new Company. In addition, SMC has built a solid
infrastructure in Mexico which will provide us with access to resources that
have only been available through consultants in the past."

    The proposed management of the resulting company is as follows:

    Peter J. Hawley, Chairman and CEO
    M. Ross Orr, President
    Louis R. Nagy, Chief Financial Officer
    Stephen Roebuck, Vice President, Development.
    Dr. Paul Miller, Vice President Technology and Engineering

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

    Peter J. Hawley, Chairman
    M. Ross Orr
    John C. Gingerich
    D. Roger Scammell
    Samuel W. Ingram
    (plus 2 mutually agreed independents)

    The new company will be based in Toronto at BacTech's current location
and will continue to be listed on the TSX Venture Exchange.

    The Scorpio Gold Assets

    Caribou Gold Mine: Located 80 km north of Halifax. Scorpio has the right
to earn a 100% interest in this past-producing high grade gold mine, with
excellent potential to expand and upgrade the current National Instrument
43-101 (NI 43-101) inferred mineral resources of 350,305 tonnes grading
8.41 g/t gold, uncut (94,763 contained ounces of gold). An aggressive
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 and
various avenues are being considered for this fundraising. A bulk sample
decision will be made based on the results of this program.

    Cochrane Hill Deposit: 100% owned, located in Guysborough County, Nova
Scotia. Recently, this advanced property was optioned to Atlantic Gold of
Australia. The current NI 43-101 resource study estimates an indicated mineral
resource of 588,794 tons grading 0.191 oz/ton gold (112,460 contained ounces
of gold) and an inferred mineral resource estimate of 29,422 tons grading
0.165 oz/ton gold. Atlantic Gold will work to increase these resources through
a planned $4.75M exploration program and will make $100,000 in cash payments
over a four year period to earn a 60% interest in the project. Atlantic Gold's
main focus will be to look at the economic viability of an open pit mining
operation.

    Lac Arseneault Property: Located in the Gaspé region of eastern Quebec,
the property is a mid-stage exploration project in which Scorpio has an option
to earn 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.

    SMC has had a presence in Mexico for over nine years and, as such, has
evaluated numerous properties which do not fit its mandate but could
potentially fit Scorpio Gold's plans. Initial reconnaissance by SMC has
identified five gold showings worthy of follow up by Scorpio Gold. Mexico is
host to many refractory deposits in both gold and base metals, and an
extensive search will begin to locate a suitable project following the
completion of this transaction.
    The Qualified Person, as defined under National Instrument 43-101 is
President of Scorpio Mining Corporation, Mr. D. Roger Scammell, PGeo.
Mr. Scammell is responsible for the current exploration and development
programs and the preparation of all technical information provided in this
release and has reviewed and approved the contents of this news release.

    BACTECH PROFILE

    BacTech has developed and patented bacterial oxidation technology for the
treatment of refractory ores and concentrates to enhance the recovery of gold,
silver and base metals. BacTech has successfully commissioned three bioleach
plants for gold and demonstrated its technology in the selective recovery of
base metals from complex sulphide concentrates in a joint project with
Industrias Penoles de C.V. of Mexico that was completed in 2001. BacTech's
focus is the acquisition of equity positions in projects amenable to
bioleaching. Recently, the company expanded its focus through the
establishment of a uranium joint venture with Quinto Mining Corporation in
Quebec.
    Further information on the Company and the Nuestra Senora project 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 transactions, events or developments that the
Company expects, are forward looking statements. Although SMC 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 as well as those other
risk factors set out in SMC's annual information form for the year ended
December 31, 2006. The reader is cautioned not to place undue reliance on
forward looking statements.





For further information:

For further information: 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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