Scorpio Mining Corporation Makes Production Decision on its 100% Owned Nuestra Senora Project, Sinaloa State, Mexico



    TSX:SPM

    VANCOUVER, June 25 /CNW/ - Scorpio Mining Corporation (TSX:SPM) is
pleased to announce that following review of the positive results from the
recently received independent Pre-Feasibility Study ("PFS") (see news release
of June 14, 2007) the Company has been given a mandate by its Board of
Directors to proceed into production.
    The PFS projects that the base case cash operating cost of producing
silver at the Nuestra Senora project, after accounting for by-product credits,
will be a negative US$0.98 per ounce produced using discounted metal prices of
US$11.00 per oz. for silver, US$1.25 per lb. for zinc, US$0.50 for lead and
US$2.25 for copper.
    Peter J. Hawley, Chairman, CEO comments, "After reviewing the PFS and
given the project's strong economics, particularly the current metal price
scenario which shows a 60.7% Internal Rate of Return (IRR), along with the
upside potential to increase mineral reserves and resources, it is the
Company's view that we have to get this project into production as soon as
possible to take advantage of the current strong metal prices. With the recent
additional staffing of a Mill Superintendent, Mill Construction Manager, Chief
Production Geologist and the awarding of mill construction contracts, we are
in a position to aggressively push the project forwards towards commencement
of production as scheduled for March, 2008. We look forward to providing
ongoing updates of our surface exploration results, underground development
and exploration work and our progress on the mill facility construction as we
approach the start up time line."
    Filing of the final PFS report on SEDAR is expected to be completed
before July 4th, 2007. Scorpio Mining Corporation will then provide notice of
a conference call to discuss the PFS results and answer any questions.

    
    Development and Construction Update

    -   Construction of the Company's 100% owned, dedicated 34-kilometre
        power line from the main hydro dam was begun in the second week of
        March. As of June 18, 2007, 350 of 400 posts have been installed with
        17 kilometres of high tension power wire strung. Estimated time line
        for completion is late August, 2007 which includes the building of an
        electric sub-station.

    -   The 4.3-kilometre Cosala by-pass road has been completed and final
        cement work on culverts is nearing completion. This private Company-
        owned road is intended to be used for moving oversized mill
        equipment, trailers, etc. for installation at the mill facility and
        the transfer of daily metal concentrates to smelters without
        impacting the town of Cosala with heavy traffic.

    -   All mill equipment required for the construction of the processing
        facility is currently located in México at one of the three re-
        furbish/storage yards and shops the Company has in Mazatlan, Cananea
        and Cosala.

    -   The primary ball mill and 800-horsepower motor has been re-furbished
        and rebuilt at the Cananea shop and expected to be shipped to the
        Cosala yard by June 25, 2007.

    -   The various electric motors, conveyor roller and floatation cells
        located in the Mazatlan re-furbish yard are nearing completion and
        expected to be moved to Cosala with the next month.

    -   At the Cosala re-furbish yard a repair shop has been constructed,
        stockpiling of containers containing various pipes, fittings, welding
        machines, etc. is ongoing, and the primary jaw crusher, main pumps
        and the Company owned 70-tonne crane have been re-furbished.

    -   In the fall of 2006 the Company purchased 118 hectares of land for
        the building of the mill facility, offices, hospital, ore storage
        pads, concentrate storage and tailing dam installation and storage of
        waste by-products. The area has now been stripped and surveyed at
        1-metre intervals. Since March 2007 the Company has been excavating
        the various sites in preparation for construction. To date the mill
        site has been blasted and is ready for foundations, primary crusher
        location is in the progress of being blasted, office and building
        locations have been excavated, and ore stockpiling has been on going
        for the past 4 weeks. Waste material from the mine is being used as
        road ballast and fill.

    -   The Company has ordered and is expecting immediate delivery of five
        office trailers, which join to become one unit, with a working space
        of 230 m(3) to supply temporary accommodations for the base camp,
        warehouse and office-construction-supervision personnel during the
        construction of the mill facility.

    -   The Company has awarded Telecom of México the communications contract
        for the mill site facility for the installation of a main
        communications tower, which is currently in construction and will
        supply telephone lines, internet connections and video feed for mill
        site surveillance.

    -   The construction of the foundations for the ball mills, crusher
        buildings and mill floatation facility is scheduled to begin July 15,
        2007 with the outside building shells to be completed by September 1,
        2007.

    -   The Company has engaged CEMEX of Mazatlan to set up a mobile cement
        plant and provide three cement trucks to supply the 3,000 m(3) of
        cement required for construction footings and foundations. CEMEX's
        subcontractor SORIA will supply five trucks per/day for the
        2,100 m(3) of crushed gravel and 1,700 m(3) of sand required for the
        cement.

    -   Current ore stockpile inventory consists of 20,000 tonnes at mill
        site, 5,000 tonnes at the Nuestra Senora portal and 10,000 tonnes
        within the mine.

    -   As outlined in the PFS, the initial commissioning of the mill
        facility is scheduled from December 2007 to the end of February 2008.
        From March 1, 2008 until May 2008 the mill throughput is projected to
        be 500 tonnes/day (TPD) and from June 2008 onwards mill throughput is
        scheduled to be at 1,000 TPD.

    -   The milling facility will have the potential for easily increasing
        throughput to 2,000 TPD and while operating at 1,000 TPD, mill
        construction will continue to equip the facility for the designed
        maximum throughput.

    -   At present, during one 10-hour shift the Company is capable of moving
        1,536 tonnes of waste/ore from stope development and preparation plus
        development ore from the underground Hoag Zone to the mill site. This
        consists of 8 trucks containing 24 tonnes per truck making 8 trips
        per shift. This supports management's view that the Company can
        easily haul from underground the initial 1,000 tonnes per day
        initially projected for mill feed and, with two shifts per day could
        supply a 2,000 TPD mill facility.

    -   The planned initial mining will start from the lower grade Hoag zone
        where primary and secondary blocks have been outlined. Primary blocks
        contain 56,000 tonnes and long hole drilling of the blocks from the
        9th level to the 10th level (30 metres) will begin in August, 2007
        and the first blasting of blocks is slated for October, 2007.

    -   The purpose of starting with ore from the lower grade Hoag area is
        that for the mill commissioning and initial start up period the
        recoveries will not be optimized, and as such the Company does not
        want to lose higher grade mineralization to the tailings. Once mill
        recoveries have been optimized the Company will begin to mine and
        blend in the higher grade Nuestra Senora mineralization.

    -   Currently the Company is mining 2,000 tonnes per month of development
        ore from the Hoag zone area in preparation for production and will
        ramp up to full mining in October 2007.

    -   As of the end of May 2007 total underground development of the main
        4.5 x 5 metre Nuestra Senora ramp stands at 1,469.8 metres
        (1.4 kilometres) plus 2,662.8 metres of 4 x 4 metre cross-cuts and
        access points.

    -   The Company currently has four underground diamond drills performing
        in-fill delineation drilling for areas of exploitation as well as
        exploration drilling.

    -   Currently the Company is looking at various commercial smelter
        alternatives which could improve the net smelter returns received.

    -   The PFS estimates Pre-Production Capital Expenditures of
        US$26.5 million for 2007 and the first quarter of 2008.

    -   The Company currently has over $18 million in working capital with no
        debt. All warrants are in the money and if exercised would bring in
        an additional $26 million of working capital. The Company is also in
        discussions with metal brokers with a view to potentially forward
        selling certain by-product metals and has been approached concerning
        bridge loan financing. The company does not currently anticipate it
        will need to undertake additional equity financing to fund the Pre-
        Production Capital Expenditures
    

    President, Mr. D. Roger Scammell, PGeo, is the Company's Qualified Person
for the Nuestra Senora project. Mr. Scammell is responsible for the current
exploration and development program 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 the future price of silver, zinc, copper, lead and
gold, the timing of construction and production activities, the mine life of
the Nuestra Senora Project, the economic viability and estimated internal rate
of return of the Nuestra Senora Project, the estimation of mineral reserves
and mineral resources, the results of drilling, estimated future capital and
operating costs, projected mineral recovery rates, requirements for additional
financing 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 potential development and
construction 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 parametres as plans continue to be
refined, future prices of silver, zinc, copper, lead and gold, 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 date March 27, 2007. 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
provide 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
doses not undertake to update any forward-looking statements that are
incorporated by reference herein, except in accordance with applicable
securities laws.





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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