VANCOUVER, Nov. 16 /CNW/ - Scorpio Mining Corporation (TSX: SPM) ("Scorpio" or the "Company") today reported unaudited financial and operating results for the third quarter ended September 30, 2009 ("Q3") and provided an update on operations.
Peter J. Hawley, Chairman, CEO reports, "Once again the Scorpio team is very proud to report a record third quarter for commercial production with positive mine operations earnings, positive net earnings and earnings per share, an increase in concentrate sales, underground production, mill throughput and a decrease in Mexico operating costs per tonne, smelter treatment charges and underground development costs. Given that is this only our third quarter of commercial production and the Company is able to report positive earnings per share, it speaks well of the dedication of our team to enhance shareholder value.
Since the end of the third quarter, metal prices have strengthened allowing a production ramp-up that saw us exceeding all the mandated targets set for each quarter and once again increasing the mill throughput to 21,000 tonnes per month for the next quarter. This positive track record for 2009 should continue in the fourth quarter resulting in increased revenues per tonne of concentrate sold. The Company has set strict mandates for 2009 to show profitability, and to date has exceeded all goals set. The Company, as mandated, has also aggressively sought acquisitions of near-term, high-grade development projects and operating assets in Mexico as shown in the recently announced Platte River Gold transaction."
This earnings release should be read in conjunction with the Company's MD&A, Financial Statements and Notes to Financial Statements for the period ended September 30, 2009, which are available on the Company's website at www.scorpiomining.com and have been posted on SEDAR at www.sedar.com.
Third Quarter 2009 Highlights:
- Nuestra Senora mine operating earnings were $1,800,936 compared to
$1,100,429 in the second quarter of 2009 ("Q2").
- Net earnings were $908,549 or $0.01 per share compared to net
earnings of $462,634 or $0.00 per share in Q2.
- The Company's Mexican operations generated positive cash flows.
- Nuestra Senora cash operating costs were 4% lower than budgeted at US
$43.94 per tonne compared with the forecasted cost of US$45.89 per
- Underground ore production increased from 26,536 tonnes in Q2 to
39,687 tonnes in Q3, an increase of 50%.
- The average monthly mill throughput increased from 14,142 tonnes in
Q2 to 18,975 tonnes in Q3, an increase of 34%. The Company expects
throughput to further increase to 21,000 tonnes per month during the
remainder of the year.
- During Q3, the mill processed 56,925 tonnes in 77 days of production
at an average grade of 1.30% lead, 0.44% copper, 2.47% zinc and
105 g/t silver. This represents a 34% increase from Q2 production of
42,425 tonnes in 58 days at an average grade of 1.42% lead, 0.40%
copper, 2.43% zinc and 115 g/t silver.
- During Q3, contained metals produced in concentrates consisted of
1.108 million pounds of lead, a 26% increase from Q2; 335,000 pounds
of copper, a 152% increase from Q2; 2.120 million pounds of zinc, a
24% increase from Q2 and 167,817 ounces of silver, a 46% increase
from Q2. In comparison, in Q2 the contained metals produced were
876,000 pounds of lead, 133,000 pounds of copper, 1.709 million
pounds of zinc and 115,261 ounces of silver. The Company's mandate
for Q3 was to focus on increasing mill throughput and, as a result of
higher metal prices, the Company was able to process lower-grade
material in Q3 thereby reducing its reliance on the higher-grade cut
and fill ore and extending the high-grade life of mine sectors.
- For the first three quarters of the year, contained metals produced
in concentrates consisted of 2.817 million pounds of lead,
701,000 pounds of copper, 5.416 million pounds of zinc and 397,924
ounces of silver.
- On October 8, 2009, Scorpio Gold signed an agreement for the
acquisition of a net smelter return royalty affecting certain areas
of the Mineral Ridge Property for US$3 million to enhance the
economics of the project. Scorpio Gold is in the process of
completing the definitive documentation to acquire a joint venture
interest in the Mineral Ridge property. The royalty acquisition
remains subject to completion of that acquisition. The Company owns
approximately 75% of the outstanding shares of Scorpio Gold.
- On October 15, 2009, the Company announced the proposed acquisition
of Platte River Gold Inc., a private company with an advanced stage
property near the Nuestra Senora mine, in consideration for the
issuance of approximately 74.8 million shares of Scorpio. The
transaction remains subject to due diligence, definitive
documentation and shareholder and regulatory approvals.
- The 2009 six-month smelter off-take contract for the Company's zinc
and copper concentrates expired on October 31, 2009. In view of the
favourable metal market prices and negotiated off-take terms, the
Company has entered into a long-term agreement effective November 1,
2009 to December 31, 2010 where the customer will purchase all of the
Company's zinc and copper concentrate production estimated at between
200-300 wet metric tonnes ("wmt") of copper and 450-750 wmt of zinc
concentrates per month. This will ensure stability of treatment and
refining charges over that period.
(1) This is a non-GAAP performance measure; please see Non-GAAP
Performance Measures section in the Company's MD&A.
Further information is available on the Company's web site at:
President, Mr. D. Roger Scammell, PGeo, is the Company'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
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 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, 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 27, 2009. 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: email@example.com