TORONTO, Sept. 17, 2012 /CNW/ - Scorpio Mining Corporation (TSX: SPM) ("Scorpio Mining" or the "Company") is pleased to provide an update on its corporate, operational and exploration activities and progress during 2012 and report the Company's action plan for the remainder of the year.
Highlights of the Company's recent activities and progress are as follows:
- Planned mining and processing is expected to continue at full capacity for the remainder of 2012
- Reducing operational costs
- Three months of drilled/blasted ore inventory with good grade to be sustained at mine
- The Updated NI 43-101 compliant mineral reserve estimate for Nuestra Señora mine is on target for completion in Q4 2012
- Completed the installation of a new flash floatation cell at the Nuestra Señora processing facility, allowing for increased recoveries and throughput
- Processing plant operating at full capacity (1,500 tonnes per day)
- Environmental Impact Statement ("EIS") for exploitation permit for El Cajón deposit to be submitted in October 2012
- Completed the definition of the underground development and power requirements at El Cajón and commenced planning stage
- Completed 33,000 meters of 36,000 meter drill program at Nuestra Señora mine and other deposits
- Updated NI 43-101 compliant mineral resource and mineral reserve estimates for El Cajón and San Rafael are on target for completion by the end of October 2012
- El Cajón Preliminary Economic Assessment ("PEA") on target for completion by the end of Q4 2012
- In-house reports on all exploration projects being compiled
- Progressing with search for new Chief Executive Officer
Peter J. Hawley, the Company's interim Chief Executive Officer, stated "We are pleased to report that, as a result of our operational and plant improvement efforts at Nuestra Señora, the processing facility is operating at full capacity and we have completed developed ore stopes at the mine, which is supplying consistent high grade blended feed. We have carried out a thorough review of our operations and based on the results of this review, we are implementing an immediate action plan that includes continuing to reduce costs and improve efficiency. Our action plan also features the accelerated development of the El Cajón deposit in an effort to ensure a sustained flow of plant feed for years to come. On behalf of the Company's Board of Directors and management, I thank and congratulate the Scorpio team for their dedicated efforts in reviewing operations and implementing our cost saving, operational and exploration initiatives, which have and will continue to improve the Company's business."
For the past two months, the Nuestra Señora processing plant has been operating at its full capacity processing 1,500 tonnes per day (tpd), while successfully reducing operating costs. Several long-hole stopes of relatively high metal grades are currently in the process of becoming operational, which the Company expects will sustain higher grade feed to the processing plant for the remainder of this year. From mid-August, head grade of +100 g/t silver plus other metal credits have been attained. The Company expects to maintain average head grades of approximately 100 g/t silver plus other metal credits for the remainder of 2012. In addition, the Company plans to maintain an inventory of drilled and blasted ore equivalent to three months of production to enable blending of materials with various other stopes being developed. As previously announced, the Company has engaged Mine Development Associates (MDA), an independent expert, to produce a new NI 43-101 compliant reserve estimate for Nuestra Señora in Q4 2012.
Permitting and Development
Land agreements for the Cosalá Norte area, which includes the San Rafael and El Cajón deposits, have been reached and registered with the Mexican national regulatory body. Environmental studies for the El Cajón exploitation permit have been completed with the formal documentation expected to be submitted in early October 2012 to the Secretaría de Medio Ambiente y Recursos Naturales (SEMARNAT), the Mexican federal government agency responsible for the permitting process. The Company expects to receive the first written response from SEMARNAT in connection with its submission within 60 working days.
In anticipation of receiving the exploitation permit for El Cajón, the Company has defined the underground development and power requirements and commenced work to improve the haulage road to its Nuestra Señora processing plant. Following the permitting process, the Company's goal is to commence production at El Cajón and feed the ore at the 1,500 tpd processing plant.
To date, the Company has drilled more than 33,000 meters as part of its 36,000 meter 2012 drill program for Nuestra Señora and its properties in the Cosalá and Parral districts. Underground drilling is continuing at Nuestra Señora at a rate of approximately 1,000 meters per month.
At El Cajón the discovery of the new La Emma trend demonstrates the exploration potential of the Cosalá district.
Given the Company's aggressive drill and exploration programs for 2012, its main focus at this time is to eliminate all backlogs of sampling and logging, while awaiting new exploration permits and planning future drill targets. The Company is also currently compiling baseline work including: geochemical studies, mapping, geophysical studies, and review of all historical assay results data in order to prioritize the exploration targets for future exploration work.
Scorpio Mining's Chief Executive Officer, Mr. Peter J. Hawley, P. Geo, is a Qualified Person (as defined in NI 43-101) for the Company's Mexico projects and supervised the preparation of the disclosure contained in this news release.
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 has 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 and is currently updating its mineral resource estimates for the San Rafael and El Cajón Projects. Scorpio Mining also holds a 100% interest in the advanced, high-grade La Revancha silver and Tepozán silver-gold projects, both located in the productive Parral District within the respective states of Chihuahua and Durango, Mexico. The Company's strategy focuses on developing the San Rafael and the El Cajón projects while maintaining an active regional exploration program at its existing mineral properties.
ON BEHALF OF SCORPIO MINING CORPORATION
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 Company's operations, exploration and development plans, expansion plans, estimates, expectations, forecasts, objectives, predictions and projections of the future. 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 Company's projects in Mexico, 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 26, 2012. 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
Email: [email protected]
Rich Kaiser, YES International: 1-800-631-8127; 001-757-306-6090 (outside North America)
Email: [email protected]