VANCOUVER, April 21 /CNW/ - Scorpio Mining Corporation ("Scorpio", or the "Company") (TSX: SPM), wishes to outline its planning and future outlook with respect to the Company's Mexico operations and intended production increases.
Peter J. Hawley, Chairman, CEO reports, "The Company is in the process of finalizing an expansion plan for its Mexico operations. Metallurgical work and flow sheet design completed by SGS Lakefield Research show that the San Rafael mineralization (Platte River project) reports a lead concentrate that grades 58% lead and 680 g/t silver with 78% recovery, and a zinc concentrate that grades 51% zinc and 128 g/t silver with 82% recovery. The current plan is to install a second circuit for the San Rafael material at the Nuestra Senora (Cosala) mill facility, at a normal throughput of 2,500 tonnes per day (TPD). This new circuit, together with the existing circuit of 1,600 TPD, will easily handle the planned 2012 production increase to 4,000 TPD. The Cosala mill facility was originally designed for expansion and the existing primary crushing system and conveyors are more than sufficient for the 2012 ramp up. Modifications required for the expansion include the installation of an additional ball mill, flotation cells, thickeners, regrind mills and various pumps. The Company expects the plant expansion to be cost effective and completed by the end of the second quarter of 2011."
"In February 2008, an in-house Preliminary Economic Assessment Study (PEA) by Mine Development Associates of Nevada for Platte River Gold Inc. (now a wholly owned subsidiary of Scorpio) looked at open pit mining of the San Rafael body at a rate of 3,000 TPD. The Company has initiated work to augment the PEA for a pre-feasibility level study ("PFS") and design for a minimum of 2,000 TPD mining operation. To this end, the Company is in final planning for open pit infill drilling for mine planning, condemnation drilling for waste rock disposal, and geomechanical and hydrogeological drilling for rock mechanics of the pit walls and any potential water flow in the pit area. The results of this work will be incorporated in the final PFS, which is expected later this year. Importantly, the land on which the deposit sits is 100% owned by Scorpio, which will help accelerate the estimated 3-month permitting window."
"In closing, the Company has begun an aggressive expansion program aimed at reducing operating costs while increasing metal output over the next 2.5 years, at which time it expects to achieve intermediate producer status with respect to metals produced."
Forecast for the Year 2010 Metal Output:
- First quarter mill throughput exceeded the budgeted rate of 1,000 TPD
at an average of 1,173 tonnes per operating day.
- Yearly throughput is budgeted at 30,000 tonnes per month (TPM) or
330,000 tonnes per year (TPY) based on 330 days operating; a 52%
increase over 2009 output of an average of 660 TPD based on 330 days
- Lead output is expected to increase by 43% to ~6 million pounds from
the 2009 output of 4.19 million pounds.
- Zinc output is expected to increase by 49% to ~13 million pounds from
the 2009 output of 8.75 million pounds.
- Copper output is expected to increase by 1% to ~1.2 million pounds
from the 2009 output of 1.19 million pounds.
- Pure silver output is expected to increase by 6% to ~635,000 ounces
from the 2009 output of 600,000 ounces.
- Silver equivalent ounces* are estimated to total ~2.007 million
ounces; a 25% increase from the 1.60 million ounces silver equivalent
Forecast for the Year 2011 Expansion and Metal Output:
- Daily mill throughput is estimated to be 2,100 TPD; an increase of
110% from the estimated 2010 mill throughput of 1,000 TPD.
- Yearly throughput is budgeted at 726,000 TPY based on 330 days
operating; a 120% increase from 2010.
- Lead output is expected to increase by 107% to ~12.4 million pounds
from the forecasted 2010 output of 6 million pounds.
- Zinc output is expected to increase by 106% to ~26.8 million pounds
from the forecasted 2010 output of 13 million pounds.
- Copper output is expected to increase by 150% to ~3 million pounds
from the forecasted 2010 output of 1.2 million pounds.
- Pure Silver output is expected to increase by 86% to ~1.18 million
ounces from the forecasted 2010 output of 635,000 ounces.
- Silver equivalent ounces* are estimated to total 4.1 million
ounces; a 104% increase from the forecasted 2.007 million ounces
silver equivalent in 2010.
Forecast for the Year 2012 Expansion and Metal Output:
- Daily mill throughput is estimated to be 4,000 TPD; an increase of
90% from the estimated 2011 mill throughput of 2,100 TPD.
- Yearly throughput is budgeted at 1.32 million TPY based on 330 days
operating; an 82% increase from 2011.
- Lead output is expected to increase by 45% to ~18 million pounds from
the forecasted 2011 output of 12.4 million pounds.
- Zinc output is expected to increase by 46% to ~39 million pounds from
the forecasted 2011 output of 26.8 million pounds.
- Copper output is expected to increase by 60% to ~4.8 million pounds
from the forecasted 2011 output of 3 million pounds.
- Pure silver output is expected to increase by 61% to ~1.9 million
ounces from the forecasted 2011 output of 1.18 million ounces.
- Silver equivalent ounces* are estimated to total 6.22 million
ounces; a 52% increase from the forecasted 4.1 million ounces silver
equivalent in 2011.
* Metal prices used to calculate silver equivalent ounces are as
follows: Lead US$0.80 per lb; zinc US$0.80 per lb; copper US$2.20 per
lb and silver US$13 per ounce.
More information on the Platte River acquisition and its mineral properties can be found in the Company's Management Information Circular, dated January 8, 2010 and filed on SEDAR at www.SEDAR.com.
Further information is available on the Company's web site at: www.scorpiomining.com.
President, Mr. D. Roger Scammell, PGeo, is the Company's Qualified Person for the Nuestra Senora and Platte River projects 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 Scorpio Mining Corporation's commitment to, and plans for increasing production. 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 mineral projects, 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, 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 29, 2010. 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: firstname.lastname@example.org