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Message: Scorpio Mining Reports Fourth Quarter and Year-End Financial Results for 2013
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Toronto, March 18, 2014 - Scorpio Mining Corporation (TSX: SPM) ("Scorpio Mining" or the "Company") today reported its financial and operating results for the fourth quarter ("Q4") and year ended December 31, 2013. This press release should be read in conjunction with the Company's audited Financial Statements and Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2013, as available on the Company's website at www.scorpiomining.com and on SEDAR at www.sedar.com. All monetary figures are expressed in Canadian dollars unless otherwise specified. HIGHLIGHTS FOR THE THREE MONTHS AND YEAR ENDED DECEMBER, 2013 table.fin td p { margin:0px; } td.db { border-top:1px solid #000000; border-bottom:1px solid #000000; } td.b { border-bottom:1px solid #000000; } td.t { border-top:1px solid #000000; }
(1) This is a non-IFRS performance measure; see Non-IFRS Performance Measures section in the MD&A. (2) Silver equivalent ounces were calculated using the following metal prices: silver US$24/oz.; zinc US$0.90/lb.; copper US$3.50/lb.; and lead US$0.90/lb. RECONCILIATION OF RESERVES AND RESOURCES - NUESTRA SEÑORA The Company completed an internal reconciliation of its Mineral Reserves and Resources as at December 31, 2013, against the amounts declared as at December 31, 2012 in the report titled "Technical Report and Preliminary Economic Assessment, Nuestra Señora , San Rafael and El Cajón Deposits" prepared by Mine Development Associates ("MDA Technical Report"). The reconciliation was prepared by the Company's technical services team under the supervision of the Company's V.P. Exploration, James Stonehouse who is a Qualified Person in accordance with NI 43-101. The following table presents the remaining reserves and resources in the Nuestra Señora Mine, accounting for mining operations and definition drilling work through 2013. Reconciliation of Nuestra Señora Reserves and Resources at EOY 2013
(1) Based on MDA Technical Report (2) Reserves included in M&I Resources During 2013, only 31% of the reserves were thus depleted, representing 31% of the overall plant feed tonnage processed, with the balance provided from non-reserve material within Nuestra Señora and from La Verde. The remaining reserves of 366 kilotonnes represent 65% of the budgeted plant feed in 2014, with the possibility of adding more tonnage as plant feed from the resource envelope, as mining and development progress during the year. 2013 HIGHLIGHTS Financial
Operations
(1) This is a non-IFRS performance measure; see Non-IFRS Performance Measures section in the MD&A. (2) Silver equivalent ounces were calculated using the following metal prices: silver US$24/oz.; zinc US$0.90/lb.; copper US$3.50/lb.; and lead US$0.90/lb. Project development
Exploration
OUTLOOK FOR 2014 The Company is focused on maintaining ore production at current levels, to meet the nominal plant capacity of 1,600 tpd throughout 2014, first through providing the plant with a mixture of material mined from the Nuestra Señora and La Verde Mines and, second through El Cajón which becomes the primary source once it is fully ramped up. At this point, remnant mining at Nuestra Señora would not justify maintaining a production team and related equipment within this mine. These assets would then be redeployed within El Cajón, to minimize equipment purchases. A program based on a continued thorough review of previously mined sections of the Nuestra Señora orebody, including the Candelaria Zone, the on-going placement of backfill, which enabled mining of secondary stopes, and other initiatives provided higher plant feed grades in Q3 and Q4 2013. These same sources are expected to be available through Q4 2014. Mining of the reserves and resources at Nuestra Señora will continue, with additional plant feed as defined by short-term definition drilling while ensuring that safe, sustainable methods are used. The CUS for the El Cajón deposit was approved by SEMARNAT in Q4 2013. This has allowed the Company to commence development of El Cajón in early 2014. This underground development work at El Cajón is expected to be completed in Q3 2014. An additional quarter will be needed to ramp the mining activities to a regular production regime at an expected potential of up to 1,500 tpd using design assumptions based solely on surface drilling data. A level of sustainable output will be better determined once underground operations are underway and multiple accesses to the orebody are achieved. JDS is currently working on a PFS to be provided in Q3 2014. Geotechnical drilling and tree-clearing activities have been completed at El Cajón, with cut-and-fill activities at the location of the mine adit and surface infrastructures nearing completion. A short-list of mine contractors for driving the ramp has been completed, with the selection of the retained bidder expected in March 2014. The Company ended 2013 with approximately $16.4 million in its treasury, over $35 million in working capital and no debt. Despite reduced cash flows brought on by the difficult metal pricing environment, reduction in the operating and exploration expenditures, coupled with improved head grades, the Company believes that its treasury and future cash flows will be adequate to finance the development of El Cajón, define resources at the La Verde Mine, de-risk the San Rafael Project and sustain minimal regional exploration during 2014. ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS Scorpio Mining also announces that its 2014 Annual General and Special Meeting of Shareholders will be held at 4:00 pm Eastern Time on Tuesday, May 13, 2014 at the New Brunswick Room, Main Mezzanine Floor of the Fairmont Royal York Hotel, 100 Front Street West, Toronto, Ontario, M5J 1T1. Scorpio shareholders of record at the close of business on April 3, 2014 are entitled to attend the Annual General and Special Meeting and vote their shares. About Us Scorpio Mining Corporation is a silver producer operating in Mexico with significant base metal by-product credits. The 100% owned Nuestra Señora Mine in the Cosalá District of Sinaloa State, Mexico, has flexible mining methods and diversified metal production. It has a fully mechanized underground operation and a processing facility with permitted capacity for expansion to 4,000 tonnes per day. The plant produces zinc, copper and lead concentrates, with a significant payable silver component in the copper and lead concentrates. In addition, the Company has numerous exploration targets in the vicinity of its current operations as well as the advanced El Cajón and San Rafael development projects. The Company's strategy for near-term growth is currently focused on mine development of the El Cajón deposit upon receipt of permitting. Scorpio Mining's President and CEO, Mr. Pierre Lacombe, Eng., is a Qualified Person as defined under National Instrument 43-101 and has reviewed and approved the content of this release. ON BEHALF OF SCORPIO MINING CORPORATION Pierre Lacombe President & CEO For further information contact: Victoria Vargas, Vice President Investor Relations and Corporate Communications +1 416-585-2200 Email: [email protected] Website: www.scorpiomining.com 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 14, 2013. 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. Copyright © 2012 SCORPIO MINING CORPORATION (TSX: SPM) All rights reserved. For more information visit our website at http://www.scorpiomining.com or send email to [email protected] |
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