Scorpio Gold Corporation

Scorpio Gold Corporation

February 07, 2013 08:00 ET

Scorpio Gold Releases Final Fourth Quarter 2012 Operating Results and Provides 2013 Guidance for the Mineral Ridge Project, Nevada

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 7, 2013) - Scorpio Gold Corporation ("Scorpio Gold" or the "Company") (TSX VENTURE:SGN) announces its final operating results for the fourth quarter of 2012 ("Q4") and provides 2013 guidance for its 70% owned Mineral Ridge Project located in Nevada.

Peter J. Hawley, CEO reports: "The Company is pleased to provide its final production numbers for 2012. In our first year of declared commercial production the Mineral Ridge operation produced a total of 32,066 ounces of gold and 13,871 ounces of silver, meeting its yearly production guidance for 2012. Actual mined ore production in the Drinkwater Pit in 2012 was 3.9% higher than predicted by the reserve block model and the ore mined contained 11.4% more gold ounces than predicted.

"The Company has taken a conservative approach to production guidance for 2013. In the year ahead we look forward to receiving approval for an amended Plan of Operations submitted to the Nevada Bureau of Land Management for the incorporation of a super pit, which will expand the current Mary Pit to incorporate the Mary LC zone. The new super pit will have dimensions greater that the current operating Drinkwater Pit. In addition, the Company looks forward to completion of its new crushing plant that will increase average throughput in 2013 to approximately 2,700 tons per day."

Key Operating Statistics
Q4 Q3 Q2 Q1 Total 2012
Mining operations
Drinkwater pit
Ore tonnes mined 161,699 156,007 160,664 122,995 601,365
Waste tonnes mined 606,047 738,890 700,523 656,770 2,702,230
Total mined 767,746 894,897 861,187 779,765 3,303,595
Mary pit (in development)
Ore tonnes mined 15,072 8,727 3,156 - 26,955
Waste tonnes mined 340,576 282,157 244,927 280,205 1,147,865
Total mined 355,648 290,884 248,083 280,205 1,174,820
Tonnes processed 176,500 186,858 160,759 126,668 650,785
Gold head grade (g/t) 2.67 2.10 2.09 2.34 2.30
Ounces produced (1)
Gold 10,812 6,663 7,394 7,197 32,066
Silver 4,867 2,900 2,930 3,174 13,871
Throughput (tonnes per day) 2,292 2,427 2,115 1,667 2,127
Precious Metal Sales (ounces)(1)
Gold 9,266 7,234 7,803 7,774 32,077
Silver 3,954 3,135 2,956 3,429 13,474
Exploration Drilling
Holes 42 35 63 51 191
Meters 6,826 5,880 6,436 5,104 24,246
(1) Production and sales numbers for Q4 include 1,878 ounces of gold and 759 ounces of silver that were part of a sale of loaded carbon to Waterton Global Value L.P. ("Waterton"). Waterton is a joint venture partner and secured creditor of the Company and has certain rights to purchase gold and silver produced by the Company.

2013 Production and Operating Guidance

In 2012, the Company commenced construction of a new crushing plant in an improved location that is permitted for 24 hour per day operation at 400 tons per hour. Among multiple design improvements, the new plant will have greater horsepower, a larger jaw crusher, 25% more screen capacity, a modified cone crusher with quick change design, a "bag-house" dust suppression system to reduce water addition to ore and process logic control at multiple stations with inter-locks. With the new plant coming online in 2013, the estimated average throughput for the year will increase to approximately 2,700 tons per day.

Gold production for 2013 at the Mineral Ridge operation is forecast at 32,000 to 35,000 ounces at a total cash cost of US$800 to $US900 per ounce of gold sold.

The following key parameters form the basis for the 2013 production forecast and operating cost estimate:

  • Throughput: 2,700 short tons (2,450 metric tonnes) per day
  • Average grade: 0.057 ounces per short ton (1.95 grams per tonne) gold
  • Waste to ore ratio of Mary and Drinkwater pits combined: 4.37 to 1

The Company expects these parameters to fluctuate throughout 2013 and as a result, these parameters should be treated as full-year averages and will not necessarily be reflective of quarterly operating results.

2013 Operating and Development Budget

The 2013 capital and development cost budget is US$6.5 million and includes the following key items:

Capital Expenditure - Mineral Ridge Operation 2013 Budget
Mary pit development US$2.0 million
Water well US$0.1 million
Crusher enhancements US$2.8 million
Power line relocation US$0.5 million
Mobile equipment, contingency, other US$1.1 million
Total US$6.5 million

2013 Exploration Budget

The 2013 exploration budget for the Mineral Ridge project is US$3.2 million and will focus on continued resource and reserve expansion of the Mary LC, Drinkwater Highwall and adjacent satellite deposits, as well as testing of high quality exploration targets.

Scorpio Gold's CEO, Peter J. Hawley, P.Geo., is a Qualified Person for the Mineral Ridge project and has reviewed and approved the content of this release. For additional information, please see the Company's website at

About Mineral Ridge

The Mineral Ridge gold mining operation is located in Esmeralda County, Nevada. Scorpio Gold holds a 70% interest with joint venture partner Waterton Global Value L.P. (30%), and is entitled to receive 80% of cash flow generated. Mineral Ridge is currently in production as a conventional open pit mining and heap leach operation. The property is host to multiple gold-bearing structures, veins and bodies at exploration, development and production stages. Scorpio Gold recently acquired the Goldwedge gold property and milling facility in Manhattan, Nevada and the Pinon gold property near Carlin, Nevada. The Company is assessing its exploration plans for these properties as well as the potential for toll milling at the 500 ton per day Goldwedge plant.



Peter J. Hawley, CEO

The Company relies on litigation protection for "forward-looking" statements. This news release contains forward-looking statements that are based on the Company's current expectations and estimates. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other similar words or statements that certain events or conditions "may" or "will" occur, and include, without limitation, statements regarding the Company's plans with respect to the exploration, development and exploitation of its Mineral Ridge project and forecasts of mining, gold production and operating costs. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from estimated or anticipated events or results implied or expressed in such forward-looking statements, including risks such as mining risks, factors that can increase operating costs, delays related to completion of exploration programs and those risk factors outlined in the Company's Management Discussion and Analysis as filed on SEDAR. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty thereof.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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