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NEWS OUT (SILVER): TSX-SPM - SCORPIO MINING CORP. - RESERVE REPORT
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Scorpio Mining Reports Nuestra Seora Mineral Reserve of 2.764 Mt @287 AgEq
g/t
TORONTO, March 9 - Scorpio Mining Corporation (TSX: SPM) ("Scorpio Mining"
or the "Corporation") is pleased to report an updated mineral resource and
reserve estimate below the 4750 level at its Nuestra Seora mine, Sinaloa
State, Mexico.
Parviz Farsangi, President & CEO reports, "We are very pleased with this
latest estimate.
Reserves alone at Nuestra Seora now support approximately
six years of production at our existing processing facility.
The mineral
resources at Nuestra Seora and other nearby projects are expected to
provide additional years of production and are all open to expansion.
An
aggressive 10,500-metre drilling program to test the exploration potential
at Nuestra Seora is scheduled to commence in March 2011.
Together with the
known and expanding resources in our other mineral concessions in the
district, we are building a solid base from which to support growth."
Mineral Resource and Reserve Estimate
Independent consultant, Genivar Inc.
of Val dOr, QC (Genivar), prepared the
updated mineral resource and reserve estimate at Nuestra Seora in
accordance with NI 43-101.
The estimate includes the results of drilling
performed since the Corporations previous estimate (Sedar filing - Jul 9,
2008) and was updated for prevailing costs and metal prices.
Genivar
provided separate estimates for above and below the 4750 level of the
Nuestra Seora mine (just above Level 8).
The extent of historical mine
workings by Asarco and later artisanal mining above the 4750 level is
uncertain, and future development in this area needs further evaluation.
The
area below the 4750 level is accessed by current operations and will
continue to be the focus of development and extraction.
The mineral resource
and reserve estimate for Nuestra Seora below the 4750 level is as follows:
Table 1.
Nuestra Senora Mineral Resources below the 4750 level - October 31,
2010
Category
Cut-off
Value
US$/t
Tonnes
t x 1,000
Silver
(g/t)
Zinc
(%)
Copper
(%)
Lead
(%)
Gold
(g/t)
Silver
Equivalent
(g/t)
Measured
>$85
1,890
114
3.41
0.46
1.60
0.16
349
Measured
$50-$85
1,372
47
1.08
0.15
0.54
0.12
127
Indicated
>$85
1,181
115
3.42
0.49
1.50
0.14
348
Indicated
$50-$85
1,104
47
1.06
0.15
0.51
0.11
126
Measured + Indicated
>$85
3,071
114
3.41
0.47
1.56
0.15
349
Measured + Indicated
>$50
2,476
47
1.07
0.15
0.53
0.12
127
Inferred
>$85
446
123
3.97
0.53
1.68
0.17
388
Inferred
$50-$85
383
49
1.00
0.13
0.50
0.14
124
Inferred
>$50
829
89
2.60
0.34
1.13
0.15
266
Table 2.
Nuestra Senora Mineral Reserves below the 4750 level - October 31,
2010
Category
Cut-off
Value
US$/t
Tonnes
t x 1,000
Value
US$/t
Silver
(g/t)
Zinc
(%)
Copper
(%)
Lead
(%)
Gold
(g/t)
Silver
Equivalent
(g/t)
Proven
>$85
1,701
148
94
2.81
0.38
1.32
0.13
288
Probable
>$85
1,063
148
95
2.82
0.40
1.23
0.12
287
Proven + Probable
>$85
2,764
148
95
2.81
0.39
1.28
0.12
287
Notes:
1.
Hugues de Corta, P.Geo., of Genivar Inc.
is the Qualified Person for this
mineral resource and reserve estimate.
2.
All mineral resources and reserves have been classified in accordance with
CIM definition standards.
3.
The estimation is based upon geological data and a mine excavation survey as
of October 31, 2010 and accordingly represents the estimated resources and
reserves as of that date.
4.
The quoted mineral reserves are completely contained within the mineral
resources.
5.
Mineral resources have had factors for dilution (12.5% at zero grade) and
mining recovery (80%) applied to obtain the mineral reserves.
6.
"Value US$/t" has been calculated on a contained metal basis using: US$16/oz
silver, US$1,015/oz gold, US$2.30/lb copper, US$0.80/lb lead and US$0.85/lb
zinc.
7.
Silver equivalence has been calculated on a contained metal basis using the
metal prices noted above, with no factors for metallurgical recovery or Net
Smelter Returns.
It is calculated as: AgEq gpt = Ag gpt + (63.4 x Au gpt) +
(36.4 x Zn%) + (34.3 x Pb%) + (98.6 x Cu%)
8.
Totals may not add due to rounding.
9.
Mineral resources that are not mineral reserves do not have demonstrated
economic viability.
The general methodology used for the mineral resource and reserve estimation
includes the following:
*
All calculations were made using GEMS software, version 6.2.4.
*
Capping grade factors were applied and samples composited at a length of 1.5
metres.
*
A block model with cell sizes of 2.5 x 2.5 x 2.5 metres was interpolated
using the inverse of the square of the distance using samples in the search
ellipsoids.
Blocks with composite assay values within a range of 10 metres
were classified as "Measured" those with the closest composite within 10 and
20 metres were classified as "Indicated" and blocks with samples within 20
to 30 metres were classified as "Inferred".
*
A specific gravity was also interpolated for each block based on nearest
neighbour lithology.
The average specific gravity for the total mineral
resource is 2.88 tonnes per cubic metre.
*
All known underground excavation openings were subtracted from the gross
estimated mineral resource.
*
All historic Asarco drill data was removed from the estimation to ensure
sample integrity and reliability.
Due to the polymetallic nature of Nuestra Seora, the disclosed mineral
reserves are based upon the value of the contained metal.
The conservative
cut-off value of US$85/t is the metal content contained in one tonne of ore
for which the net revenue (net of smelter and refining costs) is in excess
of the average cash operating costs to mine and process one tonne of ore.
This assumes current concentrate sales contract terms, concentrate grades
and typical plant performance metal recoveries to calculate the net value.
Total cash operating costs at Nuestra Seora, including mining, milling,
administration and general costs, are currently under US$50/tonne.
The forecast average daily and annual plant throughput for 2011 is estimated
at 1,273 tonnes per day and 464,600 tonnes respectively, and due to higher
utilization represents an increase of 22% from 2010 actual plant throughput.
An independent NI 43-101 technical report supporting this mineral resource
estimate will be filed on SEDAR within 45 days from the date of this press
release.
Scorpio Minings Mexico Country Manager, John A.
Sadek, B.Eng.
(Mining),
MAusIMM, is a Qualified Person for the Corporations Mexico projects and has
reviewed the content of this release.
Hugues de Corta, P.Geo., of Genivar
Inc.
is the independent Qualified Person for this mineral resource and
reserve estimate and has also reviewed the content of this release.
Further information is available on the Corporations web site at:
www.scorpiomining.com.
ON BEHALF OF SCORPIO MINING CORPORATION
Parvi Farsangi
President & 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 mineral resource and reserve estimates,
production, objectives, strategy, mine operations, exploration and future
performance.
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 Seora and
La Verde projects, risks related to international operations, construction
delays and cost overruns, equipment breakdowns, 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 Corporations 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.
For further information:
Rich Kaiser, YES International: 1-800-631-8127; 001-757-306-6090 (outside
North America)
Email: