Strong Quarter Of Production At Mineral Ridge Mine

 

VANCOUVER - Scorpio Gold Corporation CEO, Peter Hawley said, "We are pleased to report another strong quarter of production and cash flow at Mineral Ridge with 10,089 ounces of gold produced in the second quarter of 2016, representing a 15% increase over Q2 2015, and representing an aggregate of 18,597 ounces of gold produced in the first half of 2016. Performance in Q2 was partially driven by a 42% increase in processed material and a 39% increase in recoverable ounces placed on the leach pad. Gold head grade in Q2 decreased slightly by 3% compared to the same quarter in 2015. 

"The Company remains focused on being cost effective and anticipates that production at Mineral Ridge during the second half of 2016 will be mainly supported by the Mary LC Phase Three pit.

"Production guidance for the Mineral Ridge operation in 2016 remains at 30,000-35,000 ounces of gold at a revised estimated total cash cost of $900-$950 per ounce of gold sold, compared to the Company's initial estimate of $850-$900 per ounce of gold sold as reported on March 23, 2016. The Company foresees a higher total cash cost per ounce of gold during the second half of 2016 compared to the first half mainly due to an expected higher strip ratio in producing pits along with a reduction in grade as well as ore tonnage mined and processed.

"Scorpio Gold has expanded its 2016 exploration program to include surface mapping, sampling, geophysics and follow-up small diameter core drilling on first priority targets. This program will incorporate our revised model of structural controls to gold mineralization within the extensive under explored areas of the Mineral Ridge property. The Company also intends to initiate diamond drilling on the Drinkwater Highwall and Mary LC Phase Four areas to confirm the Company's evaluation of potentially economic mineralization, which if successful is expected to increase the Life of Mine. In addition, an increase in the price of gold is allowing the Company to re-evaluate outlined mineralization sources within its permitted mining boundary that were previously deemed uneconomic.

"Permitted mining at Mineral Ridge remains scheduled to end in mid-2017. An initial presentation was made in March 2016 to the Bureau of Land Management (BLM) with respect to permitting the Custer and Oromonte claims for additional mining, which could extend the mining schedule. There can be no assurance that any applications made for permitting will be successful or be obtained before the current permitted mining expires."