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    Scorpio Mining Updates El Cajón Project Status and Signs Letter of Intent for Contract Mining at La Verde
  • 03Jun

    TSX: SPM

    TORONTO, June 3, 2013 /CNW/ - Scorpio Mining Corporation (TSX: SPM) ("Scorpio" or the "Company") reports that the Secretariat of Environment and Natural Resources (SEMARNAT) of the state of Sinaloa has declined the Company's initial submissions for Change of Land Use permits pertaining to the development of underground mining operations at the El Cajón and San Rafael projects and continued exploration drilling at El Cajón. As previously disclosed, Scorpio requires two independent permits in order to commence mine construction at El Cajón: the Environmental Permit, which was delivered to the Company on April 30, 2013, and the Change of Land of Use Permit.
    Scorpio's wholly-owned subsidiary, Minera Platte River Gold, S. de R.L. de C.V., will resubmit its application for the Change of Land Use permit related to the development of underground mining operations at the El Cajón and San Rafael projects.
    In meeting with the Sinaloan delegate of SEMARNAT on May 24, 2013, the Company and its consultants were given directives towards filing a new submittal that would receive a more streamlined review than what was afforded to the original submittal filed in December 2012. A follow-up meeting with the technical reviewers of SEMARNAT to finalize the draft submittal is scheduled for June 5, 2013. The Company is encouraged by SEMARNAT's assistance in preparing a new document and willingness to review the application in an expedited timeline, and is confident that the revised submittal will be accepted given that no major deficiencies were identified in SEMARNAT's earlier assessment.
    The re-submission is likely to postpone the onset of surface works at El Cajón by a few months, from early to late in Q3 2013. Likewise, delivery of plant feed from the initial stope production to the Nuestra Señora plant is now expected in early 2014. In the meantime, the Company is continuing with metallurgical testwork, mine design engineering and upgrading of the geological database as recommended in the Preliminary Economic Assessment to increase confidence levels in the mineral resources at El Cajón, providing the basis for conversion of resources into reserves early in 2014.
    Other Developments
    On June 1, 2013, Scorpio signed a letter of intent ("LOI") with a Mexican mining contractor interested in establishing a mining services venture to provide plant feed to Scorpio's Nuestra Señora processing facility from the former producing La Verde Mine. The LOI is providing the basis for finalizing contractual terms for a formal agreement. Production could be resumed as early as within one to two months following signature of the contract.
    Pierre Lacombe, President and CEO comments, "This agreement will provide flexibility to our current operations, with La Verde having been shown as a steady source of copper and silver for the former operators of this mine. With the mining contractor identified to restart production having been involved during the last operating period, there is no learning curve involved and a fast ramp-up of production to past levels, in the order of 400-500 tonnes per day, can be expected."

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