Scorpio Announces Third Quarter 2010 Financial Results

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

TSX:SPM

VANCOUVER, Nov. 15 /CNW/ - Scorpio Mining Corporation (TSX:SPM) ("Scorpio Mining" or the "Corporation") is pleased to announce its unaudited interim financial and operating results for the third quarter ended September 30, 2010.

	Three months ended September 30, 2010	Three months ended September 30, 2009	Nine months ended September 30, 2010	Nine months ended September 30, 2009
	$	$	$	$
Revenue	8,515,531	5,413,071	21,001,736	12,317,106
Mine operating earnings	1,186,255	1,800,936	3,475,512	3,796,961
Gain (loss) on dilution and deconsolidation   of Scorpio Gold Corporation	-	(31,663)	20,164,101	1,205,738
Net earnings (loss)	(1,342,211)	652,652	15,983,163	689,442
Earnings per share (loss)	(0.01)	0.01	0.10	0.01
Adjusted EBITDA^(1)	2,568,856	2,010,441	6,078,646	4,283,693
Cash operating cost per tonne^(2)USD	43.74	43.94	43.44	41.62

Peter J. Hawley, CEO reports, "With normal processing back at near full capacity, and the strong metal prices, the Company believes the fourth quarter will be a record for tonnes processed and it is anticipated the Company will reach its produced metal forecast for 2010".

This earnings release should be read in conjunction with the Corporation's MD&A, Financial Statements and Notes to Financial Statements for the period ended September 30, 2010, which are available on the Corporation's website at www.scorpiomining.com and have been posted on SEDAR at www.sedar.com. 

HIGHLIGHTS FOR THE THIRD QUARTER AND NINE MONTHS ended SEPTEMBER 30, 2010

THIRD QUARTER

• Net loss was $1,342,211 compared to net earnings of $652,652 for the same period of 2009.
• Nuestra Señora mine operating earnings were $1,186,255 compared to $1,800,936 for the same period of 2009.
• Cash flow generated from operations totals $2,216,277, a 91 % increase compared to the same period of 2009.
• Adjusted EBITDA⁽¹⁾ was $2,568,856 compared to $2,010,441 for the same period of 2009.
• The average monthly mill throughput increased from 18,975 tonnes in Q3 2009 to 35,545 tonnes in Q3 2010, an increase of 87%. During Q3 of 2010, the Nuestra Señora mill processed 106,636 tonnes in 87 days of production, at an average grade of 1.05% lead, 1.91% zinc, 0.28% copper and 96 g/t silver.
• Contained metals produced in concentrates consisted of 1.768 million pounds of lead, 385,082 pounds of copper, 3.628 million pounds of zinc and 252,450 ounces of silver for the quarter.
• Revenue from metal payable for the period totalled $10,547,495 (2009, $6,865,196) and was distributed as follows: silver 43% (2009, 45%); zinc 30% (2009, 25%); lead 15% (2009, 16%); copper 12% (2009, 13%).

NINE MONTHS

• Due to the gain on dilution and deconsolidation of Scorpio Gold Corporation of $20,164,101, net earnings were $15,983,163 compared to net earnings of $689,442 for the same period of 2009.
• Nuestra Señora mine operating earnings were $3,475,512 for the nine-month period ended September 30, 2010 compared to $3,796,961 for the same period of 2009.
• Cash flow generated from operations totals $3,948,307, a 30% increase compared to the same period of 2009.
• Adjusted EBITDA⁽¹⁾ was $6,078,646 compared to $4,283,693 for the same period of 2009.
• The Nuestra Señora mine increased its production from 138,946 tonnes in 2009 to 268,432 tonnes in 2010 at an average grade of 1.07% lead, 2.05%, zinc, 0.29% copper and 94 g/t silver.
• Contained metals produced in concentrates consisted of 4.496 million pounds of lead, 1.019 million pounds of copper, 10.124 million pounds of zinc and 614,031 ounces of silver.
• Revenue from metal payable for the period totalled $26,535,135 (2009, $16,510,640) and was distributed as follows: silver 43% (2009, 46%); zinc 30% (2009, 27%); lead 15% (2009, 16%); copper 11% (2009, 12%); gold 1% (2009, 0%).

⁽¹⁾ This is a non-GAAP performance measure. The following table provides a reconciliation of cash operation   costs per tonne:

		Three months	Three months	Nine months	Nine months
		ended	ended	ended	ended
		September 30,	September 30,	September 30,	September 30,
		2010	2009	2010	2009
Tonnes of ore milled		106,636	56,925	268,432	138,946
Cost of sales per consolidated
	interim financial statements
	expressed in CAD	5,271,310	2,848,519	12,356,037	6,504,625
Cost of sales, expressed
	in US$	5,070,859	2,598,076	11,927,035	5,701,816
Adjustments:
Concentrate inventory
	write-down	(39,843)	-	(39,843)	-
Variation in inventory		(280,706)	(87,799)	3,279	549,210
Stock-based compensation		(86,199)	-	(228,739)	(48,361)
Stockpile inventory write-up		-	(8,838)	-	(419,921)
Cash operating costs US$		4,664,111	2,501,439	11,661,732	5,782,744
Cash operating costs per tonne US$		43.74	43.94	43.44	41.62

⁽²⁾ This is a non-GAAP performance measure. The following table provides a reconciliation of adjusted and standardized EBITDA to the financial statements:

	Three months	Three months	Nine months	Nine months
	ended	ended	ended	ended
	September 30,	September 30,	September 30,	September 30,
	2010	2009	2010	2009
	$	$	$	$
Net earnings (loss) for the period	(1,342,211)	652,652	15,983,163	689,442
Income taxes	668,720	-	1,514,264	51,658
Interest expense	521,810	514,009	1,534,341	1,475,342
Depletion and amortization of mineral
properties, plant and equipment	2,065,913	779,758	5,218,413	2,064,239
Standardized EBITDA	1,914,232	1,946,419	24,250,181	4,280,681
Stock-based compensation	654,624	32,359	1,992,566	1,208,750
Gain (loss) on dilution and deconsolidation   of Scorpio Gold Corporation	-	31,663	(20,164,101)	(1,205,738)
Adjusted EBITDA	2,568,856	2,010,441	6,078,646	4,283,693

Further information is available on the Corporation's web site at: www.scorpiomining.com. President, Mr. D. Roger Scammell, PGeo, is the Corporation's Qualified Person for the Nuestra Señora project and has reviewed the content of this release.

The Corporation is also pleased to announce the appointment of Mr. Parviz Farzangi, the Corporation's newly appointed CEO, as a member of its Board of Directors.  

ON BEHALF OF SCORPIO MINING CORPORATION 

Peter J. Hawley
Chief Executive Officer

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 production and throughput targets, enhancing mine operations, completing acquisitions and Scorpio Mining Corporation's commitment to, and plans for developing the Nuestra Señora Project. 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 Señora Project, 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 Corporation's 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: [email protected]