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Operations

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Mineral Ridge

Current Operations
FOURTH QUARTER 2017

Production in Q4 2017 totalled 3,709 ounces of gold and 2,256 ounces of silver. Total production in 2017 amounted to 19,045 ounces of gold and 10,203 ounces of silver. Mining operations were suspended in early November 2017; however, residual but diminishing gold recoveries continue from the leach pads. Mine production decreased in 2017 due to mining 47% fewer ore tonnes, although average grades were 9% higher as compared to the prior year. A summary of the Q4 2017 operating results is presented in the Company's January 10, 2018 news release.

THIRD QUARTER 2017

Production at Mineral Ridge in Q3 2017 totalled 4,935 ounces of gold and 2,588 ounces of silver. Mining was suspended in early November 2017 due to limited remaining pad capacity and higher strip ratios. A summary of the Q3 2017 operating and financial results is presented in the Company's October 27, 2017 and November 29, 2017 news releases with complete details provided in the Q3 2017 Financial Statements and Management Discussion & Analysis.

On January 4, 2018, the Company announced an updated feasibility study outlining positive economics for processing the residual heap leach material and mining of higher-grade mineralization in the existing pits. The study provides ~7.5 years of additional mine life at Mineral Ridge and 250,500 oz. life of project gold sold at a total cash cost of US$805/oz. The Company is pursuing financing for the construction of a 4,000 TPD milling facility with CIL recovery and dry stack tailings circuit.

Highlights for the Third Quarter Ended September 30, 2017 and Subsequent Events:
  • 4,935 ounces of gold were produced at the Mineral Ridge mine during Q3 of 2017, compared to 9,981 ounces during Q3 of 2016.
  • Revenue of $6.0 million, compared to $13.3 million during Q3 of 2016.
  • Total cash cost per ounce of gold sold(1) of $1,209 compared to $956 during Q3 of 2016.
  • Mine operating loss of $1.1 million compared to mine operating earnings of $3.2 million during Q3 of 2016.
  • Net loss of $2.8 million ($0.02 basic and diluted per share), compared to net earnings of $2.3 million ($0.01 basic and diluted per share) during Q3 of 2016.
  • Adjusted net loss(1) of $0.9 million ($0.01 basic and diluted per share) compared to $2.4 million ($0.01 basic and diluted per share) for Q3 of 2016.
  • Adjusted EBITDA(1) close to nil ($0.00 basic and diluted per share) compared to $3.5 million ($0.02 basic and diluted per share) during Q3 of 2016.
  • In October 2017, the Company announced a positive feasibility study for processing the heap leach mineral resource at Mineral Ridge, with a proven & probable mineral reserve of 6.9 million tons grading 0.0171 oz/t (0.59 g/t) or 117,200 oz. of gold.
  • On October 24, the Company engaged Mine Technical Services to complete a NI 43-101 mineral resource report on existing drilled targets at the Mineral Ridge mine for possible run of mine feed to the proposed milling facility.
  • On November 15, the Company announced the engagement of Bordeaux Capital Inc. to act as a financial advisor to Scorpio Gold in connection with a proposed financing for the construction of a new processing facility at Mineral Ridge, to re-finance the Company's current debt and for general working capital purposes.

Highlights for the Nine Months Ended September 30, 2017:
  • 15,336 ounces of gold were produced at the Mineral Ridge mine, compared to 28,578 ounces produced during the nine months ended September 30, 2016.
  • Revenue of $22.2 million, compared to $35.2 million during the nine months ended September 30, 2016.
  • Total cash cost per ounce of gold sold(1) of $991, compared to $883 during the nine months ended September 30, 2016.
  • Mine operating earnings of $2.4 million, compared to $8.1million during the nine months ended September 30, 2016.
  • Net loss of $3.0 million ($0.02 basic and diluted per share), compared to net earnings of $4.6 million ($0.02 basic and diluted per share) during the nine months ended September 30, 2016.
  • Adjusted net earnings(1) of $1.0 million ($0.00 basic and diluted per share), compared to $5.7 million ($0.03 basic and diluted per share) during the nine months ended September 30, 2016.
  • Adjusted EBITDA(1) of $3.1 million ($0.02 basic and diluted per share), compared to $7.9 million ($0.04 basic and diluted per share) million during the nine months ended September 30, 2016.
(1)This is a non-IFRS measure; refer to Non-IFRS Measures section of this press release and the Company's Management Discussion & Analysis for Q3 of 2017 for a complete definition and reconciliation to the IFRS results reported in the Company's financial statements for Q3 of 2017.





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