Vancouver, June 21, 2010 - Scorpio Gold Corporation (TSX-V: SGN) is pleased to announce the first ever NI 43-101 compliant mineral resource estimate on the Mineral Ridge gold deposit, Nevada, as audited and compiled by Micon International Limited ('Micon') of Toronto, Ontario.
Peter J. Hawley, CEO and Director, reports, "We are very pleased with the reported mineral resources, and considering the conservative approach with respect to the audit and compilation by Micon regarding search radius and waste/void dilution, the quantity and quality of the ounces are a great building stone for the Company to move forward to a full feasibility study."
Recent Company Highlights:
About Mineral Ridge
- In June 2010, approximately 4.5 million warrants at $0.60 per share were exercised by shareholders resulting in $2.7 million in cash to the Company and the issuance of 4.5 million common shares.
- All of the 15.1 million outstanding warrants in the Company are in the money.
- The Company has a strong cash position with over $4.3 million in the treasury.
- The mineral resource estimate prepared by Micon on the Mineral Ridge property has outlined a total of 221,000 ounces of gold in the measured and indicated categories and 136,000 ounces of gold in the inferred category within the area of the Drinkwater and Mary pits. A NI 43-101 compliant technical report supporting the mineral resource estimate will be filed on SEDAR within 45 days of the date of this press release.
- With this new mineral resource estimate, the Company has gained confidence in the historical mineral resources of the adjacent pit areas, which have not yet been subject to a NI 43-101 level of review and will be the subject of data compilation and further drilling this year.
- The Company recently completed a property-wide, multi-spectral satellite imagery survey, including alteration mapping, detailed elevation mapping and lithological enhancement. The resulting data sets and image maps, which greatly enhance geological and structural interpretation, are being integrated into the existing database to help detect similar types of mineralized settings on the property.
- The Company embarked on an aggressive drill campaign in early 2010, the results of which continue to support the robust nature of the mineralization both within and outside of the current mineral resource blocks. The three-phase program is directed toward upgrading existing mineral resource categories and adding to the overall mineral resource base by expanding the existing pit shell designs and testing new exploration targets.
The Mineral Ridge project, a former producer, is located about 50 kilometres west of Tonopah, Nevada and has historically produced almost 575,000 ounces of gold, including ~170,000 ounces from open pit and ~405,000 ounces from underground mining operations. The property is currently bonded and has been permitted for heap leach gold processing and production, and was in production as recently as 2005. The mine project comprises 351 claims encompassing 4,118 hectares (10,176 acres), and hosts multiple gold bearing structures, veins and bodies. It features a well-developed infrastructure consisting of roadways, power grid, heap leach pad, crushing circuit, ADR plant, water supply, maintenance shop, refuelling and storage facilities and administrative buildings, in fair to good condition with an onsite caretaker.
2010 Drill Program
The current pit area drilling is part of a three-phase drill program directed to expand and tightly define the mineral resource base. The results from drilling will be incorporated in future updates to this mineral resource estimate. The second phase of drilling, which is also in progress, is directed at expanding the currently defined pit mineralization by drilling the pit extensions and adjoining walls. To this end, the Company has mobilized a second tracked drill that is smaller in size and will allow access to the pit bench areas and between pits. The third phase of drilling will be directed on a property-wide scale to target numerous gold-bearing mineralized zones/structures recently discovered during the Company's surface exploration program. The scale of the three-phase drill program is as yet open-ended, and any or all of the three phases may be ongoing at any given time. Results will continue to be reported as received and compiled.
Mineral Resource Estimate
Table 1. Summary of Measured, Indicated and Inferred Resources - Drinkwater and Mary Pits
Note 1: Cut-off grade = 0.01 OPT Au.
||Measured & Indicated
|Total Drinkwater & Mary
||Measured & Indicated
|Total Drinkwater & Mary
Note 2: This mineral resource estimate includes technical information which requires subsequent estimates to derive sub-totals, totals and weighted averages. Such estimations inherently involve a degree of rounding and consequently introduce a margin of error. Where these occur, Micon does not consider them to be material.
Note 3: The effective date of the mineral resource estimate presented above is May 31, 2010.
Note 4: Mineral resources that are not mineral reserves do not have demonstrated economic viability. There are no mineral reserves presently identified on the Mineral Ridge Property.
Mineral Ridge Mineral Resource Estimate Parameters
1. Economic Parameters
Table 2. Lerchs-Grossmann Pit and Gold Cut-off Grade Calculation Parameters
- Cut-off grade = 0.01 opt Au
- Gold price = US$ 1,000.00 per ounce
- Lerchs-Grossmann Pit Assumptions and Au grade cut-off -- see Table 2 below.
2. Classification Parameters
|Au Price ($/oz Au)
||Net Price ($/oz Au)
||Mining Cost ($/ton)
||Proc Cost ($/ton)
||Cut-off Grade (opt Au)
||Cut-off Grade (opt Au)
The following constraints were placed on drill hole data for the Measured, Indicated and Inferred categories:
3. Discounting Factors for Existing Underground Workings
- For the Measured Category -- Drill holes were contained within a 60 ft x 60 ft square grid since the range of influence for the measured category is 30 feet. The 30 ft distance corresponds to the variogram range at 66% of the variogram total sill. (This criteria takes into account the tabular and lenticular geometry of the stacked lenses and requires a minimum of 4 drill holes on a square grid.)
- For the Indicated Category -- Drill holes were contained within a 100 ft x 100 ft square grid.
- For the Inferred Category -- Drill holes were more than 100 ft apart.
(Abbreviations: UG = Underground; OP = Open pit; Voids = Stopes = S)
- OP/UG ratio = Total OP historical production tons/Total UG historical production tons = 3,339,000/1,489,000 = 2.24.
- Incremental factor for known S = Historical UG mined tons/known UG S tons = 1,489,000/773,000 = 1.93 (This is applicable to the Mary deposit where there is no OP)
- Uncertainty factor Drinkwater UG = 1.5 (Based on 50% assumption that OP operations on the Drinkwater deposit have gone through half the existing stopes.)
- Incremental factor Drinkwater stopes (voids) = (1.93/2.24) x 1.5 = 1.29
The mineral resource estimate, as audited and compiled by qualified persons Charley Murahwi, P.Geo. and Alan J. San Martin, AusIMM of Micon, was prepared using drilling data available up to January 31, 2010. Further details regarding the methodology used for the mineral resource estimate will be contained in the NI 43-101 compliant technical report filed on SEDAR within 45 days from the date of this press release.
For additional information please see the Company's website at www.scorpiogold.com
President & CEO, Peter J. Hawley, PGeo, is the Qualified Person for the Mineral Ridge project and has reviewed the content of this release. Qualified persons Charley Murahwi, P.Geo., Alan J. San Martin, AusIMM, Mike Godard, P.Eng. and William J. Lewis, P.Geo.of Micon, have also reviewed the content of this release.
ON BEHALF OF THE BOARD
SCORPIO GOLD CORPORATION
Peter J. Hawley,
Chief Executive Officer and Director
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
The Company relies on litigation protection for "forward-looking" statements. This news release contains forward-looking statements that are based on the Company's current expectations and estimates, including statements as to future sales. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other similar words or statements that certain events or conditions "may" or "will" occur, and include, without limitation, statements regarding the Company's plans with respect to the exploration and development of its projects. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from estimated or anticipated events or results implied or expressed in such forward-looking statements, including those risk factors outlined in the Company's Management Discussion and Analysis for the year ended December 31, 2010 as filed on Sedar. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.